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Mar 17 2009

The colonial experience-4: The economic transformation

(For previous posts in this series, see here.)

Perhaps the biggest disruption caused by the British colonialists was the massive change in rural life and agricultural practices as a result of the conversion from a somewhat communal, subsistence form of agriculture, where much of the local resources used for food production (such as water supplies, grazing land for animals, and forests as a source of food and fuel) was held in common, to a plantation economy with strict private ownership.

Sri Lanka before colonial rule was a feudal country and in such systems land usage was controlled by the feudal lords or by tradition. The colonial powers, on the other hand, were mercantilist and later capitalist and in such systems, it was necessary to have clear rules about who owned what, especially land. Since many of the farmers in rural areas in Sri Lanka did not officially have title to the land they cultivated, the land being either held in common by the village or rights assigned by custom or by the feudal lords, it was easy for the central government to get ownership and convert that land into single crop plantations under the control of large British-owned companies.

Creation of this plantation-based economy resulted in the displacement of huge numbers of small farmers and villages from their traditional lands and crops and made them into landless peasants, suddenly transformed from self-sufficient people, albeit often at a bare subsistence level, into unskilled laborers, forced to seek low paying jobs on the plantations or in the newly growing urban areas. The problem of how to solve the huge problem of landless peasants has been the bane of all those former colonies that had a plantation economy imposed on them.

Furthermore, traditional foods like rice now had to be imported in large quantities because the land was now being used for cash generating export crops. Local communities that were largely self-supporting now became interdependent with distant communities and even foreign countries.

The increased trade within the country and between the country and the external world did result in development of the country and the creation of new sources of wealth due to the rise of the merchant class and its associated banking and financial and transport sectors. It also resulted in urban areas now becoming the centers of activity. As a result, the terms of trade between rural and urban now shifted to the benefit of the latter, thus impoverishing the rural sector. By ‘terms of trade’ I mean that while the rural sector produced basically food, the urban sectors supplied finished goods (clothes, machinery, etc.), and the amount of food (say bags of rice) that needed to be grown to purchase (say) a shirt was such that the labor of the rural peasant became worth much less than that of the urban worker, resulting in a decline in the standards of living of the rural peasantry, except for a few wealthy land and plantation owners.

In turn, the terms of trade between Sri Lanka and England favored the latter, because Sri Lanka was basically exporting low value-added agricultural cash crops while importing high value-added finished goods. Thus Sri Lankan labor became effectively much cheaper than British labor. As has been said, the British made Sri Lanka into a tea plantation economy, the Caribbean countries into a sugar plantation economy, all so that the English could have their perfect cup of tea at a cheap price.

There was little or no attempt by the British to create local industries since they wanted to increase markets for the products grown in England, and creating industries in the colonies would defeat that goal. The British were content to keep Sri Lanka as basically an agrarian country producing food for the British and world market, and as a place to sell (or more appropriately dump) their own finished products. For a long time after the end of colonial rule, clothes, cars, canned goods, toys, etc. sold in Sri Lanka still came almost exclusively from England. It was only after independence that local industries started being created on a wide scale.

Having this captive market in the colonies was good for the colonial powers in the short run but actually harmful to them in the long run. While they still controlled the colonies, it enabled them to avoid having to compete with other rising world economic powers like the Americans. But this also discouraged them from investing in making improvements. As a result, when these colonial markets became open to the world as a result of the post-World War II movements for independence, the British found their products were no longer competitive in terms of quality or price. It used to be, for example, that when I was a child almost all the cars in Sri Lanka were English brands like Austin, Morris, Vauxhall. Rover, Triumph, and all the buses were made by British Leyland. The rapid decline in their market share following independence was quite remarkable, though one can still find forty year-old models on the roads.

So although Sri Lanka was modernized by the British in some ways, like all other colonies it seriously lagged behind in its own industrialization and in the production of finished goods for domestic consumption and for export. The net result was the steady siphoning of the wealth of the land from rural Sri Lanka to urban Sri Lanka and from there to England, with urban Sri Lanka getting some of the crumbs that fell in transit. These crumbs took the form of modern towns and cities and the creation of an educated urban elite.

This latter group plays an important role in how attitudes towards colonialism were shaped, with some seeing the British presence as largely positive and others as negative, depending on how much they personally benefited. The ambiguity of their response reflects the contradictory role that the urban centers played in colonial times, benefiting in some ways from colonial rule and losing in others. I will expand on this later.

POST SCRIPT: What about the aqueduct?

This clip from Monty Python’s Life of Brian about Roman rule in Palestine captures well the inherent ambiguity of the relationship between the colonizing power and the colonists.

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