This Oriental inability to compete with Western industry arose not merely from methods of production but also from other factors such as the mentality of the workers and the scarcity of capital. Throughout the Near and Middle East economic life rested on the principle of status. The Western economic principles of contract and competition were virtually unknown. Agriculturalists and artisans followed blindly in the footsteps of their fathers. There was no competition, no stimulus for improvement, no change in customary wages, no desire for a better and more comfortable living. The industries were stereotyped; the apprentice merely imitated his master, and rarely thought of introducing new implements or new methods of manufacture. Instead of working for profit and advancement, men followed an hereditary "calling," usually hallowed by religious sanctions, handed down from father to son through many generations, each calling possessing its own unchanging ideals, its zealously guarded craft-secrets.
The few bolder, more enterprising spirits who might have ventured to break the iron bands of custom and tradition were estopped by lack of capital. Fluid "investment" capital, easily mobilized and ready to pour into an enterprise of demonstrable utility and profit, simply did not exist. To the Oriental, whether prince or peasant, money was regarded, not as a source of profit or a medium of exchange, but as a store of value, to be hoarded intact against a "rainy day." The East has been known for ages as a "sink of the precious metals." In India alone, the value of the gold, silver, and jewels hidden in strong-boxes, buried in the earth, or hanging about the necks of women must run into billions. Says a recent writer on India: "I had the privilege of being taken through the treasure-vaults of one of the wealthiest Maharajahs. I could have plunged my arm to the shoulder in great silver caskets filled with diamonds, pearls, emeralds, rubies. The walls were studded with hooks and on each pair of hooks rested gold bars three to four feet long and two inches across. I stood by a great cask of diamonds, and picking up a handful let them drop slowly from between my fingers, sparkling and glistening like drops of water in sunlight. There are some seven hundred native states, and the rulers of every one has his treasure-vaults on a more or less elaborate scale. Besides these, every zamindar and every Indian of high or low degree who can save anything, wants to have it by him in actual metal; he distrusts this new-fangled paper currency that they try to pass off on him. Sometimes he beats his coins into bangles for his wives, and sometimes he hides money behind a loose brick or under a flat stone in the bottom of the oven, or he goes out and digs a little hole and buries it."[206]
Remember that this description is of present-day India, after more than a century of British rule and notwithstanding a permeation of Western ideas which, as we shall presently see, has produced momentous modifications in the native point of view. Remember also that this hoarding propensity is not peculiar to India but is shared by the entire Orient. We can then realize the utter lack of capital for investment purposes in the East of a hundred years ago, especially when we remember that political insecurity and religious prohibitions of the lending of money at interest stood in the way of such far-sighted individuals as might have been inclined to employ their hoarded wealth for productive purposes. There was, indeed, one outlet for financial activity—usury, and therein virtually all the scant fluid capital of the old Orient was employed. But such capital, lent not for productive enterprise, but for luxury, profligacy, or incompetence, was a destructive rather than a creative force and merely intensified the prejudice against capital of any kind.
Such was the economic life of the Orient a hundred years ago. It is obvious that this archaic order was utterly unable to face the tremendous competition of the industrialized West. Everywhere the flood of cheap Western machine-made, mass-produced goods began invading Eastern lands, driving the native wares before them. The way in which an ancient Oriental handicraft like the Indian textiles was literally annihilated by the destructive competition of Lancashire cottons is only one of many similar instances. To be sure, some Oriental writers contend that this triumph of Western manufactures was due to political rather than economic reasons, and Indian nationalists cite British governmental activity in favour of the Lancashire cottons above mentioned as the sole cause for the destruction of the Indian textile handicrafts. But such arguments appear to be fallacious. British official action may have hastened the triumph of British industry in India, but that triumph was inevitable in the long run. The best proof is the way in which the textile crafts of independent Oriental countries like Turkey and Persia were similarly ruined by Western competition.
A further proof is the undoubted fact that Oriental peoples, taken as a whole, have bought Western-manufactured products in preference to their own hand-made wares. To many Westerners this has been a mystery. Such persons cannot understand how the Orientals could buy the cheap, shoddy products of the West, manufactured especially for the Eastern market, in preference to their native wares of better quality and vastly greater beauty. The answer, however, is that the average Oriental is not an art connoisseur but a poor man living perilously close to the margin of starvation. He not only wants but must buy things cheap, and the wide price-margin is the deciding factor. Of course there is also the element of novelty. Besides goods which merely replace articles he has always used, the West has introduced many new articles whose utility or charm are irresistible. I have already mentioned the way in which the sewing-machine and the kerosene-lamp have swept the Orient from end to end, and there are many other instances of a similar nature. The permeation of Western industry has, in fact, profoundly modified every phase of Oriental economic life. New economic wants have been created; standards of living have been raised; canons of taste have been altered. Says a lifelong American student of the Orient: "The knowledge of modern inventions and of other foods and articles has created new wants. The Chinese peasant is no longer content to burn bean-oil; he wants kerosene. The desire of the Asiatic to possess foreign lamps is equalled only by his passion for foreign clocks. The ambitious Syrian scorns the mud roof of his ancestors, and will be satisfied only with the bright red tiles imported from France. Everywhere articles of foreign manufacture are in demand.... Knowledge increases wants, and the Oriental is acquiring knowledge. He demands a hundred things to-day that his grandfather never heard of."[207]
Everywhere it is the same story. An Indian economic writer, though a bitter enemy of Western industrialism, bemoans the fact that "the artisans are losing their occupations and are turning to agriculture. The cheap kerosene-oil from Baku or New York threatens the oilman's[208] existence. Brass and copper which have been used for vessels from time immemorial are threatened by cheap enamelled ironware imported from Europe.... There is also, pari passu, a transformation of the tastes of the consumers. They abandon gur for crystal sugar. Home-woven cloths are now replaced by manufactured cloths for being too coarse. All local industries are attacked and many have been destroyed. Villages that for centuries followed customary practices are brought into contact with the world's markets all on a sudden. For steamships and railways which have established the connection have been built in so short an interval as hardly to allow breathing-time to the village which slumbered so long under the dominion of custom. Thus the sudden introduction of competition into an economic unit which had from time immemorial followed custom has wrought a mighty change."[209]
This "mighty change" was due not merely to the influx of Western goods but also to an equally momentous influx of Western capital. The opportunities for profitable investment were so numerous that Western capital soon poured in streams into Eastern lands. Virtually devoid of fluid capital of its own, the Orient was bound to have recourse to Western capital for the initiation of all economic activity in the modern sense. Railways, mines, large-scale agriculture of the "plantation" type, and many other undertakings thus came into being. Most notable of all was the founding of numerous manufacturing establishments from North Africa to China and the consequent growth of genuine "factory towns" where the whir of machinery and the smoke of tall chimneys proclaimed that the East was adopting the industrial life of the West.
The momentous social consequences of this industrialization of the Orient will be treated in subsequent chapters. In the present chapter we will confine ourselves to a consideration of its economic side. Furthermore, this book, limited as it is to the Near and Middle East, cannot deal with industrial developments in China and Japan. The reader should, however, always bear in mind Far Eastern developments, which, in the main, run parallel to those which we shall here discuss.
These industrial innovations were at first pure Western transplantings set in Eastern soil. Initiated by Western capital, they were wholly controlled and managed by Western brains. Western capital could not venture to entrust itself to Orientals, with their lack of the modern industrial spirit, their habits of "squeeze" and nepotism, their lust for quick returns, and their incapacity for sustained business team-play. As time passed, however, the success of Western undertakings so impressed Orientals that the more forward-looking among them were ready to risk their money and to acquire the technique necessary for success. At the close of Chapter II, I described the development of modern business types in the Moslem world, and the same is true of the non-Moslem populations of India. In India there were several elements such as the Parsis and the Hindu "banyas," or money-lenders, whose previous activities in commerce or usury predisposed them to financial and industrial activity in the modern sense. From their ranks have chiefly sprung the present-day native business communities of India, exemplified by the jute and textile factories of Calcutta and Bombay, and the great Tata iron-works of Bengal—undertakings financed by native capital and wholly under native control. Of course, beside these successes there have been many lamentable failures. Nevertheless, there seems to be no doubt that Western industrialism is ceasing to be an exotic and is rooting itself firmly in Eastern soil.[210]
The combined result of Western and Eastern enterprise has been, as already stated, the rise of important industrial centres at various points in the Orient. In Egypt a French writer remarks: "Both banks of the Nile are lined with factories, sugar-refineries and cotton-mills, whose belching chimneys tower above the mud huts of the fellahs."[211] And Sir Theodore Morison says of India: "In the city of Bombay the industrial revolution has already been accomplished. Bombay is a modern manufacturing city, where both the dark and the bright side of modern industrialism strike the eye. Bombay has insanitary slums where overcrowding is as great an evil as in any European city; she has a proletariat which works long hours amid the din and whir of machinery; she also has her millionaires, whose princely charities have adorned her streets with beautiful buildings. Signs of lavish wealth and, let me add, culture and taste in Bombay astonish the visitor from the inland districts. The brown villages and never-ending fields with which he has hitherto been familiar are the India which is passing away; Bombay is the presage of the future."[212]