New Frontiers

Charlotte Tate: From the Rohatyn Center for Global Affairs at Middlebury College, this is “New Frontiers.” I’m Charlotte Tate, the Center’s associate director. In this episode, Mark Williams sits down with historian Ian Barrow to examine what made Britain’s East India Company unique, and its economic, political, and imperial impacts on India and Britain alike.

Mark Williams: For nearly 300 years, the East India Company operated under royal charter from the English and later British governments. Its purpose was to explore trade opportunities between India, East and Southeast Asia, and the British Isles. The world’s first mutli-national corporation, it ran a global trading network and operated for profit, politics, and eventually for empire.
But how did a company, originally established simply for trade, grow in wealth and power until eventually it actually came to govern territories that were far more extensive than its home base of the British Isles. What does this company’s history tell us about the rise of capitalism or the nature of colonialism? And what are some of the legacies its operations left behind. To find out, I spoke with Ian Barrow, a professor of history at Middlebury College. Ian directs the Axinn Center for Humanities at Middlebury. He specializes in South Asian history and his most recent book is titled “The East India Company: 1600 to 1858.” Ian Barrow, welcome to New Frontiers.

Ian Barrow: Well, thank you so much for inviting me.

Mark Williams: Glad you're here. Let's start with this company's creation, the origin story. Why was the East India Company formed?

Ian Barrow: Well, it was formed in 1600 during the time of Queen Elizabeth in England. And it was decided by a number of merchants to try to outperform the Dutch, who at that time were beginning to exert their financial and mercantile muscle by developing trade routes to Southeast Asia. And so this English East India Company was formed to try to make sure that the English could get in on the spice trade to the Southeast Asian islands.

Mark Williams: So it was formed to vie with a competitor in the Dutch.

Ian Barrow: Yes, the Dutch East India Company doesn't get formed until a little later, but the Dutch were very active in the trade. And this was not an overland trade. This was a trade by sea only, which made it cheaper than the land routes that had existed before.

Mark Williams: What kind of company was this really? What's the best way to describe it as a company?

Ian Barrow: Well, it's very interesting because it really is at the very beginning of modern capitalism and in some ways, the beginnings of the company in the modern day parlance. So the East India Company was a joint stock company, which meant that it was owned by those who put in money to buy stock in the company itself. And those who purchased stock were not traders. Instead, they elected a board which then directed merchants to go out to Southeast Asia and eventually to India and to China to trade on the shareholders behalf. And this distinguished it from another kind of company that existed at the time called a regulated company, which was an association of merchants who would get together to enjoy common trade rules. But they excluded other people from joining and they themselves did not share the profits of their trade. Each of them was successful or unsuccessful, but they didn't have a joint stock whereby they shared the profits or the loss.

Mark Williams: So it had what we would recognize as the trappings of a modern corporation with shareholders and a board and so forth.

Ian Barrow: Exactly. And what also made it very interesting at the time was that the board was elected. And many people have also seen that as, in some ways, also the beginning of democracy. Which is ironic because the company becomes, of course, the vehicle for colonial domination.

Mark Williams: The antithesis of democratic rule. What was the relationship like between the company and parliament? Was it a close relationship? Was it contentious? Did the company try and use the government to enhance its business? Or did the government try and use the company for its own political purposes?

Ian Barrow: Well, that's a very interesting question and it changes over the course of the company's history. So the company, as I said, was founded in 1600. And it finishes in 1858. And over the course of that time, there's a contentious relationship between the company and the government. But sometimes, especially during the 17th century, the relationship was one of client and aristocrat, I suppose. In the sense that the East India Company, in order to maintain its privileges, which was assured through a monopoly, often engaged in corruption. So it would bribe the government officials and also the king in order to gain that monopoly, which was granted to it about every 15, eventually every 20 years.
But generally speaking, the company was not a popular form of commerce and it was seen as being anti-national right up until the mid 1700s. And the reason for this is that the prevailing economic philosophy in Britain in the late 1600s was what was called mercantilism. And the idea of mercantilism is that wealth is finite. And if you controlled more bullion than your competitor, you were wealthy. And so the idea that the East India Company was exporting silver in particular from Britain in order to return to Britain, frivolous items, as they were considered by many, spices, but also eventually cotton textiles that were seen as a way to undermine the woolen industry in Britain. And as a result, the East India Company was seen as being definitely anti-national in the 1660s right through to the 1720s.

Mark Williams: So it was seen as working against the national interest in some ways. Interesting.

Ian Barrow: Exactly. Yes.

Mark Williams: Now this company lasted over 250 years, a pretty long time. What kinds of trade did it get involved in over the course of its life?

Ian Barrow: So it had three different phases of trade. The first phase lasts from about 1600 to roughly 1660 or so, even though the trade continues in these commodities, but it was mostly interested in cloves and mace and nutmeg. And to a lesser extent at this time in pepper, although pepper becomes important in the second half of the 17th century. The Dutch were also very interested in these commodities, but the Dutch added to them cinnamon. And most of these commodities were purchased in what is today Indonesia and also in Sri Lanka.

The second phase lasts from about 1660 and up until about 1760, 1770, and this was focused on what was then called calico. So these were cotton textiles that were purchased by the company in India, from various ports of call on the west and the south, and these were exported to Indonesia, but they were also exported back to Europe, where they were wildly popular and displaced, in many ways, wool as the main clothing item.

And then that third phase begins in the 1770s. And this is the famous opium phase where the company was involved in a triangular trade with opium and tea. And maybe we can get to that a little later too.

Mark Williams: How did the company actually grow its trade and its operations? How did it deal with competitors? You've mentioned the Dutch, for example. Did it have any particular tactics or strategies that it used to get a leg or two up on competition?

Ian Barrow: You know, this is a very interesting question because it gets us into the broader question of when does the colonial appear in company activities. So from the very beginning, the East India Company was acquisitive, but it was also very violent. And it had to be violent because it had to contend with not just the Spanish, but also the Dutch, who were more powerful in the 1600s. And so it armed its ships with cannon and it defended its trade violently. And wherever it set up ports of call, it often surrounded those ports with walls and fortresses and began to entrench itself in such a way that it was highly militarized right from the beginning.

So certainly, violence was one way in which it dominated. The other way was through the rules of trade that it had established in England and later in Britain. And that was through a monopoly. So only the East India Company had the right to trade in the Indian Ocean and in the Pacific. And any other person or entity trying to trade from Britain was considered to be what was called then an interloper, or especially a pirate, for instance. And they were dealt with harshly by the company and also by the authorities back in England and later Britain.

Mark Williams: So in terms of Britain's purview, the company was granted a monopoly and competitors from Britain were dealt with under that rubric. With respect to an external actor, like the Dutch, you're saying that violence was often employed.

Ian Barrow: That's exactly right, yes. And even Britain itself went to war against the Dutch three times. The Anglo Dutch wars were fought in part, not wholly, but in part, because of the animosities raised as a result of the competition for trade to the East Indies.

Mark Williams: Can you give us an example of perhaps one product that the company traded that really illustrates the global nature of its trading network, maybe spices or maybe tea or cotton or something else?

Ian Barrow: Let's talk about cotton. Tea is going to be very important, of course, and so will opium. But cotton textiles were really transformative. As I mentioned earlier, most people in Britain, and in Northern Europe especially, wore wool or other kinds of domestic products for clothing. And when cotton became king, as it were, in Britain, beginning in around 1680 and lasting right through to the 1760s, 1770s, and even beyond, it created a transformation in how people clothed themselves.
And it went even beyond Britain in the sense that cotton cloth was sold to traders who would then take it to the east coast of Africa and exchange that cotton cloth for enslaved people. It was called Guinea cloth. And some of that cloth also went to clothe enslaved people in the Caribbean. So these textiles that were being produced in Calcutta or Madras or in Surat or Bombay, these came to clothe not only people from Northern Europe, but also West Africans and also enslaved people in the Caribbean.

Mark Williams: So you have this one product that is making its way from continent to continent in this global trading network.

Ian Barrow: That's correct. Exactly.

Mark Williams: Now, at some point, the company's operations transcended simply trading goods, and it started to acquire territory, property. How did this all start? And why did the firm keep acquiring more and more land?

Ian Barrow: I think that it begins in the late 1600s when the company is forced to defend its lucrative cotton textile trade. And so it does so by beginning to establish what is eventually going to be a state in India.
Not only are the Dutch involved in a competition and later also the French with the English East India Company. But we also have South Asian actors, most importantly, the Mughal Empire who have a fraught relationship with the company. So beginning in the 1680s, maybe a little bit earlier, the company is already beginning to establish the footprint of a state in India by creating a fortress-like settlement, by establishing a mint, by setting up courts of law. And even though this is on a very small scale, it's the beginning of what's, it will later become a fully developed state. But the acquisition of territory doesn't begin in earnest until the 1750s.

Mark Williams: And then it keeps going and going.

Ian Barrow: Yes, the logic behind the continued expansion of the company is that it became so lucrative for the officers who were fighting on behalf of the East India Company, that there was in some ways a logic behind continued expansion because it enriched these individuals. And the company had several things going for it. It had ready access to cash, in the form of silver. It also had essentially a navy, although it didn't call itself a navy, but it was able to transport troops rapidly from one settlement to the other using shipping. And it also had an ability to bring into its army local recruits who served it very efficiently.

Mark Williams: Now you say army. The company had its own army?

Ian Barrow: The company had three armies.

Mark Williams: Three armies?

Ian Barrow: Three armies. The company divided its territories into what were called presidencies. One in Calcutta, one in Madras, one in Bombay. And each presidency had its own army. It was small at first. And so in the 1750s, it was really numbered only a few dozen thousand people, but it expanded very rapidly after 1760. So that by about 1770, 1780, the company's army rivaled in strength, the British army. And it continued to grow in such a way that even after, certainly after the Napoleonic Wars, the East India Company's armies collectively were larger in number than the British army.

Mark Williams: That's fascinating. And the company's armies were comprised of English soldiers or Indian soldiers or a mix?

Ian Barrow: They were mostly Indian soldiers. And the largest of the armies was known as the Bengal army, and it recruited from Northern India. All of the officers though were at first Europeans, and eventually after about 1770, there were reforms in the army that made it almost impossible for non-British subjects to become officers of the East India Company. There were no Indians who were officers. After that time as well.

Mark Williams: Interesting. Well, you may have already answered the next question that I wanted to pose, but perhaps we haven't fleshed it out fully. Once the company did acquire extensive land holdings, how did this affect its operations or did it?

Ian Barrow: So the shareholders were at first quite ecstatic with the idea that the conquest of Bengal in particular, in northern India, was going to reap enormous financial rewards. And the feeling for that was that up until then, a lot of silver had been sent from England, from Britain, in order to buy the cotton textiles. And so the idea was that with the conquest of Bengal, land revenue from Bengal would pay for the investment in textile trade. But it turns out that that revenue from Bengal went to two places. First, it went into the army, and second, it went into the pockets of the British who were serving the company in India.
Corruption became a major problem. And so as a result of that, it was easier to deal with corruption than it was with the army. And so the British government began to crack down on the East India Company by imposing certain regulations. First in 1773, and then a major regulation called the India act in 1784 that began to strip power away from the company and attach that power to the British state.

Mark Williams: Now by stripping power from the company, do you mean the power to engage in commerce, to engage in trade?

Ian Barrow: Eventually, that will be the case. But in the 1770s and 1780s, what occurred was most importantly, a board of control was established in 1784. And this board of control acted as a check on the power of the East India Company's directors. So no longer did the directors, who were elected by the shareholders, no longer did they have unfettered power over the direction of the East India Company. Now an organ of the British state had significant control. And so this is really the beginning of a phased transfer of power from the company to the British state.

And it just shows how complex the colonial establishment was at this time, because by the 1780s, 1790s, it's a hybrid entity. It's partly a state, partly a company, and partly controlled by the British government itself. So it's a highly complex situation that's being established at this time.

Mark Williams: It sounds like a conglomeration with multiple dimensions of operation.

Ian Barrow: Yes.

Mark Williams: So the stripping of power begins with these early regulations to limit East India's political autonomy from the British government. But they don't end there, as Ian explains.

Ian Barrow: These regulations continue into the 19th century. And so what happens in 1813, and then in 1833 is that the company is stripped of its monopoly powers, first in India in 1813, and then to China in 1833. And this is as a result of free trade advocates petitioning the government in Britain to allow the opening up of trade to these localities.

Mark Williams: Obviously a company whose operations had grown this extensive and that had become so wealthy and powerful that the British government felt impelled to clip its wings must have had enormous political effects too, in India and beyond. I asked Ian to reflect on what he saw as some of the company's most consequential political effects.

Ian Barrow: Well, let's begin with India. And I think this is a good opportunity to talk about what a colonial state was at that time and how it was developed. Because I think that is the answer to your question, that the company very rapidly after the 1750s established the outlines of a colonial state. And what this meant was that it deprived Indians of the ability to form their own government. It stripped power from existing princes and kings and transferred that to itself. It began a process of deindustrialization of the land, and it also began a process of extraction. So it tried to find and extract as much revenue as possible to fund first and foremost its army, but also its trade that eventually benefited the shareholders in Britain. So this was the outline of a state that it established, not to the benefit of Indians but certainly to the benefit of the shareholders in Britain.

Mark Williams: Were authorities in Britain cognizant of what was taking place on the ground, so to speak, in India at this point?

Ian Barrow: They were. And in the 1700s, they were ambivalent about the rise of East India Company power. They saw it as antithetical to a good government, because they felt that government couldn't be both a trader and a state. And so it had to make a decision as to what it was going to be. And this was an argument for actually increased British government control over the territories of Britain. It wasn't an argument to transfer control to Indians themselves.

Mark Williams: Now, history can be told from different vantage points, of course. Can you tell us something about this company's history from the Indians’ point of view? How did the Indians respond to the company's presence, to its local impact, its growing influence in their lives? Was there a lot of opposition?

Ian Barrow: This is complex because on the one hand the company could not have built its empire without Indians. So Indians were those who really staffed its armies, and the British were reliant upon Indians as interlocutors, as translators, as workers. And so the empire was in many ways built upon the backs of Indians. However, there was considerable opposition throughout the period that we're discussing to British trade, but also to its forms of rule. And there were ongoing rebellions and attacks on the East India Company, both violently, but also in print. And I think it's fair to say that the East India Company maintained its power through force.

Mark Williams: And it put these rebellions down.

Ian Barrow: Yes. And so the armies that it established eventually became armies of occupation. And this is another hallmark of colonial states in the 19th century is that the armies that are garrisoned in India, for instance, are designed in large part to suppress internal rebellion. So that gives us a clue as to the kind of opposition that the British experienced and expected.

Mark Williams: Part of the story your book tells us is about how the company related to religion, both the Christian religion found in Britain and the Muslim and Hindu religions found in Asia. Can you elaborate some on this and why religion came to be an important aspect of its corporate strategy?
Ian Barrow: Yes. So what's surprising about the company is that at first it was not a religious organization. It didn't see itself as a proselytizing organization. It saw that as an expensive endeavor. It was also because they did not want to encourage proselytization. Because they felt that that would undermine their trade. That it would be seen as hostile, and it would be following the mistakes of the Portuguese, who were criticized for putting religion front and foremost in their efforts to expand Portuguese influence.
And so the East India Company was adamant that it was not going to follow that mistake. And this continued right up until 1813, when no missionary activity was permitted by the East India Company. But after 1813, that changes with the new charter that is passed by parliament. Evangelicals had a big say in transforming the relationship between the company and religion so that after 1813, and especially after 1833, missionaries were allowed into India, and indeed they were encouraged to go.

Mark Williams: The more we learn about the East India Company, the more the true scope of its importance comes into view. At its height, it dominated global trade between Europe, South Asia, and the Far East. It fought numerous wars, using its own army and its own navy. And it conquered and colonized what today is India, Pakistan, Bangladesh, and Burma. I asked Ian to reflect on what lessons the East India Company might teach us about colonialism in particular and about how history unfolded in the company's wake.

Ian Barrow: I think the major lessons have to do with the colonial state and what a company is. So with a colonial state, I think we tend to have, often, a fairly simplistic understanding of what that means. But in fact, the East India Company demonstrates that colonialism changes over time and in different localities as well. So that what the French experienced in the 1760s is going to be really quite different from what the British experienced in the 1820s, for instance.

Mark Williams: Can you give us an example of the simplistic notion of a colonial state versus the type of colonial state your research uncovered?

Ian Barrow: Yes, so I think most people will think of the colonial state as it existed in the 1880s and 1890s, where there's centralization, where there's control by a metropole, for example, London, where there is high bureaucracy, where there is militarization, extraction of labor and also resources. And also the complete control over political voice. So I think this is something that people are familiar with in the 1880s, 1890s. But in fact, if you look at the 1760s and 1770s, what existed as a colonial state in India is very different. It's much more amorphous. It hasn't been established. And yet I think most people would think of what the company was establishing at that time does indeed fit the definition of a colonial state.

Mark Williams: You talk about it having its own legal institutions, its own courts, its own military, its own coining money, currency, and so forth.

Ian Barrow: Exactly.

Mark Williams: All of these are activities of state, at least the way that we conceive.
Ian Barrow: They are. But they're not, they're not sui generis. They don't appear out of nowhere. They are the product of interactions with local individuals, with local traditions. They are attempts at compromise sometimes or attempts at intervention. And so what we see in, even within the presidencies of the East India Company are different ways of establishing and maintaining power. And that these change over the course of time. And what we consider to be colonialism shifts in its definition. I think that's one of the important things that we should take away from an investigation of the East India Company.

Mark Williams: Do you think that the colonial presence that was planted in India by the British acquired over time a heaviness, the greater the colonial presence, the less choice local people may have had, or did the company’s success and prosperity also mean greater opportunities for Indians that might have been involved or affected by its operations?

Ian Barrow: Well, as the company established its authority in India, and as new understandings of race in particular became prevalent, the character of a company changes dramatically, and that race becomes a predominant characteristic of the East India Company. So before the mid 18th century, categories that were particularly important to the English and then the British had to do with religion–so what kind of religion you were–were really important to how individuals regarded others and set parameters between themselves.
But beginning in the 1760s and accelerating into the 19th century, race becomes the defining characteristic that establishes the rationale for political control, for instance, or economic exploitation. It's the dominant narrative of the 19th century, racism and ideas of racial hierarchies. So I think that that is something that is definitely a characteristic of the colonial state of the 19th century.

Mark Williams: Ian, in terms of its activities, scope, and importance to trade and international politics, is the East India Company comparable to any contemporary multinational corporations? Does any modern firm even come close?

Ian Barrow: I get asked this question a lot, and I think people want me to say yes. But the company had an army, had its own currencies. It had territory, it had the power to kill people, to hang people, to negotiate peace and to engage in war. And I don't think any comparable company today has that.
But what I find most unfortunate is that those who have seen comparisons between the modern day and East India Company see positive comparisons. And so, meaning that for instance, when the US invaded Afghanistan, there were scholars and pundits who turned to the experiences of the East India Company as a positive precedent for how to govern in Afghanistan, invidious as that was. The East India Company was seen as a model for governance. But I can't think of a modern day corporation that approaches the complexity and the scope and the power of the East India Company.

Mark Williams: Yes, we're talking about economic power, financial power, trading power, political power, military power.

Ian Barrow: On a scope that we haven't seen before.

Mark Williams: Yes, on a scale that's beyond anything that we've actually witnessed before.

Ian Barrow: One aspect that we haven't discussed, perhaps our listeners would be interested in hearing, has to do with the final trade of the East India Company, the opium and tea trade.

Mark Williams: Ah, let's discuss.

Ian Barrow: So, beginning in the 1760s, as a result of its conquests in northern India, the East India Company came across the opium fields and established a monopoly over their production and sale of opium. And it would sell opium at auctions in Calcutta, because selling that opium directly to China was illegal in China. And so it sold it to licensed merchants, who then transported the opium secretly to China and smuggled it into China, and they got in return silver. And many of those merchants would then deposit the silver in the company's warehouses in Canton in exchange for bills that they could then cash in Calcutta or London. But the East India Company enjoyed the benefits of this trade because they were then able to use the silver that had been deposited in Canton to buy Chinese tea, which it then brought back to Europe and eventually to the US, at great profit.

So the company was profiting both on the sale of the opium and on the sale of the tea. And this was the dominant form of trade that it engaged in from the 1760s right through to the 1830s.

Mark Williams: Opium and tea.

Ian Barrow: Opium and tea.

Mark Williams: What does this history tell us about the modern world that we live in today? What does the East India Company tell us about our time, its development, its contours perhaps?
Ian Barrow: Well, I think the East India Company really sets the stage for, in many ways, the politics, the demographics of the late 20th century. So that the colonial state that it establishes is so broad in scope and so deep in its power that it has long lasting ramifications. And I think we see that in migration patterns following the Second World War and independence of India. We see that in ongoing relations between Europe and Asia. And we see that in the ongoing efforts to develop what have formerly been colonial states that had systematically been deprived of the ability to industrialize. So, I think that the modern world is in many ways shaped by the world established by the East India Company.

Mark Williams: Finally, what's the most surprising thing that you discovered in your research on the East India Company?

Ian Barrow: I think we touched on this a little bit before, but what surprised me was how anti-religious the company was in the 17th and early 18th century. By anti-religious, I mean how it established a policy whereby it was not going to promote Anglicanism or Christianity in its settlements and beyond. And I think I found that to be particularly surprising. I also found it very surprising that the company itself was considered to be so anti-national in its policies by the British. Because it was a colonial state, I expected it to be seen as an arm of the state itself. But in fact, a surprisingly large number of English and then British after 1707 considered the company as hostile to national interests.

Mark Williams: And finally, Ian, what was the fate of the company after 258 years? What happened to it?
Ian Barrow: So in 1857, a rebellion broke out in Northern India, and it was so extensive and so threatening. that the British government had to send troops to quell the rebellion. It took two years or more for it to be fully extinguished. And as a result of that, the British parliament decided that it was no longer going to support the idea of a company being independent. And so it rapidly wrapped up the power of the company and folded it into the British state so that thereafter in 1858, the British government controlled India.

Mark Williams: So what had been for a good period of time a quasi independent colonial state run by the company itself at this point became de jure, became part of the British empire.

Ian Barrow: Exactly right.

Mark Williams: Great. Well, this is a fascinating discussion. I learned a lot from reading your book. It's a great read and I want to thank you very much for making time to visit with us here on New Frontiers.

Ian Barrow: Thanks. Thank you so much.

Mehr Sohal: Professor Ian Barrow was born in Switzerland; he grew up in England, and now resides in Middlebury, Vermont. Besides researching and teaching history, he enjoys playing golf and squash, collecting coins, and reading mysteries—especially those from the golden era of mystery novels, the 1920s to the 1950s.