Splendid Exchange, A
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By the early eighteenth century, cotton fabrics had deposed silks and woolens at the apex of the fashion world. Daniel Defoe observed:
Our wrought silks and our fine stuffs submit to that noble usurpation of printed calico; striped muslins have most gallantly deposed your manufacture of bordelace, and are sometimes sold for as great a price.32
The EIC had also discovered the salutary effects of annual changes in style. Defoe sniffed, “[That] the clothes [are] thrown by in England, not for their being worn out, but merely for their being out of Fashion is incredible, and perhaps are equivalent to the Clothing Expense of some Nations.”33 The Company also encouraged the concept of “undress,” or what we today call leisure wear—lightweight gowns and shifts worn in the privacy of the home.34
While enlisting high and low fashion in the service of the EIC, Josiah Child did not neglect the status of its Indian outposts. Less than a decade after its founding in 1600, the Company established its first base of operations at Surat (north of Bombay), the chief Mughal port, which had succeeded Cambay after the latter silted up. By the time Child became a director in 1677, the EIC had already established “presidencies,” or trading posts, in Madras (on India’s southeast coast) and Bombay. (Bombay derives its name from Bom Baia, or “good bay,” the name given to it by the Portuguese. In 1661, England’s Charles II had acquired it as a dowry from his Portuguese bride, Catherine of Braganza, and the port soon overshadowed nearby Surat.35) In 1690, under Child’s leadership, a third presidency was established in Calcutta. Eventually, these trading posts, whose main purpose was the purchase of textiles, would become the cornerstone of the British Empire.
An unabashed admirer of the Dutch system of fortified trading posts, Child rapidly built up the EIC’s military presence at the three presidencies. This policy paid off during the conflict between the Mughals and Hindu Marathas that raged between 1681 and 1707. He also solidified the complex “trading rules” required by the two-year “feedback loop” between the initial departure of cargoes of silver and trade goods from England and the arrival back home of calicoes.
By the end of the seventeenth century, the Company was shipping home more than 1.5 million cotton bolts and clothing items per year, which represented 83 percent of the total value of its imports.36 Spices were dead; cotton was now truly king.
Needless to say, the EIC’s competitors howled in protest. For example, the Levant Company sought in 1681 to prohibit importation of India’s superior cotton fabrics.37 Its arguments had the familiar ring of protectionist sanctimony, charging that purchases by the EIC had drained Britain of gold bullion in order to acquire
calicoes, pepper, wrought silks, and a deceitful sort of raw silk—calicoes and wrought silks manufactured in India being an evident damage to the poor of this nation and the latter of raw silks an infallible destruction of the Turkey trade.38
This was not all. The EIC also stood accused of exporting advanced English technology to India, having sent
into India throwsters, weavers, and dyers, and actually set up there a manufacture of silk . . . importing them ready made and dyed into England is an unspeakable impoverishment of the working people of this kingdom who would otherwise be employed therein and to the ruin of many thousands of families here.39
Josiah Child, recently elevated to the governorship of the EIC, carried the day, as he so often did:
The truth of the case at bottom is this: the importation of better and cheaper raw silk from India may probably throw some Turkey merchants’ profit at present though it doth benefit the kingdom. . . . What then? Must one trade be interrupted because it works upon another? At that rate there would be nothing but confusion in a nation ad infinitum.40
Modernize the grammar and change a few nouns, and the above exchange could easily pass for television talk show repartee between opponents and supporters of the latest international trade agreement.
In the closing years of the seventeenth century, three groups in England coalesced into a strange protectionist alliance dedicated to shutting down cotton imports from Asia: the moralists, angered by the social disruption caused by the new finery; the silk and wool weavers, made redundant by a cheaper and better foreign product; and the mercantilists, angered by the outflow of silver to pay for mere fashion. These forces rose against the EIC and caused dire consequences for the Company and also revolutions in England’s economy, social structure, and empire. In addition, as we shall see in chapter 11, they also destroyed the bedrock of India’s economy, its textile industry.
Of the three groups opposed to the India trade, the mercantilists were the most influential. The debate between them and the free-traders supporting the EIC engaged the nation’s most talented economic minds and found expression in that era’s equivalent of the political blog, the pamphlet, which generally sold for a few pence per piece. Mercantilist theory was simplicity itself: a nation’s wealth was measured by the amount of gold and silver it possessed.
In other words, international commerce constituted a zero-sum game in which one nation’s gain came only at the expense of another, and the only way for a country to grow rich was to garner gold and silver from abroad by exporting more than it imported. In modern parlance, the route to wealth lay in a positive trade balance. This, too, was a grim tug-of-war, since every gold sovereign or piece of eight accrued by one nation had to come from a competitor. In the words of an early EIC merchant, Thomas Mun, “We must ever observe this rule: to sell more to strangers yearly than we consume of theirs in value.”41
Not all imports and exports were equal in the mercantilist scheme of things. Ideally, a nation should import only raw materials and export only finished manufactured products, as this practice would maximize employment. Likewise, a prudent people eschewed the consumption of foreign luxury products, since these vaporized large amounts of gold and silver and weakened domestic employment, a tenet aimed squarely at the EIC. The mercantilist sought to minimize imports with high tariffs or, occasionally, outright prohibition, and to encourage exports by eliminating embarkation duties, and even by subsidizing exports.
Today, the fallacy of these arguments is obvious: nations grow wealthy mainly by improving their industrial and agricultural productivity. The consumption of foreign luxuries causes little concern, and few Americans care how many bars of gold sit in vaults in Fort Knox or in the New York Federal Reserve Bank. (The ghost of mercantilism still haunts the modern world in the form of import duties and restrictions, and, most perniciously, agricultural subsidies.)
Three hundred years ago, as England debated the India trade, few detected the flaws in mercantilism.42 One observer, Roger Coke, noted that Holland, the world’s wealthiest nation on a per capita basis, “imported everything,” whereas impoverished Ireland exported far more than it imported.43 Another, Charles Davenant, cogently explained that the benefits of keeping a nation “more Cheaply supply’d” with foreign imports far outweighed the damage done to domestic employment. He perceptively argued that trade was not in fact a zero-sum game, “For all Trades have a Mutual Dependance upon one another, and one begets another, and the loss of one frequently loses half the rest.” In his view, protectionist measures were “needless, unnatural, and can have no Effect conducive to the Publick Good”; further, they encouraged inefficient domestic industries with artificially high prices and threw good money after bad.44
By far the most remarkable early free-trader was Henry Martyn, whose Considerations upon the East India Trade preceded by seventy-five years Adam Smith’s Wealth of Nations. Martyn saw clearly that mercantilists, by equating gold with wealth, repeated the mistake of King Midas. Precious metals are useful only because they can be exchanged for things we want or need. A nation’s true wealth, Martyn realized, was defined by how much it consumed:
Bullion is only secondary and dependant, Cloaths and Manufactures are real and principal riches. Are not these things esteem’d Riches over the World? And that Country thought richest which most abounds in th
em? Holland is the Magazin of every Country’s Manufactures; English Cloth, French Wines, Italian Silks, are treasur’d up there. If these things were not riches, they wou’d not give their Bullion for ’em.45
Martyn gloried in the cornucopia of trade:
Why are we surrounded by the Sea? Surely that our Wants at home might be supply’d by our navigation into other Countries, the least and easiest Labour. By this we taste the spices of Arabia, yet we never feel the scorching Sun which brings them forth; we shine in silks which our Hands have never wrought; we drink of Vinyards which we never planted; the Treasures of those Mines are ours, in which we have never digg’d; we only plough the Deep and reap the Harvest of every Country in the World.46
Martyn freely admitted that allowing in cheap Indian goods cost English weavers their jobs, but he saw their labor as wasted “make work” that could be more profitably employed elsewhere:
If the Providence of God wou’d provide Corn for England as Manna heretofore for Israel, the People wou’d not be well imploy’d to Plough, and Sow, and Reap. . . . In like manner, if the East-Indies wou’d send us Cloaths for nothing, as good or equivalent of those made in England by prodigious labour of the People, we shou’d be very ill imploy’d to refuse the Gift.47
Martyn’s brilliant economic insights strayed too far ahead of their time, and unlike Adam Smith he did not become a household name. In the case of the EIC’s Indian imports, the legislative records barely mention him or Coke and Davenant; only the mercantilist John Pollexfen, a member of the Board of Trade, influenced parliamentary debate in the way that Smith would do in the nineteenth century.48
The real battle—the political one—began in 1678. In that year, Parliament, mindful of the difficulty of mandating fashion for the living, required that the dead, at least, be buried in wool. Over the next decade, the EIC and its allies narrowly defeated a series of bills aimed at their imports. One would have required the wearing of wool by all students, faculty members, judges, and lawyers; another, the wearing of wool by all citizens six months of the year; yet another, the wearing of felt hats by all female servants earning less than £5 per year.
By the time of the Glorious Revolution of 1688, the calico controversy had grown more contentious. With the ascension of the Dutch King William, the Company lost much of its previous influence over the monarchy. A newly adjusted Land Tax paid for King William’s conflict with France and burdened English landowners. In turn, the landowners saw the merchant class as villains perpetrating the cardinal sin of mercantilist dogma: draining the kingdom of gold and silver to pay for Asian frivolities. The new merchant class, represented by the EIC, found itself generally outgunned by the moralists, weavers, and mercantilists and fighting a rearguard action against the forces of protectionism.
In 1696, weavers and spinners from Canterbury, Norwich, Norfolk, and Cambridge, impoverished by competition from calicoes, petitioned Parliament for relief. The House of Commons responded with a draconian bill which would have outlawed the importation of any cotton fabric into the kingdom and penalized violators with a £100 fine—five to ten years of wages for the average worker. Proponents of the bill mustered a steady stream of witnesses who had been damaged by the India trade—not just wool and silk makers, but also domestic lacquer workers and makers of furniture and fans put out of work by less expensive Indian products. Opposition came from the EIC and its supporters—upholsterers, linen drapers, dyers, and calico printers.
The bill sailed through the House of Commons, but it was killed behind closed doors in the House of Lords, probably in a hail of bribes from Child. The weavers, stung by this treachery, marched on Parliament, which took the bill up again later in 1696. In January 1697, five thousand weavers, agitated by the false rumor that the bill had yet again been thrown out, surrounded Parliament and managed to break into the Commons lobby. The members locked the door to the main chamber, whereupon the weavers proceeded to the EIC headquarters, where they also failed to break in. Security was tightened at both Parliament and the EIC, and a cowed House of Commons placated the weavers by once again passing the bill. Once more, Child greased the skids in the House of Lords by “pouring gold in plenteous showers in ladyes’ laps who bore great powers.”49 Yet again, thousands of weavers marched in anger, this time on Child’s house, where soldiers fired on the mob, killing one and injuring several others.
Wealthier sponsors now acted against the EIC. For many years, small private merchants had traded in Asian ports in violation of the Company’s monopoly. In 1698, Parliament gave official status to these “interlopers,” as they were called, and granted them a charter for the New East India Company. To reestablish its monopoly, the original EIC was forced to buy a majority of shares in the new company and then merge its operations into the old one.
At this critical juncture, in 1699, Child died. Absent his intellectual presence and deep pockets, the forces of protection finally triumphed. In April 1700, the party of the landed interests, the Tories, succeeded in passing the Prohibition Act, which forbade the importation of painted or dyed calicoes and silks; unpainted fabrics were still permitted, though they became subject to a 15 percent import duty.50
The 1701 Act (named for the year it actually became effective) backfired, for three reasons. First, calicoes became forbidden fruit, and thus even more desirable. Second, smuggling, the inevitable accompaniment of prohibition, flared up in the years following the act’s passage. In the words of one pamphleteer, “England being an Island, there are a thousand places for putting goods on shore.”51 Though most of the smuggled calicoes were brought in by French and Dutch merchants, no small amount entered England in the private baggage of the EIC’s employees. Third, and worst of all for the weavers, the act aided domestic cotton manufacturers by providing them with large amounts of plain Indian cloth to feed their advanced printing machinery. The wool manufacturers soon realized that the act had worsened their situation. Before its passage:
Calicoes printed in India were most used by the richer sort of people whilst the poor continued to wear and use our woolen goods. The calicoes now printed in England are so very cheap and so much the fashion that persons of all qualities and degrees clothe themselves and furnish their houses in great measure with them.52
This overstated the case. Because of the enormous amount of labor required to turn raw cotton into fine cloth, finished calicoes were still more expensive than wool or silk garments. The economic downturn of 1719, caused by war with Spain, pushed silk weavers and wool weavers to desperation. On June 10 of that year, several hundred workers from Spitalfields, the silk-weaving district of London, attacked stores that sold calicoes, cotton printing shops, and even people unfortunate to be caught wearing the fabric. In some instances the “calico chasers” ripped the hated fabric off wearers’ backs, soaked the garments in corrosive nitric acid, mounted them on sticks, then paraded these motley trophies through the streets. For months, weavers terrorized London. The disturbance ended only with the onset of winter, when even the most fashionable ladies clad themselves in warmer wool.53
The specter of insurrection frightened Parliament and the new Hanoverian monarchy. They debated how to mollify mobs of weavers, who on at least one other occasion again angrily surrounded Parliament, chanted, and demanded action. The legislative battle raged for two years. Finally, in 1721, following the economic chaos caused by the collapse of the South Sea Bubble, Parliament banned even the importation of plain Indian cloth. Wearing it also became a crime; violators were fined £5, which could be claimed by the informer. Thenceforth, only thread or raw cotton could be imported. Curiously, Parliament allowed one exception to the ban on whole cloth: women were allowed to wear imported cottons if dyed an unfashionable plain blue.54
Inevitably, these protectionist measures backfired against the woolen industry and the silk weavers. At the beginning of the eighteenth century, calico was the classic “high value-added commodity.” The wealth of Croesus awaited those who could bridge the gap betw
een cheap raw cotton and the expensive, smooth, light cloth desired by consumers. High demand and high prices for calicoes, combined with the unavailability of Indian cloth, drove innovators to improve the spinning and weaving processes.
Improve they did. Just a dozen years after the passage of the act of 1721, John Kay perfected the flying shuttle, which doubled weavers’ productivity. This served to increase the demand for thread, whose spinning was more difficult to mechanize. In 1738, Lewis Paul and John Wyatt patented the first mechanical spinning machine, but no commercially feasible device became available until the mid-1760s, when such machines were invented by James Hargreaves, Richard Arkwright, and Samuel Crompton. (These were, respectively, the spinning jenny, the water frame, and the mule, the latter so-called because it was a hybrid of the first two.)55
As the economic historian Eric Hobsbawm famously said, “Whoever says Industrial Revolution says cotton.” The new machines that were the heart of the great transformation made redundant untold thousands of spinners and weavers, who engaged in spasms of “machine breaking” in the eighteenth and nineteenth centuries before finally disappearing into the new mills.56 (The term “Luddite” derives from the probably fictional leader of the machine-breaking riots in the 1810s, Ned Ludd.)