We still talk about the British conquering India, but that phrase disguises a more sinister reality. It was not the British government that seized India at the end of the 18th century, but a dangerously unregulated private company headquartered in one small office, five windows wide, in London, and managed in India by an unstable sociopath – Clive.
In many ways the EIC was a model of corporate efficiency: 100 years into its history, it had only 35 permanent employees in its head office. Nevertheless, that skeleton staff executed a corporate coup unparalleled in history: the military conquest, subjugation and plunder of vast tracts of southern Asia. It almost certainly remains the supreme act of corporate violence in world history. For all the power wielded today by the world’s largest corporations – whether ExxonMobil, Walmart or Google – they are tame beasts compared with the ravaging territorial appetites of the militarised East India Company. Yet if history shows anything, it is that in the intimate dance between the power of the state and that of the corporation, while the latter can be regulated, it will use all the resources in its power to resist.
When it suited, the EIC made much of its legal separation from the government. It argued forcefully, and successfully, that the document signed by Shah Alam – known as the Diwani – was the legal property of the company, not the Crown, even though the government had spent a massive sum on naval and military operations protecting the EIC’s Indian acquisitions. But the MPs who voted to uphold this legal distinction were not exactly neutral: nearly a quarter of them held company stock, which would have plummeted in value had the Crown taken over. For the same reason, the need to protect the company from foreign competition became a major aim of British foreign policy.
The transaction depicted in the painting [Wiki] was to have catastrophic consequences. As with all such corporations, then as now, the EIC was answerable only to its shareholders. With no stake in the just governance of the region, or its long-term wellbeing, the company’s rule quickly turned into the straightforward pillage of Bengal, and the rapid transfer westwards of its wealth.
Before long the province, already devastated by war, was struck down by the famine of 1769, then further ruined by high taxation. Company tax collectors were guilty of what today would be described as human rights violations. A senior official of the old Mughal regime in Bengal wrote in his diaries: “Indians were tortured to disclose their treasure; cities, towns and villages ransacked; jaghires and provinces purloined: these were the ‘delights’ and ‘religions’ of the directors and their servants.”
Bengal’s wealth rapidly drained into Britain, while its prosperous weavers and artisans were coerced “like so many slaves” by their new masters, and its markets flooded with British products. A proportion of the loot of Bengal went directly into Clive’s pocket. He returned to Britain with a personal fortune – then valued at £234,000 – that made him the richest self-made man in Europe. After the Battle of Plassey in 1757, a victory that owed more to treachery, forged contracts, bankers and bribes than military prowess, he transferred to the EIC treasury no less than £2.5m seized from the defeated rulers of Bengal – in today’s currency, around £23m for Clive and £250m for the company.
William Dalrymple, “The East India Company: The original corporate raiders”, Guardian, 2015-03-04.
February 8, 2022
QotD: The East India Company’s rise to power
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