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The Rediscovery of India by Meghnad Desai - 3
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Chapter 2 - The English Turn (contd.)

In the book Desai briskly covers the battles of Plassey (1757) and Buxar (1764), and the subsequent collection of land revenue in Bengal by the British (which is one long, saad story).

He closes the chapter with a lengthy section on the attempted impeachment of Governor General Warren Hastings. This is clearly a case of historians settling scores with each other, as he says nationalist historians cite the charges against Hastings as an indicator of how bad his regime was when it actually was not. Whatever :)

Battle of Plassey (1757)
Militarily the battle is not so interesting since it was a big betrayal that sealed the loser's fate. Siraj-ud-Daula was the Moghul emperor's Nawab in Bengal. Mir Jaffar, his Chief of Army Staff (high treason, eh?) was looking to depose him. He had the backing of a large number of merchants.

As Desai says, "behind Mir Jaffar was the emerging commercial class - the traders and the bankers who had prospered during the last 150 years off exports matched by imports of silver and gold. Jagat Seth, for instance, had an international banking network which made him a powerful man. The old Nawab had been respectful..the new Nawab was haughty and arrogant".

(That only makes sense as a childrens' bed time story)

He says the defeat at Plassey is regarded by many Indian (esp. Marxist) historians as a major event, an epic confrontation between the forces of feudalism and capitalism where capitalism won. He quotes one of them called Biplab Dasgupta: It was "the improbable takeover of a country as big as India, by a mere trading company". Desai argues that Plassey was none of that. It was a localized affair. In fact the English got inducted into it only because Mir Jaffar used them as a tool to enthrone himself.

Plassey in more detail
Digging deeper, I see that 18th Century India is much more complex, confusing and controversial than I thought. While nationalist historians have stressed the Company's intention to dominate, English historians say that this business enterprise was just unwillingly drawn into local political intrigue.

Dipping into the Oxford History book, there's this essay which offers better insight, "Reassesments of the role of the British in the first half of the 18th century have risen primarily from what is called 'private' trade. The Company's trade might be set into a relatively static pattern, but the trade of the Company was only a small part of British activities in Asia; there was a dynamic private sector as well."

As he explains in that essay (which you ought to read), many employees of the Company, along with their official work, conducted their own "side-business" which was very lucrative personally. Under the Mughal emperor the Company had been granted exemption from all customs duties. Now these individuals used that as a loophole to avoid paying taxes for their extra-curricular activities also. (Elsewhere it has been called insider trading).

Remember that the overall business picture was extremely positive at this time. For my future reference I will note down this important para from earlier in that essay:

"At the beginning of the 18th century about 90% of the Company's cargoes were obtained from India. In Western India the English operated out of the great Mughal port of Surat and from their own settlement granted to the Crown by the Portuguese at Bombay. The cargoes consisted mainly of the cotton textiles of the province of Gujarat. Pepper obtained from settlements on the south-west coast was also shipped from Bombay. Madras, held outright on a grant from a local chief, was the major English settlement on the south-east or Coromandel coast. Coromandel textiles were in high demand in Europe early in he 18th Century.

"In Bengal, Calcutta, a town largely founded by the English, was growing very rapidly indeed. On the strength of grants from the local ruler, the English had built a fort and exercised authority over the town. Bengal was a rich province, producing silk and cotton cloth for export in great quantities. Early in the 18th century it became the major source of British textile exports. From the 1720s shipments through Calcutta usually amounted to at least half of the Indian cargoes (emphasis mine). To purchase their textiles, the Company's agents set up factories in several inland weaving centres, accessible from Calcutta along Bengal's river system."

(Note that above description is w.r.t to the Company's official trade and not private trade)
Since this "private trade" was carried on by individual employees of the Company, they had to rely on capital from native merchants/bankers - who were able to use the Englishmen as fronts/shell companies to gain the tax benefit. This resulted in many strong relationships between the local merchant class and Company employees. The essay admits there is not enough quantitative evidence to estimate its impact, but the phenomenal growth of Calcutta is a pointer. "Calcutta totally eclipsed its rivals in Bengal during the first half of the 18th century. Its growth was meteoric as Indian merchants, artisans and labouring people moved into the area under British jurisdiction in large numbers."

The lines that follow remind me of SEZs:
"The dissemination of wealth among their subjects through dealings with Europeans was of course welcome, but if that wealth lay beyond the reach of the ruler within what amounted to a foreign enclave, if that enclave was growing very rapidly, and if some of the Europeans within that enclave seemed to be extending their range of activities, the challenge to the ruler's authority was unmistakeable. Calcutta in particular constituted such a challenge to the rulers of Bengal."

What was actually being traded in this private trade? How did the frictions play out? I shall have to resume some other time.

(This narrative relies too much on the Moghul tax exemption firman. Need to check if other factors were in play.)
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(Deleted comment)

Re: The East India Company


2010-09-12 12:33 pm (UTC)

That's a comprehensive list of questions! I am speechless ;)

Even I have been thinking of some of those questions you raised. Can use your comment as a reference when I come around to investigating :)

Though the EIC resembles modern shareholder companies in many ways, such companies were still new and accountability was weak. For example, EIC was created in 1600. 2 days back there was a report (link) saying the oldest stock certificate, that of Dutch East India Company, dating from 1606 has been found.

EIC was a managed by a dozen or so Directors in London, and the shareholders included rich and well connected UK folks. But the communication time b/w UK and here was immense and many of the cruel decisions were taken locally by Clive and his ilk, and the Directors often looked the other way when they came to know of it later. That's why Hastings was impeached and control of EIC went to Parliament to a large extent. Surprisingly that didn't help either :)

Actually there's tons of great literature out there about the Company. A few are:
- John Keay's The Honourable India Company
- James Mill's The history of British India written in 1848 and available free now.
- Nick Robbin's "The Corporation That Changed the World"

Check out this article by Nick Robbins or this scathing criticism by Karl Marx.

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