AHC: Bengal Renaissance Leads to Industrialization

This is why a situation where multiple Western powers have interests in India works in favour of the Indians. If there's a balance of power, no one European power can move as freely.

If, say, Maharaja Ravi Varma I of Travancore was a good ruler but his son Ravi Varma II is a moron the HEIC might want to move in but if Travancore is in the French sphere of influence, they might not be able to do so as effectively. Same thing goes for the French against British clients.

Very true. But again, not to belabor the point, we've gotten away from industrialization. What economic conditions are needed in Bengal for them to be able to industrialize during the 19th century? This is presuming the lack of a colonial power.

Cheers,
Ganesha
 
Very true. But again, not to belabor the point, we've gotten away from industrialization. What economic conditions are needed in Bengal for them to be able to industrialize during the 19th century? This is presuming the lack of a colonial power.

Capital, for starters. From what I understand, Bengal in the first half of the 18th century was one of the world's major textile producers, but the production was distributed among thousands of artisanal weavers, meaning that there were few or no people who could handle the start-up costs of a textile mill. There would have to be either cooperatives of artisans, governmental investment (whether in the form of loans or chartered companies) or foreign investment.

Technical knowledge would also be an issue, but a relatively easy one to solve - the prospective industrialists could hire a few engineers to help with the start-up and establish a Bengali engineering school.

Infrastructure: I have no idea what the Bengali roads and port facilities were like at the time. They'd have to get the jute to the mills and the finished cloth to market. Eventually they'd need railroads, although if they're already industrializing by then, the capital would probably be there.
 
Capital, for starters. From what I understand, Bengal in the first half of the 18th century was one of the world's major textile producers, but the production was distributed among thousands of artisanal weavers, meaning that there were few or no people who could handle the start-up costs of a textile mill.

Hrm. The artisanal weavers were all working for merchants who bought the textiles, no?

Also, the zamindars would have had capital, no?
 
Hrm. The artisanal weavers were all working for merchants who bought the textiles, no?

Also, the zamindars would have had capital, no?

Most of the zamindars' capital would have been tied up in land, though, and they wouldn't have been able to invest it without credit. Which leads to another issue: were there banks in Bengal at this time? Was there anyone (maybe a coalition of merchants) with enough capital to start a bank? Would there have been religious objections to banking among Muslims, i.e., how strictly was the prohibition against interest observed at that time and place? Would foreign banks have accepted Bengali land as collateral?

Failing that, maybe the merchants could have pooled their capital to start up a mill - they'd be a lot more liquid, but I have no idea what kind of margins they were running on and whether they'd have the surplus to invest in a big project that won't show a profit for a few years.
 
Most of the zamindars' capital would have been tied up in land, though, and they wouldn't have been able to invest it without credit. Which leads to another issue: were there banks in Bengal at this time? Was there anyone (maybe a coalition of merchants) with enough capital to start a bank? Would there have been religious objections to banking among Muslims, i.e., how strictly was the prohibition against interest observed at that time and place? Would foreign banks have accepted Bengali land as collateral?

Failing that, maybe the merchants could have pooled their capital to start up a mill - they'd be a lot more liquid, but I have no idea what kind of margins they were running on and whether they'd have the surplus to invest in a big project that won't show a profit for a few years.

The first banks were funded by the British in the early 1800s. I don't know of any earlier domestic ones. I think the Bank of Calcutta was founded in 1805 by Wellesley.

As I mentioned earlier, the zamindars didn't have nearly as much power in Bengal as they did in some other parts of India. As you said, there was a large merchant and artisan middle class which held much of the power. Indians have always held their wealth in land and gold, both of which were individually and privately protected.

I don't know about how Muslims might have reacted to non-interest-free banking, but it wouldn't be unlikely for foreign banks to accept Bengali land. There were plenty of British banks doing all sorts of colonial deals. As long as they figured they could profit, there'd be a bank available.

Cheers,
Ganesha
 
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Interesting. The author makes clear, though, that most of these "portfolio capitalists" were Persian and Chinese rather than Indian. So what we would need is for Bengalis to become portfolio capitalists, or for Bengal to develop some other means of large-scale capital investment.

Ganesha said earlier that Bengal had a more efficient tax structure than most other Indian kingdoms, which opens the possibility of state investment, or at least state banking. Would it be possible for the government to incorporate a bank and give loans to industrialists, possibly on terms that could help mitigate the risks and make them less reluctant to jump in? The government would have more capital to invest than any single merchant or individual moneylender, and could also earmark funds specifically for industrial development.

Oh, and the use of the word "incorporate" in the previous paragraph raises another issue: legal infrastructure. Bengal would need corporations, to facilitate the pooling of capital and to enable people to invest without the risk of personal ruin. It would also need patent law and a judicial system that could enforce contracts.

A farsighted Nawab probably could have done all this, if the Company hadn't shown up when it did. The Bengalis got robbed.
 
Interesting. The author makes clear, though, that most of these "portfolio capitalists" were Persian and Chinese rather than Indian. So what we would need is for Bengalis to become portfolio capitalists, or for Bengal to develop some other means of large-scale capital investment.

Ganesha said earlier that Bengal had a more efficient tax structure than most other Indian kingdoms, which opens the possibility of state investment, or at least state banking. Would it be possible for the government to incorporate a bank and give loans to industrialists, possibly on terms that could help mitigate the risks and make them less reluctant to jump in? The government would have more capital to invest than any single merchant or individual moneylender, and could also earmark funds specifically for industrial development.

Oh, and the use of the word "incorporate" in the previous paragraph raises another issue: legal infrastructure. Bengal would need corporations, to facilitate the pooling of capital and to enable people to invest without the risk of personal ruin. It would also need patent law and a judicial system that could enforce contracts.

A farsighted Nawab probably could have done all this, if the Company hadn't shown up when it did. The Bengalis got robbed.
Wella victorious Plassey delays British plans, so a smart Bengali ruler could ally with the French (or Dutch) and work towards it.
 
Wella victorious Plassey delays British plans, so a smart Bengali ruler could ally with the French (or Dutch) and work towards it.

Delays, but not destroys. Even before Plassey, it was pretty inevitable that the British would be the European power in Bengal, even if they were pushed out of the rest of India. That's why I think we need an earlier POD.

Jonathan Edelstein, you bring up a lot of very good points. In order to build a modern economy, you need more than coal and labor.

Cheers,
Ganesha
 
Delays, but not destroys. Even before Plassey, it was pretty inevitable that the British would be the European power in Bengal, even if they were pushed out of the rest of India. That's why I think we need an earlier POD.

Jonathan Edelstein, you bring up a lot of very good points. In order to build a modern economy, you need more than coal and labor.

Cheers,
Ganesha
Not inevitable if you have a stopping point in between them and you. That delay of time is literally the difference between life and death for Bengal, and possibly enough to later on destroy.
 
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