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The Anarchy: The East India Company, Corporate Violence, and the Pillage of an Empire

Author(s):Dalrymple, William
Reviewer(s):Tabarrok, Alex

Published by EH.Net (November 2019)

William Dalrymple, The Anarchy: The East India Company, Corporate Violence, and the Pillage of an Empire. London: Bloomsbury Publishing, 2019. 528 pp. £27 (hardcover), ISBN: 978-1635573954.

Reviewed for EH.Net by Alex Tabarrok, Department of Economics, George Mason University.

 
In The Anarchy, historian William Dalrymple recounts the remarkable rise of the East India Company from its founding in 1599 to 1803 when it commanded an army twice the size of the British Army and ruled over the Indian subcontinent. It’s an amazing story and Dalrymple tells it with verve and style drawing, as in his previous books, on underused Indian, Persian and French sources. Dalrymple has a wonderful eye for detail. After the Company’s charter is approved in 1600 the merchant adventures scout for ships to undertake the India voyage: “They have been to Deptford to ‘view severall shippes,’ one of which, the May Flowre, was later famous for a voyage heading in the opposite direction” (p. 10).

So how was a humble group of British merchants able to take over one of the great empires of history? The answer is found in the title. The Anarchy refers not to the period of British rule but to the period before that time. Under Aurangzeb, the fanatic and ruthless Mughal emperor (1658-1707), the empire grew to its largest geographic extent but only because of decades of continuous warfare and attendant taxing, pillaging, famine, misery and mass death. It was a classic case of the eventual fall of a great power through military over-extension. At Aurangzeb’s death in 1707, a power struggle ensued but none could command. “Mughal succession disputes and a string of weak and powerless emperors exacerbated the sense of imperial crisis: three emperors were murdered (one was, in addition, first blinded with a hot needle); the mother of one ruler was strangled and the father of another forced off a precipice on his elephant. In the worst year of all, 1719, four different Emperors occupied the Peacock Throne in rapid succession. According to the Mughal historian Khair ud-Din Illahabadi … ‘Disorder and corruption no longer sought to hide themselves and the once peaceful realm of India became a lair of Anarchy’” (pp. 31-32).

Seeing the chaos at the top, local rulers stopped paying tribute and tried to establish their own power bases. The result was more warfare and a decline in trade as banditry made it unsafe to travel. The Empire appeared ripe to fall. “Delhi in 1737 had around 2 million inhabitants. Larger than London and Paris combined, it was still the most prosperous and magnificent city between Ottoman Istanbul and Imperial Edo (Tokyo). As the Empire fell apart around it, it hung like an overripe mango, huge and inviting, yet clearly in decay, ready to fall and disintegrate” (pp. 36-37).

In 1739 the mango was plucked by the Persian warlord Nader Shah. Using the latest military technology, horse-mounted cannon, Shah devastated a much larger force of Mughal troops and “managed to capture the Emperor himself by the simple ruse of inviting him to dinner, then refusing to let him leave.” In Delhi, Nader Shah massacred a hundred thousand people and then, after 57 days of pillaging and plundering, left with two hundred years’ worth of Mughal treasure carried on “700 elephants, 4,000 camels and 12,000 horses carrying wagons all laden with gold, silver and precious stones” (p. 44).

At this time, the East India Company would have probably preferred a stable India but through a series of unforeseen events it gained in relative power as the rest of India crumbled. With the decline of the Mughals, the biggest military power in India was the Marathas and they attacked Bengal, the richest Indian province, looting, plundering, raping and killing as many as 400,000 civilians. Fearing the Maratha hordes, Bengalis fled to the only safe area in the region, the company stronghold in Calcutta. “What was a nightmare for Bengal turned out to be a major opportunity for the Company. Against artillery and cities defended by the trained musketeers of the European powers, the Maratha cavalry was ineffective. Calcutta in particular was protected by a deep defensive ditch especially dug by the Company to keep the Maratha cavalry at bay, and displaced Bengalis now poured over it into the town that they believed offered better protection than any other in the region, more than tripling the size of Calcutta in a decade. … But it was not just the protection of a fortification that was the attraction. Already Calcutta had become a haven of private enterprise, drawing in not just Bengali textile merchants and moneylenders, but also Parsis, Gujaratis and Marwari entrepreneurs and business houses who found it a safe and sheltered environment in which to make their fortunes” (pp. 73-74). In an early example of what might be called a “charter city,” English commercial law also attracted entrepreneurs to Calcutta. The “city’s legal system and the availability of a framework of English commercial law and formal commercial contracts, enforceable by the state, all contributed to making it increasingly the destination of choice for merchants and bankers from across Asia” (p. 74).

The Company benefited by another unforeseen circumstance, Siraj ud-Daula, the Nawab (ruler) of Bengal, was a psychotic rapist who got his kicks from sinking ferry boats in the Ganges and watching the travelers drown. Siraj was uniformly hated by everyone who knew him. “Not one of the many sources for the period — Persian, Bengali, Mughal, French, Dutch or English — has a good word to say about Siraj” (p. 82). Despite his flaws, Siraj might have stayed in power had he not made the fatal mistake of striking his banker. The Jagat Seth bankers took their revenge when Siraj ud-Daula came into conflict with the Company under Robert Clive. Conspiring with Clive, the Seths arranged for the Nawab’s general to abandon him and thus the Battle of Plassey was won and the stage set for the East India Company. Many further battles and adventures would ensue before the British were firmly ensconced by 1803 but the general outline of the story remained the same. The EIC prospered due to a combination of luck, disarray among the Company’s rivals and good financing.

The Mughal emperor Shah Alam, for example, had been forced to flee Delhi leaving it to be ruled by a succession of Persian, Afghani and Maratha warlords. But after wandering across eastern India for many years, he regathered his army, retook Delhi and almost restored Mughal power. At a key moment, however, he invited into the Red Fort with open arms his “adopted” son, Ghulam Qadir. Ghulam was the actual son of Zabita Khan who had been defeated by Shah Alam sixteen years earlier. Ghulam, at that time a young boy, had been taken hostage by Shah Alam and raised like a son, albeit a son whom Alam probably used as a catamite. Expecting gratitude, Shah Alam instead found Ghulam driven mad. Ghulam took over the Red Fort and cut out the eyes of the Mughal emperor, immediately calling for a painter to immortalize the event.

As late as 1803, the Marathas too might have defeated the British but rivalry between Tukoji Holkar and Daulat Rao Scindia prevented an alliance. “Here Wellesley’s masterstroke was to send Holkar a captured letter from Scindia in which the latter plotted with Peshwa Baji Rao to overthrow Holkar … ‘After the war is over, we shall both wreak our full vengeance upon him.’ … After receiving this, Holkar, who had just made the first two days march towards Scindia, turned back and firmly declined to join the coalition” (p. 367).

Overlaid on top of luck and disorder, was the simple fact that the Company paid its bills. Indeed, the Company paid its sepoys (Indian troops) considerably more than did any of its rivals and it paid them on time. It was able to do so because Indian bankers and moneylenders trusted the Company. “In the end it was this access to unlimited reserves of credit, partly through stable flows of land revenues, and partly through collaboration of Indian moneylenders and financiers, that in this period finally gave the Company its edge over their Indian rivals. It was no longer superior European military technology, nor powers of administration that made the difference. It was the ability to mobilize and transfer massive financial resources that enabled the Company to put the largest and best-trained army in the eastern world into the field” (p. 329).

Dalrymple has written a history with only the occasional implicit analysis. He seems particularly incensed at “corporate violence” and in a (mercifully short) final chapter alludes to Exxon and the United Fruit Company. It is an interesting question to ask: How might the actions of these corporate raiders have differed from those of a state? It’s not clear, for example, that the EIC was any worse than the average Indian ruler and surely these stationary bandits were better than roving bandits like Nader Shah. (See Mancur Olson 1993 on the distinction.) The EIC may have looted India but economic historian Tirthankar Roy (2012, p. 215) explains that: “Much of the money that Clive and his henchmen looted from India came from the treasury of the nawab. The Indian princes, ‘walking jeweler’s shops’ as an American merchant called them, spent more money on pearls and diamonds than on infrastructural developments or welfare measures for the poor. If the Company transferred taxpayers’ money from the pockets of an Indian nobleman to its own pockets, the transfer might have bankrupted pearl merchants and reduced the number of people in the harem, but would make little difference to the ordinary Indian.”

Moreover, although it began as a private-firm, the EIC became so regulated by Parliament that Hejeebu (2016) concludes, “After 1773, little of the Company’s commercial ethos survived in India.” Certainly, by the time the brothers Wellesley were making their final push for territorial acquisition, the company directors back in London were pulling out their hair and begging for fewer expensive wars and more trading profits.

Although short on analysis, economic historians and readers will find in The Anarchy a page-turning history of the rise of the East India Company with plenty of raw material to enjoy and to think about.

References:

Santhi Hejeebu. 2016. “The Colonial Transition and the Decline of the East India Company, c. 1746-1784.” In A New Economic History of Colonial India, edited by Latika Chaudhary, Bishnupriya Gupta, Tirthankar Roy, and Anand V. Swamy. Routledge.

Mancur Olson. 1993. “Dictatorship, Democracy, and Development.” American Political Science Review 87 (3): 567–76.

Tirthankar Roy. 2012. The East India Company: The World’s Most Powerful Corporation. Penguin Books India.

 
Alex Tabarrok is Bartley J. Madden Chair in Economics at the Mercatus Center at George Mason University. He is the author (with Shruti Rajagopalan) of “Premature Imitation and India’s Flailing State,” The Independent Review (Fall 2019).

 
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Subject(s):Business History
Economywide Country Studies and Comparative History
Military and War
Geographic Area(s):Asia
Time Period(s):17th Century
18th Century
19th Century