Colonialism can be described as a distinct stage in the modern historical development of the colony that comes in between the traditional economy and the modern capitalist economy. An inseparable aspect of this stage is that the basic control of the economy and the society is in the hands of a foreign capitalist class. Colonies could be settlers’ colonies like South Africa, Australia and Canada or could be the colonies of exploitation like India and Indonesia. Colonization could also happen through direct rule as in the case of India in which the colonizer country i.e England directly ruled the country. Indirect colonization was a stage in which the colonizer country controlled the polity and economy of the country which taking the onus of ruling the country.
The first commentators on colonialism were Marx and Engels who wrote on the colonial domination of Ireland. The first comprehensive critique of colonialism mainly at economic level came from the early Indian nationalists of the late nineteenth century. Dadabhai Naoro-ji, Mahadev Ranad, Romesh Chandra Dutt and others developed the concept of drain of wealth to highlight the transfer of wealth by the East India Company in the form of home charges or the expenses incurred by the government and private transfer of capital, as plunder.
There are two schools of thought with respect to study of colonialism. According to the first variant of the dependency school the economic dependence ofa colony would remain even after political freedom as long as colony, which has underdeveloped under colonialism, remains capitalist. The bourgeoisie, it is believed, is incapable of undertaking the task of economic development. Dependent economies can become independent only by undergoing a socialist revolution. This view of the dependency school is disproved by the example of India where an independent bourgeoisie has developed capitalism.
The second variant is the world systems school of Immanuel Wallerstein. This has spoken of a capitalist world economy that is divided into a centre, periphery and a semi periphery between a relation of unequal exchange prevailed. This differentiation is marked by several features.
1) Core economies which form the centre have high value products and had strong states.
2) The periphery produced low technology goods, had low wages, the state and the capitalist class were weak and the economy was dominated by the foreign capital.
3) The countries on the semi periphery, like India, were marked by the greater control of the state in the national and international market. Economic nationalism is a hallmark of such states.
There is scope of change in the position of the colony within the world system.
Imperialism and colonialism convey the same meaning; domination of one country by the other. Imperialism in earlier times meant forcible annexation of other countries for plunder or extraction of wealth in forms of tribute etc. Colonialism was an improvised system of exploitation which systematically transferred surplus the colony to the metropolis. While imperialism resulted in conquest of a country, colonialism resulted in drain of the wealth of the colony to the metropolis and destroying its indigenous economy. In fact both can be said to two sides of the same coin. Looked at from the metropolis, it is imperialism whereas in the colony it is colonialism. Colonialism is a relatively modern historical phenomenon which emerged with the growth of industrial capitalism in Britain. The two developed together for the benefit of the metropolis in such a way so as to provide raw materials for the industries and market for the finished goods manufactured in these industries of metropolis as well as provide venue for investment of capital. Colonialism functions in the colony 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 worldwide system.
Scholars hold different views about colonialism. One view is that colonial society was a traditional society in which the old relations of production were retained. Only foreign political domination was established. However, this is not true. Colonization does not imply simple political domination. It is about developing structures on the strength of the political domination to exploit the country. The other view is to see colonialism as a transitional society, which was moving towards modernization and would have become a developed capitalist society, given time. Some writers like Morris D. Morris have presented colonialism as an effort towards modernization which could not succeed because of the pre-capitalist traditions which played a restricting role. This again is not true and views colonialism from the viewpoint of the metropolis. A third view is the “arrested growth” model according to which the metropolis partially modernized the colony but failed to carry the task fully. The restrictive or feudal or semi-feudal features of colonial economy are seen as remnants of the past which the imperialism failed to or did not desire to uproot. Holders of this view accuse colonialism of preserving these features.
Factually, colonialism was a specific structure which was neither capitalist nor pre-capitalist. It does not strive to preserve the colonial modes of production. For example, agrarian relations that developed in India under colonial rule were not a carry over from the Mughal period. It was the result of revenue settlements aimed at extracting maximum revenue which could be sent to Britain and an attempt to develop capitalist agriculture for providing raw material to the industries of England. What emerged was a semi feudal semi colonial agriculture dominated by the colonial state, world capitalist market, landlords, merchants, moneylenders and having capitalist features; bourgeoisie property relations, commercialization and elements of capitalist agriculture.
The colony became an integral part of the world capitalist system but this integration did not lead to the development of a capitalist economy in the colony as integration was in subservient position; a position which was maintained by the metropolis through its influence. Many scholars believed that a colony would develop along capitalist lines. The belief was that capitalism being a world system compelled all nations to adopt the bourgeois system. However, colonies did not develop in the split image of the metropolis. They did not become capitalist in the way the metropolis did. Capitalism was introduced in the colonies but this did not bring capitalist development. The old structures were uprooted but the new ones, failed to encourage development. Instead, they proved to be regressive. The colony did not take part in the industrial revolution. Imperialism introduced capitalization of production in many spheres, but capitalist development did not take place.
Thus colonialism is not like capitalism an advanced stage of social development. It is an image of metropolitan capitalism, but it is its negative image, its opposite; and its non-developmental side. Capitalism develops productive and social forces. Colonialism on .the other hand, does not develop the productive and social forces.
Some writers see colonialism as a distinct mode of production. However, the impact of colonialism does not restrict itself to mode of production. It has impacts on all aspects of life. Bipan Chandra suggests that colonialism is a social formation in which different modes of production coexist, such as feudalism, slavery, bondage, petty commodity production: merchant and usury exploitation and agrarian, industrial and finance capitalism. The social surplus is appropriated under colonialism by varied modes of production. The appropriation of the surplus from the colony is not linked with the ownership of the means of production by the metro-political bourgeoisie but with control over state power. On the other hand, under capitalism, the surplus is appropriated on the basis of the ownership of the means of production.
The concept of varied modes of production helps in analysing how the class antagonisms between different social strata are shaped by colonialism. It also helps to identify the roles of the major classes in society and also the primary contradiction at any stage. When we see colonialism as a social formation rather than a mode of production we are able to see the primary contradiction as a societal one, rather than in class terms. Thus we have a national liberation struggle rather than a class struggle against the colonial power. The struggle from the beginning is thus political rather than economic. Classes do not join the anti-colonial struggle through class organisations but as part of the people.
The following are the four basic features of Colonialism.
1) Integration of the colony with the world capitalist system in a subordinate or subservient position. The needs of the metropolitan economy and its capitalist class determine the basic issues of the colony's economy and society. This subordination is more crucial than linkage with the world market. After all, even independent capitalist and socialist economies are linked with the world market.
2) Arghiri Emmanuel and Samir Amin have encompassed colonialism in the twin notions of unequal exchange and internal disarticulation of the colonial economy and the articulation of its different disarticulated parts through the world market and imperialist hegemony with the metropolitan economy. The colony's agricultural sector does not relate to its industrial sector but to the world capitalist market and the market of the metropolis. Marx and Engels referred to a similar process in their focus on the exploitative international division of labour. The metropolis produced high technology, high productivity, and high wage goods while the colony produced low technology, low productivity, and low wage goods. International trade thus became an instrument of exploitation. Similarly, the colony specialised in the production of raw materials while the metropolis produced manufactured goods.
3) The third feature of colonialism is the drain of wealth or the unilateral transfer of surplus to the metropolis through unrequited exports. The early Indian nationalists stressed this. A large part of the colonial state expenditure on the army and civil services represented a similar external drain of surplus. Thus production of surplus is in the colony but is accumulated abroad. This process has been described by Hamza Alavi as deformed extended reproduction.
4) The fourth basic feature is foreign political dominationor the existence and role of the colonial state.
Colonial state has some distinct features. For one, it is an instrument for exploiting entire societies rather than one class. The colonial state is an integral and intrusive element in the structuring and functioning of the colonial economy. The state is the instrument in the hands of the capitalist class in the home country to control and exploit the colony. The colonial state serves the long-term interests of the capitalist class of the mother country as a whole. It does not represent the sectional interests of groups within this bourgeoisie, who are competing with each other. In capitalism, in contrast, the capitalist state is the instrument for one class dominating another.
Colonialism is a relationship between the foreign ruling class and the colonial people as a whole. Under colonialism, the ruling coalition of class forces does not include any of the indigenous social classes. All the indigenous classes of the colony are dominated-even the propertied classes are not junior partners of colonialism or its subordinated allies. They have no share in state power though they may have some share in the social surplus. Their interests can be sacrificed for those of the metropolitan bourgeoisie at any point. For example, reforms that would be looked upon with disfavour by the indigenous bourgeoisie, such as factory legislation, would be introduced by the state, as it would make the foreign imports more competitive.
The role of the colonial state was greater than the capitalist one. It structured colonialism. It was not merely a superstructure but a part of the economic base. It not only enables the ruling classes to extract surplus, it itself is a major channel for surplus appropriation. Under capitalism, it was the ownership of the means of production that gave the ruling class the power to use the state as its instrument of domination. Under colonisation it is because of its control over the colonial state that the metropolitan ruling class is able to control and exploit colonial society. It is its control over state power that gives it control over the social surplus rather than its ownership of the means of production. For example, in India, the state did not own the means of production to any significant extent and yet it wielded great power.
The colonial state guaranteed law and order and its own security from internal and external dangers. Indigenous economic forces and processes hostile to colonial interests were suppressed. It was a channel for surplus appropriation. It prevents unity among the people of the colony, by fostering the identities of caste against class, community against community, etc. The state was actively involved in reproducing conditions for appropriation of capital, including producing goods and services.
Another important task is the transformation of the social, economic, cultural, political and legal frameworks of the colony so as to make it reproductive on an extended scale. The problem is that there is a contradiction between the policing functions of the state and its developmental functions. There is a competition for existing scarce resources and development is clearly the casualty. It is easy for the anti imperialist forces to expose the exploitative character of colonialism, as there is an explicit and direct link between the colonial structure and the state. Thus it is easy to politicise the struggle, unlike in advanced countries where the link between the state and the economy is not so evident. The mechanism of colonial control lies on the surface, hence it is easy to expose it in an instrumental fashion, and reveal the links with the industrial bourgeoisie of the home country.
The state is visibly controlled from abroad and the isolation of the colonial people from policy and decision making is evident. Compared to the capitalist state the colonial state relied on domination and coercion rather than on leadership and consent. Hence there is very little space for manoeuvre and the vacant space is rapidly occupied by .the anti-, imperialist forces. The state soon enters into a crisis. However, the other side of the coin is that as the colonial state is a bourgeois state, it introduces the rule of law, property relations, bureaucracy, and can even develop into a semi-authoritarian and semi-democratic state. Thus, there is constitutional space in the colony.