Ritu Birla's path-breaking book Stages of Capital is a much-awaited legal history of Indian capitalism and the role of indigenous capitalists therein. It focuses in particular on the North Indian business community of the Marwaris in the period spanning 1870 through 1930. An ambitious undertaking in reach and scope, the book draws on rich archival materials on “the law on economy” (p. 6) to chart the stages of capital in a temporal (status to contract) as well as spatial (the interplay between economy and culture) sense. Birla demonstrates how the colonial production of Indian Economic Man caused him to coexist in the spaces of both status and contract while reminding readers of the mutual constitution of the discourses on the economy and culture through an investigation of market as culture. In writing “between histories of world capitalism and the world history of capital” (p. 7; emphasis in original), Birla brings into conversation postcolonial studies and social histories of Indian capitalism.
Law, Birla argues, played a central role in this “staging of capital as modernity” (p. 236) by rendering indigenous practices commensurate with a value system structured by contract, revealing in the process several points of incommensurability, then mediated and consolidated through the shifting registers of binaries such as law/custom, public/private, and economy/culture. The two main parts of the book highlight different aspects of this process. Part I, consisting of the first three chapters, elaborates on how the legal standardization of commerce from the late nineteenth century onward produced the market as a supralocal object of governance, while Part II details, in the fourth and fifth chapters, how Marwaris as vernacular capitalists both resisted and appropriated colonial legal discourse by the 1920s to fashion themselves as rational, economic actors; in other words, as legitimate bearers of capital.
After an introduction that outlines the arguments of the book, Chapter 1 focuses on how the 1882 Indian Companies Act, the 1886 Income Tax Act, and the 1881 Negotiable Instruments Act both “reduced the extended family firm into joint household, making it a suspect market actor, and abstracted it in a mimesis of individuated contractual relations” (p. 17; emphasis in original). Chapters 2 and 3 elaborate on the colonial law of charitable endowments relating to private and public religious trusts, respectively. Here, colonial law understood indigenous “multitasking forms of endowment” (p. 79) through analogy and, later, identification with the British private trust, established through “mad manoeuvres—sometimes legal flights of fancy” (p. 75). The colonial juridification of deities as the only possible beneficiaries of charitable gifts in perpetuity, Birla argues, materially detracted from the free flow of charity across the public/private divide by vernacular capitalists and challenged their symbolic meanings by casting them as private ventures. Similarly, the colonial legal requirement that the public religious trust generate “general public utility” recast mercantile gifts as irrelevant to civic benefit, thereby producing a shift from a shared and layered precolonial sovereignty to a new model of sharing in colonial sovereignty (p. 29). Chapter 4 offers an absorbing and memorable account of how colonial criminal law policed, between 1895 and 1920, the boundaries of business, leisure, and crime through its classification of wagering, betting, horse-racing, indigenous hedging contracts in commodities markets, and indigenous recreational gaming such as rain-betting and betting on opium, cotton, and jute prices. Marwari civic associations meanwhile mobilized to reject their typecasting in these morally scandalous controversies, asserting instead their role as legitimate businesses vital to the national economy. These claims to legitimacy were reinforced by both conservative and liberal sectors of the Marwari community when in the social reform debates relating to child marriage, age of consent, and intercaste civil marriage, they appropriated the colonial public/private divide to validate, according to Birla, “kin-based capitalism through the defense of the HUF [Hindu Undivided Family]” (p. 200; emphasis in original).
Stages of Capital is a masterfully written book in which Birla brings to bear extensive archival material and insights from social theory, critical legal theory, and postcolonial studies, to offer a sophisticated argument about the workings of colonial law and capitalism in India. Unlike postcolonial scholars who tend to view law merely as an instrument of empire or operate within its logic to expose the politics of colonial liberal legality, Birla builds on a familiar starting point, namely, the gap between law as logos and nomos, to offer a nuanced account of law's productivity and malleability. In the mapping of the transition of Indian Economic Man from capitalist de facto to capitalist de jure, however, Birla seems to reiterate the triumph of capital more convincingly than critique its universal history. This truly interdisciplinary book will no doubt provide a point of engagement for future work in the area. The book is invaluable for legal historians and scholars working on South Asia and likely to be of interest to anyone interested in the study of law, markets, and capitalism.
In a rather different vein, Perry-Kessaris's Global Business, Local Law provides a thoroughly engaging present-day account of the micro-practices of foreign direct investment (FDI) in the South Indian city of Bengaluru, the “Silicon Valley of India” and an important outsourcing hub. Instead of viewing law as merely facilitating instrumentalist economic relations, she draws extensively on Cotterell's law-and-community approach to re-imagine law as a communal resource and asks to what extent it can help build relations of mutual interpersonal trust between government, foreign investors, and civil society organizations. Perry-Kessaris bases this analysis on semi-structured interviews with these actors as well as their advisers, lawyers, and commentators.
After a brief introduction providing an overview of the book, Chapter 2 sets out its theoretical framework while Chapter 3 introduces the Indian legal system and the FDI scene in Bengaluru. Perry-Kessaris proposes that law builds trust through its expressive function, with contracts reflecting the trust that social actors place in each other, by facilitating participation between them and by coordinating the differences between actors and different networks of community. Chapters 4, 5, and 6 assess the law's communal role against each of these functions in Bengaluru.
According to Perry-Kessaris, the two main factors that affect the utility of law as a communal resource are the legal strategies of social actors themselves and the hegemonic neoliberal investment climate discourse. Government actors, investment actors, and civil society actors all use, abuse, and avoid the law using a range of techniques both political (lobbying, corruption) and legal (stalling, strategic lawsuits against public participation, public interest litigation, civil contempt proceedings, and criminal defamation lawsuits). Such contingent use of the law should come as no surprise to sociolegal scholars. What is most instructive about Perry-Kessaris's book then is her revelation of the extent to which the Indian state has institutionalized what she calls investment climate discourse promoted by the World Bank and propagated domestically through the Govindarajan Committee, set up in 1992 to make recommendations to speed up the FDI investment approvals process. As a result, a “thick meta-regulation” has emerged to facilitate market governance with a shift in allocative powers from the state to the market. Economic values driving policy choices have led to changes in substantive laws and administrative procedures relating to the FDI approvals process, land acquisition, the national environmental policy, environmental clearance processes, and the national environment appellate authority, along with a shift since 1991 from discretionary procedures to rule-based procedures.
Perry-Kessaris demonstrates through a range of FDI projects undertaken in Bengaluru in the past 15 years, including the high-stakes Bengaluru-Mysore Infrastructure Project, how bilateral interactions between investment actors and the government have become privileged, undermining and effectively obliterating tripartite relations between them and civil society organizations. This is true whether one considers the expressive role of the law or its ability to foster participation and coordination, the latter two being assessed in the realms of administration and adjudication. The law appears to be used as much for expressing trust as mistrust. Public interest litigation is the only resource completely at the disposal of civil society, but this too has resulted in “hit or miss jurisprudence” due to its abuse by the government and the reluctance of the judiciary to interfere with matters of economic policy despite their activism in, say, the environmental arena.
Sadly then, the crux of the book lies in the erstwhile Indian finance minister's statement that the government of India is “willing to tolerate debate and perhaps even dissent, as long as it does not come in the way of eight percent growth” (p. 119). As Perry-Kessaris repeatedly illustrates the diminishing spaces for public engagement in major investment projects in India today, the power of ideology looms large. This makes readers wonder about the utility of trust as a normative goal or preferred path leading up to a positive and alternative approach to what some have labeled the post-Washington Consensus. To Perry-Kessaris's credit, however, she shows that the hold of investment climate discourse is far from determinative. Indeed, by keeping the empirical door open, Perry-Kessaris counters any conspiratorial theories by illustrating the varied, contingent, and often unpredictable relationships between government, investor, and civil society actors. In fact, she marshals her interviews to convincingly unpack the tight correlation between a market-friendly host legal system and investment flows, assumed by investment climate discourse, by showing that investors have ranked Indian states with poor legal systems as having better investment climates (p. 125). Under these circumstances, she asks how host states can possibly justify “the sacrifices of space for coordination, and the associated frustration of the interests of others” (pp. 125–6).
Global Business, Local Law offers a thoroughly researched, fine-grained, and lucidly written analysis of FDI in Bengaluru that will undoubtedly have tremendous analytical purchase all over the global South. The book is indispensable for both legal scholars and practitioners working in the fields of commercial law, law and development, and international economic law.
