In the end, the Company established its paramountcy by imposing itself on the Mughal Emperor as Regent, so finding a measure of legitimacy for itself in the eyes of India under the Mughal umbrella. As late as 1831, the Bengali reformer Raja Rammohan Roy dwelt ‘on the greater stability to the power of the British government attained by securing the grateful friendship of a monarch, who though without territorial possession, was still regarded by the nations of Hindustan as the only legitimate foundation of either honour or dominion’.169 The Company understood the importance of infiltrating the Mughal system rather than simply blowing it apart or abolishing it.
Wellesley would protest to the directors that he ‘recoiled from the thought of it being suspected in England’ that he wished to ‘place the East India Company, substantially or vicariously, on the throne of the Mughals’.170 But this, of course, was exactly what he had done. In less than fifty years, a multinational corporation had seized control of almost all of what had once been Mughal India. It had also, by this stage, created a sophisticated administration and civil service, built much of London’s docklands and come close to generating half of Britain’s trade. Its annual spending within Britain alone – around £8.5 millionj – equalled about a quarter of total British government annual expenditure.171 No wonder the Company now referred to itself as ‘the grandest society of merchants in the Universe’. Its armies were larger than those of almost all nation states and its power now encircled the globe; indeed, its shares were by now a kind of global reserve currency. As Burke wrote: ‘The Constitution of the Company began in commerce and ended in Empire;’ or rather, as one of its directors admitted, ‘an empire within an empire’.172
Nevertheless, for all its vast resources, to finance his six years of incessant warfare Wellesley had come close to bankrupting the Company, hugely increasing its annual deficits to around £2 millionk a year. The Company’s overall debt, which had stood at £17 million when Wellesley first arrived in India, was now rising towards £31.5 million.l Between 1800 and 1806, £3.9 million of silverm had to be shipped from London to Bengal to help begin repaying the enormous debts that Wellesley had run up.173 The news of the cost of the palatial new Government House in Calcutta, which Lord Wellesley had begun to build on a truly Mughal scale, was the final straw for the directors. Under Wellesley, the Government of India, they declared, had ‘simply been turned into a despotism’.
On 6 November 1803 the Court of Directors wrote to the government’s Board of Control listing their objections to Wellesley. They accused him of
making various inroads upon the constitution established for the governance of British India, and when they so far expressed their feelings in the hope of his effecting great promised retrenchments in the public expenditure … instead of answering their views he embarked, unnecessarily as they think, those extensive plans of foreign policy inevitably leading to wars which … have, in the opinion of the Court, been productive of many serious evils, have removed further than ever the prospect of reducing the debt and expenses of the country, and have exchanged the secure state and respected character of British power for an uncertain supremacy, and it is to be feared, the disaffection of all the states in India.174
By the end of 1803, the final decision had been taken: Wellesley, the Empire-building government cuckoo in the Company’s corporate nest, was to be recalled.
In 1803 the directors got their way, but in the end it was the British government that prevailed over the Company. Even as the Company grew daily stronger and more invincible than it had ever been in India, as the first half of the nineteenth century progressed it became ever more closely overseen and restricted by the British state; and the idea that the corporation should be running what had now become the country’s most important colony began to be seen as more and more of an anomaly.
An anonymous writer in the Edinburgh Review, probably James Mill, put it well a few months after Wellesley’s recall: ‘Among all the visionary and extravagant systems of policy that have been suggested,’ he wrote, ‘no one has been absurd enough to maintain that the most advisable way to govern an empire was by committing it to the care of a body of merchants residing at a distance of many thousands of miles.’175 In 1813, Parliament abolished the Company’s monopoly of trade with the East, allowing other, merchants and agency houses to set up shop in Bombay and Calcutta.176
By 1825 there was growing opposition in Parliament to the continuing existence of the East India Company at all. One MP remarked that the power and influence of the Company were so great that ‘were it not, indeed, that the locality of its wealth is at so remote a distance, the very existence of such a body would be dangerous, not merely to the liberty of the subject, but to the stability of the state’. Five years later another MP raged against politicians allowing ‘a gigantic power to exist in opposition to the welfare of the kingdom, and over which Parliament has a most feeble and indirect control’.177 In Parliament, James Silk Buckingham went even further: ‘The idea of consigning over to a joint stock association … the political administration of an Empire peopled with 100 million souls were so preposterous that if it were now for the first time to be proposed it would be deemed not merely an absurdity, but an insult to the meanest understanding of the realm.’178
In 1833, Parliament finally took action. They passed the East India Company Charter Bill, which removed the East India Company’s right to trade and so turned it into a sort of governing corporation. The Company, which had once presided over a vast empire of business – and which even at this stage was annually making £1 millionn from the tea trade alone – entered its final phase devoted exclusively to the business of Empire.179
Finally, on 10 May 1857, the EIC’s own private army rose up in revolt against its employer. On crushing the rebellion, after nine uncertain months, the Company distinguished itself for a final time by hanging and murdering many tens of thousands of suspected rebels in the bazaar towns that lined the Ganges, probably the bloodiest episode in the entire history of British colonialism. In the aftermath of the Great Uprising – the Indian Mutiny as it is known in Britain, or the First War of Independence as it is called in India – Parliament finally removed the Company from power altogether.
Enough was enough. The Victorian state, alerted to the dangers posed by corporate greed and incompetence, successfully tamed history’s most voracious corporation. The Company’s navy was disbanded and its army passed to the Crown. In 1859, it was within the walls of Allahabad Fort – the same space where Clive had first turned the Company into an imperial power by signing the Diwani – that the Governor General, Lord Canning, formally announced that the Company’s Indian possessions would be nationalised and pass into the control of the British Crown. Queen Victoria, rather than the directors of the EIC, would henceforth be ruler of India.
The East India Company limped on in its amputated form for another fifteen years when its charter expired, finally quietly shutting down in 1874, ‘with less fanfare,’ noted one commentator, ‘than a regional railway bankruptcy’.
Its brand name is now owned by two brothers from Kerala who use it to sell ‘condiments and fine foods’ from a showroom in London’s West End.
a £6.5 million today.
b £4,379,550 today.
c Some secondary sources erroneously have Tipu’s body being discovered by Arthur Wellesley. That it was Baird who found Tipu is made quite clear in the letter Baird wrote to General Harris; it can be found in Montgomery Martin (ed.), The Despatches, Minutes and Correspondence of Marquis Wellesley, vol. I, 1836, pp. 687–9. Arthur Wellesley’s role in the taking of Seringapatam has in general been exaggerated by some historians who have inflated his importance with the benefit of hindsight and in view of his subsequent European triumphs. Baird and Harris were the two ranking officers who at the time were credited with defeating Tipu.
d £200 million today.
e £2.6 million today.
f The modern equivalences of these sums are: Rs25 million = £
325 million; Rs1.2 million = £15.6 million.
g Over £29 million today.
h The Rajasthani town of Nasirabad is, perhaps surprisingly, named after the Scottish Bostonian.
i The modern equivalences of these sums are: 600,000 rupees = almost £8 million; 64,000 rupees = £832,000.
j £890 million today.
k Say, £210 million a year in today’s currency.
l Say, £3.3 billion in today’s currency.
m Over £400 million today.
n Over £100 million today.
Epilogue
The red sandstone Mughal fort where the Diwani was extracted from Shah Alam, and where the Company was finally dispossessed of its empire – a much larger fort than those visited by tourists in Lahore, Agra or Delhi – is still a closed-off military zone. When I visited it late last year, neither the guards at the gate nor their officers knew anything of the events that had taken place there; none of the sentries had even heard of the Company whose cannons still dot the parade ground where Clive’s Diwani tent was once erected.
On the evening of my visit, I hired a small dinghy from beneath the fort’s walls and asked the boatman to row me upstream. It was an hour before sunset, that beautiful moment north Indians call godhulibela – cow-dust time – and the Yamuna glittered in the evening light as brightly as a scattering of Mughal gems. Egrets picked their way along the banks, past pilgrims taking a dip near the auspicious point of confluence, where the Yamuna meets the Ganga. Ranks of little boys with fishing lines stood among the holy men and the pilgrims, engaged in the less mystical task of trying to hook catfish. Parakeets swooped out of cavities in the battlements; mynahs called to roost.
For forty minutes we drifted slowly, the water lapping against the sides of the boat, past the mile-long succession of mighty towers and projecting bastions of the fort, each decorated with superb Mughal kiosks, lattices and finials. It seemed impossible to imagine that a single London corporation, however ruthless and aggressive, could have conquered a Mughal Empire that was so magnificently strong, so confident in its own strength and brilliance and beauty.
In both India and Britain, people still talk about the British conquering India, but, as this book has attempted to show, that phrase disguises a much more ominous and complex reality. Because it was not the British government that seized India in the middle of the eighteenth century, but a private company. India’s transition to colonialism took place through the mechanism of a for-profit corporation, which existed entirely for the purpose of enriching its investors.
The Company’s conquest of India 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, the corporation will use all the resources in its power to resist.
Today we are back to a world that would be familiar to Britain’s first envoy to India, Sir Thomas Roe, where the wealth of the West has begun again to drain eastwards, in the way it did from Roman times until the birth of the East India Company. Now when a Western prime minister visits India, he no longer comes, as Clive did, to dictate terms. In fact, negotiation of any kind has passed from the agenda. Like Roe, he comes as a supplicant begging for contracts and business, and with him come the CEOs of his country’s biggest corporations.
The corporation – the idea of a single integrated business organisation stretching out across the seas – was a revolutionary European invention contemporaneous with the beginnings of European colonialism that upended the trading world of Asia and Europe, and which helped give Europe its competitive edge. It is, moreover, an idea that has continued to thrive long after the collapse of European imperialism. When historians debate the legacy of British colonialism in India, they usually mention democracy, the rule of law, railways, tea and cricket. Yet the idea of the joint stock company is arguably one of Britain’s most important exports to India, and the one that has for better or worse changed South Asia as much any other European idea. Its influence certainly outweighs that of communism and Protestant Christianity, and possibly even that of democracy.
Companies and corporations now occupy the time and energy of more Indians than any institution other than the family. This should come as no surprise: as Ira Jackson, the former director of Harvard’s Center for Business and Government, recently noted, corporations and their leaders have today ‘displaced politics and politicians as … the new high priests and oligarchs of our system’. Covertly, companies still govern the lives of a significant proportion of the human race.
The 300-year-old question of how to cope with the power and perils of large multinational corporations remains today without a clear answer: it is not obviously apparent how a nation state can adequately protect itself and its citizens from corporate excess. No contemporary corporation could get away with duplicating the violence and sheer military might of the East India Company, but many have attempted to match its success at bending state power to their own ends.
As the international subprime bubble and bank collapses of 2007–9 have so recently demonstrated, just as corporations can enrich, mould and positively shape the destiny of nations, so they can also drag down their economies. In all, US and European banks lost more than $1 trillion on toxic assets from January 2007 to September 2009. What Burke feared the East India Company would do to England in 1772 – potentially drag the government ‘down into an unfathomable abyss’ – actually happened to Iceland in 2008–11, when the systemic collapse of all three of the country’s major privately owned commercial banks brought the country to the brink of complete bankruptcy. In the twenty-first century, a powerful corporation can still overwhelm or subvert a state every bit as effectively as the East India Company did in Bengal in the eighteenth.
Corporate influence, with its fatal blend of power, money and unaccountability, is particularly potent and dangerous in frail states where corporations are insufficiently or ineffectually regulated, and where the purchasing power of a large company can outbid or overwhelm an underfunded government. This would seem to have been the case, for example, with the Congress government that ruled India from 2009 until 2014 and which was embroiled in a succession of corruption scandals that ranged from land and mineral giveaways to the corrupt sale of mobile phone spectrum at a fraction of its real value.
In September 2015, the then governor of India’s central bank, Raghuram Rajan, made a speech in Mumbai expressing his anxieties about corporate money eroding the integrity of parliament: ‘Even as our democracy and our economy have become more vibrant,’ he said, ‘an important issue in the recent election was whether we had substituted the crony socialism of the past with crony capitalism, where the rich and the influential are alleged to have received land, natural resources and spectrum in return for payoffs to venal politicians. By killing transparency and competition, crony capitalism is harmful to free enterprise, and economic growth. And by substituting special interests for the public interest, it is harmful to democratic expression.’ His anxieties were remarkably similar to those expressed by Horace Walpole and many others in Britain more than 300 years earlier, when the East India Company had become synonymous with ostentatious wealth and political corruption.
The East India Company has, thankfully, no exact modern equivalent. Walmart, which is the world’s largest corporation in revenue terms, does not number among its assets a fleet of nuclear submarines; neither Facebook nor Shell possesses regiments of infantry. Yet the East India Company – the first great multinational corporation, and the first to run amok – was the ultimate model and prototype for many of today’s joint stock corporations. The most powerful among them do not need their own armies: they can rely on governments to protect their interests and
bail them out.
Today, the site of the company’s headquarters in Leadenhall Street lies underneath Richard Rogers’ glass and metal Lloyd’s building. No blue plaque marks the site of what Macaulay called ‘the greatest corporation in the world’, and certainly the only power to equal the Mughals by seizing political power across wide swathes of South Asia. But anyone seeking a monument to the company’s legacy in the City need only look around them.
This book has attempted to study the relationship between commercial and imperial power. It has looked at how corporations can impact on politics, and vice versa. It has examined how power and money can corrupt, and the way commerce and colonisation have so often walked in lock-step. For Western imperialism and corporate capitalism were born at the same time, and both were to some extent the dragons’ teeth that spawned the modern world.
Such was the disruption caused in eighteenth-century India by the advent of the East India Company that a whole new literary genre was invented to deal with it. This is the genre of moralising histories known as The Book of Admonition, or ‘Ibrat-Nâma. The admonitory purpose of these histories was put succinctly by Khair ud-Din Illahabadi, the author of the best known such volume: ‘Az farâ-dîd-i sar-guzasht-i guzashtagân, bar khud ‘ibrat pazîrad’ – By considering these past lives, take heed for your own future.1
The East India Company remains today history’s most ominous warning about the potential for the abuse of corporate power – and the insidious means by which the interests of shareholders can seemingly become those of the state. For as recent American adventures in Iraq have shown, our world is far from post-imperial, and quite probably never will be. Instead Empire is transforming itself into forms of global power that use campaign contributions and commercial lobbying, multinational finance systems and global markets, corporate influence and the predictive data harvesting of the new surveillance-capitalism rather than – or sometimes alongside – overt military conquest, occupation or direct economic domination to effect its ends.
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