The Anarchy: The East India Company, Corporate Violence, and the Pillage of an Empire

by William Dalrymple

We still talk about the British conquering India, but that phrase disguises a more sinister reality. It was not the British government that began seizing great chunks of India in the mid-eighteenth century, but a dangerously unregulated private company headquartered in one small office, five windows wide, in London, and managed in India by a violent, utterly ruthless and intermittently mentally unstable corporate predator – Clive. India’s transition to colonialism took place under a for-profit corporation, which existed entirely for the purpose of enriching its investors.

But the East India Company really was too big to fail. So it was that the following year, in 1773, the world’s first aggressive multinational corporation was saved by one of history’s first mega-bailouts – 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.

This book does not aim to provide a complete history of the East India Company, still less an economic analysis of its business operations. Instead it is an attempt to answer the question of how a single business operation, based in one London office complex, managed to replace the mighty Mughal Empire as masters of the vast subcontinent between the years 1756 and 1803.

In comparison, England then had just 5 per cent of India’s population and was producing just under 3 per cent of the world’s manufactured goods.

One woman, however, was spared. Both Miran and his father asked for the hand of the famously beautiful Lutf un-Nissa. ‘But she declined and sent this reply: “having ridden an elephant before, I cannot now agree to ride an ass.”’

It was not brilliant, but I was now Mir Atish, just as Shah Alam had become Emperor. The idea was everything.38

The three great armies of the Mughal world had come together to defeat the Company and expel it from India. When instead it was the Mughals that were defeated, the Company was left the dominant military force in north-east India. Buxar confirmed the Company’s control of Bengal and the coast and opened the way for them to extend their influence far inland to the west. The Company, which had started off as an enterprise dominated by privateers and former Caribbean pirates, had already transformed itself once into a relatively respectable international trading corporation, with a share price so reliable its stock was regarded almost as a form of international currency. Now the Company was transformed a second time, not just as a vehicle of trade operating from a scattering of Indian coastal enclaves, but as the ruler of a rich and expansive territorial empire extending across South Asia. For this, above all, was the moment this corporate trading organisation succeeded in laying the ground for its territorial conquest of India. A business enterprise had now emerged from its chrysalis, transformed into an autonomous imperial power, backed by a vast army, already larger than that of the British Crown, and was poised now to exercise administrative control over 20 million Indians. A body of merchants had been transformed into the de facto sovereign rulers of much of northern India. As one contemporary observer put it: ‘Through many unexpected contingencies, an incorporated society...

Henceforth, 250 East India Company clerks backed by the military force of 20,000 Indian sepoys would now run the finances of India’s three richest provinces, effectively ending independent government in Bengal for 200 years. For a stock market-listed company with profit as its main raison d’être, this was a transformative, revolutionary moment.

A trading corporation had become both colonial proprietor and corporate state, legally free, for the first time, to do all the things that governments do: control the law, administer justice, assess taxes, mint coins, provide protection, impose punishments, make peace and wage war.

The total numbers are disputed, but in all perhaps 1.2 million – one in five Bengalis – starved to death that year in what became one of the greatest tragedies of the province’s history.9

But in this, too, North ultimately failed. The Company enjoyed chartered privileges, guaranteed by the Crown, and its shareholders were tenacious in their defence of them. Moreover, too many MPs owned EIC stock, and the EIC’s taxes contributed too much to the economy – customs duties alone generated £886,922* annually – for it to be possible for any government to even consider letting the Company sink. Ultimately, it was saved by its size: the Company now came close to generating nearly half of Britain’s trade and was, genuinely, too big to fail.

On 19 June 1773, Lord North’s bill passed its final reading by 47 votes to 15. The world’s first aggressive multinational corporation was saved by one of history’s first mega-bailouts, an early example of a nation state extracting, as its price for saving a failing corporation, the right to regulate and rein it in.

Clive left no suicide note, but Samuel Johnson reflected the widespread view as to his motives: Clive, he wrote, ‘had acquired his fortune by such crimes that his consciousness of them impelled him to cut his own throat’.

It was at this point that it became clear, as Pearse noted, ‘that both gentlemen were unacquainted with the modes usually observed on these occasions’; indeed, neither of the two most powerful British intellectuals in Bengal seemed entirely clear how to operate their pistols. Francis said he had never fired one in his life, and Hastings said he could only remember doing so once. So both had to have their weapons loaded for them by their seconds who, being military men, knew how to operate firearms. Hastings, ever the gentleman, decided to let Francis fire first. Francis took aim and squeezed the trigger. The hammer snapped, but the pistol misfired. Again, Francis’s second had to intervene, putting fresh priming in the pistol and chapping the flints. ‘We returned to our stations,’ wrote Hastings. ‘I still proposed to receive the first fire, but Mr F twice aimed, and twice withdrew his pistol.’ Finally, Francis again ‘drew his trigger,’ wrote Pearse, ‘but his powder being damp, the pistol again did not fire. Mr Hastings came down from his present, to give Mr Francis time to rectify his priming, and this was done out of a cartridge with which I supplied him finding they had no spare powder. Again the gentlemen took their stands and both presented together.’

What a farce

At the end of ten years’ captivity, one of these prisoners, James Scurry, found that he had forgotten how to sit in a chair or use a knife and fork; his English was ‘broken and confused, having lost all its vernacular idiom’, his skin had darkened to the ‘swarthy complexion of Negroes’ and he found he actively disliked wearing European clothes.126 This was the ultimate colonial nightmare, and in its most unpalatable form: the captive preferring the ways of his captors, the coloniser colonised.

Elsewhere in the world, 1780 saw the British suffering other major reverses – and these were indeed followed through to their logical conclusion. In America, the Patriots had turned on the King, partly as a result of government’s attempts to sell the stockpiles of East India Company tea, onto which was slapped British taxes: the Boston Tea Party, an event that built support for what would become the American War of Independence by dumping 90,000 pounds of EIC tea, worth £9,659 (over £1 million today), in Boston harbour, was in part provoked by fears that the Company might now be let loose on the thirteen colonies, much as it had been in Bengal.

Interesting that he calls them Patriots and not Colonials or Americans. Feels British

Captain James Stewart was among those killed on 4 January 1779 near Karle, when he shinned up a tree to see where the Maratha army was and was promptly shot dead by a Maratha marksman.Two hundred years later Ishtur Phakda, as he is now known around Karle, has become a local Tantric deity, to whom the local police – among others – offer weekly blood sacrifice. The shrine to his head, which at some point seems to have become detached from his body, is in the local police station, just beyond the cells. If the station chief ignores him, according to the officer on duty, Ishtur Phakda ‘gives him a good slap’. With many thanks to the great historian of the Marathas, Uday S. Kulkarni, who not only told me this story, but took me on a prolonged search for the obelisk marking the spot of his death, a second shrine – covered in goat’s blood – where his body lies, and the third to his head in the local Wadgaon police lockup.

the historian Shakir Khan commented, ‘A single courageous, decisive man with an intelligent grasp of strategy is better than a thousand ditherers.’24

Happy he is who has no wealth, this is the one true wealth today.

In that year Alexander Dalrymple, the Company’s now retired hydrographer, put it with utmost clarity and confidence: ‘The East India Company must be considered in two lights’, he wrote, ‘as commercial and political; but the two are inseparable: and if the politics are not made subservient to the commerce, the destruction of the Company must ensue.’

Presumably an ancestor of the author

Amid all the spectacle of Hastings’ trial, it made sense that the man sent out to replace him was chosen by Parliament specifically for his incorruptibility. General Lord Charles Cornwallis had surrendered the thirteen American Colonies of the British Empire over to George Washington, who then declared it a free and independent nation. Cornwallis’s mission was now to make sure that the same never happened in India.

The reforms Cornwallis initiated on his return to Calcutta further consolidated this position. In America, Britain had lost its colonies not to Native Americans, but to the descendants of European settlers. Cornwallis was determined to make sure that a settled colonial class never emerged in India to undermine British rule as it had done, to his own humiliation, in America. By this period one in three British men in India were cohabiting with Indian women, and there were believed to be more than 11,000 Anglo-Indians in the three Presidency towns.

Cornwallis then set about making a series of land and taxation reforms guaranteeing a steady flow of revenue, particularly in time of war, as well as reinforcing the Company’s control of the land it had conquered. The Permanent Settlement, introduced in 1793, gave absolute rights to land to zamindar landowners, on the condition that they paid a sum of land tax which Company officials now fixed in perpetuity. So long as zamindars paid their revenues punctually, they had security over the land from which the revenue came. If they failed to pay up, the land would be sold to someone else.65 These reforms quickly produced a revolution in landholding in Company Bengal: many large old estates were split up, with former servants flocking to sale rooms to buy up their ex-masters’ holdings. In the ensuing decades, draconian tax assessments led to nearly 50 per cent of estates changing hands. Many old Mughal landowning families were ruined and forced to sell, a highly unequal agrarian society was produced and the peasant farmers found their lives harder than ever. But from the point of view of the Company, Cornwallis’s reforms were a huge success. Income from land revenues was both stabilised and enormously increased; taxes now arrived punctually and in full. Moreover, those who had bought land from the old zamindars were in many ways throwing in their lot with the new Company order. In this way, a new class of largely Hindu pro-British Bengali bankers and traders began to emerge as ...

In the end it was this access to unlimited reserves of credit, partly through stable flows of land revenues, and partly through the collaboration of Indian moneylenders and financiers, that in this period finally gave the Company its edge over their Indian rivals. It was no longer superior European military technology, nor powers of administration that made the difference. It was the ability to mobilise and transfer massive financial resources that enabled the Company to put the largest and best-trained army in the eastern world into the field.

In the end, it all came down to money.

All the while, Baji Rao kept in close touch with his new Company allies, who soon put into action a rescue operation.

I’m always struck by stories like this because idk how you can be on the run in hostile territory with just a bodyguard and avoiding enemies but also "in close contact" before the telephone or telegraph

The Company’s army had expanded very quickly under Wellesley’s rule and within a few years its muster roll had gone up by nearly half from 115,000 to 155,000 men; in the next decade its numbers would rise again to 195,000, making it one of the largest standing European-style armies in the world, and around twice the size of the British army.

The sinews of British supremacy were now established. With the exception of a few months during the Great Uprising of 1857, for better or worse, India would remain in British hands for another 144 years, finally gaining its freedom only in August 1947.

He was now in his seventy-seventh year. As a boy he had seen Nader Shah ride into Delhi, and leave carrying away the Peacock Throne, into which was embedded the great Koh-i-Noor diamond. He had escaped Imad ul-Mulk’s attempt to assassinate him and survived repeated battles with Clive. He had fought the Company at Patna and Buxar, awarded the Diwani to Clive at Allahabad and defied the Company with his cross-country trek back to Delhi. There, with Mirza Najaf Khan, against all the odds he had nearly succeeded in rebuilding the empire of his ancestors; only to see it vanish like a mirage after the premature death of the last great Mughal general. Finally, at his lowest point, the Emperor had been assaulted and blinded by his psychotic former favourite, Ghulam Qadir. Now under the wings of Wellesley’s protection, and with a Company pension, he could at least spend his last years on the throne of his ancestors, in his beloved Red Fort, in comfort and safety, and with some measure of dignity.

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.

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.

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 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.

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.

The anxieties before trump...