A refreshingly candid perspective on the Tata empire

By Vishnu Makhijani

New Delhi, July 2 (SocialNews.XYZ) It has its origins in the Harvard University PhD thesis of Mircea Raianu, a historian of global capitalism and modern South Asia and currently Assistant Professor of History at the University of Maryland, who was "struck by the extraordinary continuity and resilience" of the Tata conglomerate "from its origins in the mid-19th century to its current position of importance to the Indian economy in the early 21st century".

He wondered why the region's academic literature did not feature more research on business groups over time and the outcome is "Tata - The Global Corporation That Built Indian Capitalism" (Harvard University Press) which tracks the fortunes of a family-run business that was born during the High Noon of the British Empire and went on to capture the world's attention with the headline-making acquisition of luxury car manufacturer Jaguar Land Rover.

"It is true that there are many other books on Tata, but none written by professional historians in conversation with the latest scholarship (not just on business but also in other fields such as economic, legal, intellectual, social, and political history). There are of course a few exceptions, mainly on specialised topics or specific companies (Chikayoshi Nomura's excellent work on steelmaking at TISCO comes to mind)," Raianu told IANS in an interview.

"I spent around two years in total researching in libraries and archives in India, the UK, and US. This is the first book-length study of Tata to use the company archives in Pune and Jamshepdur alongside state archives in Delhi, Mumbai, London, and elsewhere. I also conducted a few interviews with people within and outside the group, but most of the book is based on written and visual records (letters, reports, memos, plans, photographs, advertisements etc.)," he added.

To this extent, his fresh insights lie "in the selection and organization of material around an overall argument about Tata's relationship with the colonial and postcolonial state - how, when, and why a private company in an emerging market context acted in opposition to the state or like a state itself," Raianu explained.

Thus, the six chapters are based on themes such as global financial connections, between paternalism and technology, control over land and labour, and the evolution of philanthropic networks that detail a complex process shaped by world historical forces: the eclipse of Imperial free trade, the intertwined rise of nationalism and the developmental state, and finally the return of globalisation and market liberalisation.

The book details how "Tata's exceptional characteristics evolved gradually and contingently" in that it was not till the early 1930s that the group "ceased to rely on a far-flung network of trading companies run by family members" for technical and financial assistance.

"Around the same time, practices of scientific management imported from the West were introduced in the textile mills in Bombay and the steel town in Jamshedpur but never without compromises or countermeasures. Family and community ties remained important, often generating controversy when the financial reputation of the group was on the line, or when its philanthropy came under question in the Parsi community to which they belonged.

"The Tatas' ideas of ethical or socially responsible capitalism, common to many businesses in emerging markets, were not organic outgrowths of traditional religious values and norms, nor natural responses to mass poverty and a weak state. They were produced through unpredictable and intermittent flows of knowledge and expertise, as well as a conscious process of adaptation and experimentation," Raianu writes in the book.

Although not unique in occupying a liminal position between empire and nation, Tata also kept its distance from the state in both its colonial and post-colonial avatars, the author states.

"The group carved out a unique niche for itself by separating the economic and political dimensions of 'swadeshi', giving only tepid support to the Indian National Congress while proudly assuming the mantle of industrialisation in the service of the nation-in-the-making. It enjoyed the 'best of both worlds' until World War II and independence, when this niche began to disappear."

Rivals like G.D. Birla, who had openly supported and financed the Congress during the years of the independence struggle, moved closer to the corridors of power in New Delhi and as the restrictive "Licence-Permit Raj" took shape, the Tatas found themselves excluded from planning decisions, their further expansion restricted.

"Yet the group survived the transition to independence, held off the threat of nationalisation and maintained its position at the top of the corporate pyramid into the late 1970s, when the state laid down its regulatory weapons and embraced the private sector in a concerted push for growth," Raianu points out.

Tata, he writes, was "able to preserve and sustain a significant degree of autonomy over time due to three principal factors: transnational financial connections, first with East Asia and then with the United States, control over land, labour and natural resources within India; and networks of scientific and technical expertise cultivated through strategic philanthropy. All these factors, in different ways, conferred upon the group certain attributes of sovereignty in the interstices of state power".

There are many who might fault Raianu for not taking the narrative beyond the lifting of the Emergency; that the 10-page Epilogue of the 291-page book (inclusive of an Appendix, Notes, Acknowledgements and Index that stretch over 90 pages), is no substitute because some of the group's best years have come in the 1980s and beyond; that it glosses over the role of Ratan Tata from the1990s onwards and the fact that the Tata group is one of the two players in the running for the privatisation of Air India, the airline that J.R.D. Tata founded and nurtured till it was nationalised in 1953.

It might also seem to some that the author is biased against Ratan Tata because of the spat with Cyrus Mistry, which, in the overall context of the group is seen only as a minor hiccup. (What do you expect when someone tries to overturn the very focus of the group and all that it has stood for all these years?)

"My book is not intended as a comprehensive account or chronicle of the group. It can serve as a platform for further research by others who will make different choices about what to include and exclude," Raianu said in the interview, acknowledging this "may be unsatisfying to some readers" but citing three reasons.

"First, archival sources (both from the Tata and state archives) are quite limited for the period after 1980. Second, this moment provided a natural endpoint for the three trends that interest me (use of global financial connections to circumvent the state, land and labor control, and the transition from philanthropy to CSR). Third, the recent history of the group has been amply covered by other studies and the contribution I could have made was limited."

He also disagreed that he was biased against Ratan Tata in general, or specifically in regard to the conflict with Cyrus Mistry.

"As a historian I wanted to discuss how the issues brought up by this episode (in particular, the tension between investments on a global vs. national scale and the role of the Tata Trusts in the overall structure of the group) are similar to what happened in Tata's past. I do not take a position on who was right and wrong. Nor can I predict the future and know whether it will be only a 'minor hiccup' or if it will have more lasting significance," Raianu concluded.

(Vishnu Makhijani can be reached at vishnu.makhijani@ians.in)

Source: IANS