Nick Robbins’ book raises searing questions about the silence over the brutal legacy of the Company, but it fails to adequately address why BEIC survived and thrived, despite the fact that stories of its corruption and crimes started filtering in by the late 17th century itself.
Nick Robbins’ book raises searing questions about the silence over the brutal legacy of the Company, but it fails to adequately address why BEIC survived and thrived, despite the fact that stories of its corruption and crimes started filtering in by the late 17th century itself.
How East India Company Shaped the Modern Multinational Company—By Nick Robins, Orient Blackswan (2009)
In 1765, Robert Clive wrote from Calcutta to his agents in London,asking them to invest heavily in buying him shares of the East India Company, which he headed in India at the time.
He knew that in a few months, Mir Jafar, the traitorous general who had helped the East India Company overthrow the Nawab of Bengal, Siraj-ud-daulah at the
Battle of Plassey, and who had been placed as Nawab instead, would gift Clive the diwani of a vast district today known as the 24 Parganas. Clive also knew that the Company’s stocks, already rising since Plassey eight years earlier, would shoot up further once the news of the diwani became public.
Clive was right, and earned a windfall from this act of insider trading. Incidentally the history of East India Company is inseparably mixed with that of the stock exchange. It was the first company whose shares were listed and traded on London Stock Exchange, then a pioneer. Perhaps Robert Clive was one of the pioneers in insider training. No wonder when Clive went back to England and wanted desperately to use his private fortune made out of corruption and loot in India to earn a peerage, the snobs among British Aristocracy nick named him “Robber” Clive.
It is through nuggets of information; well-researched, detailed and insightful analysis that Nick Robbins makes a persuasive argument that the British East India Company and its executives must be seen as key forerunners of the modern multinational corporation with its use of all means possible – corruption, deceit, violence and destruction – to win markets and secure maximum profits across multiple countries. Using internal East India Company documents and correspondence between its executives – particularly source material from the 17th and 18th centuries – much of which has never been written about in public before, Robbins paints a vivid picture of a rapacious company led by greedy executives who not only robbed and destroyed India, but also cheated British citizens by manipulating the London stock market.
Robbins describes in detail how the greed for profits through merciless taxation played a critical role in making the Bengal famine of the late 1760s one of the largest human disasters of modern times. The Company raised taxes from 10% to 50% on land it gained control of after the Battle of Plassey, and kept these rates intact even when crops failed in 1768 and 1769. In the early 1760s, Clive also established a monopoly over salt manufacture – a monopoly over salt trade remained a feature from 1757 till the early 20th century – that drove up salt prices, pushing the ingredient, a key dietary component in tropical climates, out of reach of an increasingly impoverished population in Bengal. Over 10 million people – one in every three people – are estimated to have died in the famine. The book also talks about other well-known acts of economic and military savagery – from chopping off thumbs of weavers in Dacca (as Dhaka was then known) to killing any potential threats to their supremacy.
But what makes Robbins’ work stand out are his detailed descriptions of how the Company manipulated the markets back home, much like many modern corporations that do not hesitate to manipulate markets today too, while mouthing platitudes on superiority of free competition and market economics.
Josiah Childs, one of the Company’s top executives from 1671 till his death in 1699, frequently sent exaggerated or false news about the Company’s successes from India to influence the markets, and made himself a fortune through the speculation that ensued. Robbins quotes Daniel Defoe, today best-known as the author of Robinson Crusoe but one of the most prolific and influential economic writers of the early 18th century, talking about the letters from the East Indies, “talking of war with the Great Mogul when they have been in perfect tranquility, and of peace with the Great Mogul when he has come down against the factory of Bengal with 100,000 men, just as was thought proper for the rising or falling of the stock and when it was for this purpose to sell cheap or buy dear.”
What has stayed most with Robbins himself, from his work on the East India Company: The Corporation that Changed the World, is how the Company and its legacy are seen – rather unseen – in Britain itself.
In India, Robbins points out, the name Mir Jafar remains synonymous to a traitor. The Company remains a part of the trauma of the Indian collective psyche which was exploited in a television commercial for a tobacco product, where an Indian patron beams proudly on buying over the British East India Company that once ruled his motherland.
In London though, the East India House today stands unremarkably, offering little sense of the role those headquarters played in strengthening and building the British Empire, and the gory legacy in India that period left.
Robbins points out that figures once feted are often pulled down later when history revises its views on them. But, statues of Robert Clive, his hand holding the pommel of his sword, persist in London – as also, ironically, in the Victoria Memorial in Calcutta.
Speaking to this reviewer in New York earlier this year, Robbins appeared troubled by what he called the failure of Britain to face up to its inglorious past.
But while Robbins’ book raises searing questions about this silence over the brutal legacy of the Company, it fails to adequately address why it survived and thrived, despite the fact that stories of its corruption and crimes started filtering in by the late 17th century itself.
Edmund Burke, one of the most influential thinkers of 18th century Britain, wrote reams criticizing the East India Company, and as an MP, used the floor of Parliament to accuse the Company of its crimes. The company’s rivals consistently challenged its monopolistic characteristics. And in 1763, as Roy Moxham points out in The Great Hedge of India, the British Parliament even struck out against Clive, ending his monopoly over salt manufacture.
Yet, the British state allowed the Company to not just survive, but thrive to the stage that it controlled most of current day India. Why? Sadly, Robbins provides few answers here.
But you end the book getting much deeper insight into and understanding of how the East India Company functioned and how the modern corporation evolved to the stage where it dominates the economy today. Robbins’ background – as a financial executive, currently with HSBC –lends credibility to his understanding of a world where the cloak of obfuscation is often used to cover up the biggest corporate crimes. This book needs to be read.