Loot – in search of East India Co. (excerpts)

Several months ago, I wrote this essay on the Economic Exploitation and Drain of Wealth During the British “Raj”.

The essay relied�heavily�on research by Western historians to make the point about economic exploitation during the British domination of�India. It deliberately ignored research done by Indian scholars and historians on the subject�to blunt allegations of bias or non-scientific /lax methodology.

Last week, I came across another very well-written and well-researched essay which substantiated and added to what I had written before. It is�a hard-hitting and fact-laden “account of the East India Company, the world�s first transnational corporation.”

In this essay, titled, “Loot: in search of the East India Company”, Nick Robins argues that an unholy alliance between British government, military and commerce held India in slavery, reversed the flow of trade and cultural influence forever between the East and West and then sunk almost without trace under the weight of colonial guilt.

Below are some excerpts (emphasis and shading has been added).

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�At its height, the (British East India) Company ruled over a fifth of the world’s people, generated a revenue greater than the whole of Britain and commanded a private army a quarter of a million strong.

Although it started out as a speculative vehicle to import precious spices from the East Indies � modern-day Indonesia � the Company grew to fame and fortune by trading with and then conquering India. And for many Indians, it was the Company’s plunder that first de-industrialised their country and then provided the finance that fuelled Britain’s own industrial revolution. In essence, the Honourable East India Company found India rich and left it poor.�

��the East India Company�was not just any corporation. Not only was it the first major shareholder owned company, but it was also a pivot that changed the course of economic history. During its lifetime, the Company first reversed the ancient flow of wealth from West to East, and then put in place new systems of exchange and exploitation. From Roman times, Europe had always been Asia’s commercial supplicant, shipping out gold and silver in return for spices, textiles and luxury goods. And for the first 150 years after its establishment by Queen Elizabeth I in 1600, the Company had to repeat this practice; there was simply nothing that England could export that the East wanted to buy. �

The situation changed dramatically in the middle of the 18th century, as the Company’s officials took advantage of the decline of the Mughal Empire and began to acquire the hinterland beyond its vulnerable coastal trading posts. Territorial control enabled the Company both to manipulate the terms of trade in its favour and gouge taxes from the lands it ruled. Within a few years of Clive’s freak victory over the Nawab of Bengal at Plassey in 1757, the Company had managed to halt the export of bullion eastwards, creating what has poetically been called the ‘unrequited trade’ � using the East’s own resources to pay for exports back to Europe. The impacts of this huge siphoning of wealth were immense, creating a ‘misery’ of ‘an essentially different and infinitely more intensive kind than all Hindustan had to suffer before’, in the words of a columnist writing for the New York Tribune in 1853, one Karl Marx.

Established as a means to capture control of the pepper trade from the Dutch, the East India Company prospered as an importer of luxury goods, first textiles and then tea. From the middle of the 17th century on, the growing influx of cottons radically improved hygiene and comfort, while tea transformed the customs and daily calendar of the people. And it was in the huge five-acre warehouse complex at Cutlers Gardens that these goods were stored prior to auction at East India House.

Here, over 4,000 workers sorted and guarded the Company’s stocks of wondrous Indian textiles: calicoes, muslins and dungarees, ginghams, chintzes and seersuckers, taffetas, alliballlies and hum hums�. �

This lifestyle revolution was not without opposition. For hundreds of years, India had been renowned as the workshop of the world, combining great skill with phenomenally low labour costs in textile production. As the Company’s imports grew, so local manufacturers in England panicked. In 1699, things came to a head and London’s silk weavers rioted, storming East India House in protest at cheap imports from India. The following year, Parliament prohibited the import of all dyed and printed cloth from the East, an act to be followed 20 years later by a complete ban on the use or wearing of all printed calicoes in England � the first of many efforts to protect the European cloth industry from Asian competition. �

And it was behind these protectionist barriers that England’s mechanised textile industry was to grow and eventually crush India’s handloom industry.

…Standing on Leadenhall Street facing the site of East India House, it is difficult to appreciate the raw energy, envy and horror that the Company generated in 18th-century England. Today, Richard Rogers’ sleek Lloyds insurance building stands on the site, but on auction days in the 18th century, the noise of ‘howling and yelling’ from the Sale Room could be heard through the stone walls on the street outside. For 30 years after Robert Clive’s victory at Plassey, East India House lay at the heart of both the economy and governance of Britain, a monstrous combination of trader, banker, conqueror and power broker.

�when Clive captured the French outpost of Chandernagore in Bengal in 1757, stocks rose by 12%. The share price moved higher still in the 1760s as investors fed hungrily on news of the apparently endless source of wealth that
Bengal would provide. The Company was rapidly extending its reach from trade to the governance of whole provinces, using the taxes raised to pay for the imports of cloth and tea back to England.

�Clive obtained almost a quarter of a million pounds in the wake of Plassey, and told a House of Commons enquiry into suspected corruption that he was ‘astounded’ at his own moderation at not taking more. Thomas Pitt, Governor of Madras earlier in the century, used his fortune to sustain the political careers of his grandson and great-grandson, both of whom became Prime Minister. By the 1780s, about a tenth of the seats in Parliament were held by ‘nabobs’. They inspired deep bitterness among aristocrats angry at the way they bought their way into high society. A few lone voices � such as the Quaker William Tuke � also pointed to the humanitarian disaster that the Company had wrought in India.

For centuries, the City of London has ruled itself from the fine mediaeval Guildhall. It was here in 1794 that the Mayor of London made the Governor-General of Bengal, Lord Cornwallis, an Honorary Freeman of the City, awarding him a gold medal in a gilded box. Cornwallis had certainly earned this prize from Britain’s merchant class. He had defeated Tipu Sultan of Mysore, extracting an eight-figure indemnity, and had just pushed through the ‘permanent settlement’ in Bengal��

Seeking to increase the efficiency of tax collection in the Company’s lands, Cornwallis cut through the complex patterns of mutual obligation that existed in the countryside and introduced an essentially English system of land tenure. At the stroke of a pen, the zamindars, a class of tax-farmers under the Mughals, were transformed into landlords. Bengal’s 20 million smallholders were deprived of all hereditary rights. Two hundred years on, and after decades of land reform, the effects still live on in Bengal. �

�Just five years after the Company secured control over Bengal in 1765, revenues from the land tax had already tripled, beggaring the people. These conditions helped to turn one of Bengal’s periodic droughts in 1769 into a full-blown famine. Today, the scale of the disaster inflicted on the people of Bengal is difficult to comprehend. An estimated 10 million people � or one-third of the population � died, transforming India’s granary into a ‘jungle inhabited only by wild beasts’. But rather than organise relief efforts to meet the needs of the starving, the Company actually increased tax collection during the famine [similar policies were applied again more than a hundred years later by the government of British India – see Present Hunger, Past Ghosts] . Many of its officials and traders privately exploited the situation; grain was seized by force from peasants and sold at inflated prices in the cities. �

Even in good times the Company’s exactions proved ruinous. The Company became feared for its brutal enforcement of its monopoly interests, particularly in the textile trade. Savage reprisals would be exacted against any weavers found selling cloth to other traders, and the Company was infamous for cutting off their thumbs to prevent them ever working again. In rural areas, almost two-thirds of a peasant’s income would be devoured by land tax under the Company � compared with some 40% under the Mughals. In addition, punitive rates of tax were levied on essentials such as salt, cutting consumption in Bengal by half. The health impacts were cruel, increasing vulnerability to heat exhaustion and lowered resistance to cholera and other diseases, particularly amongst the poorest sections. �

The Company’s monopoly control over the production of opium had equally devastating consequences. Grown under Company eyes in Bengal, the opium was auctioned and then privately smuggled into China in increasing volumes. By 1828, opium sales in China were enough to pay for the entire purchase of tea, but at the cost of mass addiction, ruining millions of lives. When the Chinese tried to enforce its import ban, the British sent in the gunboats.

�while the Company promoted a mission to make Indians ‘useful and happy subjects’, the twin pillars of Company rule remained the same: military and commercial conquest. By the 1850s, the budget for ‘social uplift’ was meager � while �15,000 was indeed made available for Indian schools, �5 million went to the military war chest. The telegraph, steam ship and railway were introduced to accelerate access of British goods to Indian markets. The rapid influx of mill-made cloth shattered the village economy based on an integration of agriculture and domestic spinning, and the great textile capitals of Bengal. Between 1814 and 1835, British cotton cloth exported to India rose 51 times, while imports from India fell to a quarter. During the same period, the population of Dacca shrunk from 150,000 to 20,000. Even the Governor-General, William Bentinck, was forced to report that ‘the misery hardly finds parallel in the history of commerce. The bones of the cotton-weavers are bleaching the plains of India.’

�The uprising (1857) itself and the massacres of Europeans had generated a ferocious bloodlust in British society. Even the mild-mannered Charles Dickens declared that ‘I wish I were commander-in-chief in India [for] I would do my utmost to exterminate the Race upon whom the stain of the late cruelties rested.’ �

�Many would argue that the Company was no worse and in some respects somewhat better than other conquerors and rulers of India. What sets the Company apart, however, was the remorseless logic of its eternal search for profit, whether through trade, through taxation or through war. The Company was not just any other ruler. As a commercial venture, it could not and did not show pity during the Bengal famine of 1769�1770. Shareholder interests came first when it dispossessed Bengal’s peasantry with its ‘permanent settlement’ of 1794. And the principles of laissez-faire ensured that its Governor-General would note the devastation of India’s weavers in the face of British imports, and then do absolutely nothing. �

Many institutions have justifiably disappeared into the anonymity of history. But in a country like Britain that is so drenched in the culture of heritage, the public invisibility of the East India Company is suspicious. Perhaps a single Hindi word can now help to explain this selective memory, this very British reticence: loot.

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Original essay in full at http://www.opendemocracy.net/debates/article-7-29-904.jsp#