The Honourable East India Company was chartered by Queen Elizabeth to represent the crown in all matters of trade with the nations of the far east in 1600. It was a simple beginning to what evolved two and half centuries later into the worst possible anecdote for corporate power unchecked. With its own army, it subdued the Indian subcontinent and forced China to import vast quantities of opium.
Corporations have a unique ability to transcend national boundaries. They represent opportunity as well immediate cash on the table. In a world opening up as never before they have the first foot in the door and an opportunity to create quick profits for everyone. They rarely set out to do evil, but with their unique position largely unchecked temptation lurks just behind every fair deal.
The example of the East India Company is not antique. History does not repeat, but it does rhyme.
In the early days of empire, the crown ruled all matters of foreign policy, including trade. The charter granted to the East India Company was simply an authorization to do what they needed to. The crown simply assigned its prerogative to a group of worthy gentlemen. What could go wrong?
It started humbly with trading posts established in India and across the region. These had to be protected by guards, so an army was formed. The French and others encroached, so the Seven Years War (aka World War 0) created an opportunity for conquest that was much appreciated by the crown. Local rulers went back on deals, so the army went back into the field. And so on, and so on,
The low point was reached when the population, subject to periodic famine, was forced into growing opium instead of food so that the company would stop depleting its reserve of silver coin to buy tea and had a salable good to force on, er, trade with China. This led to a series of wars, fought largely by the company, which culminated in the full colonization of India, the humiliation of China, and the creation of Hong Kong.
Everything became so horrible that the crown was forced to intervene, and in 1858 took India as a proper part of the British Empire. The company was dissolved. Related bits of it still exist today, however, such as HSBC (formerly the Hong Kong and Shanghai Banking Corporation).
The world today is opening up in ways that we have not seen since the age of colonization and conquest. Something like a crown charter is much easier to obtain, and corporations form everywhere for the purpose of making money one way or the other. Open trade is a great opportunity to do just that. Another great way is to exploit cheaper labor in a nation hungry for work that pays cash. Resources can also be hunted everywhere then delivered to where they are scarce.
This is a time for corporations, and the world has been largely remade in their image. The bigger the better, in many cases. A global reach is definitely a possibility for even the smallest of companies as well, but their resources are limited. Their ability to pull an East India Company is not a major concern, and they can indeed create great opportunities for everyone. But what is the line? At what point should we be concerned?
Many political philosophies over the last century or so have stressed a balance between government and corporations. The broadest definitions of socialism and capitalism, as used in politics, depict the ends of a linear scale of thought. Exactly what this means has become muddy at times, especially given that industrial nationalism or the prestige of a nation remains an important value in nearly all systems.
The problem with globalization, as we have come to know it, is that this balance has been thrown completely out of whack. Nations are still largely tied to their borders, excepting the reach of a few outsized militaries. Corporations are not. Many corporations have been able to create situations where they so dominate a local economy in a relatively poor part of the world that they are a government unto themselves – not at all unlike the Honourable East India Company.
What is lost in all of this, in nations rich and poor, is the status of people. It should be taken as obvious that both governments and corporations are institutions by and for people. They serve different aspects of their lives, but neither exists without the skills, ambitions, empathy, and faith of the people which make it up. The battle lines are still drawn in ways which delineate two centers of power, and only two.
How, then can this situation empower and enrich the people who it should serve? Forget the questions of national sovereignty, profit, wealth distribution, and all the other endless talking points the great -isms of our world demand are important. Things have changed. It’s long past time to go back to the basics.
How do either of these institutions serve people?
Good blog. The more things change the more they stay the same, yes?
Yes, very much so. I think what matter is that in times of great change, those with the resources are always in a better position to exploit the new opportunities. I really think it’s that simple. Without any controls, it can naturally get out of hand.
I love history. We have so much to learn from it. This is never taught to us & I have to wonder why. Any links to more information?
I linked to one which I like, https://www.historyextra.com/period/tudor/the-east-india-company-how-a-trading-corporation-became-an-imperial-ruler/
There is also this detailed site on the entire company, taken from its archives. http://www.eastindiacompany.amdigital.co.uk/Introduction/Overview
This short video on the conquest of India shows what they were able to do. https://www.youtube.com/watch?v=DzDwz18ng7w&t=470s