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“Business is by nature collusive and conspiratorial, readily congealing into monopolies and cabals, fixing the highest gain that can be squeezed out of the consumer.”

– Adam Smith (1723-90), Scottish moral philosopher and also recognized as the father of modern economics, in his opus, `An inquiry into the nature and causes of the wealth of nations`.


“It was a time when English power was unaccompanied by English morality. It was an interval, between the time at which the Bengalees became our subjects and the time at which we realized that we had to discharge towards them the duties that fall upon rulers. During that interval, the traders of the East India Company simply wrung out of the natives every drop of blood as speedily as possible, so that they might return home to marry a peer’s daughter, buy some rotten borough in Cornwall and throw balls in St. James’s Square.”

– Lord Thomas Babington Macaulay (1800-59), British politician and historian.



Crest of the East India Company, once the world’s largest business organisation and the world’s only commercial outfit that boasted a standing army of 250000 (Image source: Wikimedia)

On a bone chilling evening in January 1600, Queen Elizabeth I signed a royal charter, granting a joint stock company that had 220 merchants working for it, a trade monopoly in all the regions of the world that lay to the east of the Cape of Good Hope. The British East India Company (EIC) was born. In the 280 years that it existed, the EIC grew to be the world’s largest and single most unscrupulous business entity that the world has ever known.

The EIC began with a simple mandate – commerce. It brought in silks, textiles, spices, coffee, indigo, tea and ivory from India and carpets and nuts from Persia and the rest of the middle-east, in exchange for gold and silver. And opium, oh yeah, lots of opium. Where do you think Sherlock Holmes got his daily fixes from? There was competition of course, though not from other British business entities. There were other jackals at the kill – the Dutch East India Company, the French East India Company and the Portuguese East India Company. India had many suitors but the Brits won out, through sheer military muscle.

To make all that trade happen smoothly and profitably, the logistics had to be worked out. The EIC first set up an office at a coastal village with a natural harbor in south India, called Machlipatnam. From there, through the 17th century, it spread and established fortified trading posts at Mumbai, Chennai and Kolkata.

The logistics of the day weren’t like the way they are now. A business trip to and from India by a boss from the EIC’s HQ in London was more like how we see interplanetary space travel today. Each trip was a two-year expedition with four to six ships, mounted at considerable expense and fraught with immense risk. The waters were uncharted since the maps were rudimentary, the weather patterns were unfamiliar, tempests and 50 foot waves frequent and as if that was not enough, pirates prowled the seas for easy pickings and they took no prisoners.

The chances that you would be back sipping sherry with your mistress in a London salon at the end of it were 25-75. If you wrote a letter to your branch rep in Kolkata, you would be lucky if his response came within the year. Under these circumstances, the EIC branch heads or ‘Governors’ were given an enormous amount of independence in how to conduct their business. And what happens when you have an employee at the other side of the world doing business any which way he likes? He throws the rules to the winds, kicks native butt and enriches himself of course.

Don’t begin envying the Company men. Life was hard. Enriching oneself in the face of attacks from the French or the Portuguese, who were the other hyenas at the kill, or even the armies of the native rulers, or killer diseases like typhoid, flu, TB and malaria, was not for the faint-hearted.

The EIC’s trading post chieftains were merchants and military commanders rolled in one. They had in their payroll, large armies that protected what they saw as their turf. If a regional raja or nawab didn’t negotiate business with them reasonably, he was looking at being invaded and ousted.

The Nawab of Bengal, Siraj ud-Daulah, was one of those unfortunate nawabs who paid with his life for his obstinacy, in the Battle of Palashi (c.1757). Those days, the British were still just traders looking for a secure base to do their business with Indian merchants from. When they looked as if they were digging in and building a small empire within his territory, the Nawab told them to desist and leave. Imagine a empire-building testosterone pumped white man being told by some two-bit brown nabob to beat it. Robert Clive took it personally.

In those days if you spoke up, you had to back up your words with military force. The Nawab and his league of like-minded Bengali military commanders had on their side, 45000 infantry and 20000 cavalry. Artillery had been provided by the French who saw the British as a threat to their own French East India Company, a similar ‘carpet-bagging’ outfit under the then French King Louis XIV. The French held two bases in India, one in Chandannagar, 50kms from Kolkata and the other in Pondicherry, a coastal town south of Chennai.

The EIC’s commander, the robber-baron I mentioned earlier, Colonel Robert Clive, had just 3000 men. The Nawab’s firepower should have been sufficient to beat the crap out of the Brits. But Clive had guile and a cool head. Like any successful military man, he had human intel and he looked for the enemy’s weaknesses. He came to know through a Bengali birdie that the Nawab had a huge stockpile of gold and silver that he had grabbed from his subjects over the years as tax and had not thought to share with his equally rapacious commanders.

Clive sought out those commanders and got them to change sides, after promising them a share of the spoils (which by the way, they didn’t get when the dust settled). The Nawab ran for his life, was caught and executed. What can I say? A Nabob who didn’t share was a dead Nabob, I guess.

Siraj-ud-Daulah has been portrayed by Robert Clive’s biographer as an 18th century Cesare Borgia, a mercurial monster of vice and depravity, given to harsh cruelty toward his subjects. I read somewhere that when he sent for his senior commanders, they trembled, much like the way those New York Mafioso felt when they were summoned for a sit-down, not knowing if they would come out feet first. Even if Bobby Clive’s biographer had been biased, enough is on record to suggest that maybe the Nawab got what was coming to him.

After his victory, Clive installed Mir Jaffar, the commander who had switched sides, as the new Nawab of Bengal and did what his EIC masters in London had emphasized was his Key Business Perfomance Criterion – loot, a word that actually originated from the Bengali word ‘loot’, which means just that – loot. Clive’s men looted Bengal’s treasury, loaded the gold and silver worth over 5 million 1757 dollars (which is around $ 1 billion today), on to a fleet of more than a hundred barges and sent them downriver to his base at Kolkata.


“Where the f—k is my share?” Sucker of the day, Mir Jaffar, with Robert Clive after the Battle of Palashi. (Image source:Wikimedia)

Clive got to keep 10% – 500000 dollars (~ $100 million today) for himself – finder’s fees, I guess. Palashi was the first step in the creation of the British Empire in India. It is perhaps better understood as the company’s most successful business deal.

500K here, a bag of diamonds there and Robert Clive went on to become one of the world’s richest men. Unfortunately, he broke the golden rule for drug traffickers and it took his life – he got hooked on the very opium that he traded in, to dull the pain that one historian says was caused by gallstones. One night, unable to bear, the constant pain, Clive over-dosed, in a drug-riddled moment of frenzy. Poetic justice, innit? In India, they still have roads named after Robert Clive (and his partner in crime, Warren Hastings) while in England the statue that adorns the frontage of the British Foreign office is his.

There was another act that the EIC excelled in, just like the Exxons of today who splurge millions on ‘green’ ads. It went to great pains explaining to the public at home how it was delivering the wretched Indian natives from deeply ingrained backwardness, how it was planning to remodel education, how the ‘ignorance and superstition that was inherent in Hinduism’ was being addressed by dedicated Christian missionaries in its payroll. The world hadn’t yet woken to pedophilic Christian priests but let’s just say that the first missionaries must have had a ball in India and leave it at that, shall we?

As the decades passed and the 19th century dawned, the EIC’s mandate expanded, from just commerce to subjugation and as the Mogul Empire waned, the EIC grabbed more and more territory as its own until all of India was theirs. The new nabobs were now the EIC chieftains like Robert Clive and Warren Hastings, wielding enormous power, not only in India, but in England as well, where they bribed, threatened and cajoled their way into both houses of Parliament.

The EIC now had, not only a trade monopoly, but also the right to tax the Indian citizens, mint its own coins with the company crest and have a 250000-strong army. For a while, before the bubble burst, EIC owned not only India but England as well. Profit became everything. It is universally believed that the great Bengal famine of 1770, which claimed the lives of 10 million of Bengal’s poor and the wretched, was brought on by rapacious greed of the EIC. That year, the annual monsoon rains had failed.


A one rupee coin issued by the East India Company (Photo source: Wikimedia)

Seeing that the harvest was doomed, EIC’s traders started buying up all the grain that they could lay their hands on, driving up the price and making it impossible for the poor Bengali commoners to feed their families. As if that was not enough, the EIC decided to raise taxes so that revenue levels would remain stable. Those who aspire to rule have a responsibility toward their subjects. EIC was not aware of any such responsibility.

There were men with a conscience back home who denounced the East India Company as a bloodstained bunch of thugs, bent upon mercilessly raping a nation of its wealth. There was Adam Smith (1723-90), Scottish moral philosopher who is widely recognized as the father of modern economics and a harsh critic of state-controlled monopolies. Edmund Burke (1729-97), an Irish author, orator, philosopher, political theorist and member of parliament and Lord Thomas Macaulay (1800-59), a historian and Whig politician who advocated avarice-free conservatism.

Around the same time as the Bengal famine, other events were conspiring to pull the rug from below the EIC’s feet. Its stock price crashed on the London market, in lock-step with a Europe-wide financial meltdown. The EIC’s handling of the Bengal famine came to the notice of the British parliament and did little to bolster investor confidence. By the turn of the 18th century, the British government had taken away EIC’s monopoly and finally in 1873, EIC ceased to exist. India was now a full-fledged colony of the British Empire.

During its heyday, the East India Company not only established trade through Asia and the Middle East but also effectively became of the ruler of territories vastly larger than the United Kingdom itself. It created colonies like Singapore, an island that the EIC purchased from the ruler, the Sultan of Johor, and developed into one of the world’s richest and busiest mercantile hubs.

If you can discount the private army of 250000, then the East India Company has had quite a few parallels in the present day. Having an army on the ground is no longer necessary. Today’s EICs have security guaranteed by the state, available at very short notice. The United Fruit Company and Guatemalan and other central American dictatorships which this corporate giant virtually owned through bribery and the threat of overthrow, to ensure unimpeded imports of fruits, especially bananas, comes readily to mind. The writer, O Henry, coined the derogatory term ‘banana republic’, referring to those two-bit nations that were run like fiefdoms by rapacious dictators, propped up by the United Fruit Company and secured by the world’s only in-plain-sight criminal organization, the CIA.

There have been others, again American business conglomerates all, like ITT (International Telephone & Telegraph) and its own stable of pet Latin American dictatorships, such as Chile and Cuba. (The solid gold telephone that the ITT rep presents the Cuban dictator, Batista in Godfather II, really happened). Construction giants Bechtel, Halliburton and SNC Lavalin are not far behind. Some commentators opine that if Stalin’s Soviet Union hadn’t gone overboard with its purges and its gulags, American style capitalism would have lost out to socialism and we would not have had to see the Reagans and Thatchers gloating obscenely, mistaking overkill for victory of the forces of good. I would tend to agree.

The late comic genius, Robin Williams, put it quite simply in December 2008 when he was performing in front of Britain’s Prince Charles. Referring to the placard that the US President, Harry Truman, got a kick out of hanging up on the wall behind his desk, which read, ‘the buck stops here’, Williams gave it a twist – ‘Yeah right, the buck stops here…for a moment….and then it just sort of continues on, to AIG and GM.”