Famine relief and Laissez-faire
economics in 19th century British India
- Rune Møller Stahl, MSc. in Economic History
INTRO
The late 19th century witnessed some of the worst famines in Indian history, with
millions of deaths. In most cases the response of the British colonial
administration to the appalling mortality was very limited and characterised by
government non-intervention. In practice this meant that extent the authorities
relied on private trade to ensure food availability.
The British famine policy in India presents one of the largest experiments with
the application of a laissez-faire attitude to relief in times of hunger. The policy is
very close to the policy adopted in Ireland in the 1840s, but the consequences in
terms of death tolls were on a vastly larger scale.
Based on an examination of letters, reports and correspondence, concerning the
on the debates in the British colonial administration and the British public, this
paper will argue that economic doctrines of laissez-faire and free trade played a
central role in the formulation of the British famine policy. This role is
understated in the current research literature, where the background policies
are presented as a question of colonial extraction, racism or a wish to minimize
expenditure. I challenge this position and argue that the doctrine of laissez-faire
economics played a key role. The arguments for the strict relief policies seem to
be based on very similar principles that were developed in the debates in
England leading up to the Poor Law Amendment of 1834, although they were
applied under very different circumstances.
This means that the British famine relief policy in India is not only relevant for
the understanding of empire and colonialism, but also as a part of the history of
British poor relief.
HISTORICAL FACTS
In the late 19th century India experienced a very high level of famine
catastrophes. Between 1860 and 1910 the country saw more than 20 episodes
of famine with a total death toll of between 18 and 22 million people.1 This is
arguably the most fatal period in Indian history, and stands as a striking
contrast to the period after 1910, where the prevalence of catastrophes fell
dramatically.
It is especially the worst of famines - the Great famine from 1876-78, that hit
large part of southern and western India - that I will focus on today.
Despite the large number of famines, the end of the 19th century was not a
period of generalised agricultural deterioration. Between 1872 and 1900 Indian
agricultural labour productivity rose 0,4% per year, while the period 1900-47
saw a complete stagnation.2 Consequently, India exported food almost every
year during the 19th century, in stark contrast to the years after 1910, when the
growth in productivity had ended, and India had become a net-importer of food.
Yet, between 1910 and 1942 there was not a single major episode of famine.3
The fact that the worst famines took place in a period of relative benign
agricultural conditions, at least compared to later developments, tells us that the
precarious position of Indian peasants and labourers was not primarily a result
of drop in total food production.
Seavoy, 1986, 242; Maharatna, 1996, 15.
Broadberry & Gupta, 2010, 266.
3 Ghose, 1982, 374.
1
2
By and large the British policy toward these calamities were one of strict laissez
faire, as will be descried below. There is one exception, however,. The relief
efforts during the 1874 Bengal Famine saw willingness to bend the principles of
non-intervention for humanitarian reasons. The Government imported large
quantities of grain from Burma to keep prices down and wages paid by the
British administration were calculated solely by nutritional needs. As a result,
only 23 people died. This not only distinguishes the relief efforts in 1874 from
the efforts in 1876-78, but also from the government relief efforts during the
great famines of the 1890s, through the influence on the famine commission of
1880.4
In the following I will focus on the policy laid out by the government of India in
1876-78. The principles behind this policy were later affirmed by the famine
commission report in 1880.
PRINCIPLES OF BRITISH RELIEF POLICY
The famine relief policy of the British administration was based on strict ideals
of government non-interference. To a large extent the authorities relied on
private trade to ensure food availability in areas where the harvest had failed.
The government’s role was to ensure adequate transportation that made trade
possible, and only in the case of a complete breakdown in trade the government
would intervene and import grain actively.5 Price controls or ban on food grain
export were never imposed. To the extent that the government intervened
directly, it mainly took the form of public works like railroads and irrigations,
where relief was exchanged for hard labour, often at very low wages. Gratuitous
relief was given only to the completely starved or infirm.
4
Bhatia 1991, 87
5
Famine Correspondence 1878, 278.
In an official declaration from November 1877 Viceroy Lord Lytton lays out the
main principles behind the famine policy of his administration:
-
“1st: An abstinence by the government from all measures which might
interfere with the activity of private trade.
-
2nd: The initiation of a large scheme of public works as the essential part
of the relief system, other forms of relief being subsidiary.
-
3rd: All gratuitous relief to be as far as possible temporary, and all relief
camps to be maintained only for receiving and supporting the starving
and the infirm and for getting them into a condition to labour.”6
1: Unregulated grain markets
The first principle was based on the basic idea that self-regulating market forces,
ceteris paribus, would lead to the most efficient distribution of food, and thus
help the starving population. If the grain markets were functioning well, the
price mechanism would ensure enough grain in areas stricken by famine. As
scarcity would set in, the price would rise. This meant that imported grain would
flow to the stricken areas, where it would obtain a greater price than elsewhere.
-
This principle is ultimately based on the writings of Adam Smith, who wrote
in The Wealth of Nations: “[T]he unlimited, unrestrained freedom of the corn
trade (…) is the only effectual preventative of the miseries of famine.”
The issue of free trade was at the centre of the debates during the great famines.
The policy of the Government of India was clear. In accordance with laissez-faire
principles it remained central that the government did not intervene despite
rising prices. This would attract surplus corn from the rest of the country and, at
the same time, give rise to profit opportunities for grain merchants. John
Strachey stated this view in his address to the Legislative Council in Calcutta,
where he explained, “high prices are, at such times, the salvation of the country”.7
Declaration from Government of India 22 November 1877 (Famine Correspondence 1878, 278).
Legislative Council of the Governor-General at Calcutta, on the 27th December 1877 (Lytton et
al., 1878, 35).
6
7
While the Government of India upheld their view on prices during the entirety of
the Great famine, there were contesting voices heard from Madras. The
Government of Madras stated that the situation was so grim that the normal
rules of non-intervention had to be suspended, and the Government was to
secretly import 30,000 tonnes of grain that could be released into the market at
lower prices if there arose a tendency to hoard the grain.8
The Government of India under Lytton managed to put down this attempt to
meddle with free trade, and when Lord Salibury, the Secretary of State for India
tried to intervene on behalf of Madras Lytton replied the following:
“Do you intend to say that you think it is probable that Government ought
to make a large import of grain? We can foresee no circumstance under
which such government interference with private trade would not be a
ruinous mistake. (...) Free trade cannot coexist with Government
importation.”9 After this Lord Salisbury no longer insisted on a divergence from
the principles of free trade, and no more grain were imported from Madras
during the great famine10
2: Famine works and Labour requirements
The two last points in Lyttons policy, was based on the principle that relief
should only be exchanged in return for hard labour.
This principle was first put to a test in the Province of Bombay in late 1876. In
accordance with prior precedence the Government of Bombay had opened relief
works for the afflicted.11 In a statement of general policy on 18 December 1876
the Government of Bombay assured that despite being “strongly urged to depart
from this policy” by local pressure, they adhered “firmly and consistently” to a
policy of non-intervention “and exercised the utmost economy”. 12 The
8
Bhatia, 1991, 94
Famine Correspondence 1878, 117 (my emphasis).
10 Bhatia, 1991, 96
11 Bhatia, 1991, 91
12 Famine Correspondence 1877-III, 7.
9
Government of India still feared that the expenditure would be too high and sent
Richard Temple as a special envoy to ensure that expenses were not excessive. In
a letter of 24 January, he immediately ordered that “every person now on the
works be discharged who apparently can get on for a time, and let no person in
the future be admitted unless there is reason to believe that he or she is in
absolute need.”13 He went on to slash wages and institute “the so called “Temple
Wage”, which consisted of half a pound of rice, or around 2/3 of the subsistence
wages paid out in 1874. The level was so low that when Temple later tried to
institute it in Madras, Doctor Cornish, the Surgeon General of the Government of
Madras, wrote to protest against the wage and point out the “insufficiency of the
famine wage to supply the food necessary for the physiological requirements of
the body”.14
The worsening conditions in the famine relief works meant that in April 102,000
relief recipients left the works in an act of “passive resistance” according to
government reports.15 Despite the strike and the active protests Temple was not
moved, and he received support from the Government of India with orders to
uphold the harsh conditions to “guard against the danger of the population to
rely upon Government aid rather than their own industry and thrift”.16
Viceroy Lord Lytton claimed that he was inspired by the 18th century French
economist Turgot in his creation of useful public works like railroads and
irrigation, which would provide employment opportunities for famine victims
and create infrastructure that would help relieve future famines.17 In order to
make sure that no one took advantage of the works, without being properly
destitute an admissions test to the famine works was instituted. Often the works
were placed at a considerable distances from the areas hit by famine, in order to
ensure that only the most determined and needy would seek employment; only
people deemed sufficiently undernourished were allowed. Finally, the workload
.Famine Correspondence 1877-III, 26.
Letter to Temple 8 May 1877 (Famine Correspondence 1878, 20).
15 Government of India - 12 April 1877 (Famine Correspondence 1877-III, 349.
16 Famine Correspondence 1877-II, 32.
17Lytton et al., 1878, 73.
13
14
was made very strenuous in order to make it as unattractive as possible to
anyone but the most hungry. The importance placed on low wages and the
insistence on harsh conditions were not only a matter of cutting costs; it was also
a result of a fear in the administration and in the mind of the public that if you
gave people famine relief it would undermine the incentives to work. This is
often put in moralistic terms, as by Lord Lytton when he 12 August 1877
approved Richard Temples intent to “to keep the wages on relief works at the
lowest rate compatible with the health of the labourers; this being
necessary, not only in the interest of economy, but also to prevent the
demoralisation of the people”.18
Mike Davis has calculated that the value of the handouts of the Temple wage was
1627 calories daily, which is lower than at the Buchenwald concentration camp
during the Second World War19
The concern with making relief works unattractive also stemmed from a fear
that the government would end up being responsible for the support of large
parts of the population. This would put a strain on the already stretched fiscal
situation of the British administration; as it was formulated by the Famine
Commission: “The doctrine that in time of famine the poor are entitled to
demand relief (…) would probably lead to the doctrine that they are
entitled to such relief at all times, and thus the foundation would be laid of
a system of general poor relief, which we cannot contemplate without
serious apprehension”.20
The concerns voiced by the colonial administrators mirrored the fears of
creating a class of unproductive idlers that was raised during the debates on the
Poor Law Amendment in 1834 in Britain.21 Karl Polanyi has described how
Lytton, “Minutes” (Famine Correspondence 1878-IV, 114).
Davis 2002, 39
20 RIFC-I, 59
21 Blaug, 1963, 151
18
19
liberal reformers and advocates of laissez-faire wanted to use the threat of
hunger as a means to force the poor to work and thereby force them to live a
virtuous and productive life.22 The choice between hunger and employment
would compel the otherwise troublesome elements in society to live a
disciplined life.23
CONCLUSION
No matter what the ultimate causes of the famines in the late 19th century were,
it seems hard to deny that government inaction and harsh relief policy in many
circumstances aggravated the crises. The efforts during the 1874 famine show
that the British administration had the capacity to reduce mortality drastically, if
they chose to do so.
It remains to explain, then, why the colonial bureaucracy generally chose a
stance of non-interference in the face of mass morality. Throughout this paper I
have argued that the ideas of laissez-faire economics is an important key to this
question.
While the government policy obviously cannot be understood outside the
context of colonisation or notions of racial superiority, it does not appear that
these ideas were especially dominant within the colonial bureaucracy. If
anything, it seems that racist prejudices and notions of backwardness and
inferiority were less prevalent among the administrators in India, than among
the general public in Britain, that by and large, demanded humanitarian
interventions. The harsh policies were rather motivated by the same principles
that had been used in the debates about economic policy in England during the
19th century. Furthermore, it seems interesting that the two central debates that
launched the laissez-faire movement in Britain – the repeal of the Corn Laws of
22
Polanyi, 2001, 114
Mill describes how in a situation of guaranteed employment it only possible to discipline the
labourers ”by the power of the lash” (Mill, 1909 [1848], 363).
23
1846 and the Poor Law Amendment of 1834 – were mirrored by the two major
dogmas of the administrators in the 1870s: the unrestricted trade in grain and
the exchange of hard labour for government aid. The exact nature of the
influence of these debates in the response to dearth and famines within the
British Empire represents an interesting avenue for further research.
While the importance of government non-interference has generally been
recognised in the literature, the background are generally referred to as one of
pessimistic Malthusian fatalism. I will argue instead that this is not an accurate
representation of the debates in the colonial bureaucracy. In contrast to the
debate in Britain, ideas of overpopulation or inherent backwardness were not
dominant in the leading parts of the administration in India; instead, the
principles of non-interference were motivated by ideas of capitalist
developmentalism. These principles led to the view that a strict famine policy
was important, because government intervention would stand in the way of the
creation of an industrious nation with a disciplined workforce, clearly defined
property rights and a healthy business climate. In this respect, the principles
applied were not much different from the ones dominating the British debates
earlier in the 19th century. And the principles themselves, if not the way they
were practiced, are not that different from the ones underlying the debate on
economic development today.
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