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Sunday, August 6, 2017

Pirates, Loot and the East India Company

East India Company Looted India

The East India Company is the Model for the Modern Corporation. This is an extraordinary fact because that company ran its own foreign relations, own armies (The famous Sepoy's), fought their own wars,bribed, subverted, suborned, got contracts to perform government services and then exploited those to take over governments. They went from running trading posts in coastal cities on a lease from the Mogul Emperors, to keeping them virtual prisoners on a pension. They invaded what is now Afghanistan and both loved and despised the Moslems who had formerly dominated in India. Eventually their greed and stupidity forced them to step aside from Governing India to the role of continuing to loot it. Heck the word "loot", both as noun and verb, comes from India.

East India Company And Loot

The word Loot comes from India. William Dalrymple writing in the Guardian on Wednesday 4 March 2015 00.59 EST, wrote an article titled "The East India Company: The original corporate raiders" in it he writes;

"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." [Dalyrymple]

It's not like equivalents to the word "plunder" weren't known before the East India Company invaded India. But under British piratical Tory Economics and political policies the term was raised to a whole new level of perversity. Even if Parliament wasn't directly involve. This is thanks to the Institution of the organized, and legal, pirate fleet known as the East India Company. This company has been the model for all sorts of companies since.

East India Company (EIC) Origins

The Corporation finds its true inspiration in a company that began rather humbly.

"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. [Dalyrymple]

Sea Dogs, AKA Pirates

"Adventurers" is a euphemism for "Sea Dogs," pirates and privateers like William Hawkings. William Hawkins had served with Sir Francis Drake on his pirate (privateer) expeditions, including the one to the Pacific in 1577 and with Edward Fenton in 1588. The East India Company was made to ease the path of privateers and sea dogs to trade with the lands that border the Pacific & Indian Oceans.

The East India Company would have a tradition of smuggling, piracy, trafficking, all kinds of fraud, privatizing government functions, private militaries and looting. All enabled by that first charter

A New Kind of Business

A year later "On 31 December 1600" [Manas], 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”. [Dalyrymple]

Queen Elizabeth and James the First had created the East India Corporation as a new kind of company whose charter:

"authorized 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 realizing much larger amounts of capital." [Dalyrymple]

A Company Chartered with a Letter of Marquee

Queen Elizabeth and James the First had created the East India Corporation with an extended form of "Letter of Marquee:"

"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." [Dalyrymple]

Early Pirate Voyages of the East India Company

The East India company sought to compete with similar companies sponsored by the Dutch and others, but they had little success in the spice Islands (Indonesia) but had better luck when they turned their Attention to India.

Voyages to India

"The Company's ships first arrived in India, at the port of Surat, in 1608." [Manas]

The before mentioned, William Hawkins led that expedition:

"On 28 August 1608, William Hawkins 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." [Dalyrymple]

Sir Thomas Roe

The next Expedition sent the accomplished diplomat Sir Thomas Roe, instead:

"Sir Thomas Roe reached the court of the Mughal Emperor, Jahangir, as the emissary of King James I in 1615, and gained for the British the right to establish a factory at Surat." [Manas]

Sir Thomas Roe was an extraordinary ambassador, and the British East India started out with a bit of humbleness. But all that would change within a hundred years. The Buccaneers came!

Robert Clive, Pirate Extraordinaire!

The following hagiographic painting depicts:

"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." [Dalyrymple]
Image is a hagiography showing a scene where: "The Mughal emperor Shah Alam hands a scroll to Robert Clive, the governor of Bengal, which transferred tax collecting rights in Bengal, Bihar and Orissa to the East India Company." Illustration: Benjamin West (1738–1820)/British Library"

Private Warfare Sinister Reality

The reality of Clive's career is that:

"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." [Dalyrymple]

In short, India was conquered by British Pirates.

"Robert Clive, defeated the forces of the Nawab of Bengal, Siraj-ud-daulah , at the Battle of Plassey in 1757. A few years later the Company acquired the right to collect revenues on behalf of the Mughal Emperor" [Manas]

Transformation from Trading Company to Private Government

Robert Clive transformed the role of the East India Company over a 10 year period from 1743 to 1753.

Robert Clive, known to his admirers as the "conqueror of India". Clive first arrived in India in 1743 as a civil servant of the East India Company; he later transferred to the military service of the Company and returned to England in 1753, where he able to follow a comfortable life-style. [Clive]

The Right to Collect Government Revenue is Privatized Government

The Dalyrymple article illustrates the reality of this "right to collect revenues." Rather than being some result of diplomacy or clever negotiation as depicted in the hagiography what actually had happened was that:

In "August 1765" "the young Mughal emperor Shah Alam, exiled from Delhi" who had been "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" [Dalyrymple]

The East India company, had committed an act of what would be called later "filibustering", and the pirates had privatized:

"The collecting of Mughal taxes"..." henceforth subcontracted to a powerful multinational corporation – whose revenue-collecting operations were protected by its own private army." [Dalyrymple]

Privateering and Looting over the Long Haul

The reality of the East India Company, was that it was basically an organization of pirates. Privateers in that everything they did was "legal", at least from the Point of View of the British Crown. However the

"years of its administration were calamitous for the people of Bengal. The Company's servants were largely a rapacious and self-aggrandizing lot, and the plunder of Bengal left the formerly rich province in a state of utter destitution. The famine of 1769-70, which the Company's policies did nothing to alleviate, may have taken the lives of as many as a third of the population." In otherwords, genocidal [Manas]

The Dalyrymple Artilce notes:

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."[Dalyrymple]

The EIC was insulate from both British Oversight and any accountability to local populations, and looted Bengal, among other places.

"the province,... devastated by war,...struck down by the famine of 1769,....ruined by high taxation." [Dalyrymple]

Corporations are Ruthless

The Corporation, like all Kleptocratic organizations had ruthless people with impunity in charge of tax collection A senior official wrote how the corporate pirates behaved:

“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.” [Dalyrymple]

A Model for the Modern International Company

Later the East India company would be regulated somewhat, by the Crown. But it's role in India continued to be reckless and genocidal til India achieved independence! With the battle of Plassey in 1757 the East India Company had revealed itself as a Band of Pirates:

"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." [Dalyrymple]

Unusual, or pioneering. Now we have dozens of international companies following in the footsteps of the East India Company!

Corporate Government

And the East India Company 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. [Dalyrymple]

International Looting, Private Profits

Such companies are never loyal to their home country, unless they need help:

"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." [Dalyrymple]

Cheaper to Bribe a few Officials than to be responsible

They got away with this by bribing politicians and Officials

"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." [Dalyrymple]

The root of economic inequality is political power and vice versa. The East India company was devoted to organized theft:

"Bengal’s wealth rapidly drained into Britain," [Dalyrymple]

De Industrialization and India

Not into everyone's hands, though factory workers were able to eek out a living in factories making goods that once had been produced in India or China. Meanwhile once "prosperous weavers and artisans were coerced:"

“like so many slaves” by their new masters, and its markets flooded with British products." [Dalyrymple]

The East India Company would impoverish all but a tiny percentage of people in India. It turned Bengal from one of the most advanced and prosperous places on earth, to a place of poverty and hunger.

Loot for Creating Holdings of Great Wealth

Many East India Company Officials would make out like Bandits; A Pattern set by Clive:

"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." [Dalyrymple]

The deIndustrialization would benefit British workers a little. But most of it went to a few well placed officials.

Overt Piracy

The Pirates weren't subtle either:

"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." [Dalyrymple]

Corporate Structure

In other posts I've covered the evolution of piracy from the British to the Americans. How Robert Morris fielded a pirate fleet. How the Buccaneering tradition involved Anglo-American "Sea Dogs" in Smuggling everything from Drugs to Slaves, private warfare (filibustering) around the world (Henry Morgan to the Walkers in Nicaragua), piracy, the China Trade, hunting whales to near extinction; and periodic land expeditions after Gold/Silver (San Francisco), coal, oil, the diamond trade, to the present. It doesn't start with the East India Company, but it morphs into corporatism around that time. The Brits weren't alone; Dutch, Spanish, Portuguese and most European Companies also created Companies as pirate outfits. Indeed the American Colonies, were at least some of them started as private companies not that different from the East India Company.

"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." [Dalyrymple]

Further Reading

Origins of the East India Company []
Many Kinds of Privateering []
Book Review
Read the book!

Originally published on 2/27/2017

Origins of East India Company
Robert Clive
More on East India Company from Dalyrimple's article:
The East India Company: The original corporate raiders: []
Wikipedia article:
Keltic Resources
McBain's Dictionary Section 39:
Your Dictionary:
Gwydd []

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