A hundred years ago, Karl Marx was a regular correspondent of the New York Tribune, one of the direct ancestors of today's New York Herald-Tribune. Among his communications was one, published on August 8, 1853, entitled "The Future Results of British Rule in India." Though he knew little of India's past, and though some of his predictions for the future have not been borne out by subsequent events, Marx nevertheless had a remarkably clear insight into the nature and potentialities of Indian society as it existed in his time. "[The British] destroyed [Hindu civilisation]," he wrote, "by uprooting native industry, and by levelling all that was great and elevated in the native society." Political unity was imposed by the Indo-British army, strengthened by the telegraph, the free press, the railroad, and ordinary roads that broke up village isolation-all noted by Marx as instruments of future progress. But he stated clearly:

A hundred years have passed, including nearly a decade of freedom from British rule. What is the situation today and the outlook for the period ahead?

One frequently hears the argument that India still has a backward economy combining elements of different historic social forms, that feudalism is still powerful, that the country has not outgrown its erstwhile colonial framework, and that it is relapsing into the status of a dependency of the great imperialist powers, Great Britain and the United States.

We shall comment on these various questions as we proceed. But one point needs to be made with all emphasis at the outset. There can be no doubt, it seems to me, as to who rules India today: it is the Indian bourgeoisie. True, production is still overwhelmingly petty bourgeois in character. But this cannot be more than a transitory stage, and already the nature of the class in power casts a pervasive influence over the political, intellectual, and social life of the country.

Feudalism's decline in India may be said to date from the inability of Indian feudalism to defend the country against British penetration. To be sure, the British conquered and held the country by means of an Indian army, paid from India's resources and under British discipline; though in this respect the feudal powers of the day were not so different as might at first appear, since their own armies, also maintained at Indian ex pense, were often staffed by European drill sergeants and artillery experts. The difference-and it was a crucial difference- was that the British paid all their soldiers regularly in cash every month, in war or peace, paying also for supplies acquired during the march or for the barracks. The contrast is pointed up by the opposing Indian factions that fought the Battle of Panipat (A.D. 1761). Ahmad Shah Durrani's soldiers mutinied after winning the battle because they had not been paid for years; while their opponents, the Marathas, maintained themselves by looting the countryside. Faced with opposition of this kind, British-led arms were bound to triumph. (The same contrast-again involving the spoils of India, though indirectly- could be observed a few years later when the British defeated Napoleon in Spain; the French army lived off the countryside while the British used their superior wealth, much of it extracted from India, to pay the very Spaniards they were defending for all supplies.)

Indian feudalism tried its strength against the British bourgeoisie for the last time in the unsuccessful rebellion of 1857. Soon thereafter, the British abandoned their long-standing policy of liquidating feudal principalities and instead began to bolster up remaining regimes of this kind-provided they were weak enough to be dependent and hence compliant. Marx noted that the very same people who fought in the British Parliament against aristocratic privilege at home voted to maintain far worse rajahs and nabobs in India-as a matter of policy, for profit.

Despite British support, and in a sense because of it, Indian feudalism no longer had any independent strength and vitality of its own. Its economic basis had been ruined by the construction of railroads, the decay of village industry, the establishment of a system of fixed assessment of land values and payment of taxes in cash rather than in kind, the importation of commodities from England, and the introduction of mechanised production in Indian cities. The role of the village usurer changed. Previously he had been an integral part of the village economy, but he had been legally obliged to cancel a debt on which total repayment amounted to double the original loan: there was no redress against default since land could not be alienated nor could a feudal lord be brought to court. With British rule came survey and registry of land plots, cash taxes, cash crops for large-scale export to a world market (indigo, cotton, jute, tea, tobacco, opium), registration of debts and mortgages, alienability of the peasants' land-in a word, the framework within which land could gradually be converted into capitalist private property which the former usurer could acquire and rent out and exploit.

How thoroughly British rule undermined Indian feudalism has been dramatically demonstrated by events of recent years. The police action undertaken in 1948 by India's central government against Hyderabad, the largest and most powerful remaining feudal state, was over in two days. Political action in Travancore and Mysore, direct intervention in Junagadh and Kashmir, indirect intervention in Nepal, the absorption of Sikkim, the jailing of Saurashtra barons as common criminals- all these events showed that feudal privilege meant nothing before the new paramount power, the Indian bourgeoisie.

It should not be overlooked, however, that the decline of Indian feudalism had another side to it-the partial amalgamation of the old ruling class into the new. Just as the rise of factories and mechanised production converted primitive barter into commodity production and the usurer's hoard into capital, so too it opened a way for the feudal lord to join the capitalist class by turning his jewellery and his hoarded wealth into landed or productive capital. What the feudal lord could not do was to claim additional privileges not available to the ordinary investor, or any rights that would impede the free movement of Indian industrial or financial capital. This process of converting feudal lords into capitalists began relatively early: even before World War I, the Gaekwar of Baroda became one of the world's richest men by investing his large feudal revenues in factories, railways, and company shares.

Another process involving the liquidation of feudalism is exemplified by what has been happening since independence in the Gangetic basin. There the East India Company had created the class of Zamindars, tax collectors whose function was to extract tribute in kind from the peasants and convert it into cash payments to the company. As time went on, the Zamindars acquired the status and privileges of landholders and in return provided valuable political support for British rule. In recent years, a new class of capitalist landlords and well-to-do peasants of the kulak variety has been substituted for the zamindars by legislative action (the zamindars, of course, receiving compensation for their expropriated holdings) .

Everywhere in India, by one means or another, feudal wealth has already become or is rapidly becoming capital, either of the owner or of his creditors. [Every feudalism known to history rested, in the final analysis, upon primitive handicraft production, and upon a special type of land ownership. The former of these is no longer basic in India, and the latter does not exist.] Talk of fighting feudalism today is on a level with talk of fighting dinosaurs. No part of the mechanism of coercion is now in feudal hands. The legislature is bourgeois (and petty bourgeois) in composition. The armed forces, the police, the judiciary are all directly under bourgeois control, where these functions would formerly have been carried out by feudal levies, retainers, or the feudal lords themselves. Even the beginnings of capitalist production in agriculture may be seen, notably the introduction of tractor cultivation in Uttar Pradesh and Gujarat, but with smaller manifestations all over the country, especially where industrial crops like cotton are grown and where transport conditions are exceptionally favourable.

The liquidation of Indian feudalism, then, is general and complete. But it is necessary to guard against drawing unwarranted conclusions from this undoubted fact. The older privilege is being replaced or expropriated only with the due compensation. No basic improvement has been effected in the condition of the rural population, still the overwhelming majority of the Indian nation. All agrarian reforms-community schemes, voluntary (bhoodan) redistribution of land, scaling- down of peasant indebtedness, counter-erosion measures, afforestation, and so forth-have turned out to be piddling. Hunger, unemployment, epidemic disease remain the permanent and massive features of Indian society. The sole achievements have been the elimination of older property forms (with recruitment of most former owners into the bourgeoisie) and the creation of a vast class of workers with no land and no prospect of absorption into industry as long as the social structure of India remains what it is.

BOURGEOISIE AND PETTY BOURGEOISIE.

Except possibly in a few negligible corners of recently integrated backward areas, Indian production today is bourgeois 'in the sense that commodity production is prevalent and even a small plot of land is valued and taxed in rupees. But it is still petty production, consisting for the most part of the growing of foodstuffs from small holdings by primitive, inefficient methods; the produce is still largely consumed by the producer or in the locality of production. Nevertheless, the petty bourgeoisie, inhomogeneous as it is in all but its greed, completely dominates food production and, through middlemen, controls the supply to towns and cities. Though roads and other means of communication have increased, still the density of the transportation network i$ very low by American, British, or Japanese standards. The present national Five Year Plan estimates the annual national income at 90 billion rupees (one rupee equals 21 cents), which it proposes to increase to 100 billion by 1956. But the total value of all productive assets in private hands (excluding fields and houses for rent, but including plantations) is estimated at no more than 15 billion rupees, while the central and local governments' own facilities are worth more than 13 billion rupees in the field of transport, electricity, broadcasting and other means of communication, and so on. These figures prove conclusively the petty-bourgeois nature of the economy as a whole and indicate clearly that the industrialisation of India under bourgeois management can proceed only through tight co-operation between government and private capital.

Therefore, the fact that the government is the biggest capitalist, the main banker, the greatest employer, and the ultimate refuge or ineffable solace of the bootlicking intelligentsia makes for only a formal, superficial, difference. The main question to ask is: what special class-interest does this government serve? Whenever it seems to rise above the classes, or act against the bourgeois interests, does it go beyond regulating individual greed, or at most holding the balance between the petty and the big bourgeoisie? Do the government's ineffective food regulations and costly food imports mean anything beyond assuring the petty-bourgeois food-producer his pound of vital flesh while the cities are supplied with food cheap enough for the industrial labourer to maintain himself at subsistence level on the wages the factory owners are willing to pay? The government today is undoubtedly in the hands of the bigger bourgeoisie, a fact which is shown no less by its personnel than by its policies which favour Big Business and impose only such restraints as serve the interests of the sub-class as a whole and prevent any single capitalist group from dominating the rest. Moreover, there is no question that the big bourgeoisie wants industrialisation.

In this connection, it is interesting to recall the economic plan hopefully drawn up (with the aid of tame economists) by the biggest capitalists and promulgated in 1944 (published at that time as a Penguin Special, No. S148). The scheme, to be financed from unspecified sources, called for a 500 per cent increase in industry, a 130 per cent increase in agriculture, and a 200 per cent increase in "services" within 15 years. The basic figures used by planners, however, related to the year 1932 and were hence way out of date. Not only did wartime inflation and its aftermath balloon the national income beyond the dreams of the capitalist planners, but the planned agricultural output would not have sufficed to feed the population even at starvation levels (for some years after the war, India was obliged to import a billion rupees worth of food annually and the imports still continue irregularly) .

To a far greater extent than is generally realised, the big Indian bourgeoisie owes its present position to two war periods of heavy profit making. World War I gave Indian capital its first great impetus and initiated the process of Indianising the bureaucracy. World War II vastly expanded the army and Indianised the officer corps; further, it swelled the tide of Indian accumulation and enabled the capitalists, by rallying the masses behind the Congress Party, to complete the process of pushing the British out of the country. How great the accumulation was during the most recent war and postwar period of inflation is indicated by changes in the relative importance of different taxes as sources of revenue: the agricultural (land) tax now accounts for less than eight per cent of total state revenue as compared to 25 per cent in 1939, while taxes on what by Indian standards may be called luxury goods (including automobiles) rose from negligible importance to 17 per cent of the total in the same period. [The government asked in 1957 for appropriations about 100 times the central budget at the beginning of World War II. The other side of the coin as always in periods of marked inflation, has been a decline in the real income of workers and other low-income groups. It is interesting to note that the current national Five Year Plan aims to restore the general living standard of 1939-then universally recognised as totally inadequate-without, of course curtailing the immense new power and wealth that have accrued to the bourgeoisie in the intervening years.

We encounter here one of the basic contradictions of the Indian economy, the decisive roadblock to rapid development under present conditions. The civilised money-makers of advanced capitalist countries are accustomed to looking on a five percent return as something akin to a law of nature, but not so their Indian counterparts. The usual rate of return on black- market operations in recent years is 150 percent, and even the most respectable capitalist's idea of a "reasonable" profit is anywhere from 9 to 20 percent. [The very same capitalists who ask for and obtain tariff. protection for their manufactures even before beginning to produce them for the market do not hesitate to hoard smuggled gold and jewellery to the tune of (a reasonably estimated) 100 million rupees per year. This not only shows their contempt for their own government, its laws, and its plans for industrialisation in the 'private sector', but further illustrates the petty bourgeois mentality even in the wealthiest Indians.]

This kind of profiteering, however, is incompatible with the balanced development of India's economy as a whole. Seventy percent of the population still works on the land or lives off it, holdings being mostly less than two acres per family and cultivated by primitive methods. Wages are low and prevented from rising by the relative surplus population which is always pressing for available jobs. In the countryside, at least 50 percent of the population is made up of landless labourers. These conditions spell low mass purchasing power and restricted markets. When even these restricted markets are ruthlessly exploited by a capitalist class snatching at immediate maximum profits, the result can only be industrial stagnation and growing poverty.

And indeed this is precisely what we observe in fact. Idle plant is widespread; night shifts have disappeared in most textile mills; other industries show machinery and equipment used to 50 percent of capacity or even less. It is the familiar capitalist dilemma, but in a peculiarly acute form: increase of poverty and idle resources but with no adequate incentives to invest in the expanded production which is so desperately needed. This is the pass to which bourgeois rule has brought India. There is no apparent escape within the framework of the bourgeois mode of production. [The situation was changed for a while by the "pump-priming" of the First Five-Year plan- a curious jump from a colonial to a pseudo-New-Deal economy; but future prospects are decidedly gloomier.]

COLONIALISM AND FOREIGN DOMINATION.

In a sense the tragedy of the Indian bourgeoisie is that it came of age too late, at a time when the whole capitalist world was in a state of incurable crisis and when one-third of the globe had already abandoned capitalism forever. In fact, the Five Year Plans mentioned above are self-contradictory in that they are obviously inspired by the great successes of Soviet planning without, however, taking any account of the necessity of socialism to the achievement of these successes: effective planning cannot leave the private investor free to invest when and where he likes, as is done in India, nor can its main purpose be to assure him of profitable opportunities for the investment of his capital.

The Indian bourgeoisie cannot be compared to that of England at the time of the Industrial Revolution, nor to that of Japan during the late 19th and early 20th centuries, nor again to that of Germany from the time of Bismarck. There are no great advances in science that can be taken advantage of by a country with preponderant illiteracy and no colonies to exploit. Under the circumstances, as we have already seen, rapid industrialisation runs into the insuperable obstacle of a narrowly restricted domestic market.

Do all these unfavourable facts mean that capitalist India must inevitably fall under the domination of foreign industrialists and financiers with their control over the shrinking capitalist world market? Must we see signs of such a relapse into colonial status when, for example, the Indian government invites powerful foreign capitalist groups to invest in oil refineries on terms apparently more favourable than those granted to Indian capital, including guarantees against nationalisation?

The bogey of a new economic colonialism can be quickly disposed of. For one thing, the Indian bourgeoisie is no longer bound to deal with one particular foreign capitalist power, and the answer to stiff terms from the United States and Britain has already been found in the drive to recovery of Germany and Japan. The Indian government has invited Krupp-Demag to set up a steel plant; the Tata combine comes to quite reasonable terms with Krauss.Maffei for locomotive works and foundries, and with Daimler-Benz for equipment to manufacture diesel-engine transport. The more advanced capitalist powers, in short, can be played off against each other (and even better against the USSR ) , as they could not be in the days of British rule. And for another thing, the guarantees against nationalisation granted to the great British and American oil monopolies are really no more than Indian Big Business itself enjoys. The only industries that have been nationalised in India are those which, in private hands, hinder the development of larger capital (for example, road transport in Bombay State, taken over without compensation) or those in which there was danger of big investors losing money (for example, the nationalisation of civil aviation, with heavy compensation to the former owners). The Indian bourgeoisie has taken its own precautions against genuine nationalisation and hardly needs to give itself the formal guarantees demanded by foreign capitalists. [Perhaps, the strongest of these, and the most crippling to the supposedly planned advance towards socialism, is the systematic creation of revenue deficits. The first deliberate step in this direction, taken as a sweeping measure in Bombay state (where the bourgeoisie is at its strongest) was the costly, wasteful, and palpably inefficient prohibition policy. Now, deficit state budgets seem quite the normal fashion, while parallel outcries against the Five Year Plan become louder].

No, the invitation to foreign capital does not mean sudden, unaccountable lunacy on the part of those now in power, those who fought so desperately only a few years ago to remove foreign capitalist control from India. Entry is not permitted in fields where Indians have investments and mastery of technique, as for example in textiles. Even in the new fields opened up to the foreigners-fields in which Indians lack both know- how and the assurance of sufficiently large and quick returns to justify heavy investment-a "patriotic" strike or two could ruin the foreign enterprises should they ever become a threat or a nuisance to the Indian bourgeoisie. Fissionable materials (uranium, monazite, ilmenite) which foreign interests wanted to buy at the price of dirt are being processed by a company financed by the government and directed by Tatas. (On the other hand, high-grade Indian manganese ore is still being exported unrefined for lack of a sufficiently strong profit incentive to Indian capital).

Invitations to foreign capital, however, do have one function in addition to that of giving a fillip to industrialisation (which could have been secured by inviting much more technical aid from the USSR and the People's Democracies). That additional function is to provide a measure of insurance against popular revolt. The Indian bourgeoisie shows unmistakable signs of fearing its own masses. The leading bourgeois party (the Congress) has not yet exhausted the reservoir of prestige built up during the period of its leadership in the struggle for national independence. In addition, the bourgeoisie controls the bureaucracy, the army, the police, the educational system, and the larger part of the press. And there are the opposition bourgeois parties, like the Praja-Socialists, which can be relied upon to talk Left and act Right, to win election on an anti- Congress platform and then turn around immediately after to a policy of co-operation with Congress politicians, as they did after the Travancore-Cochin elections last spring. Nevertheless, "defence" expenditures continue to take about two billion rupees a year, about half the central budget (and a half that the Five Year Plans do not even mention); and police expenditures mount strangely and rapidly under the direction of those who took power in the name of Gandhian non-violence. Extra- legal ordinances, (against which the bourgeoisie protested so vigorously when the British first applied them to suppressing Indian nationalism), are actually strengthened now for use against the working class; the Press Acts remain in force; and on the very eve of the first general election, important civil liberties were removed from a constitution on which the ink was scarcely dry.

All these factors together, however, will not prevent rapid disillusionment at promises unfulfilled, nor the inevitable mass protest against hunger, the ultimate Indian reality. There may come a time when the Indian army, officered by Indian bourgeois and aided by a transport system designed for an army of occupation, may not suffice. The Indian capitalists calculate, quite understandably, that it is safer to have foreigners interested so that they could be called upon to intervene with armed force in case of necessity.

But note that neither special political rights, nor monopolies, nor military bases have been given to any foreign power, and that even those (France and Portugal, backed by the United States and Britain) which still have pockets on Indian soil are being vigorously pushed out, by popular action as well as by politico-diplomatic demands. Colonial status would mean foreign control of Indian raw materials and domination of the Indian market, both today unmistakably at the hands of the Indian capitalists themselves. And there is always the hope that a third world war will lead to even more fantastic profits for a neutral India-as the ruling class dreams of neutrality.

The solution for India, of course, would, be socialism, which alone can create a demand rising with the supply, a solution which can be utilised not only by advanced countries but by backward countries ( as China is demonstrating) , and without which planning is futile. But just as the Indian bourgeoisie imports the latest foreign machinery for production, so, when all else fails, the latest capitalist developments in politics will also be imported. And this means fascism, in the long run the only possible alternative to socialism. Already the talk in circles that count is of the need for a "strong man." And models are at hand, from nearby Thailand to faraway Egypt and Guatemala.

Monthly Review (New York) , vol. 6, 1954, pp. 205-213. Nationalism, and its logical extension provincialism, are manifestations of the bourgeoisie. In the feudal period, the Peshwas defeated the Nizam more than once, but saw nothing wrong in leaving Marathi-speaking regions in the Nizam's possession. The political reorganisation of India on a linguistic basis into new states was thus an index of bourgeoisie development and competition. The in- violability of private property as guaranteed by the Constitution no longer suffices. Each local bourgeoisie wants full political control over its own hinterland to safeguard investments and to exclude powerful competitors. This was seen in the bitter strife over the creation-not even by pretence of freely expressed public opinion, but by police action--of the new, enlarged, hybrid, anomalous, bi- lingual state of Bombay. The quarrel passed off as one between Gujarathi and Maharashtrian. The real fight, however, was between the veteran, entrenched capital of Bombay city, and the newer money of Ahmedabad. The Maharashtra petty-bourgeoisie remained characteristically helpless in disunity, to the end. Those who doubt that the big bourgeoisie can do what it likes with the government might give some thought to the TELCO affairs being discussed publicly (for the first time) since September 5, 1957.

The chances of fascism have not been diminished by the 1957 election. These showed that the only state government able to show an honest, incorruptible, bourgeois administration, able to raise funds without deficit finance for an honest attempt to carry out the Nehru policy was led by the communists in Kerala. In addition, this regime had at least made a start towards dealing with the most serious fundamental questions: food, agrarian production, re-division of land, employment, education, yet within the bourgeoisie framework, without touching bourgeois property relations. The dangers of this example cannot have escaped the brighter minds of the ruling class, whose cleverness far outstrips their honesty.