Bengal and business

Chief Minister Mamata Banerjee, through initiatives such as the Bengal Global Business Summit in Kolkata last year, is trying to encourage business in her state. Reviving entrepreneurship, scarce in Bengal today relative to the country’s west and south, will be critical in this context. 

With hindsight, the heights reached by Bengal’s businessmen until the early 20th century read like fairy tales. For example, in the 18th century, Shobharam Basak become a millionaire by supplying textiles to the East India Company. With over 12 kg of rice per rupee even in 1810, compared to less than 50 gms today, a million meant a lot those days. 

Nuku or Lakshmikanta Dhar was rich enough to lend money to the East India Company. Baishnabcharan Seth made a fortune by supplying holy Ganga water to far off places. Rani Rashmoni, founder of Dakshineswar Temple associated with Lord Ramakrishna, inherited considerable wealth from father-in-law Pritiram Das. Pritiram, a bamboo seller from the Mahishya caste, made his fortune when the price of bamboo skyrocketed in 1780. 

In 1832, Prince Dwarkanath Thakur’s Carr, Tagore and Company took over a failing coal mine in Raniganj near Burdwan, from Alexander & Co. Fortune from this colliery built Dwarkanath’s historic and palatial Jorasnako Thakurbari in central Kolkata, which now houses the Rabindra Bharati University. Thousands visit it to see where his famous grandson, poet Rabindranath, grew up.

In 1890, Rajendra Nath Mukherjee, a young engineer from Bengal Engineering College, Shibpur, along with Sir Thomas Acquin Martin, founded Martin & Company. He went on to set up the Indian Iron and Steel Company (IISCO), Burnpur, and also built the Victoria Memorial. In 1892, at the age of 31, Acharya Prafulla Chandra Ray, the brilliant professor of chemistry, started Bengal Chemicals, India’s first pharmaceutical company.

So, what happened to entrepreneurship in Bengal? The partition of the country, by breaking up a natural economic zone and inducing a massive migration of refugees, had a devastating impact on Bengal’s economy and entrepreneurship. Political agitation, industrial unrest, violent bandhs and gheraos led by the communists created a hostile, anti-business atmosphere. With persistent labour trouble in his IISCO plant in the late 60s, Rajendra Nath’s son, Sir Biren, said, “I see before my eyes a vast industrial complex, with which I was associated for nearly 40 years, crumbling to dust.” The emphasis on redistributive policies at the cost of developing infrastructure left the state with clogged-up roads, historic but silted-up riverine ports, and unplanned cities. Welcome strides in agriculture, without industrial growth, were not enough to generate gainful employment and welfare on a sustained basis.

Bengal suffered from partition more than 70 years ago, even before Korea got divided into North and South Korea. South Korea has gone ahead to join the ranks of developed countries. Furthermore, some chaebols or South Korean business conglomerates, such as Dealim and Samsung, continue to prosper even after almost seven decades. But, the legendary business houses of Bengal from yore have vanished almost without a trace from the world of business. Popular demand for a congenial business environment, for example better infrastructure, has been muted at best. All this, at a fundamental level, raises the question: Are the ethics in Bengal consistent with developing business in the spirit of rational capitalism, à la Max Weber?

In his celebrated book The Protestant Ethic and the Spirit of Capitalism, sociologist Weber argued that everyone — “waiters, physicians, coachmen, artists, prostitutes, dis­honest officials, soldiers, nobles, crusaders, gambler, and beggars” — has the universal impulse to make money. Capitalism is “identical with the restraint, or at least a rational tempering, of this irrational impulse”. It is not acquisition by force or illegal means, but utilisation of opportunities for exchange for profit, peacefully and within the law. 

Weber distinguishes two types of capitalists —traditional and rational. The traditional capitalist wants to make money only as a means to support an aristocratic lifestyle and acquire a social position. Business is got over once the necessary wealth is accumulated. 

The rise and fall of the great “banedi” or “noble” houses of Bengal fits the framework of traditional capitalism. For instance, Dwarkanath’s family produced a Nobel laureate and several other stalwarts, but no business magnate to carry his mantle. One biographer of Dwarkanath has also noted how Rabindranath “almost never referred to his grandfather in his immense writings”.

Illustration by Binay Sinha
Similarly, the Mullicks of Chorbagan became famous by building the Marble Palace in Kolkata and their philanthropy. But rare is the mention of attempts to carry on their ancestors Ganga Bishnu and Ramkrishna Mullick’s extensive banking business and large scale mercantile transactions not only in Bengal but also in faraway places such as the Northwestern provinces and China, or to move on to some other venture. 

Distaste for getting bogged down in the struggle to make more money when the desirable social status has been secured transformed “banedi” houses into zamindars. In the event, unproductive rent could neither maintain the vitality and social status of the traditional mercantile families, nor prove durable.

In contrast to the traditional variety, Weber’s rational capitalism is, beyond the satisfaction of needs, the relentless pursuit of profit by continuous, rational, capitalistic enterprise. It is rational because foregoing opportunities for making profit dooms an enterprise to extinction. Entrepreneur families from Bengal having the characteristics of rational capitalists are hard to come by.

The Hindu society, not only in Bengal but all over the country, put a penalty on rational capitalism by placing the businessmen, the vaishyas, in the bottom half of the caste hierarchy. But Bengal has, or at least had, an added intellectual disdain for getting bogged down in the pursuit of money. This disdain perhaps explains the slightly unfriendly attitude in Bengal towards the Marwari community, or more correctly the Bengalis of Marwari origin. Industrialist Ghanshyam Das Birla, who cut his teeth in business in Kolkata, noted this unfriendliness while shifting his businesses to Gwalior and the Bombay region in the 1930s and 1940s. Reportedly, Birla was later to claim, with some degree of relief that, all he had in Kolkata was 2,000 clerks. It is time Bengal changes its attitude and ensures that businesses, when they leave Bengal, have a lot to lose than only clerks. 

The writer is an economist

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