Remembering
Second World War & the Cause of Bengal
Famine
Utsa Patnaik
JUNE 2012 marked the
seventy-first anniversary
of Operation Barbarossa, Nazi Germany’s invasion of the Soviet Union. Germany’s
desire
to control Russian oil and other primary resources was a major
reason of
its drive for conquest. It is estimated that about nine-tenths
of all German
army casualties occurred on the Eastern Front and Hitler’s
ultimate defeat was
assured by his inability to counter the fierce resistance of
the Soviet Union
which itself lost an estimated 20 million people in the
anti-fascist war.
August 2012 marks the seventieth anniversary of the Quit India
movement which
unleashed mass repression by the dying British colonial power
against the
Indian people. India
had
been involved by Britain
in WW II without consulting Indian opinion. A large part of
the financing of
the Allied offensive against Japan
had to be borne compulsorily by India
and the way this burden was effectively imposed led to the
death by starvation
of over 3 million people in Bengal.
August 15,
2012, India’s
Independence
Day also marked the sixty-seventh anniversary of Japan’s
defeat, V - J Day on August
15, 1945.
Germany’s
invasion of the Soviet Union
changed political
alliances throughout the world. The attitude towards the War
of those
struggling for freedom in colonised lands came to reflect
substantial
theoretical differences. After Hitler’s invasion of the Soviet
Union in June
1941, the Communists in India,
many of whom were working within the Congress, unequivocally
supported the
anti-fascist front against Germany
and later Japan.
Many Communists however were nevertheless jailed along with
other Congress
workers. Subhas Chandra Bose adopted the opposite position of
treating ‘the
enemy of British imperialism as the friend of India’ and first
sought German
aid and later succeeded with Japanese help to raise his army.
Bose’s political
position was not that of other Congress leaders who opposed
the fascist Axis
powers and also saw an opportunity to press for independence.
Gandhiji launched
the Quit India movement in August 1942, which led to mass
repression and
arrests effectively immobilising the nationalist leadership
for nearly three
years. Many
communists within the
Congress were also jailed at the same time.
While the political
story of the period is
reasonably well known there is very inadequate understanding
even today, of the
heavy cost in resources and lives that Britain unjustly
exacted from India, and
India’s political leaders of that period themselves seem to
have had little
inkling of the true cause of the Bengal famine. Many books and
articles about
the Bengal famine have been written since then, but they do
not go to the heart
of the matter since they see little or no connection between
the famine and Britain’s
deliberate measures to extract resources from the Indian
people on a truly
massive scale to finance the war in the eastern theatre. The
only study which
explored the connection albeit too briefly is Amartya K Sen’s
Poverty and Famines which
linked the
sharp expansion of war financing to food price inflation and
quite rightly
described the Bengal famine as a ‘boom famine’, but at the
same time seemed to
exonerate the British and colonial government of any knowledge
of what it was
doing when it deficit financed to the tune of three times the
normal budget
size. However, it is not possible that the more intelligent
members of the
British and colonial governments were unaware of the impact of
following
policies which were so extreme and the exact opposite of the
financial
orthodoxy they had followed up to that time.
Let us see what the
connection was between the Bengal
famine and the financing of the War. But first we
have to dispose of a red herring – the idea given currency by
a number of
writers who are quite innocent of any knowledge of economics,
that the famine
occurred owing to a severe cyclone in mid-1942 which caused
output losses in East Bengal
in a coastal belt up to 50 kilometres inland.
This ‘natural disaster’ theory of famine keeps re-surfacing
frequently and is
quite unrealistic. To this day cyclones continue to originate
regularly in the Bay of Bengal
and will do so in the future as well. These
cyclones do flatten crops when they hit coastal areas, and
sometimes can be
devastating, destroying a lot of tree cover. But cyclones
cannot produce famine
and mortality of such magnitude when the area affected is such
a tiny fraction
of total sown area.
REAL
CAUSE
The real cause of the
famine lay in the fact
that the enormous burden of finding the real and financial
resources for
fighting the war against Japan,
was unjustly placed on India
through an agreement signed between Britain
and the colonial Indian
government. This was an open-ended agreement committing India
to finding
the resources regardless of how long the war lasted and how
much it took to
fight it. Only a part of the expenditure India
was forced to make, was to be
reimbursed in sterling but this re-imbursement was to take
place only after the
war ended and no-one knew when that would happen. Although Japan had invaded China
in 1937, the US
continued to
supply oil to Japan
on which its military operations were crucially dependent. It was only in
mid-1941 that an oil embargo
was finally imposed by US and only after Japan’s
attack on Pearl
Harbour
in December 1941 that the Allies
swung into action.
Thousands of allied
troops and air personnel
started pouring into Bengal province, which became the front
against Japan’s
advance towards India
through Burma,
and the point from which supplies and personnel could be
airlifted to Southern China.
The resources for building barracks and
airstrips, for clothing and provisioning the troops, of
transporting them and
providing all ancillary requirements, had to be met by India. A war boom resulted
where all war-related
manufacturing – cement, boots, uniforms, chemicals, and so on
grew fast as did
employment in these industries. In a poor country, the
proportion of additional
income consumed is high, economists assume at least 80 per
cent. Not only the
spending directly on feeding the troops but the rising numbers
of construction,
port and manufacturing workers spending their wages, created
through multiplier
effects, fast expanding demand for necessities which were
procured in the main
by government from the nearby areas in Bengal rather than the
rest of India.
The price of rice trebled in the 18 months before mid-1943.
The colonial
government swiftly put in place a procurement and ration
distribution system
for all those directly involved in war related production so
that they had
access to food, but paid no attention to the plight of
peasants, fisherfolk and
artisans in village Bengal.
The normal size of
the Indian central government
budget had ranged between Rs 200 crores to Rs 230 crores in
the decade before
the War. During the depths of the great depression, far from
raising its
spending as a stimulus measure which was badly required, the
government
following orthodox financial policy had actually reduced
public spending in
order to balance the budget as revenues declined. Needless to
say this deepened
the problems of unemployment and income loss for Indian
workers and peasants.
MONETISED
DEFICIT
As soon as the burden
of financing the war was
put on India
however, a fiscal and monetary policy which was the extreme
and irresponsible
opposite of earlier financial orthodoxy, started to be
followed. Government
spending shot up sharply. In order to finance Allied
operations about Rs 3,800
crores ultimately were spent by the Indian government over the
years 1941 to
1946 or more than three times the normal budgetary outlays.
The question was
how to obtain this huge increase of resources, an extra Rs
2,600 crores from a
poor population which was already over-taxed, and the solution
adopted by the
government was simply to run mountainous deficits which were
monetised, namely
money was printed to an equivalent amount. I estimate the
monetised deficit to
have amounted to about 60 per cent of the central budget on
average during the
war years. The
Reserve Bank of India,
established in 1935 acted as the pliant instrument of British
rule and
increased money supply by 500 per cent over the period. The
fiction maintained
by the RBI was that there were ‘sterling reserves’ against
which money supply
could increase, referring to the British promise to reimburse
India
in
sterling for part of the spending later when the war ended.
But the fact was
that there were no actual current reserves in existence as
legitimate backing
for such an expansion.
The mechanism through
which resources were
extracted was ‘to let prices rise faster than wages’ as J M
Keynes had put it
while advocating it as a wise policy in a different context in
his Treatise on Money.
The only
modification we need to make to the
description of the mechanism as followed in Bengal is ‘to let
prices rise
faster than wages and income of the self employed peasants and
artisans’. Since
voluntary savings to the required extent simply did not exist,
the increased
war spending was met through the extreme fiscal and monetary
measures already
detailed which raised prices much faster than money wages and
incomes, and
thereby forced reduction of consumption, which is the same as
extracting forced
savings from large masses of people unprotected against food
price inflation.
So savage and sudden was this compression of purchasing power
and consumption
that over 3 million people starved to death in Bengal and some
25 million
people were reduced to destitution.
The normally
financially cautious rulers of
British India were intelligent enough to know what the effects
would be of
monetising budget deficits of such a huge magnitude. They
would never have
dreamt of following such an inhuman policy in Britain, but in
their eyes the
colonised poor were dispensable. In ‘How to Pay for the War
‘(referring to the
WW II in Europe) Keynes advocated that the government should
borrow from the
British public and not impose taxes. Was there an alternative
to the
government-made Bengal famine? Certainly there was. The Indian
population had
less than one-thirtieth of the per capita income of the
British and should
never have been subjected to such an impossible burden. An
immediate tax, or
borrowing from the British public to the extent of £5 per
capita per year for
the five years of the war, a very affordable sum for them,
would have been
enough to raise the amount India was forced to spend on
Britain’s behalf, in
the 1950s.
The current value
today of the total sums India
was forced to contribute at such a high cost in human lives
and suffering would
be about £140 billion. India after Independence should have
demanded
reparations from Britain under international law for those who
died of
starvation in 1943-44 in Bengal, for it was no part of the
original agreement
that resources should be raised for financing the war, in such
a manner that
the lives of over 3 million civilians were sacrificed.
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