A history of Indian merchant capital and class formation in Tanganyika c. 1840-1940

The history of Indians in Zanzibar and Tanganyika while frequently described in racial terms is more scientifically analyzed as the history of merchant capital. While merchant capital has for centuries been the predominant form of capital within East African, its role in the economy has not been unchanging. With the western capitalist penetration and colonial occupation in the 19th century, merchant capital shifted from being the sole form of capital in East Africa to being an agent of western, particularly British and German industrial capital. This study examines the role of Indian merchant capital during the colonial period or phase of underdeveloped capitalism in Zanzibar and Tanganyika. During the period covered here approximately 1840 to 1940. Indian merchant capital was integrated into and subordinated to western industrial capitalism while remaining the primary form of capital at the colonial level. There are four main and interrelated features of Indian merchant capital in Zanzibar and Tanganyika. The first is the competition, between the well-established locally-based Indian traders and the newly arrived metropolitan commercial companies. In this struggle the colonial state played a central role in remoulding Indian merchant capital to better fit the needs of metropolitan capital. A counterpart to its economic subordination, was Indian merchant capitals political dependence on the colonial state. Asian politics were essentially the polities of the market place. Their political activities revolved around opposition to any government policy which would hinder expanding profits. But as,the prime beneficiaries at the local level of the colonial economy, their political disputes were generally carried out within the framework of a basic acceptance of colonialism. Thirdly, there was a dual tendency of merchant capital, toward a the dissolution and conservation of the pre-capitalist modes of production. Indian merchant capital stimulated and helped to regularize commodity production, expanded a monied economy and facilitated the extraction of export crops and distribution of imported foods. But because most of its profits were ploughed back into the sphere of circulation, merchant capital could not itself effect the transition from one mode of production to another. Fourth, a corollary to the continued predominence of merchant capital within the colony was a low level of industrial development. While some merchant profits were invested in agricultural processing small-scale industries and transport, colonialism blocked industrialization. In Tanganyika the colonial state used Asian merchant capital primarily to expand the exchange economy while discouraging it from moving on any significant scale into production. The Asian merchant classes, particularly the commercial bourgeoisie, dominated and defined the movements of the other Asian classes. Except in times of economic crisis, class antagonism rarely came to therefore unity was reinforced by a super-structure of ethnic ideology vrhich used family sect, caste and race to help mask class divisions.