Stages of Capital: Law, Culture, and Market Governance in Late Colonial India (review)

This remarkable and clever book turns capitalism inside out, revealing the little-studied colonial legal structures that shaped both market governance and the commercial tactics in India. By demonstrating how a major merchant community, the Marwaris, adapted to the tide of colonial legislation about business practices in the 1880s to 1920s, Ritu Birla breaks critical new ground for historians in search of a way into the cultural and institutional construct we call the economy.

Birla’s main argument is that colonial law “distinguished between legitimate forms of capitalism and local ones embedded in kinship, between practices that directed capital to circulate for the benefit of the public or to be hoarded in what were considered ‘private’ extended family networks” (p. 3). Thus, even as the law posited a universal mode of market practice, it consistently acknowledged exceptions for “vernacular capitalism” whose kinship-based enterprises were governed as unproductive, ancient cultural institutions. Birla also examines indigenous capitalists’ creative efforts to challenge and deploy in their own fashion the categories of culture that regulated them. In her critical but sensitive portrait, the Marwari businessman emerges as “a colonial subject involved in a process of negotiation, contestation, and appropriation of new technologies of rule that presented capitalist development as a sovereign imperative” (p. 12).

Part 1 focuses on the legal framework of market governance—how it produced the legal construct of the Hindu Undivided Family and delegitimized indigenous capitalism. Birla is at her best describing the binaries that structured British legal improvisations—the distinctions between private versus public forms of business, charity, and social welfare and how colonial administrators used legal definitions, such as “public religious trust” to govern market practices and indigenous customs. Thus, colonial law allowed tax exemptions for Marwari charities that were deemed solely charitable, but not for those “multitasking…gifts to deities that operated simultaneously as social gifts and commercial investments” (p. 79). This focus on donor intention was at odds with Hindu notions of good works which focused on detached action but crucially determined whether the British ignored, taxed, or policed particular forms of indigenous charitable endowment. A fascinating subplot to this story is the degree to which the British were forced to take the commercial power of Hindu gods seriously, at least in a legal sense, by recognizing their juristic status (albeit as minors).

Part 2 examines Marwari negotiation with this legal framework. In the book’s most gripping chapter, “Hedging Bets,” Birla enlarges on British distinctions between speculation run by a managing agency and “gambling” conducted through kinship networks, which was seen as a threat to morality and social order. As practices like rain gambling were brought under the domain of criminal law, the Marwari community appropriated the colonial definition of cultural autonomy in a bid to evade such encroachments. Drawing on a range of courses, Birla captures the “double voice” of indigenous mercantile communities as they simultaneously spoke in favor of economic nationalism, reformism, and modernization, on the one hand, and passionately defended cultural and religious orthodoxy on the other (pp. 136–7). In an ingenious final chapter, Birla finds in the unlikely arena of age of consent disputes Marwari males’ claim to speak as the nation’s “economic experts” (p. 231). As they sold the joint family as a “model of social and material management,” they quietly legitimized the indigenous modes of commerce that the British had long delegitimized (p. 216). The commercial aspects of Marwari marriage were buried beneath a loud discourse about culture.

Throughout this deeply historical book, Birla remains attentive to shifts over time, detailing a highly contingent invention of tradition. Nevertheless, she proves unable to resist descriptors like “customary” for Marwari commercial practices and ethics. For instance, we are told that “customary economic practices came increasingly into conflict with new governmental disciplines for modern market ethics” (p. 139), even though the book goes to such lengths...