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     Jan 27, 2007
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A law unto itself
The Corporation That Changed the World
by Nick Robins

Reviewed by Sreeram Chaulia

appointed by Parliament sought to overthrow Warren Hastings, the Company's governor of Bengal, on charges of corruption.

The backlash of state regulation was, however, short-lived. Hastings weathered the storm and embarked on wars and mercenary missions to crush peasant revolts. Natives unable to pay exorbitant taxes were slaughtered or "confined in open

cages". The traditional rights of Indian producers were harmed to an extent that the productive capacity of Bengal was inevitably reduced. Frantic military expeditions and wars followed to fleece the last ounce out of a hemorrhaging Indian economy.

The robbery and wanton pillage of India by the Company were popular in Britain. Burke's impeachment trial of Hastings lasted seven years, and an unfair English judicial system guaranteed that it would be a lost cause. Hastings' defense that India was a primitive and inferior land in which different standards of justice should be applied was upheld by the minders of Pax Britannica. Imperial pride and patriotism interfered in efforts to bring the Company to justice.

Hastings' successor, Lord Cornwallis, introduced the English model of landlordship in India to build up a political class of gentry (zamindars) who would support Company rule. Twenty million small landholders were dispossessed of their rights as a "rule of property" was pushed through. "India was not European or Christian, and so was ultimately subjected to a second-class settlement, treated as a piece of property rather than a living community of people" (p 140).

In the 19th century, the Company's military operations burgeoned and its army grew tenfold. Lord Wellesley, the governor general up to 1805, had a voracious appetite for land and fortresses, looting rare Indian treasures and shipping them to museums and country houses in Britain. In Malabar, tax rates were raised and land for plantation was usurped by Company agents.

Laborers, including children, were kidnapped to work as slaves "with clothes stuffed in their mouths to keep them quiet" (p 144). Rebellions were stamped out by the Company's strong-arm tactics that proclaimed, "The more villages you burn and the more cattle and other property that are carried off, the better" (p 145). By 1820, military impulse was the master, not the servant, of business opportunity.

With the opening of trade and the surge of new British entrepreneurs in the 1830s, the Company lost its monopoly. To make up for the loss, its tea sales to China were doubled and paid for with contraband smuggling of opium. The need to maintain a monopoly over opium production in India to sneak the poison into China led the Company to wage wars on the Marathas and Sindh. The Company also sent out military support to British forces in the 1842 Opium War against China that opened a new chapter of colonialism in Asia. In Britain, the imperial benefit of opium trade justified its blatant illegality.

In its twilight years in India, the Company was guided by an arrogance of power resting on the alleged superiority of Western civilization. Racist scorn and verbal abuse by Company staffers mounted, with "nigger" becoming a common expression for Indians in the 1840s and 1850s. John Stuart Mill, the Company's loyal executive for three decades, put the icing on the cake by envisaging dictatorship over India as an "educative force and a legitimate mode of government in dealing with barbarians" (p 161).
Increasing racial and administrative haughtiness lay at the root of the Revolt of 1857 that terminated the Company's rule of India. British troops recaptured lost territories after the revolt with extreme savagery, paralleling "a ferocious bloodlust in British society" (p 164). From 1858, direct rule by the British crown was installed in India, but Indians had to continue to pay dividends on the stock of the extinct Company in the form of interest on transferred debts until World War II.

The British establishment "has not yet confronted its corporate imperial past", what with monuments to Clive and other Company notables enjoying pride of place in the heart of the current power structure of the United Kingdom (p 170).

The Company was allowed free rein in its heyday and is now being given a sympathetic makeover in exhibitions and events commemorating "nabobs" and their penchant for Indian culture. Nostalgia for bygone imperial domination, coupled with Prime Minister Tony Blair's new call for Britain to become a mini-America, still cloud an honest appraisal of the Company's black deeds.

Robins draws a number of lessons from the Company's history. Enforceable systems of justice have to hold powerful corporations to account for damage to society and the environment. Both managerial personnel and shareholders should ensure that their hunger for financial returns does no harm.

Mergers, acquisitions and cartels to widen the market and narrow competition have to be prevented by a global competition authority outside the environs of the World Trade Organization. Robins concludes that the chief obstacle to democratizing world markets and rebuilding "ethical equality between East and West" is the administration of US President George W Bush, which seeks to free businesses of any form of redress for their actions overseas.

In 1700, India and China accounted for 47% of world gross domestic product while Western Europe's share was a mere 26%. By 1870, the Asian giants slumped to a combined 29% of world GDP and Western Europe leaped to 42%. The East India Company was the primary device for this reversal of world scales. In the 21st century, with China and India once again rising to world economic prominence, monitoring and controlling Western multinational corporations is a cardinal responsibility.

The Corporation That Changed the World: How the East India Company Shaped the Modern Multinational by Nick Robins. Pluto Press, London, September 2006. ISBN: 0-7453-2523-8. Price: US$24.95, 218 pages.

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