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On: 28 December 2013, At: 15:53
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Journal of Contemporary Asia
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Colonialism, stages of
colonialism and the colonial
Bipan Chandra



Centre lor Historical Studies , Jawaharlal Nehru
University , New Delhi
Published online: 02 Apr 2008.

To cite this article: Bipan Chandra (1980) Colonialism, stages of colonialism and the
colonial state, Journal of Contemporary Asia, 10:3, 272-285
To link to this article: http://dx.doi.org/10.1080/00472338085390151

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Colonialism, Stages of Colonialism and
the Colonial State
Bipan Chandra*
1. Colonialism as a Social F o r m a t i o n

(A) Quite often, the underdevelopment and the economic obstacles to development produced by the colonial period have been seen as expressions of their precapitalist or traditional backwardness or at least as the remnants of the pre-colonial
past. Even when they are seen in 'a historical perspective', in which the role of
colonalism is viewed as an unsuccessful effort at modernization. In, for example
that of India failed because of the weight of the past backwardness, and which
thus led to a dual society, part modern and part traditional. This was the dominant view among the metropolitan writers during the 19th century, only they
were convinced that modernization would be accomplished in at the most a few
decades. Several 20th century writers have also seen colonialism as a transitional
society, though they do not ask the questions: transition to what? Would the
colony have developed, however, slowly or gradually, into a 'modern' or industrial capitalist society, i.e. the spit image of the metropolis, if colonialism had
continued to develop 'naturally' for a sufficient period, that is without the overthrow of colonialism?
In reality colonies have undergone a fundamental transformation under colonialism. They were gradually integrated into the world of modern capitalism. The
conditions of economic, social, cultural and political backwardness in the colonies
and ex-colonies, the initial conditions from which they start the development process after pohtical freedom, are not those of their pre-colonial past; they are the
creation of the colonial period, the era in which there occurred "the onslaught of
modernization from outside. ''~ Far from being traditional, these conditions signify
the evolution of the traditional pre-colonial societies into colonial societies. Thus,
for example, India under Britain was not basically similar to Mughal India; nor was
it pre-industrial for it had felt the full impact of industrial capitalism. In fact,
colonialism in India was as modern a historical phenomenon as industrial capitalism
in Britain; the two developed together) And, interestingly enough, the basic integration of India, as also of other colonies, with the world capitalist economy and
its transformation into a classic colony occurred during the 19th century precisely
under the banner of modemisation, economic development and transplantation of
capitalism. It is this colonial pattern of modernization which inevitably led to "the
development of underdevelopment", to use the apt phrase of Andre Gunder Frank.
* Professor of History, Centre for Historical Studies, Jawaharlal Nehru University, New Delhi



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The same social, political and e c o n o m i c process which p r o d u c e d social d e v e l o p m e n t
in the m e t r o p o l i s p r o d u c e d and maintained u n d e r d e v e l o p m e n t and backwardness in
the c o l o n y . The t w o countries were organically linked and participated for decades
and centuries in a c o m m o n , integrated world e c o n o m i c system, t h o u g h w i t h o p p o site consequences. The c o l o n y was thus m o d e r n i z e d and u n d e r d e v e l o p e d at the
same time. s
I w o u l d like to close this section w i t h a long q u o t a t i o n f r o m what I w r o t e in
. . . the study of colonialism would be helped if it was secn as a distinct historical stage or
period in the modern historical development of India which intervenes between the traditional, pre-Britisli society and economy and the modern capitalist or socialist society and
economy. It is not a mere adaptation or distortion of the old, not a partially modernised
society, n~r a transitional state of society. It is also not an unhappy and badly mixed amalgam of positive and negative features. It is a well-structured 'whole', a distinct social formation (system) or sub-formation (sub-system) in which the basic control of the economy and
society is in the hands of a foreign capitalist class wlfich functions in the colony (or semicolony) through a dependent and subservient economic, social, political and intellectual
structure whose forms can vary with the changing conditions of the historical development
of capitalism as a world-wide system.
I may reiterate here that the British rule did shatter the economic and political basis of
the old society. It dissolved the old pre-capitalist mode of production; but a new capitalist
system did not follow; instead a new colonial mode of production came into being. For
example, the land tenure systems introduced after 1793 completely overturned the old
agrarian relations. The new agrarian structure that was evolved to suit the needs of colonialism and under the impact of economic forces released by it was undoubtedly semi-feudal
hut it was nevertheless new; it was not the perpetuation of the old. In fact, throughout the
Indian social structure, new relations and new classes - a new internal class structure were evolved which were the product of, and fully integrated with, colonialism. The confusion partly arises from the complexity of the historical situation. World capitalism is a single
system and colonialism is a basic constituent of this system. Yet colonialism has distinct
characteristics of its own. We have, therefore, to view the same sytem of imperialismcolonialism in the form of two separate entities, one in the colony a,ad the other in the
metropolis. 4
(B) Traditionally, colonialism is seen as the result o f i d e o l o g y or personality or
at the most policy w h i c h is itself guided b y the first two. Thus if different colonial
administrators can be s h o w n to have d i f f e r e n t personal m o t i v e s , ideas, and policies,
it is c o n c l u d e d that there is no such thing as colonialism in any meaningful sense,
e x c e p t as foreign political rule. S i m i l a d y , m a n y economists dealing w i t h d e v e l o p ment t h e o r y t o d a y criticise the role o f colonialism, b u t colonialism is seen m e r e l y
in its political d o m i n a t i o n a l aspect.
As p o i n t e d out earlier, the recent t e n d e n c y is to see colonialism as a structure.
The intellectual resources d o n o t yet exist to understand this structure fully and to
trace the multifarious channels and ties - t h e veins and arteries - t h r o u g h w h i c h
this structure is articulated. But we can certainly assert that colonialism is something m u c h m o r e than political c o n t r o l or colonial policy. " T h e colonial state was
u n d o u b t e d l y a part o f the colonial system: it was the i n s t r u m e n t t h r o u g h w h i c h
the system was best e n f o r c e d ; and colonial policies helped evolve and m a i n t a i n the
colonial structure. But the colonial state and colonial policies did not c o n s t i t u t e the
essence o f colonialism. Colonialism was the c o m p l e t e but c o m p l e x integration and

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enmeshing of India's economy and society with world capitalism carried out by
stages over a period lasting nearly two centuries. ''s
Thus when we say that colonialism is to be seen as a structure, we mean that
colonial interests, policies, state and its institutions, culture and society, ideas and
ideologies, and personalities are to be seen as functioning within the parameters of
colonial structure, which is itself to be defined by their inter-relationstlips as a
(C) Colonialism is structured from the beginning of the contact between the
capitalist metropolis and the colony whose economy and society are subordinated
to tile metropolis from the beginning, though the patterns of the subordination
undergo changes over time. Consequently, colonialism undergoes underdevelopmerit from thebeginning. This view is contrary not only to the traditional capitalistcolonial view that colonialism develops and modernizes the colony - or at least
tries to do so - but also the traditional Marxist view that colonialism went through
two stages, one positive and the other negative, with the positive belonging to the
first period and the negative to the second, that during the first pre-imperialist
stage the character and impact of colonialism was on the whole positive despite
many crimes and much oppression, while it turned negative once modern imperialism (finance imperialism) entered the stage between 1870 and 1914.
In fact, both aspects and impacts of colonialism operated simultaneously. The
so-called positive aspect was as integral a part of, and contributed effectively to the
structuring of, colonialism as was the negative aspect. The positive and negative
stages of colonialism were rather stages in the cognition and understanding of the
colonial phenomenon by its victims. Thus many colonial and metropolitan intellectuals, including Marx before 1859, failed to grasp the basic features of colonial
societies in the early years of their structuring and came to have a certain positive
image of colonialism. Later, as the reality surfaced, they were able to see its essentially negative features. Instead of seeing the change as an aspect of intellectual and
political history linked to the early stages of colonialism, they assumed that the
reality had undergone a drastic reversal. Hobson's and Lenin's writings, or rather
a partial reading of Lenin's writings, regarding a new stage of imperialism in the
last quarter of the 19th century added fuel to this misunderstanding.
(D) Basic to colonialism is economic exploitation or the appropriation of the
colony's social surplus. Forms of surplus appropriation or the manner in which tile
colonial economy and society is to be subordinated and put at the service of the
metropolis, undergo changes over time. And as these forms change so do colonial
policy, state and its institutions, culture, ideas and ideologies.
Colonialism is, thus, not to be seen as one continuous and the same structure;
it goes through stages which are linked to the forms of surplus appropriation. 6
Historically, colonialism underwent three distinct stages, each stage representing
a different pattern of subordination of colonial economy, society, and polity, and
consequently different colonial policies, ideologies, impact and colonial people's
response. The change from one stage to the other was partially the consequence of
the changing patterns of metropolis' own social, economic, and political development, and of its changing position in the world economy and polity.
Stages of colonialism for different colonies are not bound by the same time

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horizons; but the basic content of the stages is broadly the same in all the colonies.
Moreover, the stages do not exist in pure forms; in a sense each stage is an abstraction. Nor is there a sharp break between one stage and another. Forms of surplus
appropriation and other features of colonialism from earlier stages continue into
later ones. Each stage is, however, marked by distinct, dominant qualitative features
which demarcate it from the other stages. It is also to be noted that a dominant,
new form of surplus appropriation may become atrophied in a particular colony
because of distinct historical factors. Thus the third, finance imperialist stage was
atrophied in India; the second, free trade stage in Indonesia, and the first and the
second, the mercantalist and free trade stages in Egypt.
I! Brief Outline o f Stages o f Colonialism
(A) The First Stage: The Period o f Monopoly Trade algl Revenue Appropriation
During the first stage of colonialism the basic objectives of colonialism were:
(i) monopoly of trade with the colony vis-a-vis other European merchants and the
colony's traders and producers. Moreover, whenever handicraftsmen or other producers were employed on account of the colonial state, corporations or merchants,
their surplus was directly seized not in the manner of industrial capitalists but in
that of merchant-usurers. (ii) The direct appropriation of revenue or surplus through
state power. The colonial state or corporations required large financial resources
to wage wars in the colony and on the seas and to maintain naval forces, forts,
armies and trading posts. Direct appropriation of the colony's surplus was also
needed to finance purchase of colonial products since the colonies did not import
enough of metropolitan products. Directly appropriated surplus was also to serve
as a source of profit to the merchants, corporations, and the exchequer of the
metropolis. The large number of Europeans employed in the colony also appropriated a large part of the colony's surplus directly through extortion and corruption or high salaries.
It is to be noted that (i) the element of plunder and direct seizure of surplus
is very strong during this stage of colonialism; and (ii) there is no significant import
of metropolitan manufactures into the colony.
A basic feature of colonial rule during this period was that no basic changes were
introduced in the colony in administration, judicial system, transport and communication, methods of agricultural or industrial production, forms of business
management or economic organization (except putting-out system and plantations
in some colonies), education or intellectual fields, culture, and social organization.
The only changes made were in military organization and technology, which contemporary independent chieftains and rulers in the colonies were also trying to
introduce, and in administration at the top of the structure of revenue collection
being geared to making it more efficient.
Why was this so? Because the colonial mode of surplus appropriation via purchase of colony's urban handicrafts and plantation and other products through a
buyer's monopoly and through control over its revenues, did not require basic
socio-eeonomic and administrative changes in the colony. It couM be superimposed
over its existhzg economic, social, cultural, ideological, and political structures.

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Also the colonial power did not feel the need to penetrate the villages deeper than
their indigenous predecessors had done so long as their economic surplus was
successfully sucked out.
This lack of need for change was also reflected in the ideology of the rulers.
There was, for one, no 'developmental' ideology or fanfare. Not changed colonial
economy but the existing economy of the colony was to be the basis of economic
exploitation. There was also therefore not much need to criticise colonial civilization, religions, laws, etc., for they were not seen as obstacles to the current modes
of surplus appropriation. The need was to understand them so that the wheels of
administration might move smoothly. Criticism was confined to missionaries.

The Second Stage: Exploitation through Trade

The newly developing industrial and commercial interests in the metropolis and
their ideologues began in time to attack the existing mode of exploitation of the
colony with a view to making it serve their interests. Moreover, as it became clear
that colonial control was to be a long term phenomenon, the metropolitan capitalist class as a whole demanded forms of surplus appropriation which would not
destroy the golden goose. It realised that 'the plundering form is less capable than
others of reproducing the conditions for its own reproduction'. This is the secret of
the critique of 'colony's exploitation' which is often made during the first and
second stages by the liberals and 'radical' democrats of the metropolis. In the end,
sooner or later, for a longer or shorter period, the administrative policies and economic structure of the colony come to be determined by the interests of the industrial bourgeoisie of the metropolis.
The industrial bourgeoisie's interest in the colony lay in satisfying the need for
outlets for thief ever-increasing output of manufactured goods. Linked with this was
the need to promote the colony's exports. This for several reasons: (i) The colony
could buy more imports only if it increased its exports, which could only be of
agricultural and mineral products, to pay for them. The colony's exports had also to
pay for the 'drain' or to earn foreign exchange to provide for the export of business
profits and the savings and pensions o f Europeans working there. (ii) The metropolis
desired to lessen dependence on non-empire sources of raw materials and foodstuffs.
Hence the need to promote the production of raw materials in the colony. The
colonial rulers must enable the colony to do so. The colony had to be developed as
a reproductive colony in the agricultural and mineral spheres. (iii) Thirdly, as the

subordinated complement of a capitalist economy, the use of the colony both as
a market for goods and as a supplier of raw materials must occur within the perspective of extended reproduction.
Thus the essence of the second stage of colonialism was the making of the
colony into a subordinate trading partner which would export raw materials and
import manufactures. The colony's social surplus was to be appropriated through
trade on the basis of selling cheap and buying cheap. This stage of colonialism could
even embrace countries which retained political freedom.
A question that still awaits solution is the mechanism through which colony's
surplus is appropriated under conditions o f the metropolis' buying and selling at
competitive prices. The dominant school of European economists has, for nearly

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two centuries,denied that any exploitation is involved in this particular relationship;
rather, it has maintained through the theory of comparative costs and international
division of labour that both sides of the economic relationship benefit. Many of
the critics of this stage ofcolonialism have argued that the exploitation of the colony
occurs through the terms of trade which on the whole move against primary products. This is not always true. Export prices of the metropolis may fall faster than
import prices, reflecting falling costs due to technological improvement and greater
and better use of machinery partly made possible by expanding trade and widening
markets. Rising import prices and falling export prices may expand exports fast
enough to lead to rising productivity in the raw material producing colony. Hence
the basic question for this stage of colonialism is what happens to productivity in
the metropolis and the colony.
The question of the mechanism of surplus appropriation in this stage of colonialism has been reopened in recent years in the works of Arghiri Emmanuel and
Samir Amin.
The colony could not be exploited in the new way within its existing economic,
political, administrative, social, cultural and ideological setting; this setting had to
shattered and transformed all along the line.
This transformation was actively undertaken under the slogan of development
and modernization. In the economic field this meant integrating the colonial eco.
nomy with the world capitalist economy and above all the metropolitan economy.
The chief instrument of this integration was the freeing of foreign trade in the
colony of all restrictions and tariffs, especially in so far as its trade with the metropolis was concerned. For most of this period, the colony was to be far more of
a free trading country than the metropolis itself. Free entry was now given to the
capitalists of the metropolis to develop plantations, trade, transport, mining, and
in some cases industries in the colony. The colonial state gave active financial and
other help to these capitalists, even when the doctrine o f laissez faire reigned sup.
reme at home. The agrarian structure of the colony was sought to be transformed
with the purpose of making the colony a reproductive one by initiating capitalist
agriculture. Similiady, a major effort to improve the system of transport and communications was made.
Major changes occurred in the administrative field. Colonial administration had
now to become more detailed and comprehensive as well as to seep down if metropolitan products were to penetrate the interior towns and villages and the agricultural produce was to be drawn out o f them. Legal structure in the colony must be
overhauled as sanctity of contract and its enforcement were essential if the millions
of transactions needed to promote imports and exports were to become viable. It
was during this stage that the Western capitalist legal and judicial system was introduced in the colonies and semi-colonies. The changes, however, often related only
to criminal law, law of contract, and civil law procedures; personal law, including
that of marriage and inheritance, was often left untouched.
Modern education was now introduced, to a greater or lesser extent, basically
with a view to man the new, vastly expanded administrative machinery,but also as
an aspect of the transformation of the colony's society and culture, which was
promoted both with a view to make the colony reproductive and to promote the

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culture of loyalty among the colonial people. Many intellectuals in the colonies
also picked up the banner of social and cultural modernization but for opposite
The second stage of colonialism generated a liberal imperialist political ideology
among sections of the imperialist statesmen and administrators who talked of
training the colonial people in the arts of democracy and self-government. It was
believed that if the colonial people 'learnt' the virtues of law and order, sanctity
of business contract, free trade, and economic development, the economic relatioship lying at the heart of this stage of colonialism could be perpetuated even if the
metropolitan power was to withdraw direct political and administrative control.
The effort at the transformation of the colony's socio-economic structure inevitably required that its existing culture and society be declared inadequate and
decadent. They were now subjected to sharp criticism. This stage also witnessed
the birth and flowering of the ideology of development. Because of the emergence
of 'development' economies after the Second World War in the period of the success
of the movements of national liberation, it is often forgotten that the colonialization of the economies of most of the colonies occurred under the banner of the
ideology of development. Moreover, often the two theories of economic development are similar, even though separated by entire epochs. The earlier theory of
economic development emphasised (i) law and order, (ii) private property in land,
(iii) investment of foreign capital to compensate for lack of capital in the colony
and to act as an example to domestic enterprise, (iv) development of means of
transport, (v) promotion .of foreign trade, (vi) modern education which would
enable the colonial people to understand these theories of development, and
(vii) modern culture that would promote habits of thrift (savings) and enterprise.
One point needs to be stressed in this connection: The colonial authorities
did not deliberately set out to underdevelop the colony. On the contrary, their
entire effort was to develop it so that it could complement, though in a subordinate
position, the metropolitan economy and society. Underdevelopment was not the
desired, but the htevitable consequence o f the inexorable work#zg o f colonialism
o f trade atul o f its inner contradictions. For the same reason, there was no imperialist theo O, o f underdeveh~pment - underdevelopment was the resttlt o f the practice o]'particular theories o]'deveh~pment.

The earlier l'ornls of surplus extraction continued during this stage and became
a drag on its full working. Moreover, since the colony had also to pay the costs
tff its transformation, H~e burden on the colonial peasant rose steeply.
In practice the transformational effort was limited in many sectors and above
all in the agricultural sector because of the inner contradictions of colonialism.
For example, it was during this stage that most of the colonies acquired what
came to be known as the 'semi-feudal' features of their agriculture.

The Third Stage. The Era o f Foreign hn,estmettts and International Coml~etition fi~r G)hmies.

A new stage of colonialism was ushered in as a result of several major changes in
the world economy; spread of industrialization to several countries of Europe,
North America. and Japan; intensification of industrialization as a result of the

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