H ome
 I n the news
 S cience for everyday life
 E arth warriors
 O ne World
 E xpressions
 W hat people are talking about
 W hy people are talking about
 T he trouble with
 G ood ideas (for a better world)
 T en biggest environmental problems
 M essages from Little Earth
 D o It Yourself
 S torybook
 A lternatives
 C hangemakers
 F ind out for yourself
 M essages from Little Earth
The first MNC: Little has changed

The East India Company was the first major shareholder-owned multinational company (MNC). It found India rich and left it poor. When the company was established in 1600, in the reign of Queen Elizabeth I, and for 150 years thereafter, there were no products England could export that the East wanted to buy. Spices, textiles and luxury goods sailed west. Only money sailed east. It was the ability to acquire land and control government services that raised the fortunes of the Company -- and broke India.

As the mighty and opulent Mughal Empire declined, the Company acquired land beyond its vulnerable trading ports, extorted taxes, manipulated terms of trade in its favour, and built up a private army. In 1757 Robert Clive fought and defeated the Nawab of Bengal. Later, Lord Cornwallis defeated Tipu Sultan in the south. In both cases, and in many lesser incidents, the Company's executive officers extorted huge ransoms and accumulated unimaginable wealth. This wealth was obtained, not so much from its fashionable society customers back in England, as from suppliers in India, from defeated rulers and from taxes imposed on the populace. India financed its own impoverishment.

Under the Mughals, taxes had been collected through a complex pattern of mutual obligation. This was too complex for the Company. At a stroke the zamindars, tax farmers under the Mughals, were transformed into landlords, and Bengal's 20 million smallholders were deprived of all hereditary rights. Just five years after the Company secured control of Bengal in 1765, revenues from the land tax had tripled, beggaring the people. The devastating effects last to this day. These conditions turned one of Bengal's periodic droughts, in 1769, into a full-blown famine. An estimated 10 million people, one third of the population of Bengal, died. But, rather than organise relief efforts to meet the needs of the starving, the Company actually increased tax collection during the famine. Granaries were locked, and grain was seized by force from the peasants and sold at inflated prices in the cities.

The Company became feared for the brutal enforcements of its monopoly interests. For example, it was infamous for cutting off the thumbs of weavers found selling cloth to other traders, to prevent them ever working again. In rural areas two-thirds of a peasant's income was taken in tax, nearly double that under the Mughals. Consumption of salt was forced well below the minimum prescribed in English jails: the effect was to treat the people of India as sub-human, a class below the criminal. This disgraceful control of an essential commodity was only withdrawn after Gandhi's famous Salt March in 1930. The Company's performance, through pursuing profit for its shareholders and its chiefs, contrasted starkly with its claim, in the mid-19th century, that it ruled for the moral and material betterment of India.

In Britain, so powerful was the Company's grip on politics, that attempts to control its affairs could bring down a government. An attempt, led by Edmund Burke, to place the Company's Indian possessions under Parliamentary rule led to the dismissal of the government. The general election that followed was so generously funded by the Company that it secured a compliant Parliament in which a tenth of the seats were held by `nabobs'.

Booty from India created this new class of `nabobs', the chief executive officers (CEOs) of Georgian England. The nabobs themselves had no conscience about their wealth. Robert Clive, having extorted a fortune after the battle of Plassey, defended himself at a House of Commons enquiry into suspected corruption, saying that he was "astounded" at his own moderation at not taking more. Only a few dissenting voices, like the Quaker, William Tuke, pointed to the humanitarian disaster that the Company had wrought in India. But the case for reform was overwhelming and in 1784 the India Act transferred executive management to a Board of Control, answerable to Parliament -- a kind of public-private partnership.

Although there were expressions of intent that the Company should promote a mission to make Indians "useful and happy subjects," the underlying ethics of the public-private partnership remained the same. By the 1850s, just 15,000 pounds sterling was being spent on non-English schools compared with a military budget of 5 million pounds sterling. Railways were built to accelerate access of British goods to Indian markets. Mill-made cloth brought from Britain shattered the local village economies, which were based on the integration of agriculture and spinning. The great textile cities of Bengal collapsed. The governor-general reported that "the misery hardly finds parallel in the history of commerce. The bones of the cotton weavers are bleaching the plains of India".

Indians were worn down by the hegemony of the British presence, by the unfair trading rules, the crippling taxes, the draining of India's wealth, and the contempt in which they were held. Retaliation was inevitable. The final insult to Indian sentiments came when sepoys were forced to use a rifle cartridge greased with cow and/or pig fat -- an outrage to both Hindus and Muslims. Catastrophe struck in 1857. Mutiny. The massacre of Europeans generated a ferocious bloodlust in English society. Reprisals were brutal. Long- standing plans for increased dominance in all spectrums of Indian life and economy had now received their 'justification'. In 1858, the East India Company was abolished and direct rule by queen and Parliament was introduced.

Corporate exploitation, followed by catastrophe, led to Empire. Is history repeating itself?

Excerpted from The Little Earth Book by James Bruges, published by Alastair Sawday. To order a copy or for further details visit www.littleearth.co.uk

  Free trade: Comparative advantage for the corporations
  Intuition: Common sense, imagination and morality
  Patenting life: Wait a minute! Who made it?
  The Terminator: Corporate control of food for profit
  Population: More or less
  Pests and weeds: Biotechnology for profit, a nightmare
  A citizens' jury: The locals know what aid they need
  Imperial tribute: Why the rich are rich and the majority poor
  The WTO: Power in a moral vacuum
  Biomimicry: Science's exciting new frontier
  Water denied: A crime against humanity
  The first MNC: Little has changed
  Feeding the world: There is no shortage of money or food
  Ecological footprints: The rich wear big boots