The East India Company was in existence for over 250 years – from 1600-1858. It was the biggest corporation in world history.
Largely forgotten in the UK, it was responsible for the opium wars with China, it contributed to devastating famines in India, and was a perpetrator of cruel employment practices in Bangladesh and other British colonies.
Not suprising then, that the memory of the East India Company is very much alive throughout India and the far east, where it is a byword for exploitation and oppression. Its story holds important lessons about the dangers of the overweening power of large corporations.
In this podcast, Nick Robins, author of The Corporation That Changed the World: How the East India Company Shaped the Modern Multinational talks to Jane Trowell of Platform, an organisation that uses art, activism, education and research to work for social and ecological justice. They have been working together on projects around the legacy of empire for Britain in the 21st century.
They met up in the National Maritime Museum in London, where the Trader’s gallery focuses on the history of the East India Company. Jane started by asking Nick to describe how he first came to take an interest in the East India company.
Nick Robins: It is an interesting journey. I have been working in India and Bangladesh, working on issues around fair trade and ethical trade in the textile industry and coming to learn there about the impact of the East India Company particularly on Bengal’s textile industry.
I subsequently came to work in the City[of London], working in socially responsible investment. And I went to find the location of the headquarters of the East India Company on Leadenhall Street. That is where the Lloyd’s Building is now, the glamorous steel and glass building. I was expecting to see some form of plaque saying ‘Here was the site of the East India Company, 1600-1858’. But there was nothing there. We have so many plaques around the city, such an emphasis on heritage for very minor things. In fact, on the site there was a plaque to a postage stamp. And it just struck me as something odd, that there is the biggest corporation in world history, and it has somehow disappeared. So I started doing some research into it, particularly looking at how it was seen at the time, and from that the book came along.
Jane Trowell: For those who do not know that much about the East India Company, why is it such an extremely important fact of life – such an extremely important piece of our business history?
NR: It was founded in 1600. It was a company with shareholders, which had a charter for all the trade between England and Asia. At that time England, in particular, was very much the poor cousin compared with Asia. Traditionally, wealth has flown from west to east in the global economy. Even in the Roman Empire, there were complaints of the flood of bullion to pay for peppers and textiles from the East. Britain was in a very, very poor place and the reason the East India Company was set up was to gain access for this very marginal maritime kingdom of England into the luxury markets of Asia, to get access to spices in particular. So it was very much the supplicant. Very, very small, struggling to get into these big markets, particularly the Moghul empire of India.
And then, gradually over the years, particularly over the eighteenth century through the use of its private armies, it started actually taking control of key parts of India, particularly Bengal. It became a power behind the throne and was not just trading but was engaged in real conquest, in battles. It started with dominating the markets in India, got involved in the opium trade, smuggling opium into China in the first half of the nineteenth century.
It became more and more of a ‘public-private partnership’. It was still a private operation, it still had shareholders, was still paying dividends to its shareholders but was increasingly doing the job of the British state who were standing behind it. Eventually it was wound up in 1858 after what was called the ‘Indian Mutiny’ or the ‘Great Rebellion against the East India Company’.
But one of the things that is interesting about the company is that it continued to pay out dividends for another twenty years or so. So, its actual corporate form extended much longer than its operational life. It paid its last dividend, drawing on the taxes in India, in April 1874.
So it had a very, very long existence from 1600 to 1874, and many incarnations along the route. But probably all the way through its primary purpose was to generate profits for its shareholders and executives.
In that picture it seems like – or could come across as – a great English or British success story. But in fact your book ‘The Corporation that Changed the World’ is a brutal dissection of the company, looking at it from an ethical standpoint, looking at it from a human rights standpoint, and looking at how its own private army was used in the absolute suppression of local democratic control.
NR: If you look back at the company’s record, there are some examples of some really outrageous negligence and oppression, particularly once it had gained a real foothold in India, dominating markets and driving prices down for its goods.
For example, when it controlled Bengal, there was a drought and the company did not intervene. In fact its executives intervened to buy the grain that remained on the market, so driving up the prices. Drought led to famine. It was probably one of the biggest corporate disasters in world history, anything up to seven million people died in that famine.
The Opium War we’ve touched on. The company was the monopoly administrator of opium production in India and smuggled that deliberately, against Chinese laws, into China. So, there’s some fairly extreme examples of corporate malpractice.
As I was writing the book I was conscious and wary of implying twenty-first century values – saying, ‘they do look outrageous to us, but maybe they were not seen as as bad at the time, because of different values and so on’. But what really impelled me to write the book was how contemporaries, particularly back here in England, saw the company’s behaviour and actually did react with outrage and in many ways in disgust to some of the company’s behaviour. So in the book, I try and draw on that, in terms of the poems and the plays and the caricatures that were generated by the culture at the time, in reaction to the company’s behaviour. So, while the company was certainly powerful and a part of the establishment, it was also the subject of cultural criticism at the time. This gave me the confidence to look into it. It was not just looking back at this historical object through twenty-first century eyes but actually drawing on the critique at the time – when some people were saying ‘In future times, people will look back in horror at the East India Company’.
JT: There is, in this country, wilful ignorance about the legacy of that particular company. Unlike some of the slave trade companies, which have been held up for scrutiny in much more rigorous manner. But of course in your travels in China and in India and Bangladesh, you came across a very different story. Because in effect, this is a corporation that ended up ruling a large chunk of the Indian sub-continent.
NR: In India, I think you talk to pretty much anyone about the East India Company’s role – coming to trade but eventually conquering – and it is part of standard education. So everybody will know about it. And when I was talking to textile workers in Bangladesh and mentioned the East India Company, people would say ‘Oh yes, yes. These are the people who chopped off our weavers’ thumbs.’ There was immediately a recognition of the company after they had taken over control of Bengal, and that they were so oppressive, that they chopped off the weavers’ thumbs. I could not find evidence of that in my research, but I found evidence of something probably even more horrific – the weavers chopped off their own thumbs, so they would not actually be forced to weave under the company’s orders.
So this is very close to the surface in India. This year, in 2012, India has passed new laws liberalising the retail sector to allow multinational companies to come in and take majority stakes in retail companies. And immediately, the gut reaction in Indian society is that people were opposing at is to say it is the return of the East India Company. So, it is the motif for talking about companies, the wrong companies.
And in China, in the opium museum in modern Guandong you have the East India Company portrayed there, very powerfully. They have these fantastic full-life tableaux of the company, these opium chests, its logo or chop-mark there, and it is seen that is was the institution which was the driving force behind the opium trade which resulted in the humiliation and the loss of power, the secession of Hong Kong, it is seen that that went on for essentially a hundred years until 1949. So again, when I talked to most people in China about the East India Company and immediately there would be some reaction. Whereas I think in Britain it will be somewhat fuzzy. And if at all, it will probably be linked to consumer articles, to some nice set of teas or whatever.
JT: If you go to the very touristy Twining’s shop on the Strand, which is the original Twining’s tea building, with a very, very small frontage, it is only about three meters across, it is not a wide building, with two, in inverted commas, ‘Chinamen’, reclining on the pediment as if in total happiness with the tea trade, with Britain. These representations, like thousands of others, dominate the landscape. Before we even get into the Foreign and Commonwealth Office and look at the marvellous painting, that you describe in the book, of Britannia receiving riches… what is the exact title of ‘Britannia receiving the riches of the East’
NR: Yes, what a picture. Britannia very much in a position of hierarchy and receiving essentially tribute from Indians and Chinese and so on.
JT: And certainly in the context of England and Britain the amnesia about the company is well observed.
Except…. when we were doing our walks and talks and things in Tower Hamlets in East London, where there is a predominantly Bangladeshi community. Because of course, when we talk about Britain we have to talk about who in Britain is conveniently forgetting. And we had some extremely interesting encounters with young people and older people in Tower Hamlets, whose political understanding of their current situation and the situation in Bangladesh was deeply informed by an understanding of what had happened in Bengal, the bread basket of the world at that time under the East India Company.
So again, it is a question, it is a very interesting question, of who we are talking to about this company. Because I remember one young man, I’m not sure I was with you on that occasion, who was thumping the table with grim delight that anybody was trying to talk about this in a political way that was relevant to now. He was an eighteen or nineteen year old, dealing with racism, dealing with unequal opportunity, dealing with family back in Sylhet. It is an interesting contrast between museological world, the white-dominated world of museums, the heritage world that wants to shut it down; and the business world, which may want to shut it down – and on the other hand other communities, for whom it is a vital part of reclaiming their history.
NR: Yes, and I think it is one of the interesting things which has happened over the last five years. The history of the East India Company has not changed, it is in the past, it is there. But I think what has changed, certainly in Britain, is the ways in which different communities have encountered that legacy. So, there is a very interesting community organisation in East London, the Brick Lane Circle, which has been working to get young people of all communities and backgrounds and races to actually think about what this legacy of the East India Company means. And actually, in many ways, how you can through encountering it, through confronting it and challenging it, you can actually maybe develop a sense of a shared culture, that is not exclusive. Its not about people with a Bangladesh background having to be interested or share a certain view. But it is a way of saying that because of this company we have a lot of things in common which we have not quite explored. So that is a very interesting thing, a very live thing. A current project of the Brick Lane circle is about how Bengal dressed Britain through it textiles . o again, very good ways of bringing this history to life and showing how these historical connections formed the way we are today.
JT: It has been very interesting, hasn’t it, over the past twelve years or so that we have been working on this on and off together and sometimes separately, to see how different museums and galleries, let’s say in London, have changed or have struggled with how to interpret these histories of trade in Asia – and we could even talk about slavery, even if it is a different subject it is a related subject because those two things are very interwoven economically. Is there anything new – particular moments, particular exhibitions you have seen or have been involved with – where you have seen a shift in thinking?
NR: Yes, certainly in a cultural sense. There have been three exhibitions over the last decade which I think, do pinpoint three different moments for how British society is trying to come to terms with this.
The first was an exhibition in the British Library back in 2000 for the 400th anniversary of the Company. It was a very romanticised view and in fact, had totally omitted any reference to the opium trade. So you had community protest from the Chinese community here in Britain, very strong, to introduce a proper explanation of the company’s role in the opium trade.
Secondly, the Encounters Exhibition in the Victoria and Albert Museum. I think that had the beginnings of a recognition of the balance of the story.
And now finally here, in the National Maritime Museum, the new permanent exhibition on the East India Company which, I think, is a very good attempt to explain in a popular way the full account of the East India Company – to explain that it was a company and certain parts of it appear properly, maybe for the first hundred years, to be trading and bringing benefit. That it was bringing the benefit of stimulating demand for goods in India, bringing in tax revenues in Britain and so forth. But there was another big part of the story, which was bringing oppression and domination. And I think that the gallery here has attempted ato bring that richness without being too didactic. Hopefully, it leaves the viewer to make up their own mind. But I think it lays out this was a very complex story and the company had strengths in parts of the earlier period, where it did not have this overweening power, but then began overturning existing cultures and really changing the course of economic history so that wealth would flow from East to West, changing that historical flow from West to East.
So I think those are interesting moments, and within only a decade. They show the assertiveness of once immigrant communities now playing their part in the shaping of the public memory of Britain as a whole, particularly the Bangladeshi and Chinese community. It means we have a much richer, more honest, representation of this peculiar institution.
JT: So, we have talked a bit about different communities’ memories.
Now let’s think about business. You know, one of the things about capitalism is it likes to forget (there is some very interesting writing about that in terms of capitalism). But you have deliberately subtitled your book ‘How the East India Company shapes the modern multinational’. Working in the City [of London], you understand the forces at work. How has this book gone down in business communities?
NR: One of the things again I did as I was going into the heart of the matter, was to look at the characters of that time and whose learnings and teachings we still draw on – people like Adam Smith, Edmund Burke, Karl Marx, very different people. Adam Smith was seen as the father of liberal economics, Edmund Burke as the father of political conservatism, Karl Marx leading the communist movement. All, in very different way,s encounter the company in a period from, let’s say, 1770 to 1858/1860. And all are critical, from quite different perspectives.
Adam Smith, was a supporter of free trade but very critical of corporations, particular their monopoly power – both because of the scale issue (he was interested in open markets, so he was obviously against that) but also he was particularly concerned about the shareholder listing point of that, and the tendency towards speculation and abuse. It is interesting going back through Adam Smith’s work and realising that when he wrote his third edition of the Wealth of Nations, he actually went back to his editor and said ‘Look, I want to add another section to the book about the behaviour of corporations because we have this egregious example of the East India Company.’
I suppose when you are talking to a modern business audience, drawing on the reality of Adam Smith and actually placing his views in his time, pointing out that this was one of the big things he was struggling with, then I think you get a more honest response.
Edmund Burk again, a conservative. His reaction to the East India Company, particularly the way it destabilised – threw into turmoil – Bengal society, was similar to his reaction to the French Revolution. He opposed the East India Company because it was revolutionary. It was this revolutionary power, going into India, overturning all the established relations and leading to oppression as a result.
So you have a conservative critique as well as a liberal-economic critique. And then there is Karl Marx. For his purposes the East India Company was an agent or a tool of the British ruling class, which had turned from being the trading class to what he called the ‘moneyocracy’.
So all very different perspectives but all ones that have resonance today. And it helps us to when we are looking at those figures and their ideas, to root them in their realities so they are not abstract.
JT: At the end of the second edition of the book, you itemise, like a manifesto, what could be done or what should be done in light of what we have learned from the East India Company. You give an analysis of what you call a ‘trilogy of design flaws’ – speculative temptations of executives and investors, the drive for monopoly control and absence of automatic calamity for corporate abuse.
You then make a series of recommendations and you talk about some progress one can see in the UK 2006 Companies Act. Can you talk a bit more about how you think those recommendations might play out?
NR: Yes, I think we are looking at the company and what it teaches us about the modern corporation. I looked at four factors.
Firstly, the company as an economic agent. How the financing of the corporation is a powerful factor in determining its behaviour. As we discussed with Adam Smith we need to be very careful about the dynamics of the stock market listing. It is not necessarily intrinsically a bad idea, but we do need to recognise that there are inherent problems about stock market listing and the tendency towards speculation.
Second is the issue of scale – again something brought up by Adam Smith. We have seen recently, in the discussion of too big to fail issues, the problem of the larger the organisation, when things go wrong, the more magnified the problems are.
The third, which we have not really discussed, is technology. How the company deployed its technology – in its case, the technology was particularly its military technology and shipping technology.
And a fourth is regulation. There was a collusion of state power and corporate power in the company’s case. So how can we avoid that, and how can regulation be used to ensure public accountability.
So the recommendations are really around mechanisms through which you can ensure that both shareholders and company management must have the public interest as part of their mandate. So it is not purely the seeking of private good.
You do then have the critical issue of company scale and company size, and a recognition that economic diversity is a value in itself – diversity of size, but also of form. When we look back at the history, Adam Smith was recognising that certain economic forms are useful for certain things. You can have the joint stock company, and there are also partnerships, co-operatives, state companies and so on. And they can all play different roles – so diversity of form and size is important.
And then finally, regulation. We have had a reform in the last few years of the Company Act. In a very British way, the focus of a company is to promote the interest of its members, its shareholders. But, in a reformist measure company directors were asked to consider to take into account the interests of employees and suppliers and communities and the wider environment. To consider but not act. And there, I suppose we have seen it is important that there is more of a recognition that companies need to have that positive requirement to act in the wider interest as well. Those would be three, I suppose, big recommendations around the business side in our times.
So there are many examples, I suppose, where the company was doing the first in so many of these failings of corporate form which for me again, thinking of the history of it, is that the issues that we are facing today are not accidents of circumstances I suppose. That they are things that are more structural and do have patterns through history, which I think means we can address them today with more confidence really.
So moving from the imperial gene to the ethical gene?
That’s right, that’s right. And some people call it the ‘civil corporation’. The company corporation can be a very useful institution, but we really need to think about its design so that it does serve the interest of society.
With thanks to Dianne Prosser at the National Maritime Museum for hosting this discussion.
The podcast was produced by Matthew Flatman and the transcript was prepared by Maarten van Schaik