Killing The Golden Goose - Global Trade Magazine
  December 16th, 2015 | Written by

Killing The Golden Goose

When Vasco Da Gama arrived in Calicut, India, in 1498, he found as interpreters some North African Moslems who had been in the city a while and knew the ropes. Legend has it that they took him aside to tell him his gifts for the port officials had been laughable—next time, they said, better bring gold. And how, Da Gama asked, should he acquire gold? Go to the kingdom of Kilwa, on the East African coast, they said—and be sure to bring textiles made in Gujarat, the Northwest Indian weaving center.

Before long, of course, the Europeans found in Latin America piles of precious metals beyond anything in Kilwa. But when the Dutch arrived in the Moluccas (Indonesia) a century after Da Gama’s voyage, they found their New World loot was not acceptable as payment for the spices they sought. Instead, the local nobles and merchants wanted to be paid in textiles from Coromandel, in Eastern India; before long the Dutch East India Co. found it necessary to have a trading post in Coromandel to carry on its Southeast Asian procurement. And over the 200 years following that (all the way down to 1800), a variety of European powers found that Indian textiles were the preferred way to pay for African slaves.

These cloths made up more than 50 percent of the goods exchanged by French traders for slaves in the two years (1775 and 1788) for which we have complete records; one Frenchman noted ruefully that while Francophone planters in the Caribbean could be forced to take French goods for their sugar, African traders refused, insisting on top-quality products. The British experience in Africa was similar until very late in the century, when their artisans finally learned to make passable imitations of Bengal and Coromandel fabrics.

In much of the world, then, Indian textiles were more liquid than money. They were also probably the first industrial product to have a worldwide market. Fine Indian fabrics reached more than just Southeast Asia and Africa: in the 1700s they drove most of the Ottoman silk industry to the wall, conquered Persia, and won a big chunk of the European market; indeed, they might have wiped out the English weaving industry if the Spitalfield weavers riots of 1697 had not been followed by strict quotas and high tariffs against all grades of Indian textiles.

Probably the only court in the eighteenth-century world not graced by Indian cloth was that of the Chinese emperor. Meanwhile, the cheaper grades of Indian cloth traveled equally well, clothing laborers from Southeast Asia to North America, including many of the slaves who had been sold for fancier Indian cloths. All told, India probably produced more than 25 percent of the world’s cloth; and since its own population (at most 15 percent of the world in 1800) was poor and lived mostly in hot climates, a good two-thirds of that was available for export.

What accounted for this fabulous success? In part, it was careful attention to customers’ changing wants: Even in the 1400s, it appears, Indian merchants often returned from Southeast Asia with drawings of new patterns that their trading partners wanted copied for next year’s fabrics. In part, it was superior access to a huge crop of high-quality cotton; except in China, no comparable source existed until the post-independence American cotton boom. But above all, it was highly skilled labor—much of it available at extremely low wages.

Indian wages in general were probably lower than those in China, Japan or Western Europe; and in Bengal, where huge rice surpluses kept food cheap, nominal wages were especially low. (Indeed, both Indian and other merchants redirected many of their orders for coarse cloth from Gujarat on India’s west coast to Bengal as the gap in food prices between the two regions grew in the late seventeenth and eighteenth centuries.) But within the general category of weavers were different levels of craftsmen, who presented very distinct problems to cost-conscious merchants.

While many weavers of coarse cloth were part-time weavers and part-time farmers, weavers of the finer cloths tended to be full-timers who lived in and around a few big cities (especially Dacca, today the capital of Bangladesh). Virtually all weavers received advances from merchants; these not only paid for needed raw materials, but paid the weavers’ living expenses until the cloth was finished and accepted. The merchants, of course, always tried to use these advances as leverage over the weavers; in time, they did succeed in reducing many skilled workers to perpetual indebtedness, and so broke their power to bargain. But for the more highly skilled weavers, the strong demand for their work enabled them to accept advances with impunity. If necessary, they could usually find a new buyer for their cloth so they could repay an advance from a particularly unreasonable merchant; or, better yet, they could find a new patron who would protect them when they reneged on their original contract without repaying the advance.

Coarse cloth weavers had much less assurance that they could market their goods to a new buyer at the last minute; but if the harvest season looked busy enough, they might just abandon their cloth and go back to agriculture full-time, supplementing work on their own farm with peak-season wage labor. Even politically connected Indian merchants could not always keep control of their weavers under these circumstances; and the correspondence of eighteenth-century European merchants is full of complaints about lost advances.

What finally brought an end to the reign of Indian textiles? In the long run, England’s industrial revolution, begun by firms largely dedicated to imitating Indian cottons for sale in African and American markets. But even before that, Englishmen in India, trying to hold back the challenge from Lancashire, had begun to kill the goose that laid the golden egg. When the English East India Co. (EIC) conquered Bengal in the 1750s, it immediately set out to eliminate all other buyers of cotton textiles for export and finally bring the weavers under thorough control. Various discriminatory measures hobbled other merchants: A new law made it a criminal offense to work for anybody else while someone had an outstanding advance from the EIC (even if he finished his work for both buyers). The EIC agents were empowered to post guards at the homes of weavers under contract to them. The EIC admitted that it paid anywhere from 15 to 40 percent less than other buyers, but expected these measures to help it get all the cloth it needed anyway; a company official told Parliament in 1766 that now that it ruled Bengal, the

EIC expected to double its cloth exports within a few years.
Instead, though, weavers took the only recourse they had against what was now effectively a state monopsony; they left their looms entirely, migrating or becoming agricultural laborers. Within a generation, the specialized weaving communities around Dacca had disappeared, and the city itself shrank to a fraction of its former size.

Countless looms in peasant homes that had once produced for export now only made cloth for fellow villagers. The EIC’s goals were no different in kind from those that had always motivated the merchants in this trade; but by pursuing them with a new ruthlessness and consistency, they had done the seemingly impossible, destroying their era’s premier industry in order to save it.


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