

The East India Company

The Company that ruled the waves

As state-backed firms once again become forces in global business, we ask what they can learn from the greatest of them all

See article

Readers' comments












Iskandar Ali

The East India Company made India in a nation of slaves. Today not much is different. India is still a slave of it's feudal traditions.

KPATOΣ in reply to Iskandar Ali

"Iskandar" - a Greek name. How interesting. And Ali presumably indicates some Muslim allegiance. So I infer that you are really using this blog to make a point about aspects of India that you dislike today. In law feudal relations have always been distinct from those of slavery though one might suggest that there was often little difference in practice. If you actually know what you are talking about perhaps you would be good enough to enlighten those who know less on two questions that occur to me.

1. Isn't Pakistan a far more feudal society than India? (I remember a well informed scholar from Japan saying, when Japan's superiority in business over the West needed to be explained - in the late 1980s! - that Japan benefited from solidarity in the work place which he seemed variously to attribute to a residue of feudalism but also to tribalism. I mention this because Pakistan's tribal areas get a lot of publicity.)

2. Would it not be more true to say that the EIC's domination led to an ending of slavery, including the modified form which the caste system represents, earlier than would otherwise have occurred - or at least to its moderation if you say it still exists?


The VOC (Dutch East India Company 1602-1800) is a better example of a private-state owned trading monopoly. It was far more successfull as a business enterprise than the British one and much, much lsrger in the relevant historical period.


These so called civilized people are the real filthy criminals and Al-Qaeda comes second.

KPATOΣ in reply to anonymous111

"These so called civilized people are the real filthy criminals and Al-Qaeda comes second."

I see you have got your mother to click on Recommend so, assuming she is a woman of sound judgment, I must find out what you are talking about. "so called civilized people" (who are they and who called them that?) "are" [sic] the real filthy criminals. Are we now in the 21st century are are you smoking something?

Devils Advocate_1

[ kommonsenses in reply to KPATOS Dec 30th 2011 7:39 GMT
@KPATOS in reply to kommonsenses Dec 29th 2011 7:21 GMT
One more thing, you asked that ‘One is that China will be importing cheap Indian labour (but probably including cheaper highly skilled software engineers too) by the 2020s’,

I don’t see anything wrong if they do, as americans are already importing Indian labours as programmers.]

More than a decade ago, I saw a Chinese (HK/mainland) boss took a couple of young Indians (employees?) to dinner in a restaurant in Guangzhou. I also know that Foxconn sends some of its Indian staff to its Shenzhen factory for short assignments. So, it has already happened in a small way.

[and australia you mentioned? they’d better treat indian immigrants there better than what’s being reported. Or else and if I was indian government, I’d send in a few millions or 100s of millions Indians descending down under to help the meager 22 millions locals to develop the vast 3 million sq miles land.

you see, population density in india is about 400 per sq km, while it’s only about 3 per sq km in australia. the disparity is so absurdly skewed that something has to give, sooner or later.]

I too want to see that happen but make sure that that 100 million are Asian Indians so that they can claim back the land of Australia for the dark brown Asians, to whom the land originally belonged. ;-),...


KPATOΣ in reply to Devils Advocate_1



I take this as a wry comment, humorously meant, on
"Kommonsenses's" nonsense. As I have pointed out Australia has always been entirely unsuited to supporting a large population. Australian Aborigines seem to have arrived in several waves of people who must have wandered out of Africa, probably still evolving as varieties/races of homo sapiens on the way around the south Asia coast till some, in small numbers, managed to make the crossing from what are now Indonesian islands to the north and north-west of Australia (curiously there seems to have been little movement from New Guinea into Northern Australia though people from northern New Guinea went on to populate the Pacific, having, for the most part originated in southern China and travelled via Taiwan and the Malayan peninsula). Sometimes it is claimed that "Aboriginal" people arrived in Australia 60,000 years ago and even that they have a continuous culture from then till now. That seems to be both very unlikely and actual rubbish. 60,000 years is too early given what is now the latest evidence about the evolution of homo in Africa and the exit from it. Anyway there were several different immigrations of people with quite different cultures and cultural attainments (cf. the "Bradshaws" in Kimberley caves and the people and boats they depict, all much earlier and very different from most of the cave paintins of just a few thousand years of age). Not surprisingly, though it doesn't suit some political Aborigines to acknowledge it, there were small, fuzzy haired pygmy like people, somewhat like Andaman Islanders who existed identifiably separately in north-eastern Australia well into the 1940s and are still represented by their DNA in the Australian population. People seem to elide much of Australia's pre-history in which huge (hundreds of kilometres) changes in coast lines occurred and climate and vegetation changed enormously with the advance and retreat of the last major Ice Age. Aboriginal use of fire helped to destroy much of the early rain forest and create the classic Australian landscape (sorry to India, North Africa, southern Italy, California etc. where eucalypts have not proved an unmixed blessing when taking advantage of water supplies they never had in their original Australian habitat). Aborigines (not, as pointed out, necessarily ancestors of today's Aborigines) also wiped out the megafauna that existed in Australia - probably about 40,000 years ago. Many Aborigines are of course "brown" today, though some are darker than the average Tamil and some show how little relation their genetic makeup which determines skin colour has to "dark brown Asians". One fair haired, blue-eyed, freckled Aboriginal activist has been known to hold as yet another grievance against the Anglo-Celts who made up most of early European settlement that their genes messed up the Aboriginal ones! (On the other hand a very black and genially urbane Aboriginal businessman remarked that the aformentioned one "has a pigmentation problem"! :-).....)

Devils Advocate_1

[ Anjin-San in reply to Omricon Dec 28th 2011 5:04 GMT
"Imagine a small army in Sudan comprised of Sudanese, paid and managed by a Chinese company while they take as many resources and taxes that they can, all the while sidelining and paying off puppet presidents? "

I wonder if Chinese copy of AK-74 uses cartridges coated with pork grease....]

At least, it does not use the scalpel of Unit 731 as its bayonet.



Its understandable that the Company evokes strong emotions but the point of the article was not to catalog its misdeeds but to explain the causes of its rise and fall and what lessons it might hold for state backed Companies of today. It was an absorbing read.


Famine didn't 'strike' Bengal in 1770. This famine, like nearly all famines, was a political / economic event - it was the barbarous rule of the British that extracted taxes to the point of economic devastation of Bengal. In the early years of the famine, the East India Company increased, even doubled its revenue year over year. Eventually, of course, tax revenue dropped as 1/3 of the population perished and the remaining, near famished, were left to generation impoverishment. At the time of Indian independence, it was the poorest region of India. Not coincidentally, it was the longest occupied. Some 250 years later, the British still cannot speak honestly of these shocking crimes, and cant quite hint at the significance of how such exploitation is related to things like open markets, free trade, and globalization. The East India Company wasn't a force in global 'business', it was a force in global exploitation.

KPATOΣ in reply to JWadsworth

You write assertively as though your knowledge of India and Indian history should give you some authority on matters Indian but I would like to see your footnotes metaphorically speaking because I doubt very much that Bengal (including Calcutta) was the poorest part region of India. That hardly fits with the actions of Maoists in some of the areas heavily populated by tribal and other indigenous peoples whose poverty I hear about from a management consultant who has set up charities there.

JWadsworth in reply to KPATOΣ

Thank you for your response kpatos - you are correct that I stated this too assertively. I am not aware of a comprehensive, quantitative review of regional poverty at the time of independence. My statement originates from Nehru, who certainly had the knowledge, though who could be accused of being polemic in his assessment. There are good data soon after independence that show unequivocally that Bangladesh was 10% or more below the per capita GDP of the rest of India and that eastern Indian states fared worse on many metrics of poverty such as infant mortality, caloric intake, births per woman, etc. Other information and events support the statement, not the least of which is that the only major famine (or near-miss) in India post independence occurred in Bihar.

I should add that your friends assessment, while likely valid, is presumably of what is happening today, 60+ years after independence. I did not state that Bengal/Bangledesh were now the poorest regions now, though it is the case that most of the poorest 8 states of India are states that were early annexations of the East India Company. Bangladesh appears to be doing somewhat better.

I am interested to hear how you believe that the action of Maoist rebels today is related to the regional variations in poverty at the time of Indian independence.

KPATOΣ in reply to JWadsworth

Thank you for replying. I don't know nearly enough about India, or have the time, to follow up with any attempt to suggest that you might not be right. However, let me try out a speculation on you that comes from objective sources.

Bengal was, presumably, like Bangladesh today, much more Muslim than the rest of India except what is now Pakistan and maybe parts of some states like Gujurat. What influence might that have had? Also, is it possible that the principal Muslim converts were from the lower castes who had more fear of being enslaved by the Muslim invaders than those who were socially and economically higher? I take it that there can be no dispute: the lower the caste the greater the poverty and powerlessness.

A connected speculation tends to answer another question which is why those of Muslim background from the sub-continent do significantly worse in their GCSE exams in the UK than other sub-continentals and Indians from East Africa, not to mention Chinese of course.

My mention of Maoist rebels was only a rather desperate substitute for being able to remember where the real troubles in India are by name. I think Bihar rings a bell. I don't know if you are sufficiently well informed to answer another speculation (not defensive as I have nothing to be defensive about even by proxy, descent or other relationship, but merely to explore the true complexity of human affairs) which is that Bengal's, and the early EIC conquests' problems arose partly from the economic attractions of urbanisation and the EIC's and other traders' and manufacturers' activities. When India had a much smaller population than it does today the then current agricultural techniques aided by annual fertilising flows of crumbling mountain down the rivers which flowed from Tibet or the Himalayas would surely have provided well for both current requirements and storage for the future, so there must have been some special attraction to Calcutta, the Ganges delta and other highly populous areas where the EIC traded.


'KPATOS' and 'Word Citizen'

The East India Companies formed by Britain, France, Holland and Denmark were all of a brilliant commercial form but all of which ended up acquiring territories in Asia. They fought each other in India too. The British EIC prevailed.

The commercial form of these companies lulled Indian rulers into complacency. The Indian perspective must include some strictures they have to accept for the way the Indian rulers dealt with the EIC. They failed to read through the territorial ambitions of the EIC and to act upon it as a collective.

Amazingly, the EIC used Indian sepoys to make almost all of their conquests. At the best of times, there were no more than 10% of British men under arms in the battles waged by the EIC.

My take is the EIC saw through Indian thinking but the Indian rulers did not catch on the strategies of the EIC. Even if they did, it was too late. None expressed and acted upon the Indian perspective until one Mohandas Karamchand Gandhi came on the scene.

As the Indian folk tale says, "Two strong rams fighting each other failed to notice the approaching wolf. When the wolf got one of the rams, the other ram rejoiced at the elimination of its rival. But soon it too got gobbled up."

The EIC was very much the wolf who got what he wanted. The rams were the losers.

Incidentally, you may apply this tale to the current India-Pakistan cousin-hatred - representing the two rams. I leave it to your imagination as to who the 'wolf' may be. This time, it is not Britain.



On the 1943 Bengal famine, you have described some of the extenuating circumstances on Britain's responsibility, in particular, Churchill's role in it.
True, Britain was struggling not to be occupied by a foreign power herself.
BUT, in the period in question, she was drawing men and materials from India for the war effort. It is often forgotten that in the two World Wars, close to a million Indian soldiers and auxiliaries died fighting on the British side. There was focus for all that. Just to remind, Mahatma Gandhi, supported British war effort in both world wars.

But there was not enough political will to focus on the famine looming in Bengal. You have mentioned how seed grain was consumed by the people of Bengal after one of those periodic cyclones and flooding that affects East Bengal.

I am not sure, I find your able narrative convincing in terms of absolving Britain of her responsibility of a very serious lapse, amounting to a crime against humanity.

It is significant that despite the incompetent governments independent India has had over the last 60 years, there has NOT been millions dying of starvation, in conditions that were far more adverse than those that existed in 1942-43.

On Churchill, my take is, he was fond of the Empire, as many Britons of his generation were. He genuinely believed that the Empire was the best for Indians and India. But he was no fascist, who wanted deliberately to inflict death on millions of Indians.

However, he was either INDIFFERENT or hardened to 'over populated' Indians die. He had seen the appalling slaughter of a few million young Britons in the trenches of Europe in the First World War. He was a War Correspondent. He had seen death in its most horrid form. He was inured to it.

Watching his fellow countrymen die had only hardened his resolve to assert British authority in Europe and in the rest of the Empire.

No, he was not anti-Indian but very pro-Empire. People of his generation assumed a 'natural pecking order' of races. In that pecking order, Indians were not the lowest but lower. But then, in his reckoning Southern Europeans, such as Italians and so on would also have been 'lower'!!

Therefore, he was not singling out Indians for special discrimination.

JWadsworth in reply to indica

In exonerating Churchill of the famine in Bengal, one must take into account that he declined offers for relief by, surprisingly, Crown nations of Australia and Canada. He offerred no explanation. In his massive 6 volumen account of the war, 'The Second World War', he hardly mentions India, let alone this horrific famine. This is precisely how one commits a fascist genocide, and 60+ years later have people debate about whether or not you are a criminal.

KPATOΣ in reply to indica

"you have described some of the extenuating circumstances on Britain's responsibility, in particular, Churchill's role in it"

Not strictly correct. I was merely doing a quick cut and paste job to answer the kind of careless nonsense that joske[I forget the added number] was pouring out, even relying on Time Magazine as some kind of adequate authority when reviewing the work of a German contributor to the Scientific American who is not a historian.



This is the question the article seems to address. Unfortunately it seems commenters these days are willing to go off on a loosely related tangent if it gives them the opportunity to criticise the West.


Certainly I do not believe that cancelling annual turtle feasts would be a sound business decision in this day and age. If my employer were to cancel my great turtle feast, I would respond by being miserably unproductive the whole year.


I don't know why most commentators on this article are looking at aspects of history the article doesn't address. This article was not supposed to be a comprehensive history of the British rule in India. It is an article on how state-backed firms work, can work, and might work.

It does not address whether their behaviour is moral, or correct. Nor is it intended to justify anything the Company did in moral terms. A single article, to-pages long, is never intended to convey the full convictions of anyone rational.

This is an article about how a state-backed company deals with its own government, and how it might flourish or perish. It is not about how it affects the countries it operates in. Maybe those countries ought to be wary. But that is not the aspect of such companies being addressed here, but only its management and its identity in a corporate sense.

TE has written justly and rationally about British imperialism before and will likely do so again. But that does not mean it has to be apologetic in every article it ever writes that touches on the British Empire. Those who expect such things are letting the past dominate too much of their outlook, and do themselves and those they seek to address a disservice.

A.S. Sam

An extremely arrogant empire-harkening article that completely ignores half of the facts -- almost completely on racial lines. Without the collusion of the landed, wealthy elite, the East India Company had no chance in hell. Contrary to the article's claim, the East India Company managed India only by proxy because that elite made business relationships with the EIC to do so. Capitalism trounced any nascent notion of nationalism in India at that time and that was before an internal identity of a unified India existed. Remember that India and Hindu are external concepts foisted on the world by the Greeks and Arabs. East India Company was just one among the many European initiatives (the Portuguese, French, etc.) who intended to do the same based on the drool-generating tales of wealth in that fabled land. The big takeaway was that the sub-continent didn't get a national identity till then. The outrageous theft of wealth due to the EIC-"Indian" elite nexus woke the people up to the need of developing one. And for that, today's India is (and the rest of the world should be) thankful to that eponymous and infamous company -- nothing else.

A.S. Sam in reply to KPATOΣ

The real anachronism is the Economist trying to foist the East India Company as a model for 21st century companies. The EIC was in the sub-continent at the perfect time when a corrupt and vision-less landed class reigned. Woe be to any country with a corrupt and vision-less leadership that finds itself in the clutches of a company that tries to emulate the EIC. Stiff upper lip aside, the Economist should have a greater vision of itself than trying to find ways to finesse the murky past of the British empire into "sound economic thinking".

KPATOΣ in reply to A.S. Sam

I think you are mistaking a TE essay in the old style (well practised by Indians and educated people in other old civilisations)which have filled 6th form literary magazines and think pieces in a thousand journals for several hundred years for something quite different. I don't see it as advocacy any more than a book such as Antony {?} Jay's "Management and Machiavelli" could be regarded as attempting to glorify Renaissance Italian public morality or advocate Machiavellian methods without qualificaton to modern readers. And what about all those essayists who attempt to apply Clausewitz on war or the works of Sun Tzu to stimulate modern management ideas? Come to think of it there are still people quoting Moses, Buddha, Jesus, Marcus Aurelius, Mahomet and not a few other wordy preceptors of the past without, for the most part, being accused of glorifying ancestors or any such rubbish when they try to get people thinking outside the totally contemporary ruts they shortsightedly stick to for the most part.

A.S. Sam in reply to KPATOΣ

The only argument is against the TE essay's partitioning of the facts into what they chose to quote and what they chose to glide over -- I'd object similarly to any such biased partitioning of facts about any of the luminaries you mention.

KPATOΣ in reply to A.S. Sam

Top marks for consistency but I still question whether you are not opening up a different realm of discourse by ignoring that the article was not the moralising essay that you, and some much more than you, suggest it ought to have been.

abdul sami

greed at its best....the white supremacy at its best......come on..each history has its own version.....greatest of them all in loot ,plunder ,extortion .........the east india company.......


As the state-backed banks sack the planet and control governments around the world to destroy the rights and goodwill of the citizenry for revenue, nothing has been learned.

Peter Robertson

The East India Company was nothing more than a large criminal enterprise. It was more famous for looting and stealing than anything else. It would be proper to compare such a company with the Mafia albeit on a far larger scale. To compare it with companies like CNOOC, China Mobile, SABIC and Gazprom is really a joke.


It seems to me that the East India Company was perhaps history's first example of crony capitalism. This especially rings true to me when the article compares it with the likes of Gazprom.


Simply put, this is why we hate you losers!!!. The fact that the British doesnt even apologize for Amritsar tells the tale while the mana responsible for it was feted by the public of that time. Shame on you Pompous Colonialists. Very soon we'll see an empire strike back when you will still be smarting off your technological and social advances all made out of sweat and blood of the colonized communities. Barbaric tribes who had no indigenous culture or history of their own.


Latest blog posts - All times are GMT
The week explained: March 14th 2014: Fuelling tensions
The Economist explains March 14th, 0:00
The crisis in Venezuela: Another day, more bodies
Americas view March 13th, 16:49
A tribute to Robert Ashley: A perfect life
Prospero March 13th, 16:22
Commodities and the economy: Copper bottomed
Buttonwood's notebook March 13th, 15:58
Germany's Hoeness trial: Uli goes to jail
Charlemagne March 13th, 14:18


Products & events