Capitalism was born with the mark of Cain on its brow. From the voyages of Prince Henry the Navigator in Portugal to the piratical enterprises of Francis Drake and Jack Hawkins (in which the Virgin Queen of England held a share) to the burning of whole islands of the Indonesian archipelago by Jan Coen, the founder of the Dutch empire in the East, the gun of the killer even more than the false balances of the merchant was often the instrument of gain for the pioneering capitalist nations1 . When the shares in piratical enterprises were consolidated in the joint stock of a company, as in the case of the English East India Company (EEIC, from now) and the Dutch East India Company following on its heels, royal or republican charters allowed them the privileges of monopoly trade and empowered them to act as the advance guard of armed conquest in extra-European lands. Hugo Grotius’s code of international law stopped on the borders of Christian Europe. In the seventeenth century CE, the British learned from the Dutch in many areas, including the adage that war was an essential appendage of profit-making enterprise.
When Josiah Child, Chairman of the EEIC and an avid student of European political economy, tried the same tactics during Aurangzeb’s time, he was soundly beaten. But the EEIC did not give up. Opportunities for seizing territorial control came up first in Southern India, but the great prize was the seizure of Bengal after the traitorously won victory in Plassey. The Company’s victory in India came after the consolidation of oligarchic rule in England in the eighteenth century. The EEIC also had a role to play in that consolidation and corruption played a signal part in its defeat of forces that sought to strip it of its monopoly privileges. The two books under review devote considerable attention to the intertwining of monopoly, empire and corruption in the rise of British rule in India. Dirks’s story starts with the conspiracy that led to the ignominy of Plassey, whereas Robins’s tale starts with the founding of the EEIC during the reign of Elizabeth I. Robins is an investment advisor whereas Dirks is a historian. Robins’s forte lies in laying out the financial details of bribes, stock-jobbing and gains for the various players. Dirks concentrates his attention on laying bare the networks through which the numerous scandals of the founding of empire spread, the rhetoric used by protagonists on two sides of British politics and the stratagems used to exonerate the few culprits who were publicly arraigned in England. Child obtained royal patronage for the (mis)deeds of the Company by sending a gift of £10000 to the Stuart king, James II and backed the Catholic king against his enemies.. When the latter was ousted by his son-in-law, William of Orange, in the coup of 1688, Child was in trouble and a parliamentary committee was set up to try and dissolve the Company. But Child’s son-in-law Thomas Cooke, who had succeeded Child as Governor (chairman) of the EIIC, obtained a reprieve by bribing everybody who counted in the ruling circles, including the King and Thomas Osborne, Duke of Leeds and President of the King’s Privy Council. This reprieve proved to be temporary, since in the financial crisis the Crown and Parliament faced, the King accepted a loan of £2 million from Dowgate Adventurers, the challenger of the old EEIC and granted it a monopoly of trade to the East Indies. However, the old Company used legal loopholes to do business as usual. Moreover the new Company had no interest in encouraging competition that would cut into its profits. In 1709, in return for a further loan of £1.2 million to the government, a United EEIC, born out of the merger of the two Companies obtained a charter of monopoly of trade to the East Indies. The Bank of England’s stock, and the stock of the EEIC formed the bulwark of private wealth on which the public credit of England was erected—a system that allowed the government to wage war by drawing on the wealth of others (including many foreign investors) as debt on which it would pay interest out of taxes to be realized in future. After the bursting of the stock market bubble that occurred around the shares of the South Company, the consolidated capital of the latter company was added to the foundation of the public credit of England. That credit allowed England to carry on and win its century-long war with France, a vastly more wealthy nation in the eighteenth century, and attain global political and economic hegemony. Daniel Defoe, a prodigiously hard-working journalist, publisher, repeatedly bankrupt businessman, spy and novelist of genius, understood the close relation of war and the prosperity of London and wrote around 1724-25: ‘if peace continues, …there is a time coming,…when the public debts being reduced and paid off, the funds or taxes on which they are established, may cease, and so fifty or sixty millions of the stocks, which are now the solid bottom of the South-Sea Company, East-India Company, Bank, &c. will cease , and be no more; by which the reason of this conflux of people being removed, they will, of course, and by the nature of the thing, return again to their country seats, to avoid the expenses of living at London, as they did come up hither to share the extravagant gain of their former business here’.2 Robins uses his skills as an investment specialist to lay out the details of how the dividends of the EEIC and the capital gains or losses on its stock were influenced by trading profits, and after the capture of the revenues of Bengal, by the changes in those revenues, and rumours about those changes. The actual or threatened changes in those returns in turn shaped the opinions of influential players, including Edmund Burke, when he was starting to make a name as a politician and thinker. Robert Clive was not just a pernicious intriguer among Indian rulers, gaining most of his victories through the treachery of important players. He was also an astute manipulator of EEIC stock: he planted information so as to increase its price at the right moment, cornered enough of the stock to oust his enemy, Lawrence Sulivan from the chairmanship of the Company and sold it at the right moment to realize large capital gains. In 1783, the EEIC directors used bribes, and the King’s hatred of Charles Fox, to defeat the East India Bill piloted by Fox. In its stead, William Pitt the Younger passed a very different Act for controlling the Company’s administration. Dirks is as much interested in the historiography of the founding of the British Indian empire as in the history of the doings of the chief characters from Robert Clive to Richard, Marquess of Wellesley. He writes: ‘It was … the subjugation of India that allowed Britain to emerge as the most powerful and modern nation-state of the new nineteenth-century world order’ (p. 238). Further, ‘yet the notion of that modern Britain as we know it was the product of its imperial power—and specifically of its participation in and dependence on the colonial state—is still strangely absent from both British national and imperial historiography’ (pp. 242-3). Dirks locates this amnesia in the historiography of the contemporary writings around the founding decades, from the paradoxical stance of Edmund Burke, that conservative defender of royalty and opponent of colonial oppression to the egregious James Macpherson, the author of the fraudulent epic Ossian and paid defender, along with his cousin (or half-brother), John Macpherson, one-time Governor General of the Company’s territories, of the Nawab of Arcot. The amnesia extends even to radical theorists such as C. B. Macpherson, who wrote a life of Burke3 , without devoting a single paragraph to his writings and speeches on Indian affairs. Dirks reads the subconscious desire to suppress the way the empire was acquired and the way it functioned to the embarrassment that neither could be fitted into the notions of sovereignty or the functioning of a well-ordered state. Later, with James Mill, Thomas Macaulay and J. R. Seeley setting the tone, ‘The embarrassment of empire gave way to its naturalization and celebration, with no more blushing about either Clive and Hastings’ (p. 283). This naturalization continues down to the present: British, American and Indian historians can write the political, social and economic histories of colonial India or the global economy without mentioning how the imperatives of revenue extraction and tribute remittance could override all considerations for justice or loss of human lives. The fact that the first era of globalization in India and the world (1873-1914) was also the era of some of the greatest famines in global history can be obliterated from widely used textbooks of Indian and global economic history. There is continuity in the thinking processes of those who see nothing wrong with the super-imperial order established by US Presidents from Theodore Roosevelt through Harry Truman to George W. Bush4 and those who think that the British Indian empire brought free trade and pros-perity to Indians: whether they lived or died, or lived illiterate and short lives in the course of that mighty experiment, was an irrelevancy. The historiography of eighteenth-century Britain is awash with the discourse of Old Corruption, springing from Court patronage and the New Corruption, leaping out of the gains made in the colonies: the ‘nabobs’ who made enormous fortunes from EEIC service and private trade in Bengal were the most conspicuous exemplars of embodied corruption. But the reach of the nabobs also exten- ded to the highest figures in the land as these two books demonstrate in their different ways. This discourse has something to teach all those optimists who believe or write as if they believe, that the removal of government regulations from economic affairs would lead to the end of the corruption that links venality and politics in intricate webs. Corr-uption would inevitably follow where there are prospects of making super-profits with little redress for the real sufferers, the people whose labour was the ultimate source of those profits. The two books in their different ways shed light on the murky dealings of the Company officials, including the lives of the likes of Robert Clive, Warren Hastings, Paul Benfield, and Thomas Rumbold in the years when foundations were being laid for the rule of the Company Bahadur in India. With the introduction of Pitt’s India Act of 1784, and subsequent charter Acts, the corruption was internalized as more pay for the administrators and a more regular remittance of the tribute to the British state and guaranteed dividends to the holders of EEIC stock ?all at the cost of the peasants and artisans of India. It is not for nothing that in the nineteenth century, the British empire was dubbed a huge system of outdoor relief for the British aristocracy and other members of upper classes. The United Sates is a fantastic and frightening illustration of the legalization of corruption in politics, with lobbyists for different groups openly backing one party or even one candidate against another, Congressmen and Senators being given presents at dinner parties in their honour, and so on. Even with all the regulations of the Securities and Exchange Commission, the corruption and meltdown of Enron, WorldCom, Tyco or Global Crossing could not be prevented, nor could the links between the Bushes and the Cheneys or the Clintons, for that matter, with all kinds of big business be severed. The externalization of that web of corruption is most evident in the naked assault on the Middle East, mounted by successive US administrations. Unfortunately, most of the economists buil-ding models of corruption in developing counties have averted their eyes from the biggest scandal of all, the continuing oppression by the corrupt linkages between big business and politicians in the citadels of super-imperialist capitalism. The two books under consideration are complementary to each other. Those who want a straight story of how a joint-stock company floated in 1599 and chartered by a venal Crown two years went on to found the biggest formal empire in world history would appreciate Robins’s no-nonsense narrative. Those who want the spice of historiography flavouring the narrative of the doings of the principal actors in the founding decades of that empire will do well to pore over Dirks’s equally anti-imperialist analysis. Reference 1 A. K. Bagchi. 2005/2006. The Perilous Passage: Mankind and the Global Ascendancy of Capital, Lanham, Maryland (USA), Rowman & Littlefield; Indian edition, New Delhi, Oxford University Press. 2 Daniel Defoe. 1724-26/1986. A Tour Through the Whole Island of Great Britain; abridged and edited by Pat Rogers, Harmondsworth (UK), Penguin. 3 C. B. Macpherson. 1980. Burke, Oxford, Oxford University Press. 4 For a superb fictional treatment of the story of the establishment of the first formal colonies of the USA, in Cuba and the Philippines, see Gore Vidal: Empire: A Novel, New York, Ballantine Books, 1987. For an account of how Truman founded the Security State after World War II, and set the stage for final US take-over of the world at the cost of the life and liberty of not only blacks and other undesirable members of mankind, see Gore Vidal: ‘The Last empire’ in The Last Empire: Essays 1992-2001, London, Abacus, 2001, pp. 164-87. Amiya Kumar Bagchi is Director, Institute of Development Studies, Kolkata.