For a century, the East India Company conquered, subjugated and
plundered vast tracts of south Asia. The lessons of its brutal reign
have never been more relevant
One
of the very first Indian words to enter the English language was the
Hindustani slang for plunder: “loot”. According to the Oxford English
Dictionary, this word was rarely heard outside the plains of north India
until the late 18th century, when it suddenly became a common term
across Britain. To understand how and why it took root and flourished in
so distant a landscape, one need only visit Powis Castle.
The last hereditary Welsh prince, Owain Gruffydd ap Gwenwynwyn, built
Powis castle as a craggy fort in the 13th century; the estate was his
reward for abandoning Wales to the rule of the English monarchy. But its
most spectacular treasures date from a much later period of English
conquest and appropriation: Powis is simply awash with loot from India,
room after room of imperial plunder, extracted by the East India Company in the 18th century.
There are more Mughal artefacts stacked in this private house in the
Welsh countryside than are on display at any one place in India – even
the National Museum in Delhi. The riches include hookahs of burnished
gold inlaid with empurpled ebony; superbly inscribed spinels and
jewelled daggers; gleaming rubies the colour of pigeon’s blood and
scatterings of lizard-green emeralds. There are talwars set with yellow
topaz, ornaments of jade and ivory; silken hangings, statues of Hindu
gods and coats of elephant armour.
Such is the dazzle of these treasures that, as a visitor last summer,
I nearly missed the huge framed canvas that explains how they came to
be here. The picture hangs in the shadows at the top of a dark,
oak-panelled staircase. It is not a masterpiece, but it does repay close
study. An effete Indian prince, wearing cloth of gold, sits high on his
throne under a silken canopy. On his left stand scimitar and spear
carrying officers from his own army; to his right, a group of powdered
and periwigged Georgian gentlemen. The prince is eagerly thrusting a
scroll into the hands of a statesmanlike, slightly overweight Englishman
in a red frock coat.
The painting shows a scene from August 1765, when the young Mughal
emperor Shah Alam, exiled from Delhi and defeated by East India Company
troops, was forced into what we would now call an act of involuntary
privatisation. The scroll is an order to dismiss his own Mughal revenue
officials in Bengal, Bihar and Orissa, and replace them with a set of
English traders appointed by Robert Clive
– the new governor of Bengal – and the directors of the EIC, who the
document describes as “the high and mighty, the noblest of exalted
nobles, the chief of illustrious warriors, our faithful servants and
sincere well-wishers, worthy of our royal favours, the English Company”.
The collecting of Mughal taxes was henceforth subcontracted to a
powerful multinational corporation – whose revenue-collecting operations
were protected by its own private army.
It was at this moment that the East India Company (EIC) ceased to be a
conventional corporation, trading and silks and spices, and became
something much more unusual. Within a few years, 250 company clerks
backed by the military force of 20,000 locally recruited Indian soldiers
had become the effective rulers of Bengal. An international corporation
was transforming itself into an aggressive colonial power.
Using its rapidly growing security force – its army had grown to
260,000 men by 1803 – it swiftly subdued and seized an entire
subcontinent. Astonishingly, this took less than half a century. The
first serious territorial conquests began in Bengal in 1756; 47 years
later, the company’s reach extended as far north as the Mughal capital
of Delhi, and almost all of India south of that city was by then
effectively ruled from a boardroom in the City of London. “What honour
is left to us?” asked a Mughal official named Narayan Singh, shortly
after 1765, “when we have to take orders from a handful of traders who
have not yet learned to wash their bottoms?”
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 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.
No great sophistication was required. The entire contents of the
Bengal treasury were simply loaded into 100 boats and punted down the
Ganges from the Nawab of Bengal’s palace to Fort William, the company’s
Calcutta headquarters. A portion of the proceeds was later spent
rebuilding Powis.
The painting at Powis that shows the granting of the Diwani is
suitably deceptive: the painter, Benjamin West, had never been to India.
Even at the time, a reviewer noted that the mosque in the background
bore a suspiciously strong resemblance “to our venerable dome of St
Paul”. In reality, there had been no grand public ceremony. The transfer
took place privately, inside Clive’s tent, which had just been erected
on the parade ground of the newly seized Mughal fort at Allahabad. As
for Shah Alam’s silken throne, it was in fact Clive’s armchair, which
for the occasion had been hoisted on to his dining room table and
covered with a chintz bedspread.
Later, the British dignified the document by calling it the Treaty of
Allahabad, though Clive had dictated the terms and a terrified Shah
Alam had simply waved them through. As the contemporary Mughal historian
Sayyid Ghulam Husain Khan put it: “A business of such magnitude, as
left neither pretence nor subterfuge, and which at any other time would
have required the sending of wise ambassadors and able negotiators, as
well as much parley and conference with the East India Company and the
King of England, and much negotiation and contention with the ministers,
was done and finished in less time than would usually have been taken
up for the sale of a jack-ass, or a beast of burden, or a head of
cattle.”
By the time the original painting was shown at the Royal Academy in
1795, however, no Englishman who had witnessed the scene was alive to
point this out. Clive, hounded by envious parliamentary colleagues and
widely reviled for corruption, committed suicide in 1774 by slitting his
own throat with a paperknife some months before the canvas was
completed. He was buried in secret, on a frosty November night, in an
unmarked vault in the Shropshire village of Morton Say. Many years ago,
workmen digging up the parquet floor came across Clive’s bones, and
after some discussion it was decided to quietly put them to rest again
where they lay. Here they remain, marked today by a small, discreet wall
plaque inscribed: “PRIMUS IN INDIS.”
Today, as the company’s most articulate recent critic, Nick Robins,
has pointed out, the site of the company’s headquarters in Leadenhall
Street lies underneath Richard Rogers’s glass and metal Lloyd’s
building. Unlike Clive’s burial place, no blue plaque marks the site of
what Macaulay called “the greatest corporation in the world”, and
certainly the only one to equal the Mughals by seizing political power
across wide swaths of south Asia. But anyone seeking a monument to the
company’s legacy need only look around. No contemporary corporation
could duplicate its brutality, but many have attempted to match its
success at bending state power to their own ends.
The people of Allahabad have also chosen to forget this episode in
their history. The red sandstone Mughal fort where the treaty was
extracted from Shah Alam – a much larger fort than those visited by
tourists in Lahore, Agra or Delhi – is still a closed-off military zone
and, 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 tent was erected.
Instead, all their conversation was focused firmly on the future, and
the reception India’s prime minister, Narendra Modi, had just received
on his trip to America. One of the guards proudly showed me the
headlines in the local edition of the Times of India, announcing that
Allahabad had been among the subjects discussed in the White House by
Modi and President Obama. The sentries were optimistic. India was
finally coming back into its own, they said, “after 800 years of
slavery”. The Mughals, the EIC and the Raj had all receded into memory
and Allahabad was now going to be part of India’s resurrection. “Soon we
will be a great country,” said one of the sentries, “and our Allahabad
also will be a great city.”
***
At the height of the Victorian period there was a strong sense of
embarrassment about the shady mercantile way the British had founded the
Raj. The Victorians thought the real stuff of history was the politics
of the nation state. This, not the economics of corrupt corporations,
they believed was the fundamental unit of analysis and the major driver
of change in human affairs. Moreover, they liked to think of the empire
as a mission civilisatrice: a benign national transfer of
knowledge, railways and the arts of civilisation from west to east, and
there was a calculated and deliberate amnesia about the corporate
looting that opened British rule in India.
A second picture, this one commissioned to hang in the House of
Commons, shows how the official memory of this process was spun and
subtly reworked. It hangs now in St Stephen’s Hall, the echoing
reception area of parliament. I came across it by chance late this
summer, while waiting there to see an MP.
The painting was part of a series of murals entitled the Building of
Britain. It features what the hanging committee at the time regarded as
the highlights and turning points of British history: King Alfred
defeating the Danes in 877, the parliamentary union of England and
Scotland in 1707, and so on. The image in this series which deals with
India does not, however, show the handing over of the Diwani but an
earlier scene, where again a Mughal prince is sitting on a raised dais,
under a canopy. Again, we are in a court setting, with bowing attendants
on all sides and trumpets blowing, and again an Englishman is standing
in front of the Mughal. But this time the balance of power is very
different.
Sir Thomas Roe, the ambassador sent by James I to the Mughal court,
is shown appearing before the Emperor Jahangir in 1614 – at a time when
the Mughal empire was still at its richest and most powerful. Jahangir
inherited from his father Akbar one of the two wealthiest polities in
the world, rivalled only by Ming China. His lands stretched through most
of India, all of what is now Pakistan and Bangladesh, and most of
Afghanistan. He ruled over five times the population commanded by the
Ottomans – roughly 100 million people. His capitals were the megacities
of their day.
In Milton’s Paradise Lost, the great Mughal cities of Jahangir’s
India are shown to Adam as future marvels of divine design. This was no
understatement: Agra, with a population approaching 700,000, dwarfed all
of the cities of Europe, while Lahore was larger than London, Paris,
Lisbon, Madrid and Rome combined. This was a time when India accounted
for around a quarter of all global manufacturing. In contrast, Britain
then contributed less than 2% to global GDP, and the East India Company
was so small that it was still operating from the home of its governor,
Sir Thomas Smythe, with a permanent staff of only six. It did, however,
already possess 30 tall ships and own its own dockyard at Deptford on
the Thames.
Jahangir’s father Akbar had flirted with a project to civilise
India’s European immigrants, whom he described as “an assemblage of
savages”, but later dropped the plan as unworkable. Jahangir, who had a
taste for exotica and wild beasts, welcomed Sir Thomas Roe with the same
enthusiasm he had shown for the arrival of the first turkey in India,
and questioned Roe closely on the distant, foggy island he came from,
and the strange things that went on there.
For the committee who planned the House of Commons paintings, this
marked the beginning of British engagement with India: two nation states
coming into direct contact for the first time. Yet, in reality, British
relations with India began not with diplomacy and the meeting of
envoys, but with trade. On 24 September, 1599, 80 merchants and
adventurers met at the Founders Hall in the City of London and agreed to
petition Queen Elizabeth I to start up a company. A year later, the
Governor and Company of Merchants trading to the East Indies, a group of
218 men, received a royal charter, giving them a monopoly for 15 years
over “trade to the East”.
The charter authorised the setting up of what was then a radical new
type of business: not a family partnership – until then the norm over
most of the globe – but a joint-stock company that could issue tradeable
shares on the open market to any number of investors, a mechanism
capable of realising much larger amounts of capital. The first chartered
joint-stock company was the Muscovy Company, which received its charter
in 1555. The East India Company was founded 44 years later. No mention
was made in the charter of the EIC holding overseas territory, but it
did give the company the right “to wage war” where necessary.
Six years before Roe’s expedition, on 28 August 1608, William Hawkins
had landed at Surat, the first commander of a company vessel to set
foot on Indian soil. Hawkins, a bibulous sea dog, made his way to Agra,
where he accepted a wife offered to him by the emperor, and brought her
back to England. This was a version of history the House of Commons
hanging committee chose to forget.
The rapid rise of the East India Company was made possible by the
catastrophically rapid decline of the Mughals during the 18th century.
As late as 1739, when Clive was only 14 years old, the Mughals still
ruled a vast empire that stretched from Kabul to Madras. But in that
year, the Persian adventurer Nadir Shah descended the Khyber Pass with
150,000 of his cavalry and defeated a Mughal army of 1.5 million men.
Three months later, Nadir Shah returned to Persia carrying the pick of
the treasures the Mughal empire had amassed in its 200 years of
conquest: a caravan of riches that included Shah Jahan’s magnificent
peacock throne, the Koh-i-Noor, the largest diamond in the world, as
well as its “sister”, the Darya Nur, and “700 elephants, 4,000 camels
and 12,000 horses carrying wagons all laden with gold, silver and
precious stones”, worth an estimated £87.5m in the currency of the time.
This haul was many times more valuable than that later extracted by
Clive from the peripheral province of Bengal.
The destruction of Mughal power by Nadir Shah, and his removal of the
funds that had financed it, quickly led to the disintegration of the
empire. That same year, the French Compagnie des Indes began minting its
own coins, and soon, without anyone to stop them, both the French and
the English were drilling their own sepoys and militarising their
operations. Before long the EIC was straddling the globe. Almost
single-handedly, it reversed the balance of trade, which from Roman
times on had led to a continual drain of western bullion eastwards. The
EIC ferried opium to China, and in due course fought the opium wars in
order to seize an offshore base at Hong Kong and safeguard its
profitable monopoly in narcotics. To the west it shipped Chinese tea to
Massachusetts, where its dumping in Boston harbour triggered the
American war of independence.
By 1803, when the EIC captured the Mughal capital of Delhi, it had
trained up a private security force of around 260,000- twice the size of
the British army – and marshalled more firepower than any nation state
in Asia. It was “an empire within an empire”, as one of its directors
admitted. It had also by this stage created a vast and sophisticated
administration and civil service, built much of London’s docklands and
come close to generating nearly half of Britain’s trade. No wonder that
the EIC now referred to itself as “the grandest society of merchants in
the Universe”.
Yet, like more recent mega-corporations, the EIC proved at once
hugely powerful and oddly vulnerable to economic uncertainty. Only seven
years after the granting of the Diwani, when the company’s share price
had doubled overnight after it acquired the wealth of the treasury of
Bengal, the East India bubble burst after plunder and famine in Bengal
led to massive shortfalls in expected land revenues. The EIC was left
with debts of £1.5m and a bill of £1m unpaid tax owed to the Crown. When
knowledge of this became public, 30 banks collapsed like dominoes
across Europe, bringing trade to a standstill.
In a scene that seems horribly familiar to us today, this
hyper-aggressive corporation had to come clean and ask for a massive
government bailout. On 15 July 1772, the directors of the East India
Company applied to the Bank of England for a loan of £400,000. A
fortnight later, they returned, asking for an additional £300,000. The
bank raised only £200,000. By August, the directors were whispering to
the government that they would actually need an unprecedented sum of a
further £1m. The official report the following year, written by Edmund
Burke, foresaw that the EIC’s financial problems could potentially “like
a mill-stone, drag [the government] down into an unfathomable abyss …
This cursed Company would, at last, like a viper, be the destruction of
the country which fostered it at its bosom.”
But unlike Lehman Brothers, the East India Company really was too big
to fail. So it was that in 1773, the world’s first aggressive
multinational corporation was saved by history’s first mega-bailout –
the first example of a nation state extracting, as its price for saving a
failing corporation, the right to regulate and severely rein it in.
***
In Allahabad, I hired a small dinghy from beneath the fort’s walls
and asked the boatman to row me upstream. It was that beautiful moment,
an hour before sunset, that north Indians call godhulibela –
cow-dust time – and the Yamuna glittered in the evening light as
brightly as any of the gems of Powis. Egrets picked their way along the
banks, past pilgrims taking a dip near the auspicious point of
confluence, where the Yamuna meets the Ganges. 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 40 minutes we drifted slowly, the water gently 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 that a single London
corporation, however ruthless and aggressive, could have conquered an
empire that was so magnificently strong, so confident in its own
strength and brilliance and effortless sense of beauty.
Historians propose many reasons: the fracturing of Mughal India into
tiny, competing states; the military edge that the industrial revolution
had given the European powers. But perhaps most crucial was the support
that the East India Company enjoyed from the British parliament. The
relationship between them grew steadily more symbiotic throughout the
18th century. Returned nabobs like Clive used their wealth to buy both
MPs and parliamentary seats – the famous Rotten Boroughs. In turn,
parliament backed the company with state power: the ships and soldiers
that were needed when the French and British East India Companies
trained their guns on each other.
As I drifted on past the fort walls, I thought about the nexus
between corporations and politicians in India today – which has
delivered individual fortunes to rival those amassed by Clive and his
fellow company directors. The country today has 6.9% of the world’s
thousand or so billionaires, though its gross domestic product is only
2.1% of world GDP. The total wealth of India’s billionaires is
equivalent to around 10% of the nation’s GDP – while the comparable
ratio for China’s billionaires is less than 3%. More importantly, many
of these fortunes have been created by manipulating state power – using
political influence to secure rights to land and minerals, “flexibility”
in regulation, and protection from foreign competition.
Multinationals still have villainous reputations in India, and with
good reason; the many thousands of dead and injured in the Bhopal gas
disaster of 1984 cannot be easily forgotten; the gas plant’s owner, the
American multinational, Union Carbide, has managed to avoid prosecution
or the payment of any meaningful compensation in the 30 years since. But
the biggest Indian corporations, such as Reliance, Tata, DLF and Adani
have shown themselves far more skilled than their foreign competitors in
influencing Indian policymakers and the media. Reliance is now India’s
biggest media company, as well as its biggest conglomerate; its owner,
Mukesh Ambani, has unprecedented political access and power.
The last five years of India’s Congress party government were marked
by 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 value. The consequent public disgust was the principal reason for
the Congress party’s catastrophic defeat in the general election last
May, though the country’s crony capitalists are unlikely to suffer as a
result.
Estimated to have cost $4.9bn – perhaps the second most expensive
ballot in democratic history after the US presidential election in 2012 –
it brought Narendra Modi to power on a tidal wave of corporate
donations. Exact figures are hard to come by, but Modi’s Bharatiya
Janata party (BJP), is estimated to have spent at least $1bn on print
and broadcast advertising alone. Of these donations, around 90% comes
from unlisted corporate sources, given in return for who knows what
undeclared promises of access and favours. The sheer strength of Modi’s
new government means that those corporate backers may not be able to
extract all they had hoped for, but there will certainly be rewards for
the money donated.
In September, the 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 like those expressed in Britain more
than 200 years earlier, when the East India Company had become
synonymous with ostentatious wealth and political corruption: “What is
England now?” fumed the Whig litterateur Horace Walpole, “A sink of
Indian wealth.” In 1767 the company bought off parliamentary opposition
by donating £400,000 to the Crown in return for its continued right to
govern Bengal. But the anger against it finally reached ignition point
on 13 February 1788, at the impeachment, for looting and corruption, of
Clive’s successor as governor of Bengal, Warren Hastings. It was the
nearest the British ever got to putting the EIC on trial, and they did
so with one of their greatest orators at the helm – Edmund Burke.
Burke, leading the prosecution, railed against the way the returned
company “nabobs” (or “nobs”, both corruptions of the Urdu word “Nawab”)
were buying parliamentary influence, not just by bribing MPs to vote for
their interests, but by corruptly using their Indian plunder to bribe
their way into parliamentary office: “To-day the Commons of Great
Britain prosecutes the delinquents of India,” thundered Burke, referring
to the returned nabobs. “Tomorrow these delinquents of India may be the
Commons of Great Britain.”
Burke thus correctly identified what remains today one of the great
anxieties of modern liberal democracies: the ability of a ruthless
corporation corruptly to buy a legislature. And just as corporations now
recruit retired politicians in order to exploit their establishment
contacts and use their influence, so did the East India Company. So it
was, for example, that Lord Cornwallis, the man who oversaw the loss of
the American colonies to Washington, was recruited by the EIC to oversee
its Indian territories. As one observer wrote: “Of all human
conditions, perhaps the most brilliant and at the same time the most
anomalous, is that of the Governor General of British India. A private
English gentleman, and the servant of a joint-stock company, during the
brief period of his government he is the deputed sovereign of the
greatest empire in the world; the ruler of a hundred million men; while
dependant kings and princes bow down to him with a deferential awe and
submission. There is nothing in history analogous to this position …”
Hastings survived his impeachment, but parliament did finally remove
the EIC from power following the great Indian Uprising of 1857, some 90
years after the granting of the Diwani and 60 years after Hastings’s own
trial. On 10 May 1857, the EIC’s own security forces rose up against
their employer and on successfully crushing the insurgency, after nine
uncertain months, the company distinguished itself for a final time by
hanging and murdering tens of thousands of suspected rebels in the
bazaar towns that lined the Ganges – probably the most bloody episode in
the entire history of British colonialism.
Enough was enough. The same parliament that had done so much to
enable the EIC to rise to unprecedented power, finally gobbled up its
own baby. The British state, alerted to the dangers posed by corporate
greed and incompetence, successfully tamed history’s most voracious
corporation. In 1859, it was again within the walls of Allahabad Fort
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 15
years, finally shutting down in 1874. Its brand name is now owned by a
Gujarati businessman who uses it to sell “condiments and fine foods”
from a showroom in London’s West End. Meanwhile, in a nice piece of
historical and karmic symmetry, the current occupant of Powis Castle is
married to a Bengali woman and photographs of a very Indian wedding were
proudly on show in the Powis tearoom. This means that Clive’s
descendants and inheritors will be half-Indian.
***
Today we are back to a world that would be familiar to 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. When a British prime minister (or French president) 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 business, and with him come the CEOs of his
country’s biggest corporations.
For the corporation – a revolutionary European invention
contemporaneous with the beginnings of European colonialism, and which
helped give Europe its competitive edge – has continued to thrive long
after the collapse of European imperialism. When historians discuss 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 Centre 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 clear how a nation state can adequately protect itself and its
citizens from corporate excess. As the international subprime bubble
and bank collapses of 2007-2009 have so recently demonstrated, just as
corporations can shape the destiny of nations, they can also drag down
their economies. In all, US and European banks lost more than $1tn on
toxic assets from January 2007 to September 2009. What Burke feared the
East India Company would do to England in 1772 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. A powerful corporation can still
overwhelm or subvert a state every bit as effectively as the East India
Company did in Bengal in 1765.
Corporate influence, with its fatal mix 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 under the
Congress government that ruled India until last year. Yet as we have
seen in London, media organisations can still bend under the influence
of corporations such as HSBC – while Sir Malcolm Rifkind’s boast about
opening British embassies for the benefit of Chinese firms shows that
the nexus between business and politics is as tight as it has ever been.
The East India Company no longer exists, and it 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 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. The East India Company remains history’s
most terrifying warning about the potential for the abuse of corporate
power – and the insidious means by which the interests of shareholders
become those of the state. Three hundred and fifteen years after its
founding, its story has never been more current.
