By Sunanda Sen

This blog post is an excerpt from Professor Sunanda Sen’s talk delivered at the Plenary Session of the 23rd Annual Conference of the Association for Heterodox Economics (AHE). It is an overview of the broad themes from the considerable body of their work on the continuing mode of colonial repression and its workings in the contemporary phase of capitalism. Professor Sen’s work is located in the rich tradition of critical investigation of colonialism by scholars from the Global South.

In the following blog, I elaborate on the colonial mode of subordination, its past pattern as well as the continuing pattern of repression which prevails at present.

Colonialism came into being in the 16^th century with the emergence of a few powerful states based on the ruling ideology of racial superiority. Following its implementation, the whole world came to be divided along racial lines, primarily resulting in two types of colonies – the white-settled North and the tropical Southern colonies. Power over the colonial possessions was exercised using three aspects: a) physical-territorial control and command over the State, b) political control by asserting administrative controls; and c) control over the economy and resources. In this blog, I will provide examples of the earlier pattern of expropriation by the ruling country in two such colonies  – one my own, India, and the other, Indonesia, both subjected to colonial rule by major empires of the West.

Colonialisation started in Indonesia by the 16th century with the emergence of the spice trade in the islands of the archipelago. With spice treated as a highly precious commodity in terms of its high value in the market, the growing spice trade with Indonesia came to be directly controlled by the Dutch East India Company (the VOC). The virtual take-over was very much under the patronage of the Dutch Crown, located far from the spot of trading.

It is worth highlighting that the pattern of gaining access to the economy by using trading channels was similar in India, starting with the British East India Company (EIC) having a charter of trade from the British crown. The company eventually was in a position to rule a considerable territory of India, largely by using military power, which effectively began in 1757 with the Battle of Plassey. As with Indonesia, activities of the EIC in India were not just limited to trade but in effect were involved in the direct annexation of large territories. Finally, it was in 1858, during Queen Victoria’s regime in England, that the company (i.e. the EIC) rule gave way to direct British rule of the Crown.

Colonialism came up with the combination of a very powerful state and its power, by people who were in possession of that power. Being dominant they could also draw a distinction between their own race and the other, which could include a specified community identified by the dominant race. Thus began the division of the whole world according to race, which often was marked by the colour of the skin. The process started with the distinction between the white-settled and the tropical colonies by the 16th century. Controls by the dominant race were exercised by using the following two modes of control. First, territorial control by occupying the space and exercising command over the occupied state. Second, political as well as economic controls by taking over the administration of the economy.

These colonial controls started off quite early in the 16th century, both in India and in Indonesia. In Indonesia, colonialism started in the 16th century with trading in the spice islands of the archipelago. Using international voyages that came in search of spices, trading turned out a valuable deal at that point of time. It can be imagined that such voyages, close to plunders rather than exchanges via free markets, were not at all peaceful. While there was violence the traders in meantime formed the Dutch East India Company or the VOC in 1602, which along with the voyages were controlled by the Dutch crown.

Similar turn of events were there in India where the initial trading by the British traders were taken over by a company which was formed in 1600 and given a charter of trade by the British crown. In the meantime, they had already started occupying territories within the country, often with territorial wars. Finally, as mentioned above, the company gave way to British rule of India by 1858, during the regime of Queen Victoria.

Colonialism in action, in effect, was geared to benefit the ruling nation. To achieve this, several steps were initiated. First and foremost, it was agriculture which went through major changes. In Indonesia, the change known as “cultivation system” introduced commercial crops in Java, the cultivation of which was subject to taxes, both on farmers and on export earnings. Between those, such revenue provided 33% of the income earned by the Dutch crown.

Structural changes in Indonesia was met with coercion of the local people, especially as a huge bridge was constructed by the VOC for transporting the materials in sugar processing. Similarly, in India, the East India Company forced the cultivators to cultivate indigo, which was much needed to bleach the cotton.

Widespread commercialisation that followed changes with cultivation patterns switching to export crops did not mean much for the poor whose consumption included maize and other inferior grains. More so as the net value of exports were earned from overseas but the money in most cases never came to the cultivators, or even to the exporting country, as with the much disputed “Drain of Wealth” from India.

To talk a bit more of what was called a “Drain of Wealth” by Indian nationalists at end of 1900, taxes,  raised within India, were earmarked in the domestic budget to meet what was labelled by the ruling government as  “Home Charges”, to meet overseas expenditure of the Secretary of State for India (or the India Office) in London. The “home” was, of course, home for the British. Thus the overseas expenses were accounted for as expenses which India must meet in order to run the administration of British ruled India’s offices in England. As the nationalists claimed, this was completely illegitimate and fabricated. This blog does not provide the details of the transfer of tax revenue of India to meet those rather illegitimate expenses in England. The reader can refer to my book, apart from other writings available on the literature [1].

There also remained other channels of transferring resources from India, especially of gold which was much needed by Britain to manage the international gold standard [2]. It may be mentioned here that Britain by this time was in command of the international gold standard. Accordingly, gold was much needed to support the continuing system. While the entire sum of India’s export earnings in sterling was deposited with the India Office in London, gold was transferred from both the Paper Currency Reserve as well as the Gold Exchange Reserve in India to London. Use was made of gold which was transferred by Britain to invest in securities with handsome returns, all for Britain. Finally, silver trade was used as one more channel of making profits by the British while the dearth of procurements of silver led to a serious shortage of credit as well as currency in India.

Colonialism continued to fetch benefits by using other means, such as the use of labor. In Indonesia slavery started, as in Brazil and in many other countries, with the use of forced labor within the country. The process fetched a lot of profit to those in power to use such labour. The Dutch also imported enslaved Africans. In this the process, places like Surinam came up as appendages to the Dutch empire.

As for use of labour in India, it was an indirect form of slavery which relied on the shipping of indentured labor from India to plantation islands of the British Isles. It proved useful to the rentier plantation-owners of Britain by providing such labour when slavery formally was abolished in the British Isles in 1830s. Such labour, nearly enslaved, were engaged to run the plantations in West Indies and Mauritius. The practice of indenturing was a clever device on part of the British to get labour from India, ship them, often in in-human conditions, and engage them in plantation islands under strict conditions in order that the plantations can continue. As mentioned already, the plantations were owned by the Britishers, which included the big financiers in London – all providing the benefits Britain was enjoying. I provide a figure below which indicates the multiple benefits enjoyed by Britain in the process, which included the advantages of exploiting the cheap (or free) labour from India and the use of products cultivated by them in the sugarcane plantations for processing white sugar in Britain and exporting to rest of world, which also included India. I have worked elsewhere on the details of the triangular pattern of exports, of labour, of raw sugar or sugarcane, and finally, exporting processed sugar with benefits to Britain in multiple ways [3].

Continuing on mode of suppression. I notice a parallel process which relates to the same period between the late 19th to early 20th century. One recalls the 22 million white men and women who   migrated from Britain to the white settled colonies of Canada, Australia, New Zealand between 1815 to 1914. This was indeed a huge immigration from Britain to these newly settled white colonies. The settlers displaced the locals in every aspect of their existence by taking over administration and other controls over the settled economy. The people who were displaced were identified as aboriginals. When I visited Australia, I was told that the present generation is very aware of the injustice done by their ancestors in the past. Remedial steps as follow including the re-naming of their streets, in terms of the Aboriginal names etc. Similarly when I visited Brazil, I was told about the amazon belt as a touristic place which includes the aborigines! As it had been, people who displaced live in that region, like in a ghetto. That’s how the system continues while these 22 million who immigrated were supported under the surveillance of the nation from where they came from.

We now move to the notion of the current/continuing colonial mode in today’s time. While one talks about globalisation which apparently has integrated the world economy, the reality is far from that picture. Globalisation in practice has intensified the global divide between the North and the South.

This is how one should look at globalisation. Let us ask as to what has happened to the developing or underdeveloped countries under globalisation? One here needs to point at how globalisation operates in reality. A major force here has been the market, the market being the agency of the advanced countries. The latter believe in the free market which parallels the controls of the colonial masters. The colonial masters ruled directly by controlling, the market, today accepted like a faith in advanced countries, is ruling indirectly. The market in turn follows the dictates and prescriptions of mainstream economics, which is subscribed no-less by policy makers in major advanced countries, and more so because it provides benefits to the advanced countries.

To repeat, the global integration has divided the world between the Global South and Global North, making use of the free market, which is a parallel to the tools of expropriation on part of colonial masters. Markets conform to mainstream economics, very different from heterodox economics which we are dealing with, and it has been to the advantage of the advanced countries. In the process, institutions are changed, and  banks are also changing their form – no longer providing cheaper loans to the poor, while privatisation has been the norm. That brings an end to what newly industrialised countries like India tried after independence to achieve something which can be called a developmental state. What is happening today is a new form of subordination, by the elite state in developing countries and also in advanced countries, of the rather helpless poor in the Global South.  It is reflecting the colonial mode in terms of the repressions, while the form is different.  

Repression happens via finance with liberalised finance – which contrasts the formal colonial period, when controlled finance was the goal. Today it is liberalised finance with subordinate financialisation in the developing countries. In this corporate profits are easy, with financial supremacy and speculative bubbles fetching business and profits [4]. De-regulated finance in the Global South has been responsible for their continuing subordination by finance controlled by advanced nations. The related lack of monetary autonomy, the weak currency status of all their currencies in terms of the lack of convertibility to dollar in the market, makes the case for the subordinate financialisation. We recall here that under British rule India was denied gold currency even with considerable export earnings in gold. 

The other form or tool of repression in the current period happens to be the use of labour. Given that most of the previous protective measures on labor have been suppressed and labour rights have been scrapped the pattern now compares to the colonial mode of repressing labour.

Another form of repression is with the extraction of resources and related displacements of people who used to live in as aborigines in Australia, in Brazil’s Amazon belt, and as the tribals and locals in India’s districts prominent with mines and other extractive resources. As in India where displacements of tribals is common, Brazil is found to be handing over a large part of the Amazon belt to domestic and foreign capital.

Colonial or the modern form of subordination works by using the racial and colonial dynamics which is essentially based on power. Often based on proximity to ruling authorities, exercise of power has been responsible for the continued use of race as a tool of subordination. That is how the Dalits (low caste) in India, or black people in other places have been treated as inferiors. Those who are more powerful are usually proximate to the ruling authorities which enable them to exercise such power based on racial discrimination and oppression. Simultaneously, the process goes with state action, privileged with state sanctions by the White supremacy in advanced countries. Think of George Floyd, who was choked to death by a white policeman, a part of establishment.

The protests which have come up, and are very welcome, have been happening, thus re-stating the fact that the black lives do matter. This may initiate a re-look at history, a very positive thinking by the current generation, which include both blacks as well as whites. You also notice the overthrow of the statues like Edward Golson in Bristol, the protests, sometime back in Oxford and London, which all are continuing. Protests are also coming as new writings and even with a petition that countries which looted the former colonies and repressed their people should pay it back as reparations. This has found scholarly resonance in works such as Boris Bitker’s A Case for Reparations and William Darity Jr.’s Reparations for Black Americans. Similar discrimination and repression is continuing in present times in other countries, including in my country India,  in the targeting of tribals and Dalits on grounds of racial prejudice and class oriented privileges. So I conclude that there  prevails a continuing pattern of subordination under contemporary capitalism as it happened with formal colonialism and the only way to redress it is to continue the on-going forms of protests.

[1] Sunanda Sen, Colonies and Empire: India 1870-1914, Orient Longman, Calcutta 1992.

[2] The reader can wait to see my paper titled “ Could Britain continue with the gold standard in absence of India as a colony?” in Review of Political Economy (forthcoming in 2022).

[3] See for detailed analysis, Sunanda Sen, “Indentured Labour from India in the Age of  Empire” Social Scientist Jan-Feb 2015. See also, The Surplus Approach of Engels and Marx  and its relevance in the context of the conditions of working class in contemporary capitalism” Social Scientist Nov-Dec 2020.

[4] Sunanda Sen, Financialisation, Speculation and Instability “ in Philip Mader et al (ed) International Handbook of Financialisation [Routledge 2020]; Investment Decisions under Uncertainty”,  Journal of Post Keynesian Economics, Vol 43, No 2, 2020, pp  267-280; “Financialisation and Corporate Investments: The Indian Case” (with Zico Dasgupta), Review of Keynesian Economics, Vol 6 issue 1, January 2018.