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Redistribution along national lines presupposes a bounded world – the aff relies upon an implicit national solidarity that pits “us” within the imperial metropole against “them” in the global south – only adopting an analytic that prioritizes the frame of the imperial state over the national state can reckon with the legacy of global inequality – turns case and externally causes global war
Bhambra 22 – Professor of Postcolonial and Decolonial Studies in the Department of International Relations in the School of Global Studies, University of Sussex.
Gurminder K. Bhambra, “Relations of extraction, relations of redistribution: Empire, nation, and the construction of the British welfare state,” The British Journal of Sociology, vol. 73, no. 1, 2022, pp. 5-14, https://onlinelibrary.wiley.com/doi/full/10.1111/1468-4446.12896.
2 | RELATIONS OF EXTRACTION
The “relations of extraction”—or taxation—that bind together rulers and ruled are central to the social contract deemed, from Locke onwards, to be at the heart of the modern state (see Bhambra & Holmwood, 2021). The idea that citizens and their property were to be protected and, in their turn, they provided financial support to the state to do so through taxes—and that the levels of both were to be determined through some form of deliberation, usually via a legislative assembly—has come to be commonplace. As the authors of a call for a new fiscal sociology set out: “Taxes formalize our obligations to each other. They define the inequalities we accept and those that we collectively seek to redress” (Martin et al., 2009, p. 1). Martin et al. (2009, p. 3) go on to argue that taxation is crucial in the development of the “imagined community” of the nation to the extent that it “enmeshes us in the web of generalized reciprocity.”
A focus on taxation—and the distributed returns to citizens of that taxation—then, clarifies the nature of the state, its limits and its boundaries. While taxation was initially seen to be a significant factor in the state's ability to wage war, by the mid-twentieth century it became more extensively bound up with its execution of domestic issues of welfare. This can be seen in the shift from Charles Tilly's pithy statement that, in the early modern period “war made the state and the state made war” (1975, p. 42) to the claim by Titmuss (1958) that, by the mid-twentieth century, we can see how modern war had had a profound influence on social policy as demonstrated by the emergence of the welfare state (see also Mann, 2012). What is at issue is what sort of state was made by imperial wars and whose welfare did those wars secure.
Income tax had first been raised in Britain in 1798 to cover the costs of its wars with revolutionary France. After the end of these wars in 1815, however, it was discontinued as a consequence of strong public opposition to it. Income tax was not reintroduced in Britain until the mid-nineteenth century. First, as a temporary measure by Peel in 1842, before coming to be an established part of the social contract of the state through Gladstone's reforms in 1853. These also brought Ireland into the income tax regime following the earlier Act of Union that established the United Kingdom of Great Britain and Ireland. During this period, and through to the end of the nineteenth century, the “fiscal constitution” of the state—with its emphasis on a judicious balance of taxes and taxpayer consent—has been regarded as being remarkably successful by historians of British taxation (Kanter, 2012).
One such, Martin Daunton for example, argues that the tax system was designed “to be carefully balanced to ensure proportionality … to be a means of integration and not conflict” (1996b, p. 173); as such, “no group or interest felt it was unduly burdened” by taxation (1996a, p. 885). In this way, the British state is seen to have established a high level of trust in the central state and fellow taxpayers. But, as Douglas Kanter argues, one of the problems with this narrative is that the UK was not just “British,” but also included Ireland and “Irish fiscal policy fits uneasily into this account” (2012, p. 1123). At the very outset of reintroducing income tax into the British state, Peel omitted Ireland from any obligation to pay due to a concern with exacerbating opposition to the Act of Union. However, when the famine occurred in 1845, there was then resistance to the provision of relief by central government due to the Irish being deemed to have not paid their share of taxation.
The grants that were provided for famine relief were converted to loans, which accrued interest, increasing “the total sum owed by some 75%” (Kanter, 2012, p. 1139). Later negotiations around the partial remission of these consolidated annuities turned on the requirement to bring Ireland into the income tax regime. There was a belief among many in Ireland that not only should famine relief have been a moral responsibility of the central government, but that the new regime of taxation would generate a surplus that would be used to reduce taxes in the rest of Britain; that is, as Kanter (2012, p. 1151) argues, that the poorer periphery would subsidize tax breaks at the wealthier center.
The consensus on taxation that Daunton otherwise represents as a feature of the British state, then, did not exist in Ireland where the debate on fiscal policy—in particular arguments about over-taxation—remained a strong feature in movements for Home Rule from the mid-nineteenth century onwards. Such debates find their parallel, Kanter (2012) suggests, within the wider empire, where arguments about economic justice intersect with those of social entitlement in movements of colonial opposition. This was particularly the case in India, as Bayly (2000), among others, has also suggested.
One of the key expenses of the state, for which income tax was initially raised, was war. However, over the nineteenth century, the military costs of the British state were largely exported to the wider empire and specifically to India. As Bayly notes, both through indirect means of “tribute” as well as “directly through the overseas use of the Indian Army,” the company-state sustained the domestic military-fiscal machine (1994, p. 15). The Indian peasant, he goes on to argue, “bore a heavy part of the costs of Britain's world role which the British people were not prepared to bear” (1994, p. 16). The standard idea of the “nation-at-arms,” then, should actually be understood as the empire-at-arms as both personnel for the army and the costs of war through colonial taxation were increasingly borne by the wider empire. This reduced the claims of the British state on the national economy to below the levels of the eighteenth century and eased the burdens of domestic taxation. It also removed any requirement for national military conscription and allowed “the domestic state to disarm and ‘civilianize’ itself” (Bayly, 1994, p. 18).
One consequence of this was that that while continental Europe was convulsed in revolutions in 1848, Britain, in contrast, saw the demise of equivalent struggles, such as Chartism. One explanation for this, as Daunton suggests, is that the rhetoric of equity and the generally low levels of domestic taxation “meant that the working class was assimilated to the state rather than viewing it as coercive or exploitative” (1996a, p. 885). Similarly, Miles Taylor argues that “by displacing the tax burden from metropole to periphery” and generally facilitating an improvement in living conditions, working-class discontent in Britain during this period was eased (2000, p. 158). However, while there was no fiscal revolt in Britain, Taylor notes that there was an eruption of serious discontent across the empire: with riots and rebellions in “Ceylon, the Ionian Islands and the Orange River” together with fiscal crises across the wider empire, including in the Caribbean (2000, p. 152). A major uprising was temporarily averted in the Punjab, but not stayed. The subsequent events of 1857 were precipitated by factors that had mitigated against such disturbances domestically—primarily a sense of an unfair burden of taxation.
During the latter half of the nineteenth century, within Britain, there was a single rate of income tax imposed upon the domestic population. Those earning below £160—which was four times the national average wage of around £40 in 1900—received a full abatement and did not pay any income tax. Those earning up to £400 “were granted an abatement of £160, which fell to £70 on incomes between £600 and £700” (Daunton, 1996b, p. 176). In 1909, a super-tax was introduced on large incomes, over £5,000—the salary of a high court judge or the Chancellor of the Exchequer—and “a tax-free allowance of £10 was introduced for children under 16” (Daunton, 1996b, pp. 176–177). The abatements together with the tax-free allowances for children meant that the working class and much of the middle class did not pay any income tax at all until the First World War.
Considerations around the proper balance of taxation operated somewhat differently in the empire. The East India Company, after the defeat of the local rulers at the Battle of Plassey in 1757, had, in 1765, obtained the right to collect taxes in the Provinces of Bengal, Bihar, and Orissa. The Company initially maintained the structures of the existing taxation regime, with land revenue forming the bulk of its taxation income, but this was diversified over time to include new taxes such as the salt tax and the opium tax (Richards, 2006). An income tax was explicitly implemented after the British Crown took over direct rule a century later.
The Indian Income Tax of 1860 was closely modelled on the British version; except, as the Governor of Madras, Charles Trevelyan noted, while the financial system was transplanted to India, “a basic requirement of that system, representation of taxpayers, was wanting” (Bhattacharya, 2005, p. 52). There was an exemption for those earning less than Rs. 200 a year, but there was no system of abatement such that tax was paid on the whole income once it reached the taxable minimum. There was also no allowance for children. The average income at the time was around Rs. 20–27 which meant that the exemption limit was at eight to ten times the national average. The exemption limit was raised to Rs. 1,000 by 1903, which at the time, was over twenty times the average income of Rs. 45. This led to some within Britain arguing that India was lightly taxed. However, by examining the revenue raised in taxation as a proportion of national income, Naoroji (1901) demonstrated clearly that India bore the heavier burden. Further, if land revenue was considered as a form of taxation rather than rent, which many argued that it should be, then the recognized tax burden would have significantly increased.
There were a series of full exemptions from income tax. However, these all fell “on the side of government servants, pensioners, … foreign shipping concerns, tea agents, and the holders of sterling debt rather than in favour of the general taxpayers” (Pagar, 2012 [1920], p. 98). Further, as Pagar (2012 [1920], p. 187) sets out, no tax was deducted from the salaries of employees of the India Office in London despite those salaries being paid out of Indian revenues—this included the Secretary of State for India whose £5,000 salary would have put him amongst the highest earners in the entire empire. While there is much to discuss about the forms and rates of taxation, the central issue for my purposes here is the following, paraphrased from Naoroji: not only was India more heavily taxed than Britain, but there was another additional circumstance; the whole of British taxation returned entirely to the people themselves from whom it was raised, but that which was obtained out of India did not all return to them (1901, p. 314).
As George Wingate wrote in 1859 and whom Naoroji quotes: “Taxes spent in the country from which they are raised, are totally different in their effect from taxes raised in one country and spent in another. In the former case, the taxes collected from the population at large … are again returned to the industrious classes. … But the case is wholly different when the taxes are not spent in the country from which they are raised. In this case, they constitute no mere transfer of a portion of the national income from one set of citizens to another, but an absolute loss and extinction of the whole amount withdrawn from the taxed country” (1859, pp. 57–58). To put it in anachronistic, Keynesian, terms, the “multiplier” has its effects elsewhere while the extraction depresses activity locally.
What we see through this discussion is (a) that Britain established domestic legitimacy and quiescence through imperial revenue; and (b) that that imperial revenue included the taxes extracted from a colonized population. In the following section, I go on to discuss the “relations of redistribution” more explicitly in terms of their construction as welfare and examine the extent to which “the web of generalized reciprocity” applied to all those under British rule.
3 | RELATIONS OF REDISTRIBUTION
Scholars of distributive justice, such as Walzer (1983), argue that redistribution presupposes a bounded world. Collective solidarity relies on an understanding of “us,” as insiders, as opposed to “them,” as strangers. Such a demarcation determines who ought to be seen as the legitimate beneficiary of the distribution of collective goods and social entitlements. This is a widespread and commonplace understanding of welfare systems which are understood to pool and redistribute wealth raised through taxation for the benefit of the members of the political community. While the necessity of boundaries to the possibility of just distribution is regarded as self-evident, what is rarely considered is where the resources that are to be redistributed come from. Further, and relatedly, there is little discussion of what the entitlements are of those broader constituencies who have contributed to the building up of those collective resources, but who are under the rule of the political community without being seen to be part of it.
The community constituted through the relations of political extraction is much more extensive than that which comes into being through the relations of redistribution. This raises the further question of how legitimacy comes to be established for using the resources extracted from the imperial community and redistributing them solely to the national community. The provision of welfare in Britain in the eighteenth and nineteenth centuries, for example, occurred through a “mixed moral economy” of limited state interventions supplemented by the work of voluntary organizations, friendly societies, and private charitable activity (Johnson, 1996). The low burden of domestic taxation, made possible through the imperial relations of extraction, meant that, until the twentieth century, the state had less involvement in the direct provision of national welfare. For example, as Thane (1996) notes, at the end of the nineteenth century it is estimated that more money was transferred to the poor through charities in London alone than was expended nationally via the Poor Laws.
While much is written about how charities were organized, who benefitted from them, and the relations of deference they created, there is remarkably little systematic work on where the money that was disbursed through philanthropic initiatives came from. There is a separate literature on the extent of money brought back to Britain from empire, but the connections between the two are rarely made. The salaries paid to those working for the East India Company, for example, were exceedingly high and regardless of rank all employees received an annual pension of £1,000 so long as they had completed between 25 and 35 years of service. In addition, there were various allowances—not to mention the private investments, or loot as William Dalrymple has called it— which meant that they were able to retire well on their return to Britain. As an example from Margot Finn and Kate Smith's edited volume on the East India Company at Home, David Williams writes: “John [Melvill] spent the whole of his working life as a civil servant and judge in India before retiring back to England in 1813 with sufficient funds to purchase an 8,200-acre estate in Sussex” (2018, p. 390).
The “Nabobs,” as returning East India Company employees were known, were recognized as part of Britain's growing philanthropic community. As Tillman Nechtman notes, for example, “[n]ewspaper subscriptions show that Company employees were substantial donors to charities” (2007, p. 76); but scholarship on the relationship between charity and welfare rarely acknowledges this association with imperial wealth. An exception to this is a recent chapter by Andrew Mackillop which make a more substantial connection between the circulation of imperial wealth and charitable initiatives within early modern Scotland. Mackillop sets out how wealth made in the empire was deployed to secure status back at home through charitable activities such as contributing to the poor relief of a parish, funding hospitals and infirmaries, and donating to institutions of learning. To give one example that highlights the extent of the money being disbursed, Mackillop writes: The Bombay opium, textiles, and shipping entrepreneur John Forbes donated £10,000 for the construction of Aberdeen's new asylum in 1819. This made up 76% of its entire costs (and would be close to £1 million in today's money) (Mackillop, in press). Further, he also shows how an imagined community of belonging was often mobilized to elicit charitable donations from members across empire for national welfare projects.
The situation was somewhat different in terms of charitable initiatives in relation to issues of colonial welfare. As Andrea Major argues, “British philanthropic interest in the subcontinent tended to be more concerned with its moral rather than its material condition” (2020, p. 230). This was despite the fact that across the period of British rule—from the East India Company onwards—India faced a series of devastating famines and periods of food scarcity. One of the most intense periods of famine and scarcity was from 1860 to 1910—coinciding with the implementation of the income tax in India. During this period, it is estimated that over 14 million people died of starvation; they died in the context of grain being exported by rail from the famine regions and taxes continuing to be collected even in the worst affected areas.
While environmental factors, such as the failure of the monsoon, contributed to food shortages in specific areas, these shortages were never absolute. As Ajit Ghose argues, in the latter half of the nineteenth century India was a food-surplus country; the issue was that “[e]xports of foodgrains were taking place even in years when thousands, or perhaps millions, were dying of starvation” (1982, p. 378). The maintenance of exports was a consequence of what were presented as colonial laissez-faire policies which prevented officials from interfering in the natural operation of free trade. These policies did not, however, prevent them from collecting tax from an impoverished population; tax in such circumstances was coercive and in breach of the voluntarism otherwise inscribed in the idea of laissez-faire. Famines were products of colonial public policy.
Decisions on famine policy, as Kate Currie notes, reflected broader policy struggles “over the efficacy or otherwise of state intervention … within the spheres of the market and taxation” (1991, pp. 26–27). Deliberations by British civil servants in India tended to go along the following lines: around 80% of the people dying from starvation come from the laboring classes and do not

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