Category Archives: labor

by | 24 September 2009 · 9:42 pm

Wordcatcher Tales: Paying the Crimp

From Sailors and Traders: A Maritime History of the Pacific Peoples, by Alastair Couper (U. Hawai‘i Press, 2009), p. 105:

At these growing Pacific port towns, beachcombers established themselves as crimps and arranged girls and ships for sailors of all nationalities. Richard Copping walked off the whaler Endeavour in April 1840 at the Bay of Islands along with several other sailors and three harpooners, as “she was leaking badly.” They sought other berths through the agency of a notorious lodging house in the Bay:

Of all the orgies imaginable it was here. There were nearly 100 men, mainly deserters from different ships, drinking, singing and dancing, and fighting. The captains used to come ashore and get their men but dare not touch one. So when a ship wanted hands, two or three captains would come ashore and be hail fellow well met, call for a quantity of their detestable grog, get them nearly all drunk; and at night kidnapped as many as they wanted.

Sailors would waken outward bound and in debt to the captain, who had paid the crimp. They would need to purchase more clothing, tobacco, and drinks from the captain’s slop chest at inflated prices against future earnings:

The next I remember I woke in the morn,
On a three skys’l yarder bound south round Cape Horn,
With an ol’ suit of oilskins, an’ two pair o’ sox,
An’ a bloomin’ big head, an’ a dose of the pox.

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Filed under labor, language, migration, Pacific, slavery

by | 24 September 2009 · 6:02 pm

Failed Hawaiian Colony on Erromango

From Sailors and Traders: A Maritime History of the Pacific Peoples, by Alastair Couper (U. Hawai‘i Press, 2009), pp. 88-89:

Kamehameha died in 1819 at the age of about sixty-six. His fleet of foreign-going ships probably never made adequate profits, even though most of the capital and operating costs had been derived from the extraction of natural resources, with free Hawaiian labor ashore. Most of the voyages to China by his ships were ruinous, at least partly due to the unscrupulous agents and merchants in Canton, lack of care, recurring repairs and delays, and related payments of high port dues. His son Liholiho (Kamehameha II) faced increasing debts, as resources from land and sea, used for financing these ventures, had appreciably decreased.

Despite mounting debts the new king went on to purchase more ships. His first acquisition, at enormous cost, was the luxury yacht Cleopatra’s Barge (191 tons), bought from the American millionaire shipowner George Crowninshield Jr. Renamed Haaheo O Hawaii (Pride of Hawai‘i), the ship cruised around the Hawaiian group with the royal family and leading chiefs until 1825, when it was wrecked. It was reported that the ship at this time was “manned by a drunken, dissipated, irresponsible crew from the captain down to the cabin boy.” About the same time, the ship Prince Regent, which Vancouver had promised as a gift, was also wrecked after less than one year in service. To add to the problems of the royal family, news was received in 1825 that the king and queen had died of measles on a visit to England during 1824. They were there to elicit British political support and in the process incurred considerable expenditure.

The family, now with a boy king (Kamehameha III), faced numerous creditors, and with sandalwood and pearls exhausted, a bold maritime venture was conceived to solve these financial problems. Governor Boki of Oahu and Chief Manui‘a of Hawai‘i were to sail for Erromango in Vanuatu and acquire the still plentiful sandalwood of that region for carrying to China on Hawaiian ships. Chief Boki was in effect to occupy Erromango as ruler in a Hawaiian attempt at colonization. They sailed on 2 December 1829. Boki was in charge of the royal warship Kamehameha with a complement of 300 people, including 10 foreigners, Hawaiian sailors, soldiers, servants, women, and some other Polynesians. His navigators were Blakesly (a watchmaker) and Cox (a silversmith), possibly neither being qualified in navigation or experienced in seamanship. Manui‘a was in charge of the Becket, with 179 people. His navigator was more sensibly a former mate of a whaler.

Other merchants were also seeking Erromango sandalwood in 1829–1830 with Pacific Island labor. The Sofia carried more that 100 Tongans to the island in 1829. On a second voyage in January 1830 the Sofia recruited 200 Rotumans for Erromango. The Snapper in turn delivered another 113 Tongans for sandalwood extraction. The Kamehameha never arrived in Erromango, and no trace was ever found of the ship The Becket stayed there for six weeks, but Erromangoans were alarmed at the arrival of four European-type ships with 600 or so Polynesians, and there was much hostility, malaria, and many deaths. The Becket returned to Honolulu on 30 August 1830 with only a few Hawaiians and foreigners left alive….

The last foreign-going vessel independently owned by the Hawaiian royal family was the schooner Kamehameha III (116 tons), which sailed to California in 1848. However, the French Navy commandeered the ship in response to a complaint by its consul in Honolulu regarding unfair treatment of French business interests by the Hawaiian authorities.

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Filed under economics, Hawai'i, labor, migration, Pacific, Polynesia

by | 22 June 2009 · 6:06 am

WW2: National Armies vs. Imperial Armies

From The War of the World: Twentieth-Century Conflict and the Descent of the West, by Niall Ferguson (Penguin Press, 2006), pp. 516-518:

The Axis powers were fighting not only against the British, Russians and Americans; they were fighting against the combined forces of the British, Russian and American empires as well. The total numbers of men fielded by the various parts of the British Empire were immense. All told, the United Kingdom itself mobilized just under six million men and women. But an additional 5.1 million came from India, Canada, Australia, New Zealand and South Africa. Victories like El Alamein and even more so Imphal were victories for imperial forces as much as for British forces; the colonial commitment to the Empire proved every bit as strong as in the First World War. Especially remarkable was the fact that more than two and a half million Indians volunteered to serve in the British Indian Army during the war – more than sixty times the number who fought for the Japanese. The rapid expansion of the Indian officer corps provided a crucial source of loyalty, albeit loyalty that was conditional on post-war independence. The Red Army was also much more than just a Russian army. In January 1944 Russians accounted for 58 per cent of the 200 infantry divisions for which records are available, but Ukrainians accounted for 22 per cent, an order of magnitude more than fought on the German side, and a larger proportion than their share of the pre-war Soviet population. Half the soldiers of the Soviet 62nd Army at Stalingrad were not Russians. The American army, too, was ethnically diverse. Although they were generally kept in segregated units, African-Americans accounted for around 11 per cent of total US forces mobilized and fought in all the major campaigns from Operation Torch onwards. Norman Mailer’s reconnaissance platoon in The Naked and the Dead includes two Jews, a Pole, an Irishman, a Mexican and an Italian. Two of the six servicemen who raised the Stars and Stripes on Iwo Jima were of foreign origin; one was a Pima Indian. More than 20,000 Japanese-Americans served in the US army during the war….

The Germans, as we have seen, had made some efforts to mobilize other peoples in occupied Europe, as had the Japanese in the Far East, but these were dwarfed by what the Allies achieved. Indeed, the abject failure of the Axis empires to win the loyalty of their new subjects ensured that Allied forces were reinforced by a plethora of exile forces, partisan bands and resistance organizations. Even excluding these auxiliaries, the combined armed forces of the principal Allies were already just under 30 per cent larger than those of the Axis in 1942. A year later the difference was more than 50 per cent. By the end of the war, including also Free French* and Polish forces, Yugoslav partisans and Romanians fighting on the Russian side, the Allies had more than twice as many men under arms. Fifty-two different nationalities were represented in the Jewish Brigade formed by the British in 1944. They followed an earlier wave of 9,000 or so refugees from Spain, Germany, Austria and Czechoslovakia who had joined the so-called Alien Companies, nicely nicknamed the ‘King’s Own Loyal Enemy Aliens’.

The best measure of the Allied advantage was in terms of military hardware, however, since it was with capital rather than labour – with machinery rather than manpower – that the Germans and the Japanese were ultimately to be defeated. In every major category of weapon, the Axis powers fell steadily further behind with each passing month. Between 1942 and 1944, the Allies out-produced the Axis in terms of machine pistols by a factor of 16 to 1, in naval vessels, tanks and mortars by roughly 5 to 1, and in rifles, machine-guns, artillery and combat aircraft by roughly 3 to 1.

*It is seldom acknowledged that for most of the period from 1940 until D-Day, black Africans constituted the main elements of the rank and file in the Free French Army. Even as late as September 1944, they still accounted for 1 in 5 of de Gaulle’s force in North-West Europe.

I did not quote the immediately preceding section that compares the mismatch in purely economic terms, but I cannot resist quoting the footnote appended to the end of it (on p. 516):

‘We must at all costs advance into the plains of Mesopotamia and take the Mosul oilfields from the British,’ declared Hitler on August 5, 1942. ‘If we succeed here, the whole war will come to an end.’ But three-quarters of total world oil production in 1944 came from the United States, compared with just 7 per cent from the whole of North Africa, the Middle East and the Gulf.

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Filed under Africa, anglosphere, Asia, Britain, economics, Europe, France, Germany, industry, Japan, labor, military, nationalism, U.S., USSR, war

by | 4 May 2009 · 8:04 pm

Asian Roles in New Spain

My favorite article in the latest issue of Journal of World History (on Project MUSE) is by Edward R. Slack Jr. on “The Chinos in New Spain: A Corrective Lens for a Distorted Image.” Here are a few excerpts (footnotes and references omitted).

Spanish galleons transported Asian goods and travelers from Manila to colonial Mexico primarily through the port of Acapulco. During the two and a half centuries of contact between the Philippines and the Viceroyalty of New Spain, a minimum of 40,000 to 60,000 Asian immigrants would set foot in the “City of Kings,” while a figure double that amount (100,000) would be within the bounds of probability. From Acapulco they would gradually disperse to the far corners of the viceroyalty, from Loreto in Baja California to Mérida in Yucatan…. The majority, however, would eventually settle in two distinct zones: on the west coast in the districts of Guerrero, Jalisco, and Michoacán, and in the large, ethnically diverse municipalities of Mexico City and Puebla in the central valleys and the eastern port of Veracruz. The two zones were transversed by the most heavily traveled arteries that connected Acapulco to Mexico City (known colloquially as el camino de China) in the west; Veracruz with Puebla and Mexico City in the east; and several arterials linking the capital with Puerto Vallarta in the west and Guanajuato in the northwest.

For the most part, the chinos disembarked at Acapulco as sailors, slaves, and servants. Over the longue durée of Mexican-Asian cultural exchange, the largest contingent of Asians arrived as sailors on the galleons and smaller vessels (capitanas, pataches, and almirantes) that annually plied the long and perilous return voyage from Manila. The seamen were primarily Filipinos, Chinese mestizos (known in Manila as mestizos de Sangley), or ethnic Chinese from the fortified port of Cavite near Manila that served as the primary shipyard for Spaniards in the archipelago. In 1565, the first chino sailors from the islands of Cebu and Bohol arrived in Acapulco aboard Friar Andrés de Urdaneta’s trailblazing galleon, the San Pedro. During the late sixteenth century Iberian sailors constituted the majority of crewmen, but by the early 1600s Asians had surpassed them, accounting for 60–80 percent of the mariners from that time forward. A historical snapshot of galleon seafarers in the mid eighteenth century comes from a crew manifest of La Santissima Trinidad. In 1760, this vessel was manned by 370 sailors, consisting of 30 officers (Europeans or Mexican criollos), 40 artillerymen (27 chinos), 120 sailors (109 chinos), 100 “Spanish” cabin boys (96 chinos), and 80 “plain” cabin boys (78 chinos). In sum, 84 percent (310) of the crew were born and raised in Spain’s Asian colony, with 68 percent (250) hailing from the port of Cavite alone….

Along the Pacific coast, chino sojourners tended to congregate in the cities and pueblos of Acapulco, Coyuca, San Miguel, Zacatula, Tex pan, Zihuatenejo, Atoya, Navidad, and Colima. With the arrival of more ships from Manila, the number of sailors who either had no desire to return to the Philippines or were brought over as slaves married local Indian and mixed-race women increased. Consequently, a sizable population of chinos and their descendants made these cities and pueblos a popular destination for fellow Asians. Both freemen and slaves farmed rice (brought from the Philippines), corn, and cotton; tended cacao and coconut palm trees; fished in the seas and rivers; and transported people and goods to various ports along the coastline. Those who followed the royal highways to towns farther inland worked as muleteers or in the silver mines, haciendas, obrajes (textile workshops), or sugar mills….

Slaves and servants constituted the second largest group of Asian immigrants during the colonial era. Manila quickly became an important entrepôt for the commerce in human flesh during the first century of Spanish rule. The greater part were transported by Portuguese vessels from colonies and trading ports in Africa, India, the Malay peninsula, Japan, and China, although Chinese junks and Malay prahus also shipped large quantities to Manila. Non-Filipino slaves that fetched the highest price were from Timor, Ternate, Makassar, Burma, Ceylon, and India, because “the men are industrious and obliging, and many are good musicians; the women excellent seamstresses, cooks, and preparers of conserves, and are neat and clean in service.”…

The incorporation of Asian immigrants into the armed forces of New Spain represents another fascinating fragment of the chino mosaic from the colonial era. Similar to restrictions placed on other castas in Mexico, there were numerous prohibitions against Asians carrying weapons or riding horses….

The legion of similar antiweapons ordnances from the 1550s onward notwithstanding, from at least the 1590s free chinos not only were granted permission to carry weapons, but gradually incorporated into both the salaried companies of Españoles as well as local militias, especially those cities and towns along the Pacific coast. In several documents from the years 1591 and 1597, an “Indio Chino” from the silver mining town of Zultepec named Juan Alonzo, who earned his livelihood from buying and selling mules, was granted a license to ride a horse with a saddle and bridle and to carry a sword. A key determinant in this matter was his racial classification as a chino, since indios (unless they were elites) were forbidden such privileges….

Among the scores of Asian peoples that were widely defined as chinos, in the early decades of the 1600s Japanese converts were held in high esteem by Spaniards in the Philippines and New Spain for their bravery and loyalty. In 1603 and 1639 when Chinese residents in the Parián of Manila revolted against their Iberian overlords, Japanese swordsmen distinguished themselves in combat. Without their assistance, Sangleyes would surely have made the Philippines a colony of the Middle Kingdom. Thousands of Japanese converts, traders, and ronin made the Philippines their home prior to the closing of Cipango to Iberians in the 1630s. They lived in a suburb of Manila called Dilao, with a population estimated at 3,000 by 1624.

Thus it is not surprising that samurai converts were considered a more privileged subgroup of chinos in New Spain….

It is unclear exactly when chino militias were established on the west coast of New Spain. It is evident, however, that prior to 1729 Asian paramilitary units were routinely patrolling the regions adjacent to Acapulco. Tiburcio Anzalde, “captain of one of the militias of chinos and mulatos in the district of Atoya,” discussed the duties and obligations of militiamen in a 1746 document: repeated trips to Acapulco to deliver mail and other correspondences; to clear the roads (of bandits) while on patrol; and, most importantly, their heroic role in resisting the English pirate George Anson‘s invasion at the port of Zihuatenejo in 1741.

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Filed under Asia, China, economics, England, Japan, labor, Mexico, migration, Netherlands, Philippines, Portugal, Spain

by | 26 November 2008 · 6:48 am

Wordcatcher Tales: Begum, Jhampan

I never read much Kipling as a kid, and some of the vocabulary of British India that I have encountered in Indian Summer: The Secret History of the End of an Emperor, by Alex von Tunzelmann (Picador, 2008) is new to me. Here are two such novelties.

The royal tour ground on, zigzagging up through the belly of India and stopping in Bangalore, Mysore, Hyderabad and Indore. By 4 February [1922], it had reached Bhopal, where Dickie [Mountbatten] and David [Windsor] were the guests of the only woman ruler in Asia, the Nawab Sultan Jaban Begum. The Begum was an ardent Muslim and usually ruled from behind a purdah screen. The rare sight of her tiny figure, swathed in a blue burka, next to the white-uniformed Prince of Wales gave the tour’s photographers some of their best opportunities. But it was an image more connected to the past than to the future. [p. 70]

Bhopal seems to have had a number of enlightened female nawabs. Begum is the feminine of Turkic Beg (or Bey) which turns up in many names from former parts of the Ottoman and Mughal empires—Izetbegovic, for example.

The British continued to come to Simla, sometimes for eight months of each year, with the European ladies and gentlemen carried up in the local jhampan sedan chairs. They were followed by hundreds of coolies, who had been press-ganged from their surrounding farms into the service of Her Majesty’s government, lugging dispatch boxes, carefully packed crockery, musical instruments, trunks full of theatrical costumes for amateur dramatics at the Gaiety Theatre, crates of tea and dried provisions, faithful spaniels in traveling boxes, rolled-up rugs, aspidistras, card tables, favorite armchairs, baskets of linen and tons upon tons of files; all the paraphernalia of the raj literally borne on the shoulders of one long caravan of miserable, sweating Indian peasants. Eventually, in 1891, a narrow-gauge railway was opened, weaving in and out of 103 tunnels up from the plains at Kalka—a journey which still took at least six hours. The British never questioned whether all this was worth it. Gandhi may have criticized the administration’s annual repair to Simla for being “government working from the 500th floor,” but that was exactly the point. [pp. 193-194]

This word turns up under jompon in Hobson-Jobson (via Google books), which cites a 1716 source that defines a jampan as a “palankin”; an 1849 source that defines a jhappan as a “kind of arm chair with a canopy and curtains”; and an 1879 source that specifically mentions its use in Simla:

The gondola of Simla is the jampan or jampot аs it is sometimes called on the same linguistic principle … as that which converts asparagus into sparrow grass … Every lady on the hills keeps her jampan and jampanees just as in the plains she keeps her carriage and footmen — Letter in Time Aug. 17

That’s the wonderful Hobson-Jobson: A Glossary of Colloquial Anglo-Indian Words and Phrases, and of Kindred Terms, Etymological, Historical, Geographical and Discursive by Henry Yule, Arthur Coke Burnell, William Crooke (J. Murray, 1903), digitized from a printed original at the University of California.

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Filed under anglosphere, Britain, India, Islam, labor, language, Pakistan, South Asia, Turkey

by | 20 October 2008 · 5:53 pm

India’s Huge Informal Labor Sector

From India: The Rise of an Asian Giant, by Dietmar Rothermund (Yale U. Press, 2008), pp. 211-213:

The poor in India are a vast reserve army of cheap labour. Organized labour in the ‘formal’ sector of the economy is a comparatively small part of the total labour force. In 2003 the public and private sectors together employed 27 million workers. The private sector is the smaller one with 8.4 million but a greater share of the ‘manufacturing’ category with 4.7 million as against only 1.5 million in the public sector. According to the theory of W. Arthur Lewis, in a ‘dual economy’ (traditional and modern) there is a reserve army of labour in the traditional sector which supplies the modem one with a steady flow of new recruits. But the Indian economy is not a dual one: it consists of two parallel economies. Since the reform of 1991, employment in the formal sector has practically stagnated; there has been only a slight shift from the public to the private sector, the first losing and the latter gaining 1 million employees. These figures would confirm the frequent comments on the phenomenon of jobless growth. But, of course, this refers only to the formal sector; the actual growth takes place in the informal sector. In fact, from 1978 to 2000, the share of the informal sector in the total labour force increased slightly from 91.3 to 92.4 million, although one would have expected a decrease of informal labour in a period of steadily increasing economic growth. The wage differential between the two sectors is enormous. For employees in the public sector, official statistics show an average daily per capita rate of Rs 681. According to the National Sample Survey mentioned earlier, the daily wages for male casual labourers in urban areas are Rs 75 and in rural areas Rs 56; the rates for female labourers are Rs 44 and 36 respectively. The figure for the public sector would, of course, include the high salaries of the Class I officials, but they are a small minority when compared to the legions of humble Class IV officials who do manual work or errands for the higher-ups. Nevertheless, even these humble people are head and shoulders above the casual labourers in the informal sector. Moreover, their jobs are secure and permanent, unlike the ‘informal’ jobs, which are subject to the rule of ‘hire and fire’.

Subjection to the rule of ‘hire and fire’ has increased with the growing casualization of informal labour. New forms of contracting labour have developed which permit the employer to shift the onus of hiring and firing casual labour to agents who are told how many workers are needed at any given time. Casualization has particularly affected women workers who were previously not very active in the labour market but have joined it in recent years in increasing numbers. Concerned social scientists have coined the term ‘feminization of poverty’ in order to characterize this phenomenon.

The ‘informal’ proletarians are not protected by any trade unions, which for good reasons concentrate on the organized sector of the economy. Very few of the recognized trade unions can depend on regular fees paid by their members. Accordingly, union leaders must look for other sources of income. They usually squeeze the employers by threatening to stir up trouble. There is no collective bargaining in India: wages are set by officially appointed tribunals and there are also tribunals which try the cases of individual workers who have been made redundant or have not been paid the wages due to them. Therefore most labour leaders are lawyers who spend their time pleading before those tribunals. The informal proletariat has no contact with such tribunals or lawyers.

The usual staff of a workshop in the informal sector consists of the boss and fewer than ten workers. In small firms which operate as subcontractors for manufacturers, the boss may even be an engineering graduate. Capital investment in such workshops is minimal so very often they band together and help each other out. One has a lathe, the other a drilling machine, etc.; if the piece of work requires both, it is carried from one shop to the other. The ignorant observer may think that this cluster of workshops is a slum, but on closer inspection he will be surprised to see the quality and variety of their products. Bigger firms rely on such subcontractors for two reasons: first of all, they can keep the number of workers and the investment in machines limited; and, secondly, if there is a slack in demand they can cut the orders farmed out to the subcontractors. This explains the phenomenon of jobless growth in the organized sector. The huge number of subcontractors who have the reserve army of labour on their doorstep shield the organized sector against risks but can also respond very quickly to increased demand. There is, however, a growing gap between labour productivity in the organized and in the informal sectors. In 1983 labour in the organized sector was about six times more productive than that in the informal one; by 1999 the differential had increased to nine times. This would also account for the wage differentials between the two sectors.

The wages paid by subcontractors, particularly if they work for manufacturers producing cars or machine tools, have to be higher than the wages of casual labourers mentioned above, but they would still be much lower than those in the organized sector. The qualifications of the informal proletariat working for subcontractors range from those of skilled workers to that of untrained people. The skilled workers in workshops would be the ‘creamy layer’ of the informal proletariat and they would be above the poverty line. But the great majority of the reserve army of informal labour are quite poor, something that would be particularly true of the many landless labourers who are at the beck and call of the landowning peasantry. Earlier systems of permanent attachment of such labour to the households of their employers have long since disintegrated because the employer can always find casual labour and does not need to retain labourers in the off-season. Even at times when the harvest or other seasonal operations suddenly require additional labour, there are nowadays migrant labourers who make themselves available for seasonal employment. Workers from Tamil Nadu will show up in the Punjab or elsewhere at a distance of 1,500 kilometres from their home. Here, too, the informal proletariat shows its usefulness as a reserve army of labour. About 43 per cent of India’s rural population are landless. If one deducts from this about 8 per cent for traders, carters, and so on there would still be 35 per cent of labourers who depend on their daily wages.

Of course, ‘casualization’ is hardly limited to India or to informal sectors of large economies. One report last year estimated that 70% of the faculty in American universities now depend on part-time or limited-term contracts. So, to twist the clause that begins this passage: An oversupply of postgraduate degrees provides a vast reserve army of cheap labour for universities.

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by | 28 September 2008 · 11:53 am

India’s Infrastructure: Bad News, Good News

From India: The Rise of an Asian Giant, by Dietmar Rothermund (Yale U. Press, 2008), pp. 157-160:

Next to airports, India’s seaports require thoroughgoing modernization. The biggest and most famous of them all, Mumbai, has a notorious reputation for terrible delays and incompetent handling of goods. A few years ago, turnaround time was about eight days, regardless of the size of the vessel; this has improved somewhat but even now about four days are required to load or unload a ship. This is due to deliberate negligence as the port earns more by collecting demurrage charges than by any other means. The trick of this trade is the stranglehold which Port Authority labour has on the loading and unloading of goods. In most other ports around the world, the port authority is merely a landlord, providing berths and cranes, etc. but no labour, with loading and unloading done by labour hired by the shipowner or his agent. The port authority with ‘dedicated’ labour is a British legacy. In British ports it may have made sense to retain a labour force specialized in loading and unloading ships, particularly in the past when most of this work was not mechanized. Nobody would have thought that delay rather than speed would be the result of retaining specialized labour. Making money on demurrage charges is, of course, a flagrant example of being penny-wise and pound-foolish. No shipowner in his right mind would enter a port such as Mumbai unless he absolutely has to because it is his destination. Bulk breaking is taking place elsewhere in efficient ports like Singapore or Colombo. Many a ship with only part of its load to be delivered to India would rather call at those ports than enter an Indian port. Jawaharlal Nehru Port across the bay from the old port of Mumbai is supposed to be somewhat more efficient than the old one, but it is first and foremost a container port under the management of the Indian railways and is thus not a direct competitor of the old port. Although Jawaharlal Nehru Port is India’s largest container port, it handles only about 10 per cent of the freight handled by Hong Kong, the world’s largest port of this kind. The inefficiency of Indian ports is not only delaying imports, it is also harming the export trade. In the old days of ‘export pessimism’ this was ignored, but now when producers in India wish to export some of their production to achieve economies of scale, they may give up such plans as their goods get stuck in the port….

The story of Sunil Bharti Mittal, who is now the biggest private operator in this field, is a good example of the rise of the new type of Indian telecom entrepreneur. He is not related to the famous steel tycoon Lakshmi Niwas Mittal, and his rather unusual family name Bharti is made up. His father, who belonged to a caste of traders, married a woman of a higher caste. This inter-caste marriage was frowned upon at that time and the couple adopted the name Bharti. Sunil started making cycle parts in Ludhiana. In 1983 when many imports were still banned, he hit upon the idea of manufacturing push-button telephones and then launched his Airtel brand of mobile phones in 1995. From making phones it was only one further step to acquiring two mobile phone licences and one fixed net licence. Subsequently Mittal expanded his operations and now provides his services in all 23 mobile telephone circles of India in which field he has overtaken the public sector firm BSNL. In order to raise the capital for this relentless expansion he linked up with foreign investors. In 2001 the American firm Warburg Pincus acquired about 6 per cent of Bharti Televentures; later the Singapore firm SingTel and the British firm Vodafone also acquired shares in Mittal’s company, but they are all minority shareholders. Meanwhile Sunil Mittal dominates the Indian telecom scene and continues to win prizes both in his personal capacity as an exemplary entrepreneur and for his company as the best in its field. He has also pioneered broadband connectivity in various fields and is always a step ahead in adopting new technologies. Mittal had started from scratch as an innovative entrepreneur. As he has stated, he was inspired by Mahatma Gandhi’s words: ‘First they ignore you, then they laugh at you, then they fight you, and then they lose.’

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by | 20 September 2008 · 12:31 pm

India’s Sweatshop Diamonds

From India: The Rise of an Asian Giant, by Dietmar Rothermund (Yale U. Press, 2008), pp. 96-97:

When India had shielded its economy behind tariff walls, its share in world trade had dwindled into insignificance. As mentioned earlier, ‘export pessimism’ was the prevailing mood at that time. It was not easy to change this mood so only new branches of export production could escape it. Nowadays three new types of commodity account for more than half of India’s total exports. Diamond processing was the first and the most unexpected success story of them all. Of course, India had been known as a source of beautiful diamonds in ancient times, but in modern times South Africa has been the leading producer of raw diamonds and the processing is done in Western Europe in places such as Antwerp. Only a few decades ago Jewish merchants controlled almost the entire diamond trade and Jewish artisans participated in the processing of these precious stones. Suddenly a community of Gujarati merchants from Palanpur cut into this trade and made use of cheap and skilled labour available to them in places such as Surat and other towns of Gujarat as well as on the outskirts of Mumbai.

India has to import the raw diamonds; the contribution of its export industry is the value added by expert processing. A breakthrough was provided to this new industry by the creative use of industrial diamonds. Only about a quarter of all diamonds mined are normally fit for jewellery; the rest are passed on to the makers of machine tools for cutting and grinding. Most industrial diamonds are small. Gujarati entrepreneurs knew how to get these tiny stones processed and adopted novel designs of jewellery which sparkled due to the collective effect of many small stones rather than the individual radiance of larger and very expensive diamonds. This created a new market of middle-class consumers who could not afford expensive jewellery. But the Gujarati entrepreneurs also ventured into the market for very precious stones. They even created new brands such as the Nakshatra diamonds endorsed by the Indian actress Aishwarya Rai, a former Miss World.

The buying of diamonds in places like Antwerp is done by the so-called ‘sightholders’, experts entitled to inspect raw diamonds and select them for their respective companies. Earlier these sightholders were a charmed circle of insiders, but the Gujarati merchants gained access to the circle and now almost dominate it. Eleven of twelve diamonds processed in the world are now processed in India. This, of course, means that the fast growth which this Indian industry registered in recent years is bound to level off. The value of Indian exports of precious stones – mostly processed diamonds – has expanded by leaps and bounds. In 1966 the value of these exports was a mere US$ 25 million; by 2004 it amounted to US$ 14 billion.

India’s greatest advantage is the low wage paid for the rather demanding job of diamond processing. The fixture in which the diamond is held during processing is called a dop. With a semi-automatic dop a worker can polish 800 to 1,000 diamonds per day. The wages of Indian workers in this line are about 10 per cent of those earned by their colleagues in Antwerp. This is why more than 800,000 workers are employed in the various workshops in Surat whereas in Antwerp there are only about 30,000 still active in this field. Surat is just one of the Indian centres of diamond processing, though perhaps the largest. The conditions of the workers are generally quite miserable and children are also recruited for this work. Large profits are reaped only by the entrepreneurs, who have now extended the scope of their work to other Asian countries and even to Russia.

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Filed under Belgium, economics, India, industry, labor

by | 20 September 2008 · 7:05 am

India’s ‘Fraternal Capital’ and Contractor Networks

From India: The Rise of an Asian Giant, by Dietmar Rothermund (Yale U. Press, 2008), pp. 100-101:

Tiruppur, a town near Coimbatore in Tamil Nadu, has emerged as a major centre of knitwear production and Sharad Chari has made a fascinating study of the mode of production in this town. He has described the emergence of ‘fraternal capital’ as a typical form of cooperation among small-scale entrepreneurs in this field. Most of the owners of the small workshops and even a large number of their employees belong to the Gounder caste of peasants who have made a successful transition to industrial production. The Gounder peasants are used to hard work in intensive agriculture where the landholder and his labourers are working together and this style of operations has been transferred to the shop floor where the owner is always present, usually controlling the stitching table where the cloth is converted into garments. Gounders who want to emphasise the special features of their work often make it appear as a kind of ‘work ethic’. Actually it helps them to justify the control of labour in their small-scale industry. They do not strive for economies of scale as these would be diseconomies under the official rules favouring small-scale enterprises. Accordingly, successful entrepreneurs do not invest their capital in expanding their production, but in setting up ‘fraternal’ enterprises run by other members of the Gounder caste, albeit these people are not necessarily related to them in terms of family ties. Total production has thus grown very quickly and whereas earlier only men worked in this industry, more and more women have been recruited in recent years. Most workers are paid by piece rate or they work under various types of contracts rather than receiving regular wages.

When production for export increased, a new elite of export merchants arose from the ranks of these small entrepreneurs. Smart young men in business suits, wearing sunglasses, can be seen chatting with their relatives on the shop floor who provide them with the material which they market in New York or elsewhere. Many of these exporters are assemblers rather than producers. The links of fraternal capital connect all these people and make it difficult for outsiders to penetrate this business. In this way fraternal capital provides horizontal and vertical linkages which are otherwise only found in big corporations. Decentralized supervision – and exploitation – of labour is an asset in this type of business organization. Contracting in and out enables the small entrepreneurs to respond to changing demand. Such an organization helps to defend the class of entrepreneurs against labour unions, which have a strong tradition in this area.

Another interesting example of the control of labour in this region is the putting-out system practised by a producer of rag carpets in the adjacent Erode District. He uses rags from the hosiery industry and gets carpets woven for the big Swedish firm IKEA. Initially it was traditional weavers who got involved in this business, but soon the putting-out system was extended to villages whose supply of labour was of a very different kind. In a Gounder village affected by water scarcity, the peasants took up carpet weaving in order to survive. In another village inhabited by migrant construction workers, the women who had also participated in this work shifted to carpet weaving, which they could do at home. Tapping labour resources of different kinds for export production is a characteristic feature of the informal sector of India’s economy.

Similar features of decentralized production and exploitation of labour can be observed in the garment industry of Ahmadabad, a city once famous for its large composite textile mills, most of which have long since closed down or are ‘sick‘. But in the 1990s hundreds of small workshops producing ready-made garments sprang up. Their production is supplemented by home-based women who stitch garments for entrepreneurs who operate a putting-out system. These women had been used to stitching petticoats and children’s wear; they own very simple sewing machines. When they were required to stitch more complicated garments for export their skills and their machines often proved insufficient for the new tasks. They usually earn piece rates which amount to about 2 to 5 per cent of the value of the articles they produce. With such low wages they can hardly afford to invest in add-ons to their sewing machine for new lines of production. Nevertheless, they somehow managed to get on with their work. This area of Gujarat is also famous for its embroidery, which has been successfully adapted to the requirements of export production, a line of production in which India is ahead of China.

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by | 23 August 2008 · 2:09 am

India’s Rise: Sick Mills vs. Powermills

From India: The Rise of an Asian Giant, by Dietmar Rothermund (Yale U. Press, 2008), pp. 88-89:

In the years of the Great Depression, the Indian textile industry was partially protected under the regime of imperial preference, Production for the home market expanded, but there was hardly any investment in new machinery. Moreover, India had no textile machine industry of its own. During the Second World War, no machinery could be imported, but the mills worked around the clock under the regime of government procurement. By the end of the war, spindles and looms were worn out and mill-owners would have liked to have invested in new machinery. However, foreign exchange was scarce as India had no immediate access to its reserves accumulated in the Bank of England. At this stage something happened which had terrible consequences for the future of the Indian textile industry. Mahatma Gandhi had compelled the Indian government to abolish the food-grain controls introduced during the war. Prices fell after the controls had been abolished – as Gandhi had predicted. His followers then tried to apply the same rule to cotton texiles, which had also been subjected to controls. The mill-owners warned the government that they would not be able to cope with the rising demand with their decrepit looms. Nevertheless, the controls were abolished and prices rose. Controls were then re-imposed in August 1948. At the same time positive discrimination in favour of the products of handloom weavers was introduced. These weavers were dear to Gandhi as he regarded them as the paragon of the type of cottage industry which he preferred to the mills. The well-meaning protectors of the handloom weavers did not notice that these weavers had to a large extent been replaced by powerloom weavers, whose rise will be described below. The mills were now prevented from modernizing their equipment and expanding their production. They were turned into living fossils. The mill-owners continued production half-heartedly. There seemed no longer to be any future for this industry. Some mills were closed down as early as the 1950s and 1960s. To make matters worse, a prolonged strike of textile labour in Mumbai in the 1980s sounded the death knell for the industry in this metropolis.

It was quite natural that textile labour should be frustrated under these conditions, but resorting to a strike in an industry which was already doomed proved to be counterproductive. The workers turned to Dr Datta Samant, an independent labour leader who had organized a very succesful strike for the workers of the Premier automobile factory in Mumbai. This strike ended with a substantial increase in wages, which were tied to a productivity index. Samant was a medical doctor who knew nothing about economics and thought that his recipe would work in the textile industry just as it had done in the automobile industry. He was a charismatic leader and inspired the workers to continue their strike, which started in 1982, for eighteen months. (His life ended tragically when he was openly gunned down by gangsters in 1997.) The result of the strike which he had led was perverse: the workers shifted to the powerlooms in order to earn a living and the mill-owners procured cloth from these power looms and marketed it. By the time the strike ended the powerlooms had taken over most of the production and the mills were ‘sick’.

The phenomenon of a ‘sick mill’ can only be understood in the Indian context. Elsewhere a sick mill would go bankrupt and close down. In India, however, where there are no unemployment benefits, laid-off workers are politically dangerous and therefore the government will nurse sick mills to keep them alive even if they cease to produce anything. The mill-owners soon learned to make a profit out of being sick. The Reserve Bank of India sanctioned favourable loans for such sick mills. Clever manipulators could siphon off enough money from such loans and use it for other purposes. The production of mill-made cloth declined steeply under such conditions, from about 3.4 to 2 billion metres in the decade of the 1980s. In the same period the production of powerlooms increased from 5 to 11.4 billion metres.

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