Lessons for tomorrow from yesterday - Picking from 'The Anarchy by William Dalrymple'
Of what use is reading history if we do not learn from it?
A few weeks back I pulled up the long pending reading of ‘The Anarchy: The relentless rise of the East India Company’ by William Dalrymple.
What piqued my interest in this book was not the details of the atrocities of the colonialism, but the factors that led to it. How did a nation that had less than 5% of the world industrial output come to take over a nation with more than 20% of the industrial output? Even at its peak, it was a handful of British people who managed the machinations of India through an intricate network of policies, holdings, alliances and military technology.
The book weaves an engrossing narrative throwing light on some well hidden facts and figures, unraveling key moments which are never found in textbooks ( like the financial schemes that led to voyage, the defeat by the Dutch that forced British to consider India, the etymology of common English words like loot, mogul )
The book is not an easy read as it dives in deep detail of the events with numbers, intricate details of the key characters and the language might intimidate many readers. However, William does a great job of engrossing the reader in the plots, unlike a dry and dull historical compilation and leaves us pondering over the parallels this story draws with the corporate behemoths of today.
As a practice, I derived key takeaways from the book and here they are :
The bias to attribute correlation as causality
All the narratives paint the Indian freedom struggle as a fight against the British Raj ( or British imperialism), but was it solely responsible for it?
When the independence was won, it definitely was the British State that ruled India, but how did it come to be? Did the British state send an army to invade like the Turks, Mughals or Afghans? Well, this is the piece that almost all the narratives tend to miss, or maybe are forced to drop.
Colonization of India was never the plan, but it was the idea of profit maximization that led to it. The East India Company (EIC) was a merchant trading organization, setup with the grant of the Queen around 1600s, with the sole purpose of trade with the East Indies - specifically the regions in the Indian seas~ Indonesian islands of today. Realizing that the textiles in India are more valuable in trade than the spices, it explored India and over time, through chance and conceit, it systematically dismantled the key regional powers of India and with no competition left, took over the country.
When the Bengal famine hit around 1770, the brutal, inhuman capitalism of EIC continued to wring the Indian economy thus converting a once golden region into a famished, barren landscape. The tax collections dipped, trade suffered and eventually, the bankrupt EIC had to be bailed out by the British Parliament, not once, but twice. This sowed the seeds of British parliament control over EIC and by relation, to its assets which happened to be the Indian territories.
As decades rolled by, the EIC juggernaut captured most of India. The plunder of EIC fueled an intense mutiny which reached its peak in 1857 and yet again the EIC was rescued by British parliament. This time however, the British government took over complete control of India as its colony. For the 90 years of British Raj, there was ~200 years of EIC control that really pillaged India. Here is where the correlation and causality split.
Why did the British state not relinquish control of India when the bankruptcy bail was raised around 1770? Why did they choose to squash the mutiny in 1857 and not just hand over control to Indian provinces? Was it just profitable trade? Read on to find out.
Joys and perils of financial leverage
EIC was setup as a joint stock corporation with shareholders pooling in money that funded the initial voyages, salaries and expenses of the merchants. The profits incurred from the trade were used to pay back the shareholders. Bonds were issued, the shares were listed on Stock Exchange and as the trade flourished, the stocks and bonds ballooned in value.
Fattened by the loot in India, EIC lobbied hard with the British parliament and had close to 40% of the parliament members as its shareholders. At one point, it commanded a private army of 260,000 soldiers, twice the size of the standing British army. When EIC was on the verge of bankruptcy, banks in England started creaking and the tremors were felt across the financial system.
It is then, that the British crown realized that EIC had indeed become too big to fail. The British economy and financial system had ridden a tiger they could not leap off. After that, there was no looking back, the joint stock corporation was increasingly nationalized until it ceased to exist in 1858.
The model that birthed the EIC and enabled its shareholders to milk it for profits eventually ended its tenure in a heady pursuit for profits. It strangled the golden goose.
But, is it only the financial shenanigans that broke India’s back?
History is contextual - whose context are you viewing it from?
India’s share of the world economy when Britain arrived on its shores was 23 per cent. By the time the British left, it was down to below 4 per cent. How could a handful English merchants achieve this? Was it just the financial leverage model that enabled it?
History, as we have been taught, never raises these questions and effectively hides the many key pieces of our history. We read about the Mughals, landing of the English and then slip into the mutiny of 1857 concluding with the national freedom struggle. There is much in between that is of consequence.
The EIC cunningly exploited the fractures amongst the contemporary Indian powers - Mughals, Marathas, Nizam and Tipu Sultan- by offering financial and military help through alliances and treaties. Like a pendulum, they swung allegiances depending on the situation and used these powers to decimate each other.
The book elaborates the anecdote of how the local bankers in Bengal funded the EIC to fight against the reckless Siraj-ud-Daula and later also supplied financial and military reinforcements to EIC to guard against the rampaging Marathas. Effectively, Indians funded the EIC to destroy the very chances that could protect them.
Once the regional powers had waned, the relentless thirst for profit intoxicated the EIC. While collecting taxes in India, they ingeniously diverted some of it to purchase Indian goods for British use. In simple words, the British traders used the money from India to buy Indian goods to sell at exorbitant profits outside India. Barely any of it was used for the Indian people.
Fear of holding onto their provinces, greed to grow capital, hatred for enemies and complete lack of unity resulted in a chaotic concoction that EIC craftily exploited.
While we are inspired by our freedom fighters, would they have needed to sacrifice themselves even if one of the above had not happened? May be not.
Would India be reduced from an economic powerhouse to a dilapidated nation ? For sure, no.
Would our rich cultural heritage and oral traditions of knowledge have survived the anglicization of society? For sure, yes.
This is also the history young generations must know. While the freedom struggle inspires nationalism, the reason why it was required will instill the right values that avoid the cycles of avarice and hedonism.
Imagine living in India in the 18th and 19th century - volatility in daily lives due to fluctuating laws and taxes, uncertainty with wars and plunder from incumbents and invaders, complexity due to the social hierarchy and ambiguity created by all of this combined. Are we in a different state today? We may be better off with democracy, liberalism and free market economy but we are also in a similar VUCA situation.
Competing nationalist forces are making global trade volatile, while fluctuating interest-free money flows have made economies uncertain. Technology-led disruptions have made every business a complex affair, but the same technology has made information/data ambiguous with the misinformation-disinformation lens. Corporate behemoths are using the weapons of capital and code to trample one and all in their paths for profits.
As Mark Twain quoted “History Doesn't Repeat Itself, but It Often Rhymes”, it is important to learn why we lost freedom. After seven decades of freedom, it is now more important that we learn why and how we lost freedom rather than just the fight for freedom. Only then will history be useful, else it is a nice story
Very good view on history illuminated by contemporary conditions .
Thanks for the great summary Amit.