"Slavery of the very mildest form."
The tie that binds 19th century tea plantations in India's Assam with Uber and Lyft in 21st century California.
“In all cases Capital, which has been considered a primary, has proved to be only a secondary object, and that the primary want in all enterprise is the practical ability by which the application of capital is to be effected.”
“Application,” he clarified, meant “the supply of labor.”
H. Burkinyoung, director of the Assam Company, 1850.
The Yes on Prop. 22 campaign, backed by Uber, Lyft and DoorDash, celebrated the victory. “California has spoken,” Geoff Vetter, a spokesman for the campaign, said in a news release. “Prop. 22 represents the future of work in an increasingly technologically-driven economy.”
The New York Times, November 4, 2020.
In the course of living up to its ambitious title, Andrew B. Liu’s Tea War: A History of Capitalism in China and India, tells the story of an extraordinary about-face: the British Empire’s pusillanimous betrayal of its own ideological high ground.
Tea War is an account of how the British broke the Chinese monopoly on tea in the late 19th century. The British established a new center of production in Assam, a sliver of Northeast India that abuts Bhutan. As judged by the long-term bottom line, the project was a massive success. By the turn of the century, India overtook China as a producer of tea for the global market.
But in the short-term, serious problems emerged: namely, a severely limited supply of affordable labor. This wasn’t supposed to happen. Guided by “invisible hand” principles of minimal intervention with the “free” market, the wannabe British tea moguls assumed that ample capital and cheap land would be sufficient to make tea plantations blossom in Assam. Workers would flow naturally to the newly available jobs.
The scheme was never completely laissez-faire, emphasizes Liu; the project wouldn’t have gotten off the ground without top-down organization and direction. “Between 1834 and 1839,” writes Liu, “the Tea Committee founded an experimental tea garden in Sadiya; imported thousands of plants from China; and recruited a workforce from the local population as well as hundreds of teamakers from China and Southeast Asia.”
But then it floundered. Workers turned out to be distinctly unenthusiastic about the prospect of moving to the remote jungles of Assam and engaging in the hard labor of growing and processing tea.
In theory, acolytes of Adam Smith have an easy answer for such a quandary. Raise wages! At some price point, presumably, workers would find it worth their while to settle down in Assam.
But one of the crucial themes of Tea War is that decent wages and global competition don’t mix. Chinese producers of tea had already shaved production costs to the bone. There would be no high-wage path to undercutting the price of Chinese tea.
So over the course of the next several decades the British changed the labor market rules.
“Starting in 1865, officials in India devised a system of regulated labor recruitment and penal contract employment for the Assam tea industry. It featured the restriction of worker movement, constant surveillance, and wages fixed by law rather than by the market. Penal contract laws provided planters both a subordinated migrant workforce and the legal impunity to intensify the production process. Politically, indenture was controversial due to its resemblance to African chattel slavery. It was unquestionably “unfree” by modern standards. Commercially however, it was a dazzling success. During the last three decades of the century, as hundreds of thousands of workers were brought into the eastern Indian plantations, British planters opened up 170,000 more acres of land, and tea production skyrocketed to sixty million more pounds per year. By the turn of the century, Indian tea exports had surpassed those of their Chinese rivals, and the industry had become the leader in world production.”
Liu’s summation is a pithy reminder about how real-world global capitalism works.
“Tea planters,” writes Liu, “backed by penal contract legislation, cut costs by simply paying employees less.”
“Living under the protection of English laws,” wrote William N. Lees, an “Orientalist” employed at Fort Williams College in Calcutta, “their slavery will be of the very mildest form.”
Andrew Liu, “Tea War: A History of Capitalism in China and India.”
“I do think there’s power in a name,” he said. “Our system is called capitalism. It’s designed to optimize for long-term growth of capital. When people wonder, ‘Well, are capital owners advantaged over labor?’ it ain’t called laborism.”
Uber CEO Dara Khosrowshahi, New York Times, 7/16/21
I wasn’t looking for a refresher course in Marx’s labor theory of value when I first started reading Tea War. My interests were more parochial.
Botanically, tea plants are believed to be indigenous to the foothills of the Himalayas, a region that includes both Assam and southwest China. We will likely never know exactly which humans were the first to apply hot water to dried-out tea leaves. But the oldest historical record of tea cultivation dates back to the first century B.C. in Sichuan, where, as Victor Mair and Erling Hoh tell us in the wonderful The True History of Tea, “a certain Master Wu Lizhen is said to have planted seven tea bushes on Meng Mountain east of Chengdu.” From Sichuan, tea consumption and cultivation spread to the rest of China, and eventually the entire globe.
The unifying thesis of this newsletter is that all roads lead to a Sichuan feast. Beverages, obviously, must be on the menu. And Sichuan’s embrace of tea is no accident. According to the Sichuan historian Wang Di, Chengdu’s historical abundance of tea-houses -- more than any other Chinese city, he asserts in The Teahouse: Small Business, Everyday Culture, and Public Politics in Chengdu, 1900-1950 -- can be traced to the core infrastructural foundation of ancient Sichuan prosperity.
"The Chengdu Plain,” writes Wang, “had an ancient but well-developed irrigation system that made agriculture highly productive. Farmers did not need to work in the fields the entire year and had ample free time for trade and leisure activities."
Like hanging out in tea-houses, shooting the breeze, and thinking about how to make the next meal as interesting as possible.
How radical is that? A society set up to maximize leisure time? Would it be too bold to suggest that the ancient Sichuanese tradition of whiling away endless hours sipping tea is a model for how societies should be organized? This line of inquiry begs for more research.
But I got more than I bargained for in Tea War. All the tea in Sichuan faded into the background after I absorbed just how much Liu’s critique of global capitalism in the 19th century resonated in 21st century Berkeley.
Or at least, that’s what my phone kept telling me. As I worked my way through Tea War during the fall of 2020, my concentration kept getting diverted by a flood of emails and text notifications from Lyft and Uber. The ride-sharing giants were desperately eager for me to vote for Proposition 22, an initiative on the California ballot aimed at protecting the profit-model of all gig-economy tech startups.
Prop 22 boasts the dubious honor being, so far, the most lavishly funded initiative campaign in California history. The gig economy firms spent upwards of $220 million to ensure that California workers would not be able to maximize their income. The entire exercise was an astonishingly blatant rigging of the rules: under the new law gig workers would be defined as a special class of workers not covered by minimum wage requirements, denied the normal benefits that accrue to full-time workers, and prevented from forming unions. Most gallingly, the initiative required that any future amendment to the law be passed by an absurd 7/8 majority of the California legislature.
The initiative succeeded with 58 percent of the vote. It is now more difficult for the government of California to regulate labor conditions for gig workers than it is to raise taxes.
There is no mystery why the gig-economy tech companies poured hundreds of millions of dollars into Prop 22. Despite their much-vaunted eat-the-world software innovations, their business models turn out to be overwhelmingly dependent on keeping labor costs down to a minimum. There is no way to sugar-coat this: Uber and Lyft are identical to those 19th century Assam penal-labor utilizing tea plantation owners. For both to compete in the marketplace, workers must be screwed.
Prop 22’s passage was a profound indictment of the inability of California voters to understand that the owners of capital should not be allowed to write labor laws. That said, in August 2021, in a decision that is certain to be appealed, potentially all the way up to a very labor-unfriendly Supreme Court, a California judge ruled the law unconstitutional.
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A father-daughter text-exchange:
When I was my daughter’s current age I was enrolled in a China-focused political science survey course at U.C. Berkeley. At the time -- 1988 -- the huge success of the economic reforms pushed through by Deng Xiaoping and Zhao Ziyang seemed to demonstrate with greater potency every single passing day the utter bankruptcy of Chairman Mao’s Marxist approach to economic policy. The ensuing fall of the Berlin Wall in 1989, along with the dissolution of the Soviet Union, added an emphatic period to the end of any sentence one could imagine writing about Cold War ideological struggles. Game over: capitalism has won. I can distinctly remember the near physical revulsion I experienced one weekend when I tried to write a paper summarizing a selection of neo-Marxist critiques of Deng’s reforms. How could these people possibly so misunderstand the reality on the ground? The peasants had spoken! There would be no going back.
But then a funny thing happened. New advances in globe-spanning computer-mediated communications technologies facilitated the entry of billions of new workers from previously closed off economies (China, India, Eastern Europe) into the global economy. There is no historical parallel to the sheer scale of cheap labor that was suddenly made available to capital. When combined with the ongoing political backlash against organized labor in the West, it’s not hard to see in retrospect how worker livelihoods in what we used to call the “developed” world were bound to come under severe downward pressure. The good news: hundreds of millions of people in the “developing” world emerged from poverty. The bad news: we were all competing with everyone else in an global economy designed to find the lowest common denominator and exploit it. Ever since, nearly everywhere, income inequality has skyrocketed.
So now, “end of history” triumphalism is itself consigned to the dustbin.
Andrew Liu is one of many promising new scholars (occasionally grouped together as practitioners of a new “history of capitalism,”) who are providing fresh interpretations of economic history. Instead of taking as their starting point the collapse of the Soviet Union or the disappearance of communes in the Sichuan countryside, these scholars are influenced by different generational contexts. Their touchstones include the Great Recession and the stark accumulation of an ever-increasing share of global wealth in the hands of a tiny minority.
Why aren’t we all spending our afternoons in teahouses, savoring our caffeinated beverages and disputing the particularities of the dao, while working as little as is necessary to support our leisure? After absorbing Liu’s discourse on the history of capitalism in China and India, it’s hard not to conclude that the problem is the zero-sum logic of ludicrously-regulated global capitalist competition. And when such avatars of Silicon Valley “progress” as Uber and Lyft seek their own bottom-line success by successfully duping the general public into supporting artificial constraints on workers’ rights, even in supposedly progressive California, it’s even harder to be optimistic about the path ahead.
And yet — I keep coming back to that world-changing mass influx of workers into the global market. Barring the globe-wide reintroduction of slavery or Assam-tea plantation style “unfree” penal labor, such a momentous transition seems unlikely to happen again. In fact, the populations of most economically advanced countries are now in decline, or, in China’s case, set to plummet off a cliff. The end of history? No. The end of widely available cheap labor on a scale never before witnessed in history? Maybe?
Fewer workers, in theory, should mean higher wages. We seem to be witnessing this dynamic play out right now in the United States, although it’s unclear to me whether the current well-documented shortage of affordable labor in the U.S. is a one-time pandemic-induced oddity, or proof that something more profound is happening, something that could start tilting the balance of power between workers and capital back to a more socially healthy status quo.
We should be spending our afternoons in tea houses, rather than in a prison of built by point-to-point ride-sharing algorithms. I’d love to believe that the more attention we devote to the flood of new scholarship pointing out the hypocrisy and exploitation inherent in the triumph of capitalism, the sooner we’ll get there.
Fabulous and right on!