The Anarchy: The Relentless Rise of the East India Company

by William Dalrymple

For Powis is simply awash with loot from India, room after room of imperial plunder, extracted by the East India Company (EIC) in the eighteenth century. There are more Mughal artefacts stacked in this private house in the Welsh countryside than are on display in any one place in India – even the National Museum in Delhi.

Powis Castle

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.

India's takeover not by a government, but by a private company.

Although its total trading capital was permanently lent to the British state, when it suited, the East India Company made much of its legal separation from the government. It argued forcefully, and successfully, that the document signed by Shah Alam in 1765 – known as the Diwani – was the legal property of the Company, not the Crown, even though the government had spent an enormous 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.

Politicians had a stake in the Company

A good 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.

The painting of Clive and Shah Alam at Powis is subtly 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,

By 1803, when the EIC captured the Mughal capital of Delhi, and within it, the sightless monarch, Shah Alam, sitting blinded in his ruined palace, the Company had trained up a private security force of around 200,000 – twice the size of the British army – and marshalled more firepower than any nation state in Asia.

This turned out to offer far wider powers than the petitioners had perhaps expected or even hoped for. As well as freedom from all customs duties for their first six voyages, it gave them a British monopoly for fifteen years over ‘trade to the East Indies’, a vaguely defined area that was soon taken to encompass all trade and traffic between the Cape of Good Hope and the Strait of Magellan, as well as granting semi-sovereign privileges to rule territories and raise armies. The wording was sufficiently ambiguous to allow future generations of EIC officials to use it to claim jurisdiction over all English subjects in Asia, mint money, raise fortifications, make laws, wage war, conduct an independent foreign policy, hold courts, issue punishment, imprison English subjects and plant English settlements.

After peace with Spain, the Company was granted power in ambiguous terms, granting them more ruling leverage than expected.

Visitors invariably regarded it as the greatest and most sophisticated city in South Asia: ‘Shahjahanabad was perfectly brilliant and heavily populated,’ wrote the traveller Murtaza Husain, who saw the city in 1731. ‘In the evening one could not move one gaz [yard] in Chandni Chowk or the Chowk of Sa’adullah Khan because of the great crowds of people.’ The courtier and intellectual Anand Ram Mukhlis described the city as being ‘like a cage of tumultuous nightingales’.118 According to the Mughal poet Hatim, Delhi is not a city but a rose Garden, Even its wastelands are more pleasing than an orchard. Shy, beautiful women are the bloom of its bazaars, Every corner adorned with greenery and elegant cypress trees.119

Description of Delhi

As the EIC writer William Bolts later noted, seeing a handful of Persians take Delhi with such ease spurred the Europeans’ dreams of conquests and Empire in India. Nader Shah had shown the way.

‘As the prosperity of the state depends on union and cooperation,’ he said, ‘and its ruin on quarrel and opposition, if your rule is to be based on agreement and obedience, it is necessary that you should remain firm in following my manners and ways, so that to the end of your life you will remain safe from the dominance of your enemies. But if you take the path of quarrel and hostility, it is very likely that this state will so decline from its good name that for a long period grief and regret will prevail.’65

Enough! My life flickers away, a solitary candle, Flames from its head, waxy tears flow down its skirts Your flirtatious beauty, my dark days, all will pass, A king’s dawn, a pauper’s evening, all will pass The garden visitor, the laughing rosebud, both are fleeting Grief and joy, all will pass.17

Impermanence

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.

Power granted by the Diwani over Bengal, Bihar and Orissa

Alternative employment was hard to find, for ‘the English are now the rulers and masters of the country’ and ‘because their arts and callings are of no use to the English’, the artisans could only thieve or beg. As these rulers have all their necessaries from their own country, it follows that the handycraftsmen and artificers of this land suffer constantly, live in distress, and find it difficult to procure a livelihood sufficient to support their lives. For as the English are now the rulers and masters of this country, as well as the only rich men in it, to whom can those poor people look up for offering up their productions of their art, so as to benefit from their expenses? It is only some artificers that can find livelihood with the English, such as carpenters, silversmiths, ironsmiths &c.97

Impact of British rule over the provinces' artisans.

Moreover, wrote Ghulam Hussain Khan, the Company’s conquests represented an entirely different form of imperial exploitation from anything India had previously experienced. He articulated, long before any other Indian, both what being a subject colony entailed, and how different this strange and utterly alien form of corporate colonialism was to Mughal rule. ‘It was quickly observed that money had commenced to become scarce in Bengal,’ he wrote. Initially no one knew whether ‘this scarcity was owing to the oppressions and exactions committed by the rulers, or the stinginess of the public expenses, or lastly of the vast exportation of coin which is carried every year to the country of England.’ But it rapidly became clear that the drain of wealth was real. It soon became common ‘to see every year five or six Englishmen, or even more, who repair to their homes with large fortunes. Lakhs upon lakhs have therefore been drained from this country.’98 This, he wrote, was quite different from the system of the Mughals, who though also initially outsiders, determined ‘to settle forever [in India] and to fix the foot of permanency and residency in this country, with a mind of turning their conquest into a patrimony for themselves, and of making it their property and inheritance’: These bent the whole strength of their genius in securing the happiness of their new subjects; nor did they ever abate from their effort, until they had intermarried with the natives, and got children and f...

The difference between British and Mughal occupation, sense of permanence, reinvestment vs. draining wealth back to the home country.

This was certainly the view of the King. George III wrote that he believed ‘the real glory of this nation’ depended on the wealth of India which offered ‘the only safe method of extracting this country out of its lamentable situation owing to the load of debt it labours under’.58

The Company kept its toehold in the south only by the lack of confidence and initiative shown by its adversaries, and the quick supply of reinforcements from Calcutta. Over the months to come, with a mixture of imaginatively wide-ranging military action and deft diplomacy, Hastings managed to break both the Triple Alliance and the unity of the Maratha Confederacy when, on 17 May 1782, he signed the Treaty of Salbai, a separate peace with the Maratha commander Mahadji Scindia, who then became a British ally. For the Company’s enemies it was a major missed opportunity. In 1780, one last small push could have expelled the Company for good. Never again would such an opportunity present itself, and the failure to take further immediate offensive action was something that the durbars of both Pune and Mysore would later both bitterly come to regret.

How close the joined forces in India were to expelling the EIC from India.

but the biggest success story was tea from China.28 By 1795, tea sales had doubled in less than a decade to 20 million pounds (9,000 tons); one former director of the EIC wrote that it was as if tea had become ‘the food of the whole people of Great Britain’.29

Lol

No wonder that Scindia reflected anxiously that ‘without money it was impossible to assemble an army or prosecute a war’.72 Ultimately it was the East India Company, not the Marathas or the Sultans of Mysore, that the financiers across India decided to back.73

Bankers supported EIC which gave them the ability to finance their army.

Terrible as it was, the Battle of Delhi was the last time British troops faced French officers in South Asia, ending more than a century of rivalry which had caused so much bloodshed, mostly of non-Europeans, across the subcontinent. It also brought to a close Hindustan’s unhappy century of being fought over, and plundered, by rival armies. As Khair ud-Din put it shortly afterwards, ‘the country is now flourishing and at peace. The deer lies down with the leopard, the fish with the shark, the pigeon with the hawk, and the sparrow with the eagle.’145 Khair ud-Din was, of course, writing to flatter his British patrons, but there was a measure of truth in what he wrote: in comparison with the horrors of the last century – ‘the Great Anarchy’ – the next fifty years would be remembered as ‘the Golden Calm’. Most importantly, the Battle of Delhi decided the future fate of India. The Marathas were the last indigenous Indian power that was militarily capable of defeating the Company and driving it out of South Asia. There were other battles still to be fought against both Scindia and Holkar before they surrendered, but after Assaye and Delhi the outcome of the war was quite clear. The last power who could have ousted the Company had been humbled and was about to be conquered. Company Bengal, Madras and Bombay were now linked up as a continuous unit, joined with the Deccan and much of Hindustan, so consolidating a land empire that controlled over half a million square miles of terr...

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.