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327 pages, Paperback
First published July 20, 2006
Established on a cold New Year's Eve, 1600, England's East India Company is the mother of the modern corporation. In its more than two and a half centuries of existence, it bridged the mercantilist world of chartered monopolies and the industrial age of corporations accountable solely to shareholders. The Company's establishment by royal charter, its monopoly of all trade between Britain and Asia and its semi-sovereign privileges to rule territories and raise armies certainly mark it out as a corporate institution from another time. Yet in its financing, structures of governance and business dynamics, the Company was undeniably modern (5).
From Roman times, Europe had always been Asia's commercial supplicant, shipping out gold ad silver in return for spices, textiles and other luxury goods. European traders were attracted to the East for its wealth and sophistication at a time when the western economy was a fraction of the size of Asia's. And for the first 150 years, the Company had to repeat this practice, as there was almost nothing that England could export that the East wanted to buy (7).
One account describes how "when particularly inspired he used, before sitting down to his desk, to not only strip himself of his coat and waistcoat, but of his trousers, and so set to work, alternately striding up and down the room and writing at great speed." (189)
For its executives, the purpose of a career with the Company was to achieve a 'competence', making enough money to be able to retire and adopt the conspicuous consumption patterns of the British landed gentry. This could bot be achieved by saving from the salaries received from the Company, which barely covered living expenses. As a result, the ambitious Company man had to use his position a a platform for patronage and private trade (29).
Working in the midst of the terrible 1877 famine that he estimated had cost another 10 million lives, Cornelius Walford calculated that in the 120 years of British rule there had been 34 famines in India, compared with only 17 recorded famines in the entire previous two millenia (93).
The Bengal Famine stands out as perhaps one of the worst examples of corporate mismanagement in history (97).
Reading Smith afresh...it is shocking how his penetrating critique of the corporation has been so comprehensively suppressed. Nothing of his scepticism of corporations, their pursuit of monopoly and their faulty system of governance, enters into the speeches of today's neo-liberal advocates. Promoting his vision of free trade, they conveniently ignore that this can only be achieved with steadfast curbs on corporate power (119).
General John Clavering, Philip Francis and George Monson--arrived in Calcutta in October 1774, tensions arose. Instead of the 21-gun salute they were expecting, Hastings had organised only 17 cannon to fire as they landed (126).
'Rather than viewing history as a civilisational contest between primitive and progressive nations, Burke believed that each society had its own intrinsic value, which should not be sacrificed to the interests of profit or power (141)
Military victory alone was insufficient to restore British fortunes in India. A new regime had to be introduced to confront the extreme oddities created by a sharehold-owned corporation ruling over tens of millions of people. The reforms of the 1770s and 1780s had punctured the Company's autonomy as a business, and the 1784 India Act had introduced a two-tier system -- a 'double government' -- with the Company maintaining a facade of authority, behind which the state pulled the strings through the Board of Control (173).
After years of campaigning, Wilberforce and others managed to include in the 1813 charter Act provisions for the establihsmnet of a Church of England bishopric in India, as well as the removal of the Company's longstanding ban on missionary activity (182).
When the company retook Kanpur...where rebel troops had slaughtered European women and children, captured sepoys were made to lick the blood from the floors before being hanged. Summary executions became the norm. According to one officer, "we hold court-martials on horseback, and every nigger we meet with we either string up or shoot." The Company's recapture of Delhi was followed by systematic sacking, and the surviving inhabitants were tured out of its gates to starve (195).
The Company is often regarded as an inevitable stepping-stone to the British Raj. Instead, the British Empire in India is better thought of as the product of the Company's failure (196).