2 - Agriculture and cotton textiles

Summary

The dominant position of Indian cotton textiles in world markets was a consequence of a combination of their fine quality and their very low prices. The fine quality was due to the skill of the Indian manufacturer, but in theory could be reproduced elsewhere. More difficult to match, however, was the low price for cloth. To put it simply, much of the world was unable to manufacture cloth for less. Since the late seventeenth century observers have attributed the cheapness of Indian cottons to the exploitative and oppressive conditions under which Indian laborers toiled. We have seen, however, that weavers in eighteenth-century South India were in a very strong position in their dealings with merchants. It is now difficult to sustain old conceptions of the degraded position of laborers in eighteenth-century South Asia.

I have argued elsewhere that the competitive position of Indian cotton cloth arose not from cheap labor but from agriculture. To summarize the argument, the price of grain was far lower in South India than in Europe. Grain prices in Britain, for instance, were twice as high as in South India. Although in real terms wages in South India were comparable to, or perhaps even higher than those in Europe, the low price for grain meant that money wages were far lower. And with this, the prices of Indian textiles were far lower. Or to put it another way, the price level was far lower in India than in Britain.