British India as a Problem in Political Economy: Comparing James Steuart and Adam Smith

The consolidation of political economy as a distinct branch of the science of politics was simultaneous with the expansion and diversification of the overseas British Empire. This new political economy was often regarded as distant from the enterprise of imperial expansion. Political economists criticized the mercantile system of restricted colonial trades and monopoly corporations. This chapter discusses the political economy in relation to the imperial politics in India. It takes into focus the problems of imperial politics in India, the first of which was that the East India Company’s growing empire barely fitted into the notions of a British ‘empire of liberty’ which was perceived to be ‘commercial, Protestant, maritime, and free’; and the second was the British ignorance of and lack of sympathy for local customs and manners. In the chapter, the British theorists James Steuart and Adam Smith are closely examined. Both addressed the emerging empire of British India as a dilemma in political economy. Their thinking on Indian affairs posed challenges to the Company rule in India, but at the same time offered theoretical and conceptual resources for the unpopular Company government.