Monday, April 01, 2013

Those old Cronies: Colonialism and Capitalism

Anyone who tells you that capitalism is a force for freedom needs their head examined.  Let us see how British capitalism fared in British India.  The statistics come from "The White Sahibs in India" (1937) by Reginald Reynolds.
"From the plantations, mainly owned by European companies, dividends upto 225 per cent have been received in recent years."

A footnote tells us:

Miss Beauchamp in British Imperialism in India (p 101) cites figures from the Investor's India Year Book (1929-30) showing that Tea Compaines paid the following dividends:

Company                 Divd.    Years
Bishnauth Tea Co.        42.5%   1927
Bishnauth Tea Co.        30%     1928
New Dooars Tea Co.      225%     1924
Chulsa Tea Co.           30%     1923-7
Chulsa Tea Co.           75%     1928
Jhanzie Tea Assn.    40%-45%     1924-8

We are told
According to Miss Vera Anstey, thirty-two of the Indian jute mills paid 100 per cent dividends in at least one year between 1918 and 1927.  During the same period twenty-mills paid at least 20 per cent each year and ten mills never less than 40 per cent.

We are told of Brailsford's calculation that in the early post-WWI years, the mills paid £100 in profits for every £12 they paid in wages.

Figures in The Investor's India Year Books from 1928-30 show that the Hooghly Mills Company paid an average annual dividend of 125 percent between 1918 and 1928.  
Take that modern icon, Google.  It IPO'ed at $85 in 2004 and was around $810 as I write this.  In terms of return on investment, the Hooghly Mills Company had it beat hollow.

Anyway, Reynolds shows the mining industry and the banks also enjoyed outsized returns, yielding 100% of the investment in 2 to 6 years.  It is rather sickening, so I won't go on.  I'll just say there is no economist of the "free market" who protested these; it was only the Left that did.  No capitalist refused to take these profits on moral grounds. 

As we also see in today's China, the forces behind capitalism are **indifferent** to human freedom.  It is a different matter that the fear of revolt eventually makes the capitalists not let the workers starve; and once people are not starving, they demand more.