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

Rarely have historians endeavored to include studies of indigenous mercantile capitalism in their accounts of colonial India. In this ambitious, excitingly original work, the kin-based mercantile firm, embedded in the undivided Hindu joint family, takes center stage in the creation of a modern India. Basing her study upon the Marwaris, a Rajasthani community that rose to prominence in Calcutta from the 1890s, Birla deftly shows how the British, baffled by its mixture of public and private elements, of kinship and the market, sought to confine the family firm within the purview of the personal law that governed succession and inheritance, and to deny it standing in the arena of contracts and capital. Not surprisingly, this decision, implemented in the commercial and financial legislation of the Raj, posed immense difficulties for both government and merchant.

In several suggestive chapters, Birla discusses the implications of this decision for the family firm, most notably in the assessment of how income taxation affected charitable trusts and philanthropy. To put an end to the use of charitable gifts for profit-making purposes, the British were, for instance, driven to defining the "idol," or Hindu deity, as a legal person able to hold property, thereby allowing the government to regulate bequests to shrines. Thus, gifting was "mapped along the axis of public and private" and transformed into a contractual relationship compatible with the modern sovereign state (99, 105).

In similar fashion, Marwari indulgence in speculative wagers, not only in the commodities futures market but also in such seemingly innocent pastimes as betting on the amount of monsoon rainfall, drew British suspicion. Unless accompanied by contracts for delivery of goods, speculation—in the British view—made public that which "ought to have been private pecadillos" (171). The British took care, however, in their suppression of gaming to exclude any prohibition of betting upon horses!

Eventually, the Marwaris themselves came to acknowledge a distinction between kinship and commerce. Seeking respectability within the modern state, they "presented the family separately from the commercial mechanism of the firm" (212). Hence, they accepted the family as existing within a "private" sphere and claimed the right to regulate its practices themselves. Turning to their own advantage the enduring British belief in the existence of a "timeless" India, Marwaris now imagined the joint family as an "ancient religio-cultural institution" to be protected for its own sake (204, 210). Marriage, above all, was to be kept outside the civil law of contract. In the end, Birla concludes, "those who, like Marwaris, claimed to be legitimate agents of Capital became, at the same time, subjects of Culture" (231).

Since this book is a case study of only one community, though admittedly a very influential one, it is difficult to assess how far Birla's conclusions may apply to other mercantile groups. Furthermore, given that Birla utilized mainly government records and published materials, one could question how fully she presents the Marwari perspective. Still, this book brings together economics, law, and history in a powerful vision that shapes afresh our understanding of capitalism and colonialism.