The Father of Evil Corporations
How the EIC did 300 years ago what ruthless companies try to do today
“How the hell did the British end up conquering India?”
Every Indian has, at least once, thought about this. But most of us continue to be in the dark.
This piece is not an attempt to provide an exact answer to this question. Neither will it explain exactly how the British rose to power in the 18th century.
What it will attempt to do, however, is to talk about one of the decisive actors that helped bring about the domination and conquest of India.
India was not taken over by the British government. It was taken over by a trading firm- which later handed over the conquered territories to them on a platter.
This firm was none other than the East India Company- an enterprise that preceded today’s evil, giant corporations by 300 years in conducting some of the worst excesses of corporate overreach.
It is this actor that we will talk about today. And understanding the extent of their shenanigans will provoke nothing but shock and horror. It will make today’s big tech firms appear like mere puppies in terms of the devastation brought about by their acts.
Here are 6 aspects where the company was just way too ahead of its times, and became one of the earliest models of what corporations should NOT do:
Buying out politicians: One of the biggest reasons the EIC was slowly able to take over India was the support of the parliament: military, political as well as economic. Over time, an increasing number of parliamentarians were bought out, and they ended up owing huge amounts of company stock. So it was in their interest to do all kinds of mischief to ensure the company raked in mouthwatering profits, even if came at the cost of inhuman looting and rapine. In so doing, company officials architected one of the first acts of relentless corporate lobbying. This segues into the second point.
Corporate lobbying scandal: Given the vulgar extent of the co-opting of parliamentarians for personal gains, some of the excesses were bound to get exposed. This resulted in one of the world’s first corporate lobbying scandals in 1693, where it was discovered that the company was using its own shares to bribe prominent MPs and politicians. This resulted in the imprisonment of the company’s Governor General, but we can safely say that the shake-up didn’t do much to deter the company’s plans. It was only a temporary setback for the ruthless enterprise.
Bullying the state: What do modern corporations do when they set up operations in different geographies? They call up the taxman and say something like “You better be grateful because we’re bringing all this investment to your state. We need tax cuts- and if you don’t like that, we’re happy to take our business elsewhere”. This is textbook stuff today, but this is exactly what cocky company officials told the Carnatic governor Daud Khan in the early 1700s because they were the ones who had turned the “sandy beaches” (Chennai) into flourishing ports. Arm-twisting the state was thus a company innovation.
Corporate Bailout: As if corporate lobbying and corruption scandals weren’t enough, the company is also infamous for triggering one of the first corporate bailouts in history. By 1772, the EIC had taken on staggering amounts of debt (billion of pounds in today’s money) and a loss of revenues due to an unprecedented disaster in Bengal (see next point) led to multiple defaults. This, in turn, caused over 30 banks to shut shop. The company had indeed become “too big to fail”, which led to a mega bailout and resulted in it getting subjected to much more regulatory oversight. But we cannot ignore their actions during the infamous famine.
Corporate social irresponsibility: We’ve all heard about the Bengal famines that were triggered by Churchill’s heinous actions during WW2. But there was a terrible and probably more disastrous famine that wrecked its people in the 1770s and led to millions of deaths. Despite the death and desolation that engulfed the state, the company couldn’t care less. It is painful to read historical sources and realize that at a time when farmers were dying of hunger, the company continued to grow their profits by using violence and torture to extract their taxes- so the directors in London could continue to enjoy their dividends, even if it meant the utter destruction of millions. On top of this, officials continued to send back millions in wealth and spared not even meager sums of money that could have provided some grain and respite to the unfortunate people. Turning a blind eye to the suffering of the masses and focusing purely on the bottom line is not a recent mode of thought.
Corporate overreach: Google can decide what you see in your search results. Facebook can swing elections. These are not business features, they are instances of a business going beyond its mandate and exercising raw political power. In a case that seems eerily familiar, the EIC ended up acting more like political power and vastly exceeded the domains to which it should have confined its operations. Wielding a deadly war machine and controlling the laws of the provinces it took over by force, the EIC was one of the first examples of dangerous corporate overreach, direly in need of regulation. This control is what eventually led to the endless drain of wealth and subjugation of people, who were much better off earlier.
As you can imagine, the EIC was not just a company.
Their acts in the country were so horrific that Robert Clive, one of the generals who was most instrumental in their ascendancy, ended up committing suicide after heading back to England. Many say that his conscience was tortured by his past actions, and the only remedy was to put an end to his existence.
The actions of the company ought to be studied deeply, for they act as a warning sign.
They show us what can happen if corporations are allowed to operate unchecked, and what they can do to people when all they care about are the bottom line and their (im)balance sheets.
Thanks for reading this! If you want to dive deeper, I’d strongly recommend the book ‘The Anarchy’ by William Dalrymple. And if you want to hear more on such topics with short, incisive reads, consider getting on to the email list.