CHAPTER VII

ECONOMIC CHANGE

One of the most interesting phenomena of modern world-history is the

twofold conquest of the East by the West. The word "conquest" is usually

employed in a political sense, and calls up visions of embattled armies

subduing foreign lands and lording it over distant peoples. Such

political conquests in the Orient did of course occur, and we have

already seen how, during the past century, the decrepit states of the

Near and Middle East fell an easy prey to the armed might of the

European Powers.

But what is not so generally realized is the fact that this political

conquest was paralleled by an economic conquest perhaps even more

complete and probably destined to produce changes of an even more

profound and enduring character.

The root-cause of this economic conquest was the Industrial Revolution.

Just as the voyages of Columbus and Da Gama gave Europe the strategic

mastery of the ocean and thereby the political mastery of the world, so

the technical inventions of the later eighteenth century which

inaugurated the Industrial Revolution gave Europe the economic mastery

of the world. These inventions in fact heralded a new Age of Discovery,

this time into the realms of science. The results were, if possible,

more momentous even than those of the age of geographical discovery

three centuries before. They gave our race such increased mastery over

the resources of nature that the ensuing transformation of economic life

swiftly and utterly transformed the face of things.

This transformation was, indeed, unprecedented in the world's history.

Hitherto man's material progress had been a gradual evolution. With the

exception of gunpowder, he had tapped no new sources of material energy

since very ancient times. The horse-drawn mail-coach of our

great-grandfathers was merely a logical elaboration of the horse-drawn

Egyptian chariot; the wind-driven clipper-ship traced its line unbroken

to Ulysses's lateen bark before Troy; while industry still relied on the

brawn of man and beast or upon the simple action of wind and waterfall.

Suddenly all was changed. Steam, electricity, petrol, the Hertzian wave,

harnessed nature's hidden powers, conquered distance, and shrunk the

terrestrial globe to the measure of human hands. Man entered a new

material world, differing not merely in degree but in kind from that of

previous generations.

When I say "Man," I mean, so far as the nineteenth century was

concerned, the white man of Europe and its racial settlements overseas.

It was the white man's brain which had conceived all this, and it was

the white man alone who at first reaped the benefits. The two

outstanding features of the new order were the rise of machine-industry

with its incalculable acceleration of mass-production, and the

correlative development of cheap and rapid transportation. Both these

factors favoured a prodigious increase in economic power and wealth in

Europe, since Europe became the workshop of the world. In fact, during

the nineteenth century, Europe was transformed from a semi-rural

continent into a swarming hive of industry, gorged with goods, capital,

and men, pouring forth its wares to the remotest corners of the earth,

and drawing thence fresh stores of raw material for new fabrication and

exchange.

Such was the industrially revolutionized West which confronted an East

as backward and stagnant in economics as it was in politics and the art

of war. In fact, the East was virtually devoid of either industry or

business, as we understand these terms to-day. Economically, the East

was on an agricultural basis, the economic unit being the

self-supporting, semi-isolated village. Oriental "industries" were

handicrafts, carried on by relatively small numbers of artisans, usually

working by and for themselves. Their products, while often exquisite in

quality, were largely luxuries, and were always produced by such slow,

antiquated methods that their quantity was limited and their market

price relatively high. Despite very low wages, therefore, Asiatic

products not only could not compete in the world-market with European

and American machine-made, mass-produced articles, but were hard hit in

their home-markets as well.

This Oriental inability to compete with Western industry arose not

merely from methods of production but also from other factors such as

the mentality of the workers and the scarcity of capital. Throughout the

Near and Middle East economic life rested on the principle of status.

The Western economic principles of contract and competition were

virtually unknown. Agriculturalists and artisans followed blindly in the

footsteps of their fathers. There was no competition, no stimulus for

improvement, no change in customary wages, no desire for a better and

more comfortable living. The industries were stereotyped; the apprentice

merely imitated his master, and rarely thought of introducing new

implements or new methods of manufacture. Instead of working for profit

and advancement, men followed an hereditary "calling," usually hallowed

by religious sanctions, handed down from father to son through many

generations, each calling possessing its own unchanging ideals, its

zealously guarded craft-secrets.

The few bolder, more enterprising spirits who might have ventured to

break the iron bands of custom and tradition were estopped by lack of

capital. Fluid "investment" capital, easily mobilized and ready to pour

into an enterprise of demonstrable utility and profit, simply did not

exist. To the Oriental, whether prince or peasant, money was regarded,

not as a source of profit or a medium of exchange, but as a store of

value, to be hoarded intact against a "rainy day." The East has been

known for ages as a "sink of the precious metals." In India alone, the

value of the gold, silver, and jewels hidden in strong-boxes, buried in

the earth, or hanging about the necks of women must run into billions.

Says a recent writer on India: "I had the privilege of being taken

through the treasure-vaults of one of the wealthiest Maharajahs. I could

have plunged my arm to the shoulder in great silver caskets filled with

diamonds, pearls, emeralds, rubies. The walls were studded with hooks

and on each pair of hooks rested gold bars three to four feet long and

two inches across. I stood by a great cask of diamonds, and picking up a

handful let them drop slowly from between my fingers, sparkling and

glistening like drops of water in sunlight. There are some seven hundred

native states, and the rulers of every one has his treasure-vaults on a

more or less elaborate scale. Besides these, every zamindar and every

Indian of high or low degree who can save anything, wants to have it by

him in actual metal; he distrusts this new-fangled paper currency that

they try to pass off on him. Sometimes he beats his coins into bangles

for his wives, and sometimes he hides money behind a loose brick or

under a flat stone in the bottom of the oven, or he goes out and digs a

little hole and buries it."[206]

Remember that this description is of present-day India, after more than

a century of British rule and notwithstanding a permeation of Western

ideas which, as we shall presently see, has produced momentous

modifications in the native point of view. Remember also that this

hoarding propensity is not peculiar to India but is shared by the entire

Orient. We can then realize the utter lack of capital for investment

purposes in the East of a hundred years ago, especially when we remember

that political insecurity and religious prohibitions of the lending of

money at interest stood in the way of such far-sighted individuals as

might have been inclined to employ their hoarded wealth for productive

purposes. There was, indeed, one outlet for financial activity--usury,

and therein virtually all the scant fluid capital of the old Orient was

employed. But such capital, lent not for productive enterprise, but for

luxury, profligacy, or incompetence, was a destructive rather than a

creative force and merely intensified the prejudice against capital of

any kind.

Such was the economic life of the Orient a hundred years ago. It is

obvious that this archaic order was utterly unable to face the

tremendous competition of the industrialized West. Everywhere the flood

of cheap Western machine-made, mass-produced goods began invading

Eastern lands, driving the native wares before them. The way in which an

ancient Oriental handicraft like the Indian textiles was literally

annihilated by the destructive competition of Lancashire cottons is only

one of many similar instances. To be sure, some Oriental writers contend

that this triumph of Western manufactures was due to political rather

than economic reasons, and Indian nationalists cite British governmental

activity in favour of the Lancashire cottons above mentioned as the sole

cause for the destruction of the Indian textile handicrafts. But such

arguments appear to be fallacious. British official action may have

hastened the triumph of British industry in India, but that triumph was

inevitable in the long run. The best proof is the way in which the

textile crafts of independent Oriental countries like Turkey and Persia

were similarly ruined by Western competition.

A further proof is the undoubted fact that Oriental peoples, taken as a

whole, have bought Western-manufactured products in preference to their

own hand-made wares. To many Westerners this has been a mystery. Such

persons cannot understand how the Orientals could buy the cheap, shoddy

products of the West, manufactured especially for the Eastern market, in

preference to their native wares of better quality and vastly greater

beauty. The answer, however, is that the average Oriental is not an art

connoisseur but a poor man living perilously close to the margin of

starvation. He not only wants but must buy things cheap, and the wide

price-margin is the deciding factor. Of course there is also the element

of novelty. Besides goods which merely replace articles he has always

used, the West has introduced many new articles whose utility or charm

are irresistible. I have already mentioned the way in which the

sewing-machine and the kerosene-lamp have swept the Orient from end to

end, and there are many other instances of a similar nature. The

permeation of Western industry has, in fact, profoundly modified every

phase of Oriental economic life. New economic wants have been created;

standards of living have been raised; canons of taste have been altered.

Says a lifelong American student of the Orient: "The knowledge of modern

inventions and of other foods and articles has created new wants. The

Chinese peasant is no longer content to burn bean-oil; he wants

kerosene. The desire of the Asiatic to possess foreign lamps is equalled

only by his passion for foreign clocks. The ambitious Syrian scorns the

mud roof of his ancestors, and will be satisfied only with the bright

red tiles imported from France. Everywhere articles of foreign

manufacture are in demand.... Knowledge increases wants, and the

Oriental is acquiring knowledge. He demands a hundred things to-day that

his grandfather never heard of."[207]

Everywhere it is the same story. An Indian economic writer, though a

bitter enemy of Western industrialism, bemoans the fact that "the

artisans are losing their occupations and are turning to agriculture.

The cheap kerosene-oil from Baku or New York threatens the oilman's[208]

existence. Brass and copper which have been used for vessels from time

immemorial are threatened by cheap enamelled ironware imported from

Europe.... There is also, _pari passu_, a transformation of the tastes

of the consumers. They abandon _gur_ for crystal sugar. Home-woven

cloths are now replaced by manufactured cloths for being too coarse. All

local industries are attacked and many have been destroyed. Villages

that for centuries followed customary practices are brought into contact

with the world's markets all on a sudden. For steamships and railways

which have established the connection have been built in so short an

interval as hardly to allow breathing-time to the village which

slumbered so long under the dominion of custom. Thus the sudden

introduction of competition into an economic unit which had from time

immemorial followed custom has wrought a mighty change."[209]

This "mighty change" was due not merely to the influx of Western goods

but also to an equally momentous influx of Western capital. The

opportunities for profitable investment were so numerous that Western

capital soon poured in streams into Eastern lands. Virtually devoid of

fluid capital of its own, the Orient was bound to have recourse to

Western capital for the initiation of all economic activity in the

modern sense. Railways, mines, large-scale agriculture of the

"plantation" type, and many other undertakings thus came into being.

Most notable of all was the founding of numerous manufacturing

establishments from North Africa to China and the consequent growth of

genuine "factory towns" where the whir of machinery and the smoke of

tall chimneys proclaimed that the East was adopting the industrial life

of the West.

The momentous social consequences of this industrialization of the

Orient will be treated in subsequent chapters. In the present chapter we

will confine ourselves to a consideration of its economic side.

Furthermore, this book, limited as it is to the Near and Middle East,

cannot deal with industrial developments in China and Japan. The reader

should, however, always bear in mind Far Eastern developments, which, in

the main, run parallel to those which we shall here discuss.

These industrial innovations were at first pure Western transplantings

set in Eastern soil. Initiated by Western capital, they were wholly

controlled and managed by Western brains. Western capital could not

venture to entrust itself to Orientals, with their lack of the modern

industrial spirit, their habits of "squeeze" and nepotism, their lust

for quick returns, and their incapacity for sustained business

team-play. As time passed, however, the success of Western undertakings

so impressed Orientals that the more forward-looking among them were

ready to risk their money and to acquire the technique necessary for

success. At the close of Chapter II, I described the development of

modern business types in the Moslem world, and the same is true of the

non-Moslem populations of India. In India there were several elements

such as the Parsis and the Hindu "banyas," or money-lenders, whose

previous activities in commerce or usury predisposed them to financial

and industrial activity in the modern sense. From their ranks have

chiefly sprung the present-day native business communities of India,

exemplified by the jute and textile factories of Calcutta and Bombay,

and the great Tata iron-works of Bengal--undertakings financed by native

capital and wholly under native control. Of course, beside these

successes there have been many lamentable failures. Nevertheless, there

seems to be no doubt that Western industrialism is ceasing to be an

exotic and is rooting itself firmly in Eastern soil.[210]

The combined result of Western and Eastern enterprise has been, as

already stated, the rise of important industrial centres at various

points in the Orient. In Egypt a French writer remarks: "Both banks of

the Nile are lined with factories, sugar-refineries and cotton-mills,

whose belching chimneys tower above the mud huts of the fellahs."[211]

And Sir Theodore Morison says of India: "In the city of Bombay the

industrial revolution has already been accomplished. Bombay is a modern

manufacturing city, where both the dark and the bright side of modern

industrialism strike the eye. Bombay has insanitary slums where

overcrowding is as great an evil as in any European city; she has a

proletariat which works long hours amid the din and whir of machinery;

she also has her millionaires, whose princely charities have adorned her

streets with beautiful buildings. Signs of lavish wealth and, let me

add, culture and taste in Bombay astonish the visitor from the inland

districts. The brown villages and never-ending fields with which he has

hitherto been familiar are the India which is passing away; Bombay is

the presage of the future."[212]

The juxtaposition of vast natural resources and a limitless supply of

cheap labour has encouraged the most ambitious hopes in Oriental minds.

Some Orientals look to a combination of Western money and Eastern

man-power, expressed by an Indian economic writer in the formula:

"English money and Indian labour are the two cheapest things in the

world."[213] Others more ambitiously dream of industrializing the East

entirely by native effort, to the exclusion and even to the detriment

of the West. This view was well set forth some years ago by a Hindu, who

wrote in a leading Indian periodical:[214] "In one sense the Orient is

really menacing the West, and so earnest and open-minded is Asia that no

pretence or apology whatever is made about it. The Easterner has thrown

down the industrial gauntlet, and from now on Asia is destined to

witness a progressively intense trade warfare, the Occidental scrambling

to retain his hold on the markets of the East, and the Oriental

endeavouring to beat him in a battle in which heretofore he has been an

easy victor.... In competing with the Occidental commercialists, the

Oriental has awakened to a dynamic realization of the futility of

pitting unimproved machinery and methods against modern methods and

appliances. Casting aside his former sense of self-complacency, he is

studying the sciences and arts that have given the West its material

prosperity. He is putting the results of his investigations to practical

use, as a rule, recasting the Occidental methods to suit his peculiar

needs, and in some instances improving upon them."

This statement of the spirit of the Orient's industrial awakening is

confirmed by many white observers. At the very moment when the above

article was penned, an American economic writer was making a study tour

of the Orient, of which he reported: "The real cause of Asia's poverty

lies in just two things: the failure of Asiatic governments to educate

their people, and the failure of the people to increase their productive

capacity by the use of machinery. Ignorance and lack of machinery are

responsible for Asia's poverty; knowledge and modern tools are

responsible for America's prosperity." But, continues this writer, we

must watch out. Asia now realizes these facts and is doing much to remedy

the situation. Hence, "we must face in ever-increasing degree the rivalry

of awakening peoples who are strong with the strength that comes from

struggle with poverty and hardship, and who have set themselves to master

and apply all our secrets in the coming world-struggle for industrial

supremacy and for racial readjustment."[215] Another American observer of

Asiatic economic conditions reports: "All Asia is being permeated with

modern industry and present-day mechanical progress."[216] And Sir

Theodore Morison concludes regarding India's economic future: "India's

industrial transformation is near at hand; the obstacles which have

hitherto prevented the adoption of modern methods of manufacture have

been removed; means of transport have been spread over the face of the

whole country, capital for the purchase of machinery and erection of

factories may now be borrowed on easy terms; mechanics, engineers, and

business managers may be hired from Europe to train the future captains

of Indian industry; in English a common language has been found in which

to transact business with all the provinces of India and with a great

part of the Western world; security from foreign invasion and internal

commotion justifies the inception of large enterprises. All the

conditions are favourable for a great reorganization of industry which,

when successfully accomplished, will bring about an increase hitherto

undreamed of in India's annual output of wealth."[217]

The factor usually relied upon to overcome the Orient's handicaps of

inexperience and inexpertness in industrialism is its cheap labour. To

Western observers the low wages and long hours of Eastern industry are

literally astounding. Take Egypt and India as examples of industrial

conditions in the Near and Middle East. Writing of Egypt in 1908, the

English economist H. N. Brailsford says: "There was then no Factory Act

in Egypt. There are all over the country ginning-mills, which employ

casual labour to prepare raw cotton for export during four or five

months of the year. The wages were low, from 7-1/2_d._ to 10_d._ (15 to

20 cents) a day for an adult, and 6_d._ (12 cents) for a child. Children

and adults alike worked sometimes for twelve, usually for fifteen, and

on occasion even for sixteen or eighteen hours a day. In the height of

the season even the children were put on night shifts of twelve

hours."[218]

In India conditions are about the same. The first thorough investigation

of Indian industry was made in 1907 by a factory labour commission, and

the following are some of the data published in its report: In the

cotton-mills of Bombay the hours regularly worked ran from thirteen to

fourteen hours. In the jute-mills of Calcutta the operatives usually

worked fifteen hours. Cotton-ginning factories required their employees

to work seventeen and eighteen hours a day, rice and flour mills twenty

to twenty-two hours, and an extreme case was found in a printing works

where the men had to work twenty-two hours a day for seven consecutive

days. As to wages, an adult male operative, working from thirteen to

fifteen hours a day, received from 15 to 20 rupees a month ($5 to

$6.35). Child labour was very prevalent, children six and seven years

old working "half-time"--in many cases eight hours a day. As a result of

this report legislation was passed by the Indian Government bettering

working conditions somewhat, especially for women and children. But in

1914 the French economist Albert Métin, after a careful study, reported

factory conditions not greatly changed, the Factory Acts systematically

evaded, hours very long, and wages extremely low. In Bombay men were

earning from 10 cents to 20 cents per day, the highest wages being 30

cents. For women and children the maximum was 10 cents per day.[219]

With such extraordinarily low wages and long hours of labour it might at

first sight seem as though, given adequate capital and up-to-date

machinery, the Orient could not only drive Occidental products from

Eastern markets but might invade Western markets as well. This, indeed,

has been the fear of many Western writers. Nearly three-quarters of a

century ago Gobineau prophesied an industrial invasion of Europe from

Asia,[220] and of late years economists like H. N. Brailsford have

warned against an emigration of Western capital to the tempting lure of

factory conditions in Eastern lands.[221] Nevertheless, so far as the

Near and Middle East is concerned, nothing like this has as yet

materialized. China, to be sure, may yet have unpleasant surprises in

store for the West,[222] but neither the Moslem world nor India have

developed factory labour with the skill, stamina, and assiduity

sufficient to undercut the industrial workers of Europe and America. In

India, for example, despite a swarming and poverty-stricken population,

the factories are unable to recruit an adequate or dependable

labour-supply. Says M. Métin: "With such long hours and low wages it

might be thought that Indian industry would be a formidable competitor

of the West. This is not so. The reason is the bad quality of the work.

The poorly paid coolies are so badly fed and so weak that it takes at

least three of them to do the work of one European. Also, the Indian

workers lack not only strength but also skill, attention, and liking for

their work.... An Indian of the people will do anything else in

preference to becoming a factory operative. The factories thus get only

the dregs of the working class. The workers come to the factories and

mines as a last resort; they leave as soon as they can return to their

prior occupations or find a more remunerative employment. Thus the

factories can never count on a regular labour-supply. Would higher wages

remedy this? Many employers say no--as soon as the workers got a little

ahead they would quit, either temporarily till their money was spent, or

permanently for some more congenial calling."[223] These statements are

fully confirmed by an Indian economic writer, who says: "One of the

greatest drawbacks to the establishment of large industries in India is

the scarcity and inefficiency of labour. Cheap labour, where there is no

physical stamina, mental discipline, and skill behind it, tends to be

costly in the end. The Indian labourer is mostly uneducated. He is not

in touch with his employers or with his work. The labouring population

of the towns is a flitting, dilettante population."[224]

Thus Indian industry, despite its very considerable growth, has not come

up to early expectations. As the official Year-Book very frankly states:

"India, in short, is a country rich in raw materials and in industrial

possibilities, but poor in manufacturing accomplishments."[225] In fact,

to some observers, India's industrial future seems far from bright. As a

competent English student of Indian conditions recently wrote: "Some

years ago it seemed possible that India might, by a rapid assimilation

of Western knowledge and technical skill, adapt for her own conditions

the methods of modern industry, and so reach an approximate economic

level. Some even now threaten the Western world with a vision of the

vast populations of China and India rising up with skilled organization,

vast resources, and comparatively cheap labour to impoverish the West.

To the present writer this is a mere bogey. The peril is of a very

different kind. Instead of a growing approximation, he sees a growing

disparity. For every step India takes toward mechanical efficiency, the

West takes two. When India is beginning to use bicycles and motor-cars

(not to make them), the West is perfecting the aeroplane. That is merely

symbolic. The war, as we know, has speeded up mechanical invention and

produced a population of mechanics; but India has stood comparatively

still. It is, up to now, overwhelmingly mediæval, a country of domestic

industry and handicrafts. Mechanical power, even of the simplest, has

not yet been applied to its chief industry--agriculture. Yet the period

of age-long isolation is over, and India can never go back to it;

nevertheless, the gap between East and West is widening. What is to be

the outcome for her 300 millions? We are in danger in the East of seeing

the worst evils of commercialism developed on an enormous scale, with

the vast population of India the victims--of seeing the East become a

world slum."[226]

Whether or not this pessimistic outlook is justified, certain it is that

not merely India but the entire Orient is in a stage of profound

transition; and transition periods are always painful times. We have

been considering the new industrial proletariat of the towns. But the

older social classes are affected in very similar fashion. The old-type

handicraftsman and small merchant are obviously menaced by modern

industrial and business methods, and the peasant masses are in little

better shape. It is not merely a change in technique but a fundamental

difference in outlook on life that is involved. The life of the old

Orient, while there was much want and hardship, was an easygoing life,

with virtually no thought of such matters as time, efficiency, output,

and "turnover." The merchant sat cross-legged in his little booth amid

his small stock of wares, passively waiting for trade, chaffering

interminably with his customers, annoyed rather than pleased if brisk

business came his way. The artisan usually worked by and for himself,

keeping his own hours and knocking off whenever he chose. The peasant

arose with the dawn, but around noon he and his animals lay down for a

long nap and slept until, in the cool of afternoon, they awoke,

stretched themselves, and, comfortably and casually, went to work again.

To such people the speed, system, and discipline of our economic life

are painfully repugnant, and adaptation can at best be effected only

very slowly and under the compulsion of the direst necessity. Meanwhile

they suffer from the competition of those better equipped in the

economic battle. Sir William Ramsay paints a striking picture of the way

in which the Turkish population of Asia Minor, from landlords and

merchants to simple peasants, have been going down-hill for the last

half-century under the economic pressure not merely of Westerners but of

the native Christian elements, Armenians and Greeks, who had partially

assimilated Western business ideas and methods. Under the old state of

things, he says, there was in Asia Minor "no economic progress and no

mercantile development; things went on in the old fashion, year after

year. Such simple business as was carried on was inconsistent with the

highly developed Western business system and Western civilization; but

it was not oppressive to the people. There were no large fortunes; there

was no opportunity for making a great fortune; it was impossible for one

man to force into his service the minds and the work of a large number

of people, and so to create a great organization out of which he might

make big profits. There was a very large number of small men doing

business on a small scale."[227] Sir William Ramsay then goes on to

describe the shattering of this archaic economic life by modern business

methods, to the consequent impoverishment of all classes of the

unadaptable Turkish population.

How the agricultural classes, peasants and landlords alike, are

suffering from changing economic conditions is well exemplified by the

recent history of India. Says the French writer Chailley, an

authoritative student of Indian problems: "For the last half-century

large fractions of the agricultural classes are being entirely despoiled

of their lands or reduced to onerous tenancies. On the other hand, new

classes are rising and taking their place.... Both ryots and

zamindars[228] are involved. The old-type nobility has not advanced with

the times. It remains idle and prodigal, while the peasant proprietors,

burdened by the traditions of many centuries, are likewise improvident

and ignorant. On the other hand, the economic conditions of British

India are producing capitalists who seek employment for their wealth. A

conflict between them and the old landholders was predestined, and the

result was inevitable. Wealth goes to the cleverest, and the land must

pass into the hands of new masters, to the great indignation of the

agricultural classes, a portion of whom will be reduced to the position

of farm-labourers."[229]

The Hindu economist Mukerjee thus depicts the disintegration and decay

of the Indian village: "New economic ideas have now begun to influence

the minds of the villagers. Some are compelled to leave their

occupations on account of foreign competition, but more are leaving

their hereditary occupations of their own accord. The Brahmins go to the

cities to seek government posts or professional careers. The middle

classes also leave their villages and get scattered all over the country

to earn a living. The peasants also leave their ancestral acres and form

a class of landless agricultural labourers. The villages, drained of

their best blood, stagnate and decay. The movement from the village to

the city is in fact not only working a complete revolution in the

habits and ideals of our people, but its economic consequences are far

more serious than are ordinarily supposed. It has made our middle

classes helplessly subservient to employment and service, and has also

killed the independence of our peasant proprietors. It has jeopardized

our food-supply, and is fraught with the gravest peril not only to our

handicrafts but also to our national industry--agriculture."[230]

Happily there are signs that, in Indian agriculture at least, the

transition period is working itself out and that conditions may soon be

on the mend. Both the British Government and the native princes have

vied with one another in spreading Western agricultural ideas and

methods, and since the Indian peasant has proved much more receptive

than has the Indian artisan, a more intelligent type of farmer is

developing, better able to keep step with the times. A good instance is

the growth of rural co-operative credit societies. First introduced by

the British Government in 1904, there were in 1915 more than 17,000 such

associations, with a total of 825,000 members and a working capital of

nearly $30,000,000. These agricultural societies make loans for the

purchase of stock, fodder, seed, manure, sinking of wells, purchase of

Western agricultural machinery, and, in emergencies, personal

maintenance. In the districts where they have established themselves

they have greatly diminished the plague of usury practised by the

"banyas," or village money-lenders, lowering the rate of interest from

its former crushing range of 20 to 75 per cent. to a range averaging

from 9 to 18 per cent. Of course such phenomena are as yet merely

exceptions to a very dreary rule. Nevertheless, they all point toward a

brighter morrow.[231]

But this brighter agricultural morrow is obviously far off, and in

industry it seems to be farther still. Meanwhile the changing Orient is

full of suffering and discontent. What wonder that many Orientals

ascribe their troubles, not to the process of economic transition, but

to the political control of European governments and the economic

exploitation of Western capital. The result is agitation for

emancipation from Western economic as well as Western political control.

At the end of Chapter II we examined the movement among the Mohammedan

peoples known as "Economic Pan-Islamism." A similar movement has arisen

among the Hindus of India--the so-called "Swadeshi" movement. The

Swadeshists declare that India's economic ills are almost entirely due

to the "drain" of India's wealth to England and other Western lands.

They therefore advocate a boycott of English goods until Britain grants

India self-government, whereupon they propose to erect protective

tariffs for Indian products, curb the activities of British capital,

replace high-salaried English officials by natives, and thereby keep

India's wealth at home.[232]

An analysis of these Swadeshist arguments, however, reveals them as

inadequate to account for India's ills, which are due far more to the

general economic trend of the times than to any specific defects of the

British connection. British governance and British capital do cost

money, but their undoubted efficiency in producing peace, order,

security, and development must be considered as offsets to the higher

costs which native rule and native capital would impose. As Sir Theodore

Morison well says: "The advantages which the British Navy and British

credit confer on India are a liberal offset to her expenditure on

pensions and gratuities to her English servants.... India derives a

pecuniary advantage from her connection with the British Empire. The

answer, then, which I give to the question 'What economic equivalent

does India get for foreign payments?' is this: India gets the equipment

of modern industry, and she gets an administration favourable to

economic evolution cheaper than she could provide it herself."[233] A

comparison with Japan's much more costly defence budgets, inferior

credit, and higher interest charges on both public and private loans is

enlightening on this point.

In fact, some Indians themselves admit the fallacy of Swadeshist

arguments. As one of them remarks: "The so-called economic 'drain' is

nonsense. Most of the misery of late years is due to the rising cost of

living--a world-wide phenomenon." And in proof of this he cites

conditions in other Oriental countries, especially Japan.[234] As warm a

friend of the Indian people as the British labour leader, Ramsay

Macdonald, states: "One thing is quite evident, a tariff will not

re-establish the old hand-industry of India nor help to revive village

handicrafts. Factory and machine production, native to India itself,

will throttle them as effectively as that of Lancashire and Birmingham

has done in the past."[235]

Even more trenchant are the criticisms formulated by the Hindu writer

Pramatha Nath Bose.[236] The "drain," says Mr. Bose, is ruining India.

But would the Home Rule programme, as envisaged by most Swadeshists,

cure India's economic ills? Under Home Rule these people would do the

following things: (1) Substitute Englishmen for Indians in the

Administration; (2) levy protective duties on Indian products; (3) grant

State encouragement to Indian industries; (4) disseminate technical

education. Now, how would these matters work out? The substitution of

Indian for British officials would not lessen the "drain" as much as

most Home Rulers think. The high-placed Indian officials who already

exist have acquired European standards of living, so the new official

corps would cost almost as much as the old. Also, "the influence of the

example set by the well-to-do Indian officials would permeate Indian

society more largely than at present, and the demand for Western

articles would rise in proportion. So commercial exploitation by

foreigners would not only continue almost as if they were Europeans, but

might even increase." As to a protective tariff, it would attract

European capital to India which would exploit labour and skim the

profits. India has shown relatively little capacity for indigenous

industrial development. Of course, even at low wages, many Indians might

benefit, yet such persons would form only a tithe of the millions now

starving--besides the fact that this industrialization would bring in

many new social evils. As to State encouragement of industries, this

would bring in Western capital even more than a protective tariff, with

the results already stated. As for technical education, it is a worthy

project, but, says Mr. Bose, "I am afraid the movement is too late, now.

Within the last thirty years the Westerners and the Japanese have gone

so far ahead of us industrially that it has been yearly becoming more

and more difficult to compete with them."

In fact, Mr. Bose goes on to criticize the whole system of Western

education, as applied to India. Neither higher nor lower education have

proven panaceas. "Higher education has led to the material prosperity

of a small section of our community, comprising a few thousands of

well-to-do lawyers, doctors, and State servants. But their occupations

being of a more or less unproductive or parasitic character, their

well-being does not solve the problem of the improvement of India as a

whole. On the contrary, as their taste for imported articles develops in

proportion to their prosperity, they help to swell rather than diminish

the economic drain from the country which is one of the chief causes of

our impoverishment." Neither has elementary education "on the whole

furthered the well-being of the multitude. It has not enabled the

cultivators to 'grow two blades where one grew before.' On the contrary,

it has distinctly diminished their efficiency by inculcating in the

literate proletariat, who constitute the cream of their class, a strong

distaste for their hereditary mode of living and their hereditary

callings, and an equally strong taste for shoddy superfluities and

brummagem fineries, and for occupations of a more or less parasitic

character. They have, directly or indirectly, accelerated rather than

retarded the decadence of indigenous industries, and have thus helped to

aggravate their own economic difficulties and those of the entire

community. What they want is more food--and New India vies with the

Government in giving them what is called 'education' that does not

increase their food-earning capacity, but on the contrary fosters in

them tastes and habits which make them despise indigenous products and

render them fit subjects for the exploitation of scheming capitalists,

mostly foreign. Political and economic causes could not have led to the

extinction of indigenous industry if they had not been aided by change

of taste fostered by the Western environment of which the so-called

'education' is a powerful factor."

From all this Mr. Bose concludes that none of the reforms advocated by

the Home Rulers would cure India's ills. "In fact, the chances are, she

would be more inextricably entangled in the toils of Western

civilization, without any adequate compensating advantage, and the grip

of the West would close on her to crush her more effectively."

Therefore, according to Mr. Bose, the only thing for India to do is to

turn her back on everything Western and plunge resolutely into the

traditional past. As he expresses it: "India's salvation lies, not in

the region of politics, but outside it; not in aspiring to be one of the

'great' nations of the present day, but in retiring to her humble

position--a position, to my mind, of solitary grandeur and glory; not in

going forward on the path of Western civilization, but in going back

from it so far as practicable; not in getting more and more entangled in

the silken meshes of its finely knit, widespread net, but in escaping

from it as far as possible."

Such are the drastic conclusions of Mr. Bose; conclusions shared to a

certain extent by other Indian idealists like Rabindranath Tagore. But

surely such projects, however idealistic, are the vainest fantasies.

Whole peoples cannot arbitrarily cut themselves off from the rest of the

world, like isolated individuals forswearing society and setting up as

anchorites in the jungle. The time for "hermit nations" has passed,

especially for a vast country like India, set at the cross-roads of the

East, open to the sea, and already profoundly penetrated by Western

ideas.

Nevertheless, such criticisms, appealing as they do to the strong strain

of asceticism latent in the Indian nature, have affected many Indians

who, while unable to concur in the conclusions, still try to evolve a

"middle term," retaining everything congenial in the old system and

grafting on a select set of Western innovations. Accordingly, these

persons have elaborated programmes for a "new order" built on a blend of

Hindu mysticism, caste, Western industry, and socialism.[237]

Now these schemes are highly ingenious. But they are not convincing.

Their authors should remember the old adage that you cannot eat your

cake and have it too. When we realize the abysmal antithesis between the

economic systems of the old East and the modern West, any attempt to

combine the most congenial points of both while eschewing their defects

seems an attempt to reconcile irreconcilables and about as profitable as

trying to square the circle. As Lowes Dickinson wisely observes:

"Civilization is a whole. Its art, its religion, its way of life, all

hang together with its economic and technical development. I doubt

whether a nation can pick and choose; whether, for instance, the East

can say, 'We will take from the West its battleships, its factories, its

medical science; we will not take its social confusion, its hurry and

fatigue, its ugliness, its over-emphasis on activity.'... So I expect

the East to follow us, whether it like it or no, into all these

excesses, and to go right through, not round, all that we have been

through on its way to a higher phase of civilization."[238]

This seems to be substantially true. Judged by the overwhelming body of

evidence, the East, in its contemporary process of transformation, will

follow the West--avoiding some of our more patent mistakes, perhaps,

but, in the main, proceeding along similar lines. And, as already

stated, this transformation is modifying every phase of Eastern life. We

have already examined the process at work in the religious, political,

and economic phases. To the social phase let us now turn.

FOOTNOTES:

[206] F. B. Fisher, _India's Silent Revolution_, p. 53 (New York, 1920).

[207] Rev. A. J. Brown, "Economic Changes in Asia," _The Century_,

March, 1904.

[208] _I. e._ the purveyor of the native vegetable-oils.

[209] R. Mukerjee, _The Foundations of Indian Economics_, p. 5 (London,

1916).

[210] On these points, see Fisher, _op. cit._; Sir T. Morison, _The

Economic Transition in India_ (London, 1911); Sir Valentine Chirol,

_Indian Unrest_ (London, 1910); D. H. Dodwell, "Economic Transition in

India," _Economic Journal_, December, 1910; J. P. Jones, "The Present

Situation in India," _Journal of Race Development_, July, 1910.

[211] L. Bertrand, _Le Mirage oriental_, pp. 20-21 (Paris, 1910).

[212] Sir T. Morison, _The Economic Transition in India_, p. 181.

[213] Quoted by Jones, _supra_.

[214] _The Indian Review_ (Madras), 1910.

[215] Clarence Poe, "What the Orient can Teach Us," _World's Work_,

July, 1911.

[216] C. S. Cooper, _The Modernizing of the Orient_, p. 5 (New York,

1914).

[217] Morison, _op. cit._, p. 242.

[218] H. N. Brailsford, _The War of Steel and Gold_, p. 114 (London,

1915).

[219] A. Métin, _L'Inde d'aujourd'hui: Étude sociale_, p. 336 (Paris,

1918).

[220] In his book, _Trois Ans en Perse_ (Paris, 1858).

[221] Brailsford, _op. cit._, pp. 83, 114-115.

[222] Regarding conditions in China, especially the extraordinary

discipline and working ability of the Chinaman, see my _Rising Tide of

Colour against White World-Supremacy_, pp. 28-30, 243-251.

[223] Métin, _op. cit._, p. 337.

[224] A. Yusuf Ali, _Life and Labour in India_, p. 183 (London, 1907).

[225] "India in the Years 1917-1918" (official publication--Calcutta).

[226] Young and Ferrers, _India in Conflict_, pp. 15-17 (London, 1920).

[227] Sir W. M. Ramsay, "The Turkish Peasantry of Anatolia," _Quarterly

Review_, January, 1918.

[228] _I. e._ peasants and landlords.

[229] J. Chailley _Administrative Problems of British India_, p. 339

(London, 1910--English translation).

[230] Mukerjee, _op. cit._, p. 9.

[231] On the co-operative movement in India, see Fisher, _India's Silent

Revolution_, pp. 54-58; R. B. Ewebank, "The Co-operative Movement in

India," _Quarterly Review_, April, 1916. India's economic problems, both

agricultural and industrial, have been carefully studied by a large

number of Indian economists, some of whose writings are extremely

interesting. Some of the most noteworthy books, besides those of

Mukerjee and Yusuf Ali, already quoted, are: Dadabhai Naoroji, _Poverty

and Un-British Rule in India_ (London, 1901); Romesh Dutt, _The Economic

History of India in the Victorian Age_ (London, 1906); H. H. Gosh, _The

Advancement of Industry_ (Calcutta, 1910); P. C. Ray, _The Poverty

Problem in India_ (Calcutta, 1895); M. G. Ranade, _Essays on Indian

Economics_ (Madras, 1920); Jadunath Sarkar, _Economics of British India_

(Calcutta, 1911).

[232] The best compendium of Swadeshist opinion is the volume containing

pronouncements from all the Swadeshi leaders, entitled, _The Swadeshi

Movement: A Symposium_ (Madras, 1910). See also writings of the

economists Gosh, Mukerjee, Ray, and Sarkar, above quoted, as well as the

various writings of the nationalist agitator Lajpat Rai. A good summary

interpretation is found in M. Glotz, "Le Mouvement 'Swadeshi' dans

l'Inde," _Revue du Mois_, July, 1913.

[233] Sir T. Morison, _The Economic Transition in India_, pp. 240-241.

Also see Sir Valentine Chirol, _Indian Unrest_, pp. 255-279; William

Archer, _India and the Future_, pp. 131-157.

[234] Syed Sirdar Ali Khan, _India of To-day_, p. 19 (Bombay, 1908).

[235] J. Ramsay Macdonald, _The Government of India_, p. 133 (London,

1920).

[236] In _The Hindustan Review_ (Calcutta), 1917.

[237] Good examples are found in the writings of Mukerjee and Lajpat

Rai, already quoted.

[238] G. Lowes Dickinson, _An Essay on the Civilizations of India,

China, and Japan_, pp. 84-85 (London, 1914).

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