The Rise and Fall of British East India Company
How a Multinational created an Empire
By: Bikal Dhungel
The world we live in has turned to be a complex playground. An
individual is no more in a state of decision making for him anymore.
Commercialized world, especially companies and corporations control the
individuals in the society. For example it is virtually impossible to live
today without a computer, without a mobile phone and without electronic devices
in the kitchen. Obviously they have made our life easier but at the same time
these companies know more about the individuals themselves, they know how to
manipulate our choice and hence use it to generate profit because human minds
are fragile. By this way, these corporations have grown so big, so powerful
that among the top 100 economic entities in the world, 51 are corporations and
only 49 are countries. General Motors is richer than Denmark and Wal Mart or
Ford Motor is richer than Poland or Norway(1). Either this fact is positive or
negative depends on their actions and contributions towards the society.
Looking back to the history, Karl Marx published his famous masterpiece
‘The Communist Manifesto’ in the year 1848. The idea behind his work was to
highlight the tyranny of companies against the workers with a vision to create
decent working conditions at the beginning of Industrialization. Marx had
foreseen, if these companies grow powerful, they can control the labors for
their own profit and might slowly grow to be too powerful to control the whole
world. History also reveals the fact that Corporations and big financial
institutions had the power to enslave mankind. Thomas Jefferson puts his famous
speech “ I believe that banking institutions are more dangerous to our
liberties than standing armies. If American people ever allow private banks to
control the issue of their currency, first by inflation, then by deflation, the
banks and corporations that will grow up around will deprive the people of all
property until their children wake-up homeless on the continent their fathers
conquered. The issuing power should be taken from the banks and restored to the
people, to whom it properly belongs”.
At the same time, history books teach us about Colonization and that the
sun never set in British Empire. In fact, the United Kingdom itself, as a
country did not initially colonized India, neither South Africa nor the United
States. It was the British East India Company that took over India which
controlled the whole region including today’s India, Pakistan, Bangladesh, Sri
Lanka and Myanmar. The Massachusetts Bay Company operated in the United States
and British South Africa Company landed in the Cape Colony. Among them, the
British East India Company was the most mysterious one.
The British East India Company was founded in the year 1600. Originally,
it was formed as a Joint-Stock Company whose intention was primarily to trade
with East Indies. The company mainly traded tea, cotton, silk and also Opium.
The relation between the company and then British Government was very
cooperative, so in-turn, the government handled the company with privilege
granting it the monopoly to trade in East Indies. Nevertheless, it was not the
only company to trade these exotic regions of East Asia. The Dutch East India
Company had long maintained its trade in the region. Additionally Spanish and
Portuguese traders had been in business since over hundred years. The
relationship between these traders was hostile in course of time.
Soon after, the British East India Company discovered itself putting eye
on India, which was later called to be ‘the bread basket of the British
Empire’. Trading ports were created in Chittagong (today in Bangladesh), Goa,
Bombay (Mumbai) and Calcutta. Factories throughout the country was also built.
India was ruled by the Mughals in 16th and 17th
century. Mughals are credited for bringing extra-ordinary forms of
architectures in India, including the Taj Mahal and large pieces of arts and
cultures. The most remarkable emperor of the Mughals was Shah Jahan, who ruled
from 1628 to 1658 and whose name means ‘emperor of the world’. He kept the
harem of 5000 women but was nonetheless sufficiently distraught at the death of
his wife Mamtaz Mahal, that he had built in her memory the Taj Mahal, which is
believed to have taken 20,000 workers 20 years to construct(2).
Fascinated by the architectural buildings built by the British and the
revenues they created for the rulers, Mughals completely waved the tax duties
to British East India Company (BEIC).
‘For Indians, goods were superior to anything the foreigners had on
offer. One resource with the mughals lacked and the English had, however, was a
powerful navy, and this was later to prove decisive in the English
multinationals expansion.
Calcutta was a booming city under BEIC and becoming increasingly a source
of profit. It had become a relatively wealthy city, with opulent merchants
houses springing up outside the company’s fort. In a similar way, other parts
of Mughal Empire was flourishing and the peaceful trade between the British
East India company and Mughals was a win win game, also for the British
economy.
In 1717, the Mughal emperor Frauksiyar granted the company the
right to trade in Bengal without paying the duty. This was in return of 3000
rupees a year. In the intervening years, one underlying force, for example, was
the decline of the Mughal empire in the first half of the eighteenth century.
This had made the political environment in which the company operated
increasingly unstable, factious, and unpredictable- a situation found in many developing
countries today. For this reason, the BEIC built its own army’. (3)
The BEIC, to secure its rights to trade became increasingly involved in
internal policies of India, including bad practices like bribing, threatening
and even torturing people for corporate greed. The most important was the
exploitation of natural resources disregarding human lives and environment. By
this way, the relationship with the locals remained hostile. But this did not
happen in a short time. For the first 6 decades, the East India Company was
peaceful and operating peacefully, conflicts only arise after that and
escalated more in the final years after a century. After a long period of
mutual cooperation, as the company grew unethical, the army of BEIC itself soon
launched a revolutionary group and vowed to fight the tyranny of a company.
Conflicts arise in many places. This led to more repression. At the same time
the decreasing power of Mughal Empire was having a negative consequences for
BEIC which then thought to divert the game by switching the side, hence turned
the attention against the Mughals. Soon after, the BEIC directly involved in
the rebellion and wars throughout Indian subcontinent.
War broke out in many places. Through the battle of plassey, the BEIC
controlled Bengal. Through British Marathas war, the British secured Ganges –
Jamuna region as well as Delhi, Agra, Gujrat, and Bombay. Finally the Indian
Rebellion of 1857, led by the sepoys of BEIC ended the rule of Mughals
and Marathas marked the end of BEIC as well. The Sepoys were the Indian
soldiers mainly from the Punjab region, which had been annexed in 1849. The
sepoys liberated imprisoned soldiers in Meerut, near Delhi killing British
citizens in process.
Soon after, Delhi was seized and encircled and the last Mogul , Bahadur
Shah II was proclaimed emperor of India. British seat in Lucknow were
retaken by the British in 1857. In the wake of rebellion, The Gurkhas with the
British massacred the Indians which proved the loyalty of Gurkhas towards the British.
( 4)
The rebellion marked an interesting full stop of the rules. There
were no real victors. The Mughals and some rulers of some parts fought against
the powerful BEIC on whose side there were Gurkha Soldiers led by Jung Bahadur
Rana, the Kingdom of Nepal, and over 20 principal states where the company was
ruling.
When the East India Company dissolved in 1858 in the wake of Sepoy
Rebellion, the British crown took over the government of India, which was put
under the rule of British viceroy, and Queen Victoria assumed the title of ‘
Empress of India ‘ in 1876. The last Mughal, Bahadur Shah II was captured and
imprisoned. ( 5)However, the Sikhs and the Gurkhas remained independent of
British rule.
From 1858 onwards India became a direct British Colony until its
independence in 1947. Unfortunately, the deeds of British Government had not
been improved than that under British East India Company. When the British
wanted to divide the Bengal region to form a province with a muslim majority,
there were attacks against the British, boycotts, and revolt. Because the
bellious Bengals had become a danger for the viceroy, the seat of government
was moved from Calcutta to Delhi in 1911.(6)
In the second half of the century, the British continued the development
of administration and infrastructure. Revenues gained from property taxes, the
Opium monopoly and a salt tax was sent to London while the Indian people
suffered under the ruthless exploitation of their country. Millions lost their
lives in famines including the British.
However, the rule of BEIC and the British Government have brought
many positive changes in the Indian sub continent. Two indigenous practices:
‘Saati’ and the ritual assassination of thugs were banned. Western style
administration and education system was brought but it also led to the
emergence of an Indian intellectual class that soon began to demand democratic
rights. The construction of enormous railroad network was opened in 1853, to
open up the interior of the country, better roads and postal system. A unified
national legal system and a single currency were also introduced. At the
beginning of the 19th century the need for qualified Indian workers led
to the introduction of western educational institutions where Indians qualified
as officials, lawyers and teachers. In 1857, Universities opened in Madras,
Bombay and Calcutta and a wealthy few came to Britain to study. India was a
patchwork of 500 separately governed territories which the British appropriated
piece by piece during the wars against the Maratha confederation. (7)
At the same time, Indians were also not the innocents. An over-exited
account of the mutiny was published in London in 1858 gave graphic descriptions
of the horrors allegedly committed by crazed Indians, which apparently included
forcing English parents to eat the flesh of their children. These awful stories
will not be forgotten as long as England exists. (8)
By this way, a company that was for peaceful trading grew to be more
powerful than a country in course of 150 years which in turn left a
legacy that will never be forgotten till there are humans. Things can never be
recovered but a lesson learnt from it should be kept in mind so that there will
be no such events taking place in the future.
Sources:
(3) Empires of Profit : Commerce, Conquest and
Corporate Responsibility, Daniel Litvin, page 4-11
(4) Visual History of the World, the National
Geographic, page 393
(5) Visual History of the World, the National
Geographic, page 414
(6) Visual History of the World, the National
Geographic, page
(7) Visual History of the World, the National
Geographic, page 393,414
(8) Empires of Profit: Commerce, Conquest and
Corporate Responsibility, Daniel Litvin, page 4-11
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