WRITTEN BY R. NANJAPPA                        

Post No. 8523

Date uploaded in London – – – 17 August 2020   

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Chapter 7 – Part I

                           COLLECTED WRITINGS OF DHARAMPAL- 2

R. Nanjappa

Adam Smith Anticipates Dharampal! 

INDIA was a rich country when the Europeans came. They came to trade here precisely because India was rich. The East India Company obtained a monopoly of this trade. From the beginning the British had never intended to settle here. Their purpose was to take away to Britain the surplus products of Indian industries and the taxes imposed on them.

This philosophy was very clearly articulated by Adam Ferguson, professor of Moral Philosophy at Edinburgh. He also felt that such transfer of wealth would not be possible “without bending and breaking rules”. For this purpose he felt it advisable for the government to let the company manage the loot. But the company should be under the control and supervision of a govt. body. So the Board of Commissioners for the Affairs of India was set up in 1784. Thus, the plunder and loot of India was sanctioned and supervised by the govt., even before the Crown took over administration directly in 1858. All these are revealed by the archival documents gathered by Dharampal.

But we have a surprise here. Adam Smith, the father of modern economics, seems to have anticipated this. In his famous book “The Wealth of Nations” published in 1776, he has provided some brilliant observations about the prosperity of India, company’s activities and their likely consequences for India.

I. Agriculture and Industry:

The policy of ancient Egypt too, and that of the Gentoo government of Indostan, seem to have favoured agriculture more than all other employments.

The government of both countries was particularly attentive to the needs of agriculture..

The works…which were constructed  by the ancient sovereigns of Indostan for the proper distribution of the waters of Ganges as well as of many other rivers, though they have been less celebrated, seem to have been equally great [ as those of Egypt.]

…the confinement of the foreign market was in some measure compensated by the conveniency of many inland navigations, which opened, in the most advantageous manner, the whole extent of the home market to every part of the produce of every different district. The great extent of Indostan, too, rendered the home market of that country very great, and sufficient to support a great variety of manufactures.
Bengal, accordingly, the province of Indostan, which commonly exports the greatest quantity of rice, has always been more remarkable for the exportation of a great variety of manufactures than for that of its grain.

Book IV, Chapter IX.

II. How the ruin is brought about:

The company officials interfered in agriculture, telling people how much to grow of what, so that their own profits from the sale of poppy might soar. They monopolised internal trade in manufactures too. This led to their decline, and people were driven to seek other occupations. Adam Smith describes what would happen then.

….in a country where the funds destined for the maintenance of labour were sensibly decaying,… the demand for servants and labourers would be …less than it had been the year before. Many who had been bred in the superior classes, not being able to find employment in their own business, would be glad to seek it in the lowest. The lowest class being not only over-stocked with its own workmen, but with overflowings of all the other classes, the competition for employment would be so great in it, as to reduce the wages of labour to the most miserable and scanty subsistence….Many would not be able to find employment even upon these hard terms, but would either starve, or be driven to seek a subsistence either by begging, or by the perpetration perhaps of the greatest enormities. Want, famine and mortality would immediately prevail in that class, and from thence extend themselves to all the superior classes…..This perhaps is nearly the present state of Bengal and of some other of the English settlements in the East Indies…..the funds destined for the labouring poor are fast decaying. The difference between the genius of the British Constitution which protects and governs North America, and that of the mercantile company which oppresses and domineers in the East Indies, cannot perhaps be better illustrated than by the different state of those countries.

Book I, Chapter VIII

The great fortunes so suddenly and so easily acquired in Bengal and the other British settlements in the East Indies may satisfy us that, as the wages of labour are very low, so the profits of the stock are very high in those ruined countries. The interest of money is proportionably so. In Bengal, money is frequently lent to the farmers at forty, fifty, and sixty percent, and the succeeding crop is mortgaged for the payment. As the profits which can afford such an interest must eat up almost the whole rent of the landlord, so such enormous usury must in its turn eat up the greater part of those profits.

                         ***                    to be continued


Q & A

Dear Sir,

I just happened to come across this website and hope my email will not meet your “electronic bin” as malware.

I found the article on Dharampal by Shir R Nanjappa very interesting and wonder if it may be possible for me to know further about this unusual and knowledgeable person.  I do not even know if there is the first name or if Dharampal is the only name.  Being trained as a Botanist in India, I am very interested to  have the complete reference of the book on his collected essays.  I am particularly interested in Chapter 6, (referenced below) so I can request the book to be made available in the British library

“The beautiful tree – Indian education in the 18th century”

Many thanks 



This is my reply.


Thank you for the enquiry.

1. Dharampal is the only name by which he is known.

2. The volume” The Beautiful Tree” was published as an independent book years ago. But now, it is included as Volume No.III of the “Collected Writings” of Dharampal. The whole set consisting of 5 volumes is published by: ‘Other India Press’, Mapusa 403507 , Goa, India, in association with ‘Society For Integrated Development of Himalayas (SIDH).. The latest edition was published in 2016..

The book can be ordered at:

SIDH contact :


3. Volume I of the set contains a fairly detailed Preface by Claude Alvares which gives some information about Dharampal.

4. A Collection of articles on Dharampal in English and Hindi was brought out by SIDH in 2007. I hope it is still available.It is titled: “Remembering Dharampal”.

5. Another volume titled “Rediscovering India” containing essays and speeches of Dharampal was brought out by SIDH in 2003. It is now out of print. But they may provide a Xerox copy on request.(278 pages)

Trust I have answered your points.



Swaminathanjee Namaste

Many thanks for your prompt response and informative reply from Nanjappajee that I have just read.  I am very relieved that my email did not hit your “scam bin” as I had feared it might!   

I will use the links and hope I can get to read the “Beautiful tree” soon.

Please do pass on my regards to Nanjappajee for providing the information and links equally promptly to you.

Best Regards



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