Yesterday, I was browsing Shantanu’s blog and stumbled upon an insightful article about how India became poor.
How a gang of venal British traders, bankers, mercenary army-men and power brokers represented by the East India Company went about savaging India is a sordid tale that makes my blood boil. Their behaviour is akin to a pack of hyenas pouncing upon a wounded deer. In 1757 when the Battle of Plassey was fought with treachery (only 300 British soldiers led by Robert Clive “defeated” 18,000 of Nawab’s crack troops in a mere 40 minutes), India was a land full of milk and honey.
The British — coming from a poor country of Europe — were dazzled with the wealth of Bengal. But in a mere 100 years, they had destroyed India’s irrigation system, public institutions, education system and elaborate system of industries, and reduced the once-proud country to beggary, destitution and illiteracy. (From a near total literacy prevailing here when the British captured India, they managed to bring the literacy rate down to only 6 percent by 1901. This they achieved by derecognising the age-old traditional village schools and stopping all grants to them.)
The province of Bengal (which included today’s Bihar, West Bengal, Bangladesh and Orissa) was so fertile that it was called the granary of India. But within a mere five years of the Company acquiring total political control of Bengal, it created conditions that led to 10 million people — one third of Bengal’s total population — dying in a famine in 1769. Never before in Indian history had something like this happened.
My friend Kosla Vepa says that this genocide was deliberate and the British objective was to depopulate the continent, much like what they did to Americas by exterminating the Red Indians. Once the Indians were exterminated, the Brits would have coolly settled down in this land and repopulated it with Whites. They were not successful because the Indian population was simply too large to be finished off, no matter how hard the Brits orchestrated the famines.
Can you believe that between 1814 to 1835, the Brits managed to reduce the population of Dhaka to a mere 20,000 from 150,000! The rest starved to death and rotting corpses of artisans and farmers lay on the streets in piles. What is truly shocking is that in this period of terrible famine, the Brits actually managed to increase their tax collection from the area!
I quote from Shantanu’s blog post:
Few would doubt that Indo-British trade may have been unfair – but it may be noteworthy to see how unfair. In the early 1800s imports of Indian cotton and silk goods faced duties of 70-80%. British imports faced duties of 2-4%! As a result, British imports of cotton manufactures into India increased by a factor of 50, and Indian exports dropped to one-fourth! A similiar trend was noted in silk goods, woollens, iron, pottery, glassware and paper. As a result, millions of ruined artisans and craftsmen, spinners, weavers, potters, smelters and smiths were rendered jobless and had to become landless agricultural workers.
It seems hard to believe today that till only 200 years ago, Indians were the richest and most advanced people in the world and had remained so for the last 2000 years. Their lifestyle and living standard were of a much higher quality than the Europeans. That is why I find it amazing that the Westerners — especially the British led by their BBC — mock India for its poverty today, ridicule its slums through movies like ‘Slumdog’ and pretend that the “rich and advanced” Whites came to India, found it full of poverty and misery and – as part of the White Man’s burden — began to civilize the land, particularly through missionaries who taught Indians how to read and write for the first time. The pretensions of these charlatans are limitless. The tragedy is that the Whites know the truth but deliberately lie to put down the Easterners, but the Indians don’t know their own history, due to which they fully accept and internalise the non-sense spouted by Westerners.
Here is the article:
By Nick Robins
Although it started out as a speculative vehicle to import precious spices from the East Indies – modern-day Indonesia – the Company grew to fame and fortune by trading with and then conquering India. And for many Indians, it was the Company’s plunder that first de-industrialised their country and then provided the finance that fuelled Britain’s own industrial revolution. In essence, the Honourable East India Company found India rich and left it poor.
But visit London today, where the Company was headquartered for over 250 years, and nothing is there to mark its rise and fall, its power and its crimes. Like a snake, the City seems embarrassed of an earlier skin. All that remains is a pub – the East India Arms on Fenchurch Street. Cramped, but popular with office workers, the pub stands at the centre of the Company’s former commercial universe.
The absence of any memorial to the East India Company is peculiar. For this was not just any corporation. Not only was it the first major shareholder owned company, but it was also a pivot that changed the course of economic history. During its lifetime, the Company first reversed the ancient flow of wealth from West to East, and then put in place new systems of exchange and exploitation. From Roman times, Europe had always been Asia’s commercial supplicant, shipping out gold and silver in return for spices, textiles and luxury goods. And for the first 150 years after its establishment by Queen Elizabeth I in 1600, the Company had to repeat this practice; there was simply nothing that England could export that the East wanted to buy.
The situation changed dramatically in the middle of the 18th century, as the Company’s officials took advantage of the decline of the Mughal Empire and began to acquire the hinterland beyond its vulnerable coastal trading posts. Territorial control enabled the Company both to manipulate the terms of trade in its favour and gouge taxes from the lands it ruled.
Within a few years of Clive’s freak victory over the Nawab of Bengal at Plassey in 1757, the Company had managed to halt the export of bullion eastwards, creating what has poetically been called the ‘unrequited trade’ – using the East’s own resources to pay for exports back to Europe. The impacts of this huge siphoning of wealth were immense, creating a ‘misery’ of ‘an essentially different and infinitely more intensive kind than all Hindustan had to suffer before’, in the words of a columnist writing for the New York Tribune in 1853, one Karl Marx.
Established as a means to capture control of the pepper trade from the Dutch, the East India Company prospered as an importer of luxury goods, first textiles and then tea. From the middle of the 17th century on, the growing influx of cottons radically improved hygiene and comfort, while tea transformed the customs and daily calendar of the people. And it was in the huge five-acre warehouse complex at Cutlers Gardens that these goods were stored prior to auction at East India House. Here, over 4,000 workers sorted and guarded the Company’s stocks of wondrous Indian textiles: calicoes, muslins and dungarees, ginghams, chintzes and seersuckers, taffetas, alliballlies and hum hums. Today, the Company’s past at Cutlers Gardens is marked with ceramic tiles that bear a ring of words: ‘silks, skins, tea, ivory, carpets, spices, feathers, cottons’, but still no mention of the company itself.
This lifestyle revolution was not without opposition. For hundreds of years, India had been renowned as the workshop of the world, combining great skill with phenomenally low labour costs in textile production. As the Company’s imports grew, so local manufacturers in England panicked. In 1699, things came to a head and London’s silk weavers rioted, storming East India House in protest at cheap imports from India.
The following year, Parliament prohibited the import of all dyed and printed cloth from the East, an act to be followed 20 years later by a complete ban on the use or wearing of all printed calicoes in England – the first of many efforts to protect the European cloth industry from Asian competition. And it was behind these protectionist barriers that England’s mechanised textile industry was to grow and eventually crush India’s handloom industry.
For 30 years after Robert Clive’s victory at Plassey, East India House lay at the heart of both the economy and governance of Britain, a monstrous combination of trader, banker, conqueror and power broker. It was from here that the 24 Directors guided the Company’s commercial and increasingly political affairs, always with an eye to the share price; when Clive captured the French outpost of Chandernagore in Bengal in 1757, stocks rose by 12%. The share price moved higher still in the 1760s as investors fed hungrily on news of the apparently endless source of wealth that Bengal would provide. The Company was rapidly extending its reach from trade to the governance of whole provinces, using the taxes raised to pay for the imports of cloth and tea back to England.
In the wake of Enron and other scandals of the dot.com 1990s, the malpractice of many of the Company’s key executives is sadly familiar: embedded corruption, insider trading and appalling corporate governance. In the process, a new class of ‘nabobs’ was created (a corruption of the Hindi word nawab). Clive obtained almost a quarter of a million pounds in the wake of Plassey, and told a House of Commons enquiry into suspected corruption that he was ‘astounded’ at his own moderation at not taking more. Thomas Pitt, Governor of Madras earlier in the century, used his fortune to sustain the political careers of his grandson and great-grandson, both of whom became Prime Minister. By the 1780s, about a tenth of the seats in Parliament were held by ‘nabobs’. They inspired deep bitterness among aristocrats angry at the way they bought their way into high society. A few lone voices – such as the Quaker William Tuke – also pointed to the humanitarian disaster that the Company had wrought in India.
All these forces converged to create a new movement to regulate the Company’s affairs. But so powerful was the Company’s grip on British politics that attempts to control its affairs could bring down governments. In the early 1780s, a Whig alliance of Charles James Fox and Edmund Burke sought to place the Company’s Indian possessions under Parliamentary rule. But their efforts were crushed by an unholy pact of Crown and Company. George III first dismissed the government and then forced a general election, which the Company funded to the hilt, securing a compliant Parliament.
Yet the case for reform was overwhelming, and the new Prime Minister, William Pitt the Younger – that beneficiary of his great-grandfather’s time in Madras – pushed through the landmark India Act of 1784. This transferred executive management of the Company’s Indian affairs to a Board of Control, answerable to Parliament. In the final 70 years of its life, the Company would become less and less an independent commercial venture and more a sub-contracted administrator for the British state, a Georgian example of a ‘public–private partnership’.
For centuries, the City of London has ruled itself from the fine mediaeval Guildhall. It was here in 1794 that the Mayor of London made the Governor-General of Bengal, Lord Cornwallis, an Honorary Freeman of the City, awarding him a gold medal in a gilded box. Cornwallis had certainly earned this prize from Britain’s merchant class. He had defeated Tipu Sultan of Mysore, extracting an eight-figure indemnity, and had just pushed through the ‘permanent settlement’ in Bengal, securing healthy tax revenues for the Company’s shareholders. Seeking to increase the efficiency of tax collection in the Company’s lands, Cornwallis cut through the complex patterns of mutual obligation that existed in the countryside and introduced an essentially English system of land tenure. At the stroke of a pen, the zamindars, a class of tax-farmers under the Mughals, were transformed into landlords. Bengal’s 20 million smallholders were deprived of all hereditary rights. Two hundred years on, and after decades of land reform, the effects still live on in Bengal.
This ‘permanent settlement’ was simply a more systematic form of what had gone before. Just five years after the Company secured control over Bengal in 1765, revenues from the land tax had already tripled, beggaring the people. These conditions helped to turn one of Bengal’s periodic droughts in 1769 into a full-blown famine. Today, the scale of the disaster inflicted on the people of Bengal is difficult to comprehend. An estimated 10 million people – or one-third of the population – died, transforming India’s granary into a ‘jungle inhabited only by wild beasts’. But rather than organise relief efforts to meet the needs of the starving, the Company actually increased tax collection during the famine [similar policies were applied again more than a hundred years later by the government of British India - see Present Hunger, Past Ghosts] . Many of its officials and traders privately exploited the situation; grain was seized by force from peasants and sold at inflated prices in the cities.
Even in good times the Company’s exactions proved ruinous. The Company became feared for its brutal enforcement of its monopoly interests, particularly in the textile trade. Savage reprisals would be exacted against any weavers found selling cloth to other traders, and the Company was infamous for cutting off their thumbs to prevent them ever working again. In rural areas, almost two-thirds of a peasant’s income would be devoured by land tax under the Company – compared with some 40% under the Mughals. In addition, punitive rates of tax were levied on essentials such as salt, cutting consumption in Bengal by half. The health impacts were cruel, increasing vulnerability to heat exhaustion and lowered resistance to cholera and other diseases, particularly amongst the poorest sections.
The Company’s monopoly control over the production of opium had equally devastating consequences. Grown under Company eyes in Bengal, the opium was auctioned and then privately smuggled into China in increasing volumes. By 1828, opium sales in China were enough to pay for the entire purchase of tea, but at the cost of mass addiction, ruining millions of lives. When the Chinese tried to enforce its import ban, the British sent in the gunboats.
By this time, the Company’s dual role as trader and governor was viewed as increasingly anachronistic – not least by the rising free trade lobby that despised its dominance. Eager to sell its cloth, in 1813, Britain’s textile manufacturers forced the ending of the Company’s monopoly of trade with India. The Company’s commercial days were coming to a close. The final blow came in 1834 with the removal of all trading rights; its docks and warehouses (including those at Cutler Street) were sold off.
Technology, free trade and utilitarian ethics now came together in a powerful package to uplift the degraded people of India. But while the Company promoted a mission to make Indians ‘useful and happy subjects’, the twin pillars of Company rule remained the same: military and commercial conquest. By the 1850s, the budget for ‘social uplift’ was meager – while £15,000 was indeed made available for Indian schools, £5 million went to the military war chest.
The telegraph, steam ship and railway were introduced to accelerate access of British goods to Indian markets. The rapid influx of mill-made cloth shattered the village economy based on an integration of agriculture and domestic spinning, and the great textile capitals of Bengal. Between 1814 and 1835, British cotton cloth exported to India rose 51 times, while imports from India fell to a quarter. During the same period, the population of Dacca shrunk from 150,000 to 20,000. Even the Governor-General, William Bentinck, was forced to report that ‘the misery hardly finds parallel in the history of commerce. The bones of the cotton-weavers are bleaching the plains of India.’
Walk to the Foreign and Commonwealth Office from St James’ Park and you will go up ‘Clive’s steps’, named after the statue of Robert Clive that stands without apology outside the old India Office buildings. It was here that the government transferred the administration of India in the wake of the disastrous ‘mutiny’ of 1857. Many explanations have been given for this uprising against Company rule in northern India, but the Company’s increasing racial and administrative arrogance lay at the root.
Anglo-Indians were excluded from senior positions in the Company; non-European wives of the Company were forbidden to follow their husbands back to Britain. Verbal abuse mounted, with ‘nigger’ becoming a common expression for Indians. This slide into separatism also affected the Company’s relations with its Indian soldiers, the sepoys. One by one, ties between the army and local communities were cut: Hindu and Muslim holy men were barred from blessing the sepoy regimental colours, and troops were stopped from participating in festival parades. As missionary presence grew, fears mounted that the Company was planning forcible conversion to Christianity.
All these sleights and apprehensions came to a head when sepoys in northern India rejected a new type of rifle cartridge, said to be greased with cow and/or pig fat. What turned a mutiny into a rebellion, however, was the Company’s crass behaviour towards local rulers in Oudh, Cawnpore and Jhansi, who all turned against the Company as the soldiers rose. Symbolically, the first act of the mutineers at Meerut was to march the 36 miles to Delhi to claim the puppet Emperor Bahadur Shah as their leader.
The war, known simply as the ‘Indian Mutiny’, lasted for almost two years, and was characterised by extreme savagery on both sides. When the Company retook Cawnpore, where rebel troops had slaughtered European women and children, captured sepoys were made to lick the blood from the floors before being hanged. The reconquest of Delhi by the Company’s troops was followed by systematic sacking, and the surviving inhabitants were turned out of its gates to starve. Bahadur’s two sons and grandson were killed in cold blood, and the old Mughal was stripped of his powers and sent into exile in Rangoon.
Yet the Company that had grown in a symbiotic relationship with the Mughal Empire could not long survive its passing. The uprising itself and the massacres of Europeans had generated a ferocious bloodlust in British society. Even the mild-mannered Charles Dickens declared that ‘I wish I were commander-in-chief in India [for] I would do my utmost to exterminate the Race upon whom the stain of the late cruelties rested.’ On 1 November 1858, a proclamation was read from every military cantonment in India: the East India Company was abolished and direct rule by Queen and Parliament was introduced. Firework displays followed the proclamation
The Company’s legacy was quickly erased. East India House was demolished in 1861. India was no longer ruled from a City boardroom, but from the imperial elegance of Whitehall.
Many would argue that the Company was no worse and in some respects somewhat better than other conquerors and rulers of India. What sets the Company apart, however, was the remorseless logic of its eternal search for profit, whether through trade, through taxation or through war. The Company was not just any other ruler. As a commercial venture, it could not and did not show pity during the Bengal famine of 1769–1770. Shareholder interests came first when it dispossessed Bengal’s peasantry with its ‘permanent settlement’ of 1794. And the principles of laissez-faire ensured that its Governor-General would note the devastation of India’s weavers in the face of British imports, and then do absolutely nothing.
Many institutions have justifiably disappeared into the anonymity of history. But in a country like Britain that is so drenched in the culture of heritage, the public invisibility of the East India Company is suspicious. Perhaps a single Hindi word can now help to explain this selective memory, this very British reticence: loot.
It beggars belief that the prime minister of our country can actually go to Britain and in a public speech thank the British for ruling India.
If you have some spare time, I highly recommend reading Dharampal’s “Indian Science and Technology in 18th Century.” It is based on the dispatches of the East India Company’s officers which are currently stored in London archives. They reveal the very high level of industries prevailing in India in 18th century (much more sophisticated and advanced that anything seen by Europeans of those times) and how the Brits managed to destroy them in a mere 50 years.
The Brits were particularly stunned by the quality of Indian steel, which was much superior to what was produced by them back home. They promptly copied the process and took it to Britain and were soon producing the best steel in the world. The Brits were amazed at the Indian process and the sophistication it required. But unwilling to give any credit to Indian intellect, they claimed: “The Indians are making such good steel, but they actually cannot comprehend their own process and are merely going through the motions unthinkingly.”
The book is available online on this link:
Simply click on “Published Works” and download the book.