by Utsa Patnaik
During the Second World War, apart from being responsible for the deaths of 27 million Soviet people and millions elsewhere, the Nazis slaughtered 5 million Jews. Known as the holocaust, people throughout the world know the truth about this holocaust.
During the same war, in 1943-44 in Bengal, at least 3 million people perished from starvation, while an additional 25 million were reduced to utter destitution. Yet hardly anyone of the world is aware of this Bengal holocaust, let alone that it was perpetrated by the British colonial rulers of India who, having taken India into the war without consulting the leadership of the Indian people, then went on to impose on the Indian people a disproportionate share of the cost of financing the Allied offensive against Japan. The manner of this imposition directly resulted in the deaths of 3 million Bengalis.
The imperialist powers, supported by their compliant media and subservient ‘academics’ and other ideologues are forever inventing tens of millions of deaths in the former USSR and People’s Republic of China in an effort to malign socialism. However, when it comes to real mass murder perpetrated by the various imperialist powers, the silence of this criminal gang is truly deafening. In view of this, Lalkar is delighted to reproduce below the short article by a noted Indian Marxist academic, Utsa Patnaik, which exposes one of the holocausts perpetrated by British imperialism – namely the Bengal imperialist-made famine.
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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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