East India Company — India's encounters with unbridled capitalism

The East India Company started off innocently enough. In the 16th century, India accounted for 22% of the entire world’s GDP. The company decided to cash in on that and make some money trading with this exotic rich part of the world. The first century of their trade went relatively well, with everyone in the process getting rich. This is where corruption comes in. People in the company got rich in the first century of its operations. With money comes influence. They lobbied for complete monopoly in the British Parliament and got it.

Meanwhile, the Company also needed to keep a standing army to “safeguard” its assets. For almost a century, this meant a few hundred guards. By 1778, the army had grown to 67,000 people. An army of 67,000 in the hands of a company made solely for profit. One wonders if the British would have regulated the Company sooner if the army stood in Britain instead of far away in a remote nation, outside of their sphere of view. But it is what it is. India had in its presence an entity whose sole motive was profit and who had the power of 67,000 well trained soldiers. It goes without mentioning that most of these soldiers were Indian “sepoys”.

Now, what do you do when your neighbours are rich as fuck, you have a bigger stick than them and you want money? You beat the neighbour up with the stick and take their money (if you have no ethics). Most corporations have no real sense of social responsibilty. The East India Company definitely didn’t. Soon enough, the Company was fighting wars, marking almost all of India as territory of its own and exacting “taxes”. Now, the thing about taxes is that they’re supposed to be used to improve the lot of the people paying the taxes. In a democracy, the government has the incentive to do this because they’ll get kicked out in the next election otherwise. No money-making company has this incentive. The East India Company didn’t have it either. The money went to the company and the taxpayers would literally die without seeing a penny of it.

In the midst of Company rule, in 1770, the State of Bengal went through one of the worst famines in the history of the world. Around ten million people are estimated to have died in the famine. The rate of land tax however was increased by 10% in August 1770. Revenue earned in 1771, the peak of the famine, was higher than the revenue collected by the Company in 1768.

It wasn’t just the Company that was making money. Individuals “received” numerous “gifts” from locals too. Robert Clive, who has a pretty nicely whitewashed Wikipedia article, was the British general who led the first real war the East India Company fought. After his second trip to India, which lasted five years, Clive came back to Britain with 300,000 pounds in cash. Assuming a modest inflation rate of 2% in the last 300 years, that amounts to around 70 million pounds today. This is in cash, it’s not like the equity today’s billionaires have. And this is just one person. Clive then went on to become a British Member of Parliament.

This went on for an entire century before Indian people had had enough. In 1857, the first war of Indian Independence started. It went on for 1 year and 6 months before the British regained control. “Saner” heads prevailed, the company got dissolved. All the assets of the Company went to the Crown and India officially started being ruled in the name of the Queen.

And they all lived happily ever after. Well, not really. But that’s a whole another story.


Sidenote: I’ve started reading history, and it’s really hard to actually absorb history without reading it more than once. I’m starting to write up stuff that interests me, so that I have an incentive to read more than once, because writing up interesting stuff needs the actual facts to be verified.