Not Just Another Recession
Why the Global Economy May Never Be the Same
INDIA'S rapid progress along the path of industrialization has left big gaps in her social legislation. The enormous growth of her population (from 319,000,000 in 1921 to about 370,000,000 in 1934) and the economic depression of the last six years have only increased the need for reforms.
The industrial expansion has been going steadily ahead behind tariff walls built upon a basis of "discriminating protection" -- a policy accepted by the Government of India on the recommendation of the Fiscal Commission after the World War. The outbreak of hostilities had revealed, as in a flash, the almost complete dependence of India on her imports of manufactured articles from abroad, even for the most essential commodities. In 1916 the Government appointed an Industrial Commission headed by Sir Thomas Holland and composed of a number of distinguished men, both British and Indian, to investigate the possibilities of industrial development in India. Though the conditions of labor were not mentioned among the assigned subjects, the Commission nevertheless dealt with that problem with great lucidity and foresight. Referring to the alleged inefficiency of Indian labor, it wrote:
If the children of workers are provided with education under tolerable conditions of life, a new generation of workers will grow up, who will learn to regard mill work as their fixed occupation. Better housing is a most urgent necessity, especially in the large congested industrial cities. Facilities for healthy amusement, shorter hours of work (though a reduction of these may for a time decrease output), and other measures for economic betterment, such as cheap shops for the sale of articles required by the millhands, and co-operative societies, are almost equally important. . . . The problem, not only on moral grounds, but also for economic reasons, must be solved with the least avoidable delay, if the existing and future industries of India are to hold their own against the ever-growing competition, which will be still fiercer after the war. No industrial edifice can be permanent, which is built on such unsound foundations as those afforded by Indian labor under its present conditions.[i]
One of the best informed witnesses before the Commission was Major Norman White, then Sanitary Commissioner with the Government of India. In an admirable note on industrial development and public health he commented on the almost complete neglect of industrial hygiene in India, and attributed it to the fact that labor in India had been in the past "both plentiful and cheap." Three diseases he mentioned as being the most potent causes of industrial inefficiency -- malaria, hookworm, and tuberculosis. Of the first two, he said: "Both are almost universally prevalent in India; both exercise their malign influence from earliest childhood and seriously interfere with bodily and mental growth and development; both, by undermining the constitution, render the body more prone to infection with other diseases. Directly and indirectly they are responsible for an enormous mortality bill." He included tuberculosis "because of the special risks with regard to the spread of infection entailed by large aggregations of labor in any but the best hygienic conditions."
India did not have long to wait for a tragic illustration of Major White's penetrating analysis. Before his note was a few months old two successive waves of influenza had swept the country, killing in less than a year from ten to twelve million people.
The natural sequence to this should have been the immediate appointment of a Public Health Commission with the conditions of industrial labor as one of the subjects for its attention. Instead there was named a Fiscal Commission to report on the desirability (or otherwise) of India's definitely adopting a protectionist policy. The plain fact is that just at this time Indian Nationalism was rapidly becoming a formidable force under the leadership of Mr. Gandhi, hitherto a friendly critic of the British Government. Political discontent was growing in India, and across the frontier Afghanistan was in no friendly mood. Mr. Montagu, Secretary of State for India at the time, devised a dual policy intended on the one hand to placate the right-wing Nationalists, and on the other to isolate Mr. Gandhi as far as possible, by winning over the capitalist elements. Mr. Montagu had in 1911 made a fervent appeal on behalf of the Indian workers in one of his earliest speeches in the House of Commons;[ii] yet he was responsible eight years later for a scheme of reforms that practically ignored the interests of the workers. True, the franchise was extended to 7 or 8 million people; but the workers were not among them. In the Central Legislature, which would have had the most to do with labor legislation, landlords, mill-owners and chambers of commerce had special representatives, in addition to their right to contest general seats, while labor had but a single nominated member in the Lower House out of a total of 141, and none at all in the Upper House with its 60 members. The position of labor in the Provincial Legislatures was hardly better.
On the question of fiscal autonomy for India, both the Joint Parliamentary Committee which considered the Reforms Scheme and Mr. Montagu himself laid down in categorical terms that "whatever might be the right fiscal policy for India, for the needs of her consumers as well as for her manufacturers, it is quite clear that she should have the same liberty to consider her interests as Great Britain, Australia, New Zealand, Canada and South Africa."
To appreciate the significance of the step taken by Mr. Montagu, brief reference should be made to the long and bitter controversy concerning the control exercised by Lancashire for more than half a century over India's tariff and labor legislation. Incredible as it sounds, the best friend of the Indian industrial worker proved to be the Manchester Chamber of Commerce -- whatever the motive. It was Lancashire's representatives in the House of Commons who had espoused the Indian worker's cause and exposed the harshness of the Indian industrial system. Whenever there occurred a move to shorten the hours of work or stiffen the administration of factory laws, a memorial from Lancashire was always to be found operating the springs of initiative. But with the grant of limited fiscal autonomy to India in 1921 Lancashire had to alter its methods: when dictation through the India Office became no longer easy or profitable, it gave way to a policy of cultivating the goodwill of the Indian capitalists.
It would, indeed, be easy for those who measure progress in terms of legislation to point out the improvements effected in the conditions of Indian labor as a result of legislative action. Despite the exclusion of the worker from the electoral rolls and his inadequate representation in the legislatures, the Factories' Act has been considerably revised in the last fifteen years, notably by the reduction of the maximum number of hours of work per day from 12 to 9. Conditions of work inside the factories are being gradually improved so as to lessen the strain and minimize the risk of accidents. The Mines Act, which had so long withstood improvement, was amended in 1923 by a limitation on the weekly hours of work. The number of women working underground is being rapidly reduced, and within the next year or two the prohibition will become absolute. The scope and the provisions of the Workmen's Compensation Act, passed in 1925, were considerably liberalized eight years later. There is in force a Trades Union Act for the registration of trades unions and a Trades Disputes Act for the creation of conciliation and arbitration machinery. A great deal has also been done to improve the conditions of plantation labor by the repeal of the Workmen's Breach of Contract Act, thereby releasing workers from conditions approximating serfdom. The Government of India has claimed with pride that its record in regard to the ratification of the conventions of the International Labor Conference (of which India is a prominent member) is more creditable than that of many other members of that organization. Lastly may be mentioned the work of the Royal Commission on Labor presided over by the late Mr. J. H. Whitley, which made a study of the conditions of industrial and plantation labor in India and drew up an illuminating report in 1931. Notwithstanding the financial difficulties and the political preoccupations of the Government of India since the publication of the report, some of the recommendations of the Commission have been translated into action. The plea is often made that this catalog of achievements, though not an exhaustive one, affords evidence of an honest and courageous attempt to deal with the admittedly serious problems of industrial labor in India.
But the optimistic point of view implied in the preceding paragraph leaves out of account certain fundamental considerations. It is pertinent to inquire how many of the 26 million of India's industrial workers come under the influence of legislative action. Less than 5 million are engaged in organized industry. The rest, who constitute the vast majority and are described as unprotected labor, remain outside the range of the labor laws. Two instances will suffice to explain what in reality unprotected labor means -- the tanning industry and the indigenous cigarette manufacture.
Tanners are all drawn from the untouchable classes, since no caste Hindu will handle leather. Describing conditions in the tanneries, the Royal Commission on Labor referred in its report to the "lack of sanitary arrangements and drainage;" to "the earth space being littered with evil-smelling refuse and sodden with pools of filthy water;" to "the absence of washing arrangements, and, in the majority of cases, also of latrine accommodation." Boys commence work about the age of 9 (there is, in fact, no restriction in regard to a minimum age); the hours of work are based on the old principle observed in the ginning factories thirty years ago of "sunrise to sunset" and often exceed 13 per day, with a brief interval of barely more than half an hour for food. Holidays are practically unknown; wages vary a great deal, but even in some of the best tanneries when the industry was doing well they ranged for adult workers from 6.5 to 8 dollars a month. Most of the workers in this (as, indeed, in every other) industry are in debt, the rate of interest being commonly 75 or 100 percent, but going up in a number of cases to as high as 300 percent.
Indigenous cigarette (beedy) manufacture is spreading rapidly in some of the provinces. The Royal Commission described the conditions of this work in the following passage:
Many of these places are small airless boxes, without any windows, where the workers are crowded so thickly on the ground that there is barely room to squeeze between. Others are dark semi-basements with damp mud-floors, unsuitable for manufacturing processes, particularly in an industry where workers sit or squat on the floor throughout the working day. Sanitary conveniences and adequate arrangements for the removal of refuse are generally absent. Payment is almost universally made by piece-rates, the hours are frequently unregulated by the employer and many smaller workshops are open day and night. Regular intervals for meals and weekly holidays are generally non-existent.
Child labor is extensively used in the industry, children usually commencing work at the age of 5 or 6. Regulation of any sort is unknown and children work from 9 to 12 hours a day on a wage not exceeding, in many centers, 5 cents.
It would be easy to elaborate the point about unprotected labor in India. There are mica, carpet and shellac factories where more or less similar conditions obtain, without the slightest interference from the Labor Department of the Government. The Royal Commission condemned them in strong terms and urged legislation, particularly to protect children from a system worse than that of indentured labor, by the enforcement of a minimum age for employment and the regulation of hours of work. Although four years have elapsed since the publication of the report, it is only within the last few months that the Government of India has undertaken a preliminary survey of the problem.
Another class of unprotected labor, very numerous, is that engaged in construction, road making or drainage works. This work is entrusted to contractors who determine for themselves the wages they will pay. The Government and the local bodies are concerned only with the completion of the work according to schedule, and have no direct interest in the human agency responsible for it. Here again, the Royal Commission suggested legislative action to obtain a modified form of fair wages clause in the contracts and a minimum age for employment -- without any tangible results so far.
It is only labor engaged in organized industry which is in some measure afforded legislative protection. The new Factories' Act, it is true, provides for a nine hour day, and is a great improvement on its predecessor in many ways. But its effectiveness is impaired by the very small staff maintained by the Provincial Governments for inspection and the extremely light punishments imposed by the courts for infringement of its provisions.
Then there is the Workmen's Compensation Act under which the aggregate amount of compensation paid has been steadily rising every year; but even now a considerable number of cases receive extremely small amounts or go without payments altogether. There is no obligation on the part of an employer to pay compensation unless a worker compels him to do so within a definite period (which may vary from 6 to 9 months) of the date of the accident. But how many workers in India are aware of the procedure of the Act, or even of the existence of the measure? How many, again, of these can afford to go to court (though the procedure has been simplified and cheapened) against their employers and be certain of either winning their cases or of retaining their jobs? In some cases workers have been content with a very small part of the amount legally due them for injuries sustained while working because in that way they hold their jobs.
In theory, the Trades Union Act enables workers' organizations to register themselves and enjoy certain privileges. But no employer is compelled by the law to accord recognition to such unions, and among the privileges of membership is not included immunity from dismissal.[iii] The law affords the worker no protection against the employer; and with unemployment acute everywhere, the workers naturally hesitate to associate themselves openly with their unions. Nevertheless, it is of interest to note that there are about 200,000 workers in the different unions, the railway organizations being on the whole most efficient.
The Trades Disputes Act, intended in theory to bring about conciliation between capital and labor in the event of disputes, has remained practically a dead letter, except when a general strike is threatened. The best comment on the futility of the Act was made by the Royal Commission, when it observed that only in four out of about five hundred possible cases had the Government agreed to set the machinery in motion.
The Government of the province of Assam, where most of India's tea is grown, declared before the Royal Commission that four years after the repeal of the Breach of Workmen's Contract Act a considerable portion of the workers on the tea plantations of Assam were under the impression that the Act was still in force. When questioned on the point, the Government's official representatives observed that there would be "grave risks" if steps were taken to acquaint the illiterate workers with the fact that they were no longer bound by contracts of the old type.
Such, in brief, is the position of even protected labor in organized industry. The illiteracy of the workers, their dependence on the money lenders, the almost universal prevalence of bribery and corruption, and the vastness of the unemployment problem render the protection of the law illusory to a large extent.
One may ask how far legislation has dealt with the really vital problems of the Indian worker. India is essentially an agricultural country: nearly three-fourths of her people are dependent, directly or indirectly, on the land. It is from among those who are hopelessly in debt in the village, the superfluous population whom the land cannot support, "the ne'er-do-wells" and "women of equivocal status," as the census report observed, that migration in search of employment takes place to the industrial centers. As a rule the hiring is done at the factory gates from among the hundreds who clamor there every morning. The fortunate few who secure temporary work must have in their possession cash for an initial bribe of a few dollars; and at every subsequent stage, whether it is the grant of leave or promotion, there is a bribe, either to the time-keeper, the foreman, or some other immediate superior. Wages in India are paid by the month, and seldom is it a living wage. Wages vary from province to province, and from industry to industry; but five to six dollars a month may be taken as a rough average. Agricultural wages are much lower, in some areas going down to about 8 or 10 cents a day. In any case, the worker must borrow sufficient money for his maintenance during the first five or six weeks after he has obtained employment. From the strain of factory work, to which he is unaccustomed, he seeks escape in the liquor shop or the opium den. The vast majority of the workers are consequently in debt at the ruinous rates of interest already alluded to.
Outside the factory, the life of the worker is even more pitiable. Generally when he goes to the city to seek employment he leaves his family behind. Housing conditions are appalling in all the industrial areas and prostitution is rife. The sex disparity in India's chief cities is worthy of note. In Calcutta it is 468 women, in Bombay 554, and in Rangoon 477 to 1,000 men; but in the working class areas the disparity is bound to be even more striking. Social vice is rapidly on the increase, and according to the estimate of Sir John Megaw (who retired as Director-General of the Indian Medical Service in 1933) the number of persons suffering from venereal disease cannot be less than 13 million.
Bombay city affords one of the worst examples of housing, though other industrial centers do not lag far behind. In Bombay, according to the census report for 1931, the average number of occupants per room in single-roomed tenements, which form over 80 percent of the total number, is just over four persons. Of Bombay's population 33 percent live in single rooms occupied by five or more persons at a time; while in some of the working class areas of the city, over 90 percent of the inhabitants live in single-roomed tenements. A lady doctor, appointed by the Government of Bombay to investigate housing conditions in the city some years ago, found six families in one room, 15 feet by 12. The number of adults and children living in that room was 30.
Considerations of space prevent me from going into further details regarding the life of the industrial workers. Until the war, the capitalists periodically had to face the possibility of a shortage of labor in the industrial areas. But such a fear does not exist today, due to the rapid increase in India's population and the great decline in the price of agricultural commodities which has driven millions of the unemployed into the industrial areas. Organization among the workers is feeble, though for a period shortly after the war it showed considerable promise. Naturally, from their own point of view, the British authorities have always been suspicious of mass organization in India, however legitimate its purpose. The police are vigilant, and there is a friendly understanding everywhere between them and the employers. In all disputes, whether strikes or lockouts, the police act in coöperation with the employers. The settlement of industrial disputes is regarded by most provincial governments as primarily a matter of "law and order;" and by intimidation, coercion and pressure of various kinds (such as by prohibiting meetings and by inducing shopkeepers to withhold credit from the workers) the police generally succeed in "settling" such disputes.
It is against this background that the problems of the industrial workers have to be considered. The limitations of legislation have already been pointed out, both in regard to the comparatively small number it affects and its severely limited influence over even that minority. It is clear that labor legislation is becoming increasingly difficult to enact in India. The momentum from Geneva seems to have largely spent itself, and there is evidence of much greater reluctance on the part of the Government of India to ratify conventions than in the earlier years of the International Labor Organization. Moreover, employers in British India have asserted with unmistakable emphasis, both in the Central Legislature and at Geneva, that they will oppose all fresh labor legislation, unless it is introduced simultaneously by the Princes in the native Indian States. Some, notably Mysore and Travancore, are copying the measures passed in British India so as to level up conditions within their own borders. But the majority of the States do not accept their obligations, though the Simon Commission argued with cogency that it is India, not British India alone, which is a member of the League of Nations.
The new Constitution undoubtedly does greater justice to the working class than Mr. Montagu's creation. The extension of the franchise to 30 or 35 million people will confer the vote on an appreciable number of workers; furthermore, a larger number of seats have been reserved for labor interests, both in the provincial legislatures and in the Federal Parliament. But the real question is whether under the new Constitution the pressing problems of the workers will be dealt with effectively and promptly. On the whole these problems have changed little, except to increase in magnitude, since they were first envisaged by the Industrial Commission in 1916. Despite all that has been attempted in the intervening years, they clamor more loudly today than ever before for immediate solution.
There remains only one feature to add to this dark and sombre picture. Mr. Gandhi's movement and the general race awakening which followed the War have had a profound reaction on the masses, especially on the urban industrial proletariat. They have witnessed the extensive use by the Indian Nationalists of certain weapons -- direct action and civil disobedience. True, right wing Nationalists, who will probably be installed in power in many of the provinces as a result of the general elections to be held toward the end of 1936, have been loud in their denunciation of the safeguards with which the new Constitution bristles. But the workers will remember the numerous promises made to them by the leaders of the Indian National Congress during the years of agitation: the reduction of taxes, a school in every village, a house for every family, old age pensions, maternity benefits, unemployment relief, sickness insurance, etc. Such a program will obviously require large funds for its execution, and these will not be forthcoming in a time of acute financial stringency like the present, unless India's defense expenditure can be curtailed in a drastic manner. But defense is a Crown subject, beyond the control of the Federal Parliament and of the Executive. It is from the ministries in the autonomous provinces that the workers will expect almost immediate redemption of these promises, unmindful of the consideration that a program of social and economic reform on a basis of reduced taxation is a contradiction of terms.
For a time it may be possible to suppress manifestations of economic discontent among the workers in the same way as the British have dealt with the Nationalist movement; but it will be a short-lived phase. The Indian workers, especially in the industrial areas, can prove astonishingly tenacious in a fight: they have carried on strikes for months without any visible resources to fall back upon. It is difficult to resist the conclusion that sooner or later a great clash is inevitable. The racial and religious divisions, of which so much is heard today, will give way under the new Constitution to a reorientation of forces on an economic basis.
[i] "Indian Industrial Commission's Report, 1918," paragraph 236.
[ii] His actual words were: "The leaders of Indian opinion must set their faces against the degradation of labor, and they need to be specially vigilant, because India's working classes, besides being themselves unorganized, are not directly represented on the Legislative Councils, whose Indian Members come almost exclusively from the land-lord and capitalist classes."
[iii] No employer would directly connect a worker's dismissal with active membership in a trade union; but some excuse is generally found to discharge those who take a leading part in organizing a union.
Can India’s Prime Minister Succeed Even as the Economy Plummets?