SOUTH ASIA RESEARCH, vol. 8, No.

2, November 1988

COMMERCE AND STATE POWER IN

EIGHTEENTH-CENTURY INDIA: SOME
REFLECTIONS*
Sanjay Subrahmanyam

Introduction
The ’long eighteenth century’ - vhich ve may take to mean a period extending
roughly from 1690 to 1830 - is a hard period to come to terms vith in Indian history.
This is not only because its processes are - or most certainly appear to be - far more
complex than those of preceding ’historical blocks’, but also on account of the
veritable explosion of historical sources that characterises this century. To the classic
Persian sources of the high Mughal period are added others, and the Indian regional
archival conglomerates (such as those of Rajasthan and of the Maratha states and
magnate households), are nov proving to be immensely detailed, as vell capable of
addressing issues vhich ve have no real vay of addressing in earlier periods. Add to
these Indian literary sources, business records, and the continuing outpourings of the
scribes of the Portuguese Estado da India, the Dutch Yerenigde Oost-Indische
Compagnie, the Dansk Ostindiske-Kompagni at Tranquebar, and the French
Compagnie des Indes Orientales, and ve are faced vith possibilities that no single
historian can confidently claim to deal vith in their entire range. It is scarcely
necessary to speak, of course, of the English East India Company sources, since these
have for long formed the staff from vhich eighteenth-century history is voven.
An important fact about a great number of the sources listed above is that they
privilege commercial activities and commercial groups to a considerable extent. To be
sure, this is not surprising in the case of the Dutch, French, Danes, or even of the
Portuguese and English, but it is significant that Indian regional archives in the period
also have a great deal more documentation dealing vith local, and regional trade, bills
of exchange and financial transfers, than exists in any previous epoch. This may be
seen as the result (or the symptom) of the process of groving commercialisation of the
state and state pover, reflected also in vhat D. H. A. Kolff refers to as the formation
Indian military labour market, and what Frank Perlin sees as the circulation of
of a pan-
knovledge concerning techniques of magnate household and state management,
including in the field of accounting.I Persian and other chronicles of the period

This paper vas vntten for a vorkshop on Commercial Groups and State Systems in
Eighteenth-Century India, held at the Centre for South Asian Studies, Cambridge University,
on 13 December 1988.

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grumble about precisely these social processes, posing it as one in vhich ’grocers’
( bakals) are undermining the state from vithin; they seek implicitly to contrast
eighteenth-century state formation vith a certainly exaggerated, but nevertheless
evocative, picture of a still older regime, comprising a less commercially-oriented
political elite, and a less politically poverful bazaar. The commercialisation of state
pover is related in various vays as vell to the most over vhelming and cumulative of
eighteenth-century processes - namely, that by vhich a group of ostensible traders, the
English East India Company, came by 1820 to dominate much of sub-continental elite
politics. Contemporary Indians vere exercised by this paradox, by vhich these
’merchants from the island of England [vho] ... had made a covenant vith their ovn
Padshah that... every group engaged itself in business in its ovn defined limits’, had
acquired pover and political rights of such magnitude.2 The transformation,
occupying the period from roughly 1720 to 1830, is necessarily therefore one of the
issues to be addressed in any treatment of commercial groups and state systems in
eighteenth-century India
Merchants and Insecurity
There appears to be little doubt that ve are today in a rather better position to address
these issues than, say, ten years ago. For one, the last ten years have brought a
proliferation of studies using the English and Dutch Company archives (though the
French and Danish archives are still relatively underutilised), and as a result a number
of specialised studies of ports, trading regions and commercial interests exist. Some
of these deal vith the Companies themselves or their servants, but others are
concerned to address in explicit terms the role of Indian merchants, not merely as
dallals and dubashis for Europeans, but as independent actors. Where such Indian
merchants are concerned, perhaps the most videly knovn study is Ashin Das Gupta’s
Indian Merchants and the Decline of Surat, c. 1700-1750. Das Gupta’s
characterisation of the relationship betveen commercial groups, independent actors,
and state pover has been influential, for despite its apparently positivistic tone, his
monograph does seek to provoke a discussion using rather bold generalisations. He
informs us that the merchant in eighteenth-century Mughal Gujarat vas ’basically an
insecure man’, and goes on to add that, ’if one is looking to the relationship betveen
the merchant and the state in Mughal India then the picture presented by Michael
Pearson appears perfectly valid for Surat in the early eighteenth century. The
merchant lived in his ovn vorld and vas expected to fend for himself. The state
neither exerted itself much to protect him nor on the other hand vould it make life

1 D. H. A.
Kolff, Soldiering in India, 1500 to 1857, (Cambridge, 1989, forthcoming);
Frank Perlin, ’State Formation Reconsidered’, Modern Asian Studies, 19, 3, 1985, pp. 415-
80.
2 Burhan Ibn ed. S. Muhammad Husayn Nainar, (Madras,
Hasan, Tuzak-i-Walajahi,
1934), pp. 97-8.

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impossible for him’. 3 A typical case of such an insecure merchant, vho had to fend
for himself, is, in Das Gupta’s viev, the Bohra entrepreneur Mulla Abdul Ghafur
( 1621?-1718 ), vho, it is stressed vas a ’merchant gentleman, but vas not ... a
political animal’. Despite his enormous vealth, estimated at his death at 85 lakh
Mughal rupees, and his fleet of seventeen ships vith a carrying capacity of over 5, 000
tons, he vas still ’a pedlar ... in his isolation, his uncertainties, and his basic
dependence upon forces he could do nothing to control’. And vhat Ghafur or his
contemporary Osman Chellaby could not control, ve can scarcely believe it vas given
to smaller operators to control; thus, all merchants in vestern India vere, if not
victims, at least passive in a political sense.
Or vere they? On Das Gupta’s ovn evidence, this proves a rather difficult
question to resolve. For, contrasted to Abdul Ghafur is his ovn grandson Mulla
Muhammad Ali, a man vho vas (ve are informed) in the 1720s in Surat’the pover
behind the local throne’, and determined to live like a prince rather than a merchant’.4
This entrepreneur, according to the Mirat-i-Ahmadi, built for himself a stronghold on
the island of Prem (near Gogha), vith a turret and citadel. When the fortress had to be
abandoned on account of the less-than-congenial reptile population of the island, he
returned to his grandfather’s vharf at Athva, vhere again he built ’strong
fortifications vith turrets and citadel’. Not only this, he appointed the local kiladar and
kotwal, and began to unload his goods there, rather than at Surat. Hov does such a
figure fit in vith a social system in vhich the merchant lived in his ovn vorld and the
Mughal officials in their ovn? To resolve this difficulty, Das Gupta resorts to a form
of explanation vhich may be termed ’Buddenbrooks logic’ (from Thomas Mann’s
German bourgeois family vhich, in successive generations, moved from the pursuit
of profit to the pursuit of pover, and finally to ’culture’). Das Gupta for his part
vrites:
Abdul Ghafur had begun life as a poor man, and had climbed into
affluence and his one passion vas to become richer. Muhammad Ali
vas born into affluence and his one passion vas to become poverful.
Ghafur never vished to be anything but a merchant; Ali dreamed of
becoming a prince. 5
Unfortunately, he died too soon, poisoned at the orders of rivals in July 1733, and
thus Mann’s prognosis cannot be tested further; his sons, to our knovledge, did not
have the opportunity to vrite ghazals.
Still, in viev of the general outlines of the posited relationship betveen
commercial groups and the state, it is not surprising that the mercantile vorld of Surat,

3 Ashin Das
Gupta, Indian Merchants and the Decline of Surat, c. 1700-1750,
(Wiesbaden, 1979), pp. 13-15.
4
Ibid.,p. 199, citing Al1 Muhhamad Khan, Mirat-1-Ahmadi, trans. M.F. Lokhandavala,
(Baroda, 1965), pp. 457-62.
5 Das
Gupta, Indian Merchants, p. 198.

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as portrayed by Das Gupta, declines as a result of an autonomous political collapse.

The post-Aurangzeb anarchy disrupts trade routes vhich link Surat to its hinterland
and to Agra; the simultaneous decline of Safavid pover in Iran, and the protracted civil
var amongst the Zaidi Imams of Yemen in this period are the remaining pieces of the
puzzle. In all this, merchant groups are victims, sometimes resentful, usually
uncomprehending, but alvays victims of forces far larger than those vhich they can
grasp from their vorld - to vit, political forces.
The preceding paragraphs may seem to caricature Das Gupta’s thesis, but this
is not so. In so many vays a model piece of research, especially in its detailed use of
Dutch archival sources, it also needs to be examined for its general propositions.
Satish Chandra has vritten recently that the viev that Mughal India vas in general in
an anarchic state in the first half of the eighteenth century is integral to Das Gupta’s
explanation of Surat’s decline, but Das Gupta for his part is careful to state that
’[vhile] the decline of central control ... led to some measure of regional
consolidation, Gujarat vas not one of the favoured areas’.6 Other critiques are more
serious: Hans van Santen’s portrait of Surat in the mid-seventeenth century is quite
clear in demonstrating that half a century before the heyday of Abdul Ghafur, the
vorlds of merchants and politics vere scarcely separated from each other.7 Did this
change, then, over the period 1660 to 1690, and if so vhy?
But perhaps the greatest difficulty lies in generalising from the experience of
Surat. Das Gupta’s thesis has been extended farther afield of late by S. Arasaratnam,
vho argues that commercial groups in eighteenth-century Coromandel stood in an
even veaker position in relation to the state than in Gujarat. Moreover, like Das Gupta
and P. J. Marshall, Arasaratnam appears anxious not to link causally the decline of
Asian shipping to European competition or the use of force. Instead, the prior decline
in Asian mercantile activity, explained vith. reference to home-grovn crises in Asian
political systems (as vell as civil vars, unstable dynastic structures and revenue-
farming), is vhat facilitated the subsequent rise of European merchants as political
entrepreneurs and of the English Company as the pover it vas already by 1760 8 On
the other hand, the generalisability of the Das Gupta thesis has been disputed, too, by
Sushil Chaudhury in his essays on Bengal, vhere he portrays merchants as almost

6 Satish
Chandra, The Eighteenth Century in India; Its Economy and the Role of the
Marathas, the Jats, the Sikhs and the Afghans, (Calcutta, 1986); also see Das Gupta, IIbid., p.
8.
7 Cf. H. W. van Santen, De Verenigde Oost-Indische Compagnie in Gujarat en
Hindustan, 1620-1660, Ph.D dissertation, Leiden Uriversity, (Leiden, 1982), pp. 18-21.
8 S.
Arasaratnam, Merchants, Companies and Commerce on the Coromandel Coast,
1650-1740, (Delhi, 1986), and for a critique, Sanjay Subrahmanyam, ’Asian Trade and
European Affluence? - Coromandel, 1650-1740’, Modern Asian Studies, 22, 1, 1988, pp.
179-88. Also see Peter J. Marshall, ’Private British Trade in the Indian Ocean before 1800’, in
Ashin Das Gupta and M. N. Pearson, (eds.), India and the Indian Ocean, 1500-1800,
(Calcutta, 1987), pp. 276-300.

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vholly different in their interface vith the state than their counterparts in Gujarat.9
His evidence is fragile, hovever, and the issue vill bear further investigation in the
Bengal case.
The Prosperous Eighteenth Century?
It appears to me to be a central problem to reconcile this interpretation vith a quite
different picture of the eighteenth century that has been dravn, also in the last decade
or so, but using sources and focusing on areas that are somevhat different from those
mentioned above. For the Maratha Deccan, Frank Perlin and Andr6 Wink have
suggested an expanding commercial economy, certainly for the first three-quarters of
the eighteenth century, and Wink has further posited that this expansion vas a cause
of the decline of central Mughal authority. 10
Perlin’s arguments, vhich centre in part
on the commercialisation of agriculture and the groving use of money and near-

moneys, seem to suggest an economy in vhich merchant groups and bankers vere
still highly active rather than in a state of decline. Elsevhere, nearer to the Mughal
heartlam, Muzaffar Alam and C.A. Bayly make related arguments - Alam for the first
half of the eighteenth century, Bayly in respect to the latter too, they part. IHere,
argue, no visible decline of merchant activity may be seen. State pover does
fragment, and nev centres arise, but the disruption to the commercial economy seems
to be of far lesser order than had been held to be the case by historians vriting in the
1960s and 1970s (such as Irfan Habib and Noman Ahmad Siddiqui).
It is all too easy, in viev of the proliferation of literature, the specialisations
(and consequent non-overlapping nature of sources used by different groups of
historians) to allov this to become an exercise in ’exceptions that prove the rule’ save
that the rule does not yet exist. Indeed, though parts of Rajasthan, Kerala and
Karnataka and the areas mentioned above have received some attention for the
eighteenth century, there still remain other areas that are poorly understood, and these
may become the sites of still other case-studies vhich prove no more than the (for the
most part already assumed) ’uniqueness’ of each area. But, to the extent that one
believes that trade, the movement of credit, the movement of persons, diplomacy and
varfare, all contributed to make eighteenth-century India rather more integrated than,
say, vhat had been the case tvo hundred years earlier, it seems necessary to ask hov
the same broad set of historical circumstances could have produced Das Gupta’s
Surat, Perlin’s Maharashtra and Om Prakash’s Bengal (to name but a fev instances).

9 Sushil
Chaudhury, ’Merchants, Companies and Rulers: Bengal in the Eighteenth
Journal of the Economic and Social History of the Orient, 31,1, 1988, pp. 74-109.
Century’,Perlin,
10 ’State Formation’, also his ’Of White Whale and Countrymen in the
Eighteenth-Century Maratha Deccan’, Journal of Peasant Studies, 5, 2, 1978, pp. 172-237;
André Wink, Land and Sovereignty in India: Agrarian Society in the Age of British Expansion
,
1770 1870, (Cambridge, 1983).
11 Cf. Muzaffar
Alam, The Crisis of Empire in Mughal North India: A wadh and the
Punjab, 1707-1748, (Delh1, 1986), C. A. Bayly, Rulers, Tovnsmen and Bazaars: North
Indian Society in the Age of British Expansion, 1770-1870, (Cambridge, 1983).

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In saying this, it may appear as if nothing very nev is being said.12 In a

sense, this vas the thrust of Perlin’s oft-cited Past and Present article, vhich has

quickly made the transition form samizdat to scripture. Here, Perlin raises a vhole
series of questions which are as yet unsatisfactorily dealt vith, even though some of
these questions seem to me to have dubious empirical premises, such as the notion that
over the seventeenth century and the first half of the eighteenth century, mercantile
capital in different parts of India came increasingly to control producers through debt
mechanisms, be it in manufacture or agriculture. But other propositions are
remarkably useful, such as Perlin’s hypothesis concerning monetisation through
’gimcrack coinage’ and ’poor moneys’, as vell as his telling pre-emptive strike on the
Binghampton amoeba. Since the publication of that essay, other general pieces have
appeared as vell, which attempt also to think through in an orderly and systematic
fashion eighteenth-century processes, and many of which are strongly indebted to
Perlin’s vork - not least because they accept the necessity of integrating ’trading
company studies’ vith ’Indian regional studies’. Thus, in a recent article, David
Washbrook argues (folloving Perlin and Stein), for a sort of eighteenth century
’military fiscalism’, which is traceable in his viev through Mughal history, but vhich
is clearest in successor states like Hyderabad, Bengal, Maharashtra, Awadh and
Mysore, which ’exercised, or attempted to exercise, a much dee er control over
commerce and production than any of the regimes they replaced’. 1
He ties this in to
changes in form of property, and privileged entitlement, and to the ’grovth of
investments in vells, market centres, taccavi and nev crops’.
While Washbrook stresses the essential cohesion of the process, draving - like
Perlin - on monographic evidence from many parts of India, C. A. Bayly and Susan
Bayly attempt in another recent essay to differentiate distinct elements vithin this
broad stream. They argue that 4the key feature of eighteenth-century Indian elite
culture vas in fact the close interpenetration betveen the vorlds of revenue
administrator, the court priesthood, the merchant and the military mercenary captain
[vhich] facilitated a rapid circulation of resources from varfare, through agrarian
...

patronage to religion and kingly display’. 14 Having posited the diffusion of various
culturally reproduced patterns of consumption, as vell as of 4a general style of
management’, the question then arises of hov precisely these vorked in different
areas vhere the extent of state revenue take, and of economic and social stratification,
vere vastly different. Nov, one of the frequently stressed aspects of the study of the

12 Frank
Perlin, ’Proto-industrialization and Pre-colonial South Asia’, Past and Present,
98, 1983, pp. 30-95.
13 D. A.
Washbrook, ’Progress and Problems: South Asian Economic and Social
History, c. 1720-1860’, Modern Asian Studies, 22, 1, 1988, pp. 57-96, especially p. 69.
Also see Burton Stein, ’State Formation and Economy Reconsidered’, Modern Asian Studies,
19, 3, 1985, pp. 387-413.
14 Christopher and Susan Bayly, ’Eighteenth-Century State Forms and the Economy’, in
C. J. Dewey, (ed ), Arrested Development in India, (Delh1, 1988), pp. 66-90, especially p.
73.

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early-modem state in India is its relationship to the eco-systems of the agrarian region
from vhich it drev its resources. Though historians of southern India like Ludden,
Baker and Stein have been rather more apt to stress this than their counterparts to the
north, the argument of the Baylys seems to rest on somevhat similar premises. 15
The Baylys’ typology of eighteenth-century state forms is fourfold:

a. Lov economic and social stratification, and lov state

demand
revenue
b. Lov stratification, and high state demand
c. High stratification, and high state demand
d. And so, logically, high stratification and lov state
demand

Interestingly enough, examples can be found of all the types: (a) corresponds to the
case in Sikh and Jat territories, (b) to the situation in the Mysore of Hyder and Tipu,
(c) vhat obtained in Maratha Tanjavur, and (d) to the greater part of Kerala in the
to
period. Yet, are these mere descriptive categories, and if not, to vhat analytical use
might they be put? The argument appears to be that types (a) to (c) among these states
vere 4vu1nerable and liable to imbalance intrinsically’. In particular, type (a) tended to

compensate for its lov level of commercialisation (implicit in its lov level of
stratification?) by an external drive to plunder, while in type (b), conflicts vere the
result of the process of demanding and collecting a very large proportion of produce.
In the last tvo types, the agricultural systems tended typically to be far more
sophisticated in terms of technology, and usually depended on the use of large-scale
and complex irrigation, and they vere hence liable to face problems not so much on
account of intra-elite conflicts but at the level of labour control.
Some objections may be raised in respect of such an analysis, not hovever
because this typology is ’a collection of largely empty boxes’, as one administrative
historian of colonial India has alleged.16
In fact, one problem lies in reconciling these
ideal types to states vhich did in fact incorporate more than one of these patterns. For
instance, the early eighteenth-century Nayaka kingdom of Madurai, vhich contained
vithin it areas of both high and lov stratification, thus lending itself to a sort of
synthetic eco-typal analysis of the sort espoused by Ludden. A more thorny problem
is that of understanding ’stratification’ itself. Does one restrict this concept, as is
usually done, to peasant society, or is it to be extended to include the ’gentry’,
commercial interests resident in urban and semi-urban centres, and so on? Indeed,
surprisingly enough - given the general bent of both authors - this analysis leaves a

15 Cf. David
Ludden, ’Ecological Zones and the Cultural Economy of the Tamilnad
Countryside’, South Asia, (N.S.), 1, 1, 1978, Peasant History in South India, (Princeton,
1985); C. J. Baker, An Indian Rural Economy. The Tamilnad Countryside, 1880-1955,
(Delhi, 1984).
16 Clive Devey, ’Preface’, in Devey, (ed.), Arrested Development, p. viii.

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great many unansvered questions about the relation betveen the state and commercial
groups, and this is of particular importance since processes of ’centralisation’ in the
eighteenth century are frequently measured by historians not so much in terms of
conflicts betveen the central state and varrior peasants, but betveen the state and
commercial interests. The ’military fiscalism’ postulated by Stein (vith its close
parallels to Absolutist states in Europe, as vell as to sixteenth-seventeenth-century
Southeast Asian states like the Ayuthia of Prasat Thong, and the Aceh of Iskandar
Muda) as vell as its attendant ’Sultanism’, had already been identified before Stein’s
vritings, by Asok Sen and Nikhiles Guha, vith Tipu Sultan’s The key Mysore.17
features here appear to be commodity monopolies, and a bureaucratisation of trade, as
vell as changes in the var machine, all of vhich are far more successfully carried out
than any campaign at flattening out recalcitrant poligars.

The Centralisation of State Pover

That eighteenth-century ’absolutism’ in Indian states has to do vith trade is nothing
nev in the historiography. The state to vhich this appellation has been applied longest
and most consistently is the Travancore of Martanda Varma (r. 1729-58) and his
successor Rama Varma (r. 1758-98), and the seeds of such a viev may be found even
in late-nineteenth-century works.18 In the case of this state, it is argued that the
monarchs reduced the pover of the Nayar aristocracy (especially the so-called ettu
vittil pil1amar, and their associates, the yogakkarars of the Sri Padmanabhasvami
temple at Trivandrum), but that, more importantly, a strict monopoly on pepper as
v ell as other traded goods vas built up by the state betveen the 1740s and the 1780s.
Writing of the period, Ashin Das Gupta avers,
The merchants of Travancore proper vere turned into employees of the
state and made entirely dependent on it. Then, the merchants of the
principalities betveen Travancore and Calicut vere put out of business.
Even the poverful merchants of Cochin had to give up their trade in
pepper. Finally, Travancore challenged and broke the Dutch blockade
of the coast at sea.19

The transition seems to have been particularly rapid after about 1749, and vas clearly
defined in the Treaty of Mavalikara (1753), conclude between Martanda Varma and
the VOC. Thereafter, Dutch sources report that considerable pepper lands came under

17 See Asok Sen, ’A pre-British economic formation in India: Tipu Sultan’s Mysore’,
Barun De, (ed.), Perspectives in Social Sciences, (Calcutta, 1977), also see Anthony Reid,
’ Trade and State Pover in 16th and 17th century Southeast Asia’, Proceedings of the Seventh
IAHA Conference, (Bangkok, 1977).
18 P.
Shungoonny Menon, History of Travancore, (Madras, 1878), pp. 165-6.
A
19 Ashin Das
Gupta, Malabar in Asian Trade, 1740-1800, (Cambridge, 1967), pp. 32-3

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direct royal control, vhile those vho engaged in ’unauthorised trade’ in this
commodity stood in danger of being executed.
The existing historiography on Travancore in this period insists on the fact that
bureaucratisation closely accompanied this set of changes. A dalava7vas appointed to
head the military, fiscal and commercial administration, in vhat vas becoming a pan-
south Indian phenomenon, be it in Wodeyar Mysore, Madurai or the Marava state of
Ramanathapuram. Belov him vas established an elaborate hierarchy of Sanskritised
titles, from the valia sarvadhikariakar to the kariakars, manikarsand adhikaris. The
upper echelons of this bureaucracy seem for the most part to have been dominated by
migrants from the Tamil country (rather than the ’gifted commoners’ Das Gupta
suggests); among the best knovn is Martanda Varma’s first dalava7 Ramayyan,
described rather unkindly by K. M. Panikkar as ’an intriguing and unscrupulous
Brahmin’.20 Moreover, a substantial standing army, sometimes estimated at around
50, 000, vas created, artillery batteries vere set up facing the sea from Purakkad to
Kanyakumari, and an elaborate set of fortifications vas built, including the so-called
Travancore line, which defined the northern limits of the kingdom. Everything
appears to point, therefore, to a state vhich, in a context dominated initially by the
Dutch Company, built up an elaborate structure of resources by expropriating its
mercantile class. But modifications to the picture are beginning to be made. Susan
Bayly, vhile conceding that the latter half of the eighteenth century vas ’the period in
vhich Keralan society undervent more dramatic upheaval than at any point since the
collapse of the Chera dynasty in the 12th century AD’, vishes to modify the picture
that merchants vere the principal losers in this change. Rather, she argues that the
Syrian Christian community, one of the major mercantile groups of the area, vas ’the
centre of the nev political order’ under Martanda Varma and Rama Varma, and that the
Syrians enhanced their position as landholders and those vho controlled ’nev
monopoly posts’ (a case in point being Tachil Matthu Tharakkan).21
It vould seem
therefore that relations betveen tœ Travancore state and commercial interests vere not
vholly conflictual, although there is little doubt that the state enhanced its pover
substantially in relation to these groups during the eighteenth century.
But this brings us to the central paradox of the relationship betveen commercial
groups and the state as portrayed in the literature. For if, on the one hand, the
veakening of the state is seen as the reason for the vorsening position of Indian
commercial groups (cf. Das Gupta on Surat, or Arasaratnam on Coromandel after
1750), in part because this leaves the merchants to the tender mercies of the Company,
it is equally argued by some that the groving strength of the state is detrimental to
commercial groups. Was this then a game in which the dice vere necessarily loaded
against them? To address this question, ve must enter, if only briefly, into the forms
of mediation betveen commerce and state pover. Alternatively, one may ask vhether

20Cited in Das
Gupta, ibid., pp. 52ff.
21 Susan State and
Bayly, ’Hindu Kingship and the Origin of Community: Religion,
Society in Kerala, 1750-1850’, Modern Asian Studies, 18, 2, 1984, pp. 177-213.

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the social orders of the eighteenth century vere in fact so constituted that the ’state’
may be vieved as an entity vhich can be vholly separated from ’commercial groups’.
It is of course here that the contrasts betveen India and vestern Europe are
conventionally dravn: for Peter Marshall, ’vhile the commercial vorld of vestern
Europe and the Atlantic vas becoming predictable [in this period], the commercial
vorld of Asia remained in many respects unpredictable and may even have become
more so’. This reflects the failure, according to others (Michael Pearson and Bruce

Watson, for example) of commercial interests to cohere in any sense, or to turn

themselves into a force for the state to reckon vith.22 Or, to return to Das Gupta,
inevitably the most articulate statement on the question:
The merchants had the common interest in the continuity of trade. But
they had no common organisation vhich could assure this continuity.
The organisations they had vere basically social in character, such as the
Visha Shrimali Jain mahajan which gave Surat its nagarsheths, the jamat
of the Bohras from Patan vhich had Abdul Ghafur as a member, and the
anjuman of the Parsis from vhich emerged the famous shet khandan of
the Rustumjis [But] if ve think of the nagarsheth as standing at the
...

head of a city-vide mercantile organisation ve vould be mistaken. The

point is vorth repeating that there vas no such organisation. The role of
the nagarsheth vas essentially of an ad hoc character.23

But others disagree. Stevart Gordon, in a recent paper on the central India entrepot of
Burhanpur, underlines the role of the Bohras in that tovn and cites at considerable
length William Hunter’s description of the area in the 1770s, vherein Hunter stresses
the existence of a corporate netvork, not merely social, but also vith a religious and
politico-administrative hierarchy. Gordon goes on to claim that for such merchants,
’If the unit vas the family firm, vhich might have branches in several cities, then that
firm vas &dquo;embedded&dquo; in a larger, somevhat corporate Such organisation’.24
’merchant corporations’, vhose role and functions - both in respect individual
of
merchant houses and of the state - are hard to define, have been sited by Bayly in the
eighteenth-century middle Gangetic valley as vell. They bear more than a passing
resemblance to the ’merchant guild’ of pre-1500 southern India, and are obviously of

22 P. J.
Marshall, ’British Merchants in Eighteenth-Century Bengal’, Bengal Past and
Present, 95, 1, 1976, pp. 151-63; M. N. Pearson, Merchants and Rulers in Gujarat: The
Response to the Portuguese in the 16th Century, (Berkeley, 1976), I. B. Watson, Foundation
for Empire: English Private Trade in India, 1659-1760, (Delhi, 1981), Conclusion. Pearson’s
vievs have changed fractionally in more recent times, cf. his essay ’Merchants and States’, in
James Tracy, (ed.), The Economics of Merchant Empires, (Cambridge, forthcoming).
23 Das
Gupta, Indian Merchants and the Decline of Surat, pp. 13-14.
24 Stevart Gordon,
’Burhanpur: Entrepot and Hinterland, 1650-1750’, The Indian
Economic and Social History Review, 25, 4, 1988, pp 425-42.

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 107

considerable importance in understanding the nexus betveen commercial groups and

state.
In the south Indian case, despite large claims that are sometimes made, little
evidence has been produced to shov that these ’guilds’ (such as the Ayyavole or
Manigrammam) vere in fact concerned to regulate either the production of
commodities, or to define the spheres of operation of different sets of merchants.
Instead, the inscriptional evidence shovs them dealing vith temples to make corporate
donations, vith the state in the matter of commercial taxes, and in various other roles
vhich suggest that the ’guild’ vas fundamentally a social and political intermediary
betveen the merchant and the larger institution (be it state or temple). This is certainly
the context in vhich the last set of guilds for which one has information (namely the
hanjamana of the Kanara coast) appear to be portrayed, although in their case in
Portuguese records rather than their ovn inscriptions.
Once ve understand the south Indian’guilds’ in these terms, it becomes rather
more simple to understand their decline after about 1500. For nev forms of
intermediation arise and become videspread in southern India, in particularly a sort of
commercial magnate or ’portfolio capitalist’, vho has one foot in elite politics and
administration, and the other in commerce (be it of the seaborne or overland variety).
Similar personages are visible in north India in the eighteenth century, but there they
stand in somevhat different relation to commercial groups. In contrast to south India,
vhere the large banking house is all but unknovn up to the mid-eighteenth century,
the portfolio capitalist of the Gangetic valley tends to ally himself vith banker capital
and thus form an intermediate layer betveen older-style commercial groups and the
state. Being in essence janus-faced, even if almost chronically unstable, these figures
are crucial in mediating the impact of any large process - be it ’the collapse of central
pover’ or ’centralising fiscalism’ - on commerce. Such figures are also interesting in
their ovn right, for their combination of mercantile skills and attitudes and princely
pretensions: it is the eighteenth century, after all, vhich gives us not only Mulla
Muhammad Ali of Surat, and Shaykh Abdul Qadir of Kilakkarai, but Raja Balvant
Singh of the mid-Gangetic valley.
Elsevhere, C. A. Bayly and I have argued that this level of mediation betveen
state, commercial economy, and the sphere of prodwction, is of crucial importance for
an understanding of the transition to Company raj in the second half of the eighteenth

century.25 The vork of John Gurney and more recently Jim Phillips has shovn the
crucial role played by British entrepreneurs in defining that transition in the Carnatic
and Tanjavur, and ve have argued that such persons vere in turn folloving in the
footsteps of Asian portfolio capitalists.26 The picture elsevhere in India is admittedly
25 See
Sanjay Subrahmanyam and C. A. Bayly, ’Portfolio Capitalists and the Political
Economy of Early Modern India’, The Indian Economic and Social History Review, 25, 4,
1988
p.401-24.
26
John Gurney, The Debts of the Nawab of Arcot, 1763- 1776, Oxford D. Phil thesis,
1965, Jim Phillips, ’A Successor to the Moguls: The Navabs of the Carnatic and the East India
Company, 1763-1785’, The International History Review, 7, 3, 1985, pp. 364-89, Phillips,

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108

more complex. That the East India Company, as vell as its servants vho acted as
private entrepreneurs, tapped Indian netvorks of finance and commerce is nov vell-
recognised. For vestern India, Lakshmi Subramanian sees British Company
expansion, the ability to maintain armies and make var, as crucially underpinned by
netvorks of Indian finance. 27 In part, this is a development and a modification of a
theme set out some years ago by Karen Leonard, vho - using as evidence the history
of the firm of jagat seth in Navabi Bengal - set out to shov the crucial role played by
Indian merchant and banker capital in the transition from Pax Mughalica to Pax
Britannica2$
But it leads us to another question. Did the Company then bite the hand that fed
it? Or, put somevhat differently, having acquired political pover in late eighteenth
century, did the Company then turn on the very mercantile interests that had supported
it? Here, the ansvers have been somevhat divided. For Bengal, a long-held viev,
based on contemporary vritings like William Bolts’ Considerations on India Affairs,
maintains that Company servants soon terrorised the countryside, shook dovn
veavers and other producers, and reduced erstvhile collaborators to favning hangers-
on. For example, Sushil Chaudhury, vhile seeing the first half of the eighteenth

century as a period vhen ’Asian merchants in Bengal held fast to their grounds ... and
successfully resisted attempts to dictate terms’, contrasts this vith the last third of the
same century, vhen ’subjugation vas the keynote of the relationship betveen Asian
merchants and European txaders’.29 A similar note is struck by S. Arasaratnam in
studies on Coromandel trade in the latter half of the eighteenth century, vhere he
stresses, on the one hand, the reduction of the veaver form ’price vorker’ to 4vage
vorker’, and on the other, lays great importance on the coercive pover of the
Company and its servants. 3 0 In this viev, Plassey in the Bengal case, and the mid-
eighteenth century on the Coromandel plain, mark an important transition. Another
strand in the literature holds, hovever, that the crucial transition is somewhat later than

Philhps, ’Private Profit and Imperialism in Eighteenth Century Southern India: The Tanjore
Revenue Dispute’, South Asia, (N.S.), 9, 2, 1986, pp. 1-16.
27 Lakshmi
Subramanian, ’The Banias and the British: The role of indigenous credit in
the process of imperial expansion in the second half of the 18th century’, Modern Asian
Studies, 21, 2, 1987, pp. 473-510. The precise role of one particular group in this process
(namely, the so-called banias), has been disputed by Michelguglielmo Torri in a rejoinder to an
earlier paper by Subramanian, published in Modern Asian Studies, 21, 1987. Both vriters
base themselves solely on English East India records. For a viev based on Indian commercial
records see G.D. Sharma, ’Urban Credit and Market Economy in vestern India, c. 1750-
1850’, Third World Economic History and Development Group, London Conference, 8-10
September 1988.
28 Karen
Leonard, ’The "Great Firm" Theory of the Decline of the Mughal Empire’,
Comparative Studies
1, in Society and History, 21, pp. 151-67.
1979,
29 S.
Chaudhury, ’Merchants, Companies and Rulers’, p. 107.
30 S.
Arasaratnam, ’Trade and Political Dominion in South India, 1750-1790: Changing
Indo-British Relationships’, Modern Asian Studies, 13, 1, 1979, pp. 19-40, ’Weavers,
Merchants and the Company: The Handloom Industry in Southeastern India’, The Indian
Economic and Social History Review, 18, 3, 1980, pp 257-81

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 109

this, to vit in the late 1820s and early 1830s. This is after all the period vhen the mid-
nineteenth century price depression begins, and is also vhen all manner of ’settling
operations’ (such as the poligar vars in the south) have reached a conclusion. The
structure of trade vith Britain, and the importation of manufactures (vhich has
serious, if complex, effects on Indian handicrafts) can also be situated in this period.
Thus, to at least some historians, David Ludden’s statement that the 1820s are
’perched on the cusp betveen the long eighteenth and the later nineteenth
century transformations’ vould appear perfectly acceptable. 31
1 century
One can vager, though, that the last shot in this exchange - concerning the
relative significance of the mid-eighteenth century and the 1820s as a point of
transition - has not been fired. A vholly different argument can be made for the
significance of the mid-eighteenth century as a period of transition from the traditional
one (’the drain of vealth’ etc), espoused by old-fashioned vriters in the 4nationalist’
mould. This argument vould centre on the proposition that varfare vas substantially
transformed betveen the first and second half of the eighteenth century. Where the
earlier part of the century is concerned, Andre Wink’s vork has provided something
of a corrective (even if an exaggerated one), suggesting that vhat appear in history
books as battles of great importance vere in fact protracted negotiations, vith a lov
level of incidental violence. In a study of Wodeyar Mysore in the 1720s, I find his
chracterisation to have a fair amount of validity; a tribute mission by Saadatullah Khan,
di van of Arcot, to Srirangapatnam, described in quite stylised dramatic terms by a
Mysore chronicle, turns out - in the letters of Jesuits resident in the area - to have been
an elaborate negotiation vith some incidental bloodshed, largely of non-combatants. 32

But, some researchers have argued, things changed as the century progressed. D. H.
A. Kolff suggests that this had to do not only vith a greater efficiency in using
firearms, but in the incorporation of bayonets into varfare; cavalry forces too changed
their character. In Stevart Gordon’s viev,

At the opening of the century, Maratha troops vere lightly armed, highly
mobile and recruited mainly vith the promise of booty. Cash outlay
vas minimal, and the soldiers vent home for the monsoon. By mid-

century, there vere permanent camps of 50, 000 men and more, each
soldier needing a regular salary. 33

Not only this, but vars seem to have become more sanguine, damaging the producing
economy and netvorks of exchange to a far greater extent than before. Large-scale

31 Cf. David
Ludden, ’Agrarian Commercialism in Eighteenth-Century South India:
Evidence from the 1823 Tirunelvel1 Census’, The Indian Economic and Social History
Review, 25, 4, 1988, pp. 493-519.
32
Sanjay Subrahmanyam, ’Warfare and State Finance in Wodeyar Mysore, 1724-25: A
Missionary Perspective’, The Indian Economic and Social History Review, 26, 1989,
forthcoming, Wink, Land and Sovereignty in India.
33
Gordon, ’Burhanpur: Entrepotand Hinterland’.

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110

transfers of cattle and labour, as vell as damage to irrigation on an unprecedented

scale, characterise the vars of the 1770s and later, and a good example of this is
Hyder Ali’s campaign in Tanjavur.34
If this picture stands up to more detailed
scrutiny, it may indeed seem that the mid-eighteenth century marked a transition for
more reasons than the ones traditionally stated. It vould hovever still be a rather
different sort of change than that which marks the 1820s.

Conclusion
To conclude, I have attempted in this brief essay to survey - in an admittedly
idiosyncratic manner - a part of the literature of the past tvo decades which in some
the relationship of state pover to commerce in eighteenth-century
vay
exglores
India. 35 Inevitably, the essay is less than comprehensive in its coverage of issues,
partly because I have tried to resist the temptation to flog dead horses. But one lacuna
is the treatment of processes of production, for neither commerce nor state pover
could exist in the absence of a productive economy (unless one vere talking of
entrepot states, such as one finds in Southeast Asia in the early modern period).
Arguments concerning production processes, mercantile capital and state pover in
eighteenth century India have recently been advanced hovever in other vide-ranging
and easily accessible papers, from Perlin [ 1983] to Washbrook [ 1988]; it seems
hardly necessary to repeat points that have been made there. In vriting this piece, I
am, of course, avare of a vorrisome tendency for the secondary literature on the
eighteenth century to exist in a sort of self-sustaining limbo, somevhat adrift of any
recognisable primary sources. It is to be hoped that this essay, together vith other
recent literature, vill help somevhat to allay the suspicion (common enough among
historians of the later colonial period), that the rather abstract and schematic portrayal
of India in the eighteenth century in some ’revisionist’ vritings is in fact in dialogue
vith a solid sub-stratum of research, grounded in a variety of concrete historical
situations.

34
See, for instance, the evidence presented in Roland Lardinois, ’Deserted Villages and
Depopulation in Rural Tamilnadu, c. 1780-1830’ in Tim Dyson (ed.), Famine, Disease and
Development in India: Studies in the Subcontinent’s Historical Demography, London, 1989).
35
For a far more vide-ranging survey of the literature and issues, see. C. A. Bayly,
Indian Society and the Making of the British Empire, (Nev Cambridge History of India),
(Cambridge, 1988).

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