The Business of Empire: The East India Company and Imperial Britain, 1756-1833
“What happened in Britain when the East India Company became an imperial power in India?” (x). H. V. Bowen sets out to answer this question in his new book. As Bowen explains, the “causes, course, and consequences” of Company expansion have already received considerable attention, but surprisingly little is known about how the Company reinvented itself during its transition from “trader” to “sovereign,” and even less is known about the effects of this transition on Britain itself (1). Bowen attempts to fill in these gaps in our understanding, and the result is an invaluable contribution to the history of the Company, the British Empire, and the British economy. Drawing upon extensive archival research, Bowen delineates the company’s internal transformation as it became an empire and effectively portrays the domestic impact of this transformation.
The Business of Empire can be viewed as part of a recent trend to reestablish the importance of external factors to the development of the British economy during the period traditionally labeled the Industrial Revolution. But unlike recent work that has focused on the importance of the Atlantic economy, Bowen stresses the importance of Asia. In his introduction, Bowen presents his book as the Asian answer to Joseph Inikori’s Africans and the Industrial Revolution in England, which put forward the argument that contributions by Africans throughout the Atlantic world paved the way for the Industrial Revolution. Bowen comments that while Inikori has “provoked lively debate” concerning the role of the Atlantic economy in Britain’s development, “remarkably little attention has been paid to ways in which Britain felt the effect of economic influences emanating from Asia.” As Bowen rightly points out, this is “surprising” since “in statistical terms ‘East India’ does loom large in historical profiles of British overseas trade” (25). Giving credit to Maxine Berg, who has argued rather creatively that the importation of Asian luxury goods played a crucial role in the development of British consumer culture as well as British production processes, Bowen makes it clear that he also seeks to emphasize the importance of Asian influence.
While Bowen stresses the importance of external factors to the domestic economy, he does not make any claims that are as bold as those of Berg or Inikori. As a result, his arguments are less provocative but more convincing. While rejecting as a “myth” the old argument that the “plundering of Bengal helped prime the pump of the Industrial Revolution,” he does argue that following the establishment of an empire in India, the Company became a much more important force in the British economy. He explains that the Company expanded rapidly after the acquisition of Bengal in 1756 and estimates that the Company’s cash expenditure in Britain quadrupled during the second half of the eighteenth century, the period that witnessed the rise of industry. As a result of its expansion, the Company had a far-reaching impact on the British economy during this period. As Bowen writes, “a wide-range of individuals were drawn into the Company’s economic orbit during the late eighteenth century” (295). There were those who provided goods and services directly to the expanding company/empire; those who provided bulk goods, such as metals, linens, and woolens, for the growing export trade; and also those who distributed and resold the increasing quantities of Asian imports. Bowen points out that some of the individuals within the Company’s financial orbit were directly involved with the Industrial Revolution. James Watt and Samuel Bolton’s firm, for example, provided coin-pressing machines to the Company for use in India and various industrial foundries provided the Company with metals for export. Also, Bowen mentions that some retired commanders of East Indiamen invested their savings in industry. But although he links the Company with the Industrial Revolution in these specific ways and explains the broad economic impact of the Company on the British economy during the period of early industrialization, he responsibly abstains from claiming that the Company was of crucial importance to the onset or development of the Industrial Revolution.
While very responsible in limiting his claims regarding the Industrial Revolution, Bowen is less careful in the way he presents the uniqueness of the Company’s transition to empire. The book focuses on the period between the acquisition of Bengal in 1756, when Bowen claims the Company first became a “sovereign,” to the loss of the Company’s remaining commercial privileges in 1833, when the Company’s status as a “trader” was officially ended and it became strictly the administrative arm of the British Empire in India. When describing the historical background of the Company, Bowen starts with the merging of the New and Old Companies in 1709 and describes the prolonged growth the United Company experienced as a trading firm following the merger. As Bowen writes, “for most of the next half century the newly consolidated United Company of Merchants of England trading to the East Indies’ enjoyed a period of internal peace and steady commercial expansion” (2). But by not discussing the Company’s history before the 1709 merger, Bowen makes the transition from trader to sovereign beginning in 1756 appear more revolutionary than it perhaps really was.
According to Bowen, the Company had “no precedents to guide them” when it came to establishing an empire in the late eighteenth century. He neglects to mention, however, that in the seventeenth century the company did experiment with empire (195). For example, the conflict with the Dutch over the Indonesian archipelago resulted in the Company asserting control over key Spice Islands. More significantly, under Josiah Child’s leadership in the 1680s, the Company launched a war that was aimed at conquering and fortifying huge areas of coastal India. Although both efforts failed, they did establish a precedent of military expansion that the Company was to follow with much greater success in the second half of the eighteenth century.
Bowen describes how during the late eighteenth century the Company hired researchers and record keepers to organize the company’s old records and archive them for swift retrieval in a library/museum facility located within the Company’s London headquarters. As Bowen points out, the work of these professionals is still evident today in the organization of the British Library’s Oriental and India Office Collections that he relied upon for his archival research. According to Bowen, the work done by these men “allowed the Company to refresh its corporate memory, thereby better enabling it to understand its own past and bring historical precedent to bear upon the making of policy” (174). As these records were being organized for Company use, the company was expanding its Indian empire. It is certainly plausible that the Company would have made use of seventeenth-century records that dealt with its past experiments with empire while it was actively establishing an empire in India.
Ironically, Bowen takes a longer view of the Company’s development in a much shorter chapter that gave rise to the book-length study in question. In a chapter of Worlds of the East India Company (2002) titled “‘No Longer Mere Traders’: Continuities and Change in the Metropolitan Development of the East India Company, 1600-1834,” Bowen broke the history of the Company down into six phases, only the last three of which are addressed in The Business of Empire: the period of commercial expansion after the 1709 merger, when the Company could arguably be considered a “mere trader”; the period of imperial expansion following the acquisition of Bengal in 1756, when the company operated as both “trader” and “sovereign”; and the period after the loss of the Company’s Indian trading privileges in 1813, when the Company can only be regarded as a “sovereign” in India. Speaking of the Company’s first phase, in the more full account provided in Worlds of the East India Company, Bowen asserts that when the company was chartered, the state granted it considerable authority since it could not “itself extend any ‘national’ influence to the east but nonetheless recognized the importance of establishing some form of English presence in Asia” (Bowen et al. 2004, 20-21). Bowen therefore acknowledges that the Company did have a substantial military and political dimension from its very inception in the early seventeenth century.
In addition to ignoring the imperial precedents within the Company’s own history, Bowen also disregards the example set by the Company’s imperialist sibling and rival, the Dutch East India Company or, as abbreviated in Dutch, the VOC. Referring to the British Company, Bowen puts forward that “No commercial body has ever extended its reach so far or become so fully preoccupied with the business of empire” (1). He later repeats this sentiment when he discusses the acquisition of empire, which he argues set the Company “on a path of development that was quite unlike that followed by any other institution, either before or since” (83). Bowen fails to clarify how the path of the Dutch Company towards empire was fundamentally different from that of the British Company.
Beginning in the early seventeenth century, the VOC certainly operated as both a trader and a sovereign as it established control over a large area of the Indonesian archipelago in an attempt to dominate the overseas Euro-Asian spice trade. In its pursuit of profit, the VOC sought to destroy the European competition as well as any indigenous resistance. As Governor-General of the VOC Jan Coen famously remarked, “trade cannot be maintained without war, nor war without trade.” Since the British Company suffered greatly as one of the main European rivals of the VOC during the seventeenth century, it seems plausible that the imperialistic precedents of the VOC would be preserved in corporate memory to some degree along with the imperialistic precedents from the British Company’s own history. Certainly the model of Company empire established by the VOC had some influence on the British Company as it established an empire in India.
Since Bowen sees the Company’s transition to empire in the late eighteenth century as completely unique, this leads him to disregard interesting similarities with the VOC, with the Company’s own past, and also with modern corporations. In his introduction, Bowen cites two reasons why the Company was fundamentally different from modern firms. First, the Company’s directors permitted their employees to participate in “private commercial activities,” particularly private trade conducted by crewmembers of East Indiamen (21). Although Bowen acknowledges that this aspect of the Company has been greatly exaggerated by some scholars, he does argue that there is “clearly a need to strike a balance between interpretations of the Company as an efficient, well-organized firm, and those that view it as little more than a loose collection of private interest groups” (22). Are modern firms as “efficient” and “well-organized” as Bowen suggests? Although “private commercial activities” are perhaps not as widespread in today’s corporations, there is certainly no shortage of examples of individuals taking advantage of the corporate system in order to enrich themselves.
Secondly, Bowen argues that the Company differed from modern corporations in the way that it was transformed following the acquisition of empire. As the Company made the move from “commerce to empire” it had to develop closer ties with “government and Parliament” and had to transform its “internal management, control, and decision-making systems” (23). According to Bowen, this difference is the more important of the two. As he states, “The combined effect of these modifications took the Company some way from the organizational model that has been often invoked by historians, and in a sense therefore this book is all about how the East India Company began to act much less like a modern firm as it began to move along a path of institutional development determined by events in South Asia” (23). But interesting comparisons can be made to modern companies in this regard as well. The corporations involved in what President Eisenhower termed the “military-industrial complex” certainly became intertwined with the United States government and its aggressive foreign policy during the Cold War. Today, Halliburton and its subsidiaries are closely connected to the current US administration and are heavily involved in the occupation of Iraq. Without a doubt, many modern companies have had to make substantial internal adjustments as a result of their close relationship with the American government and their heavy involvement with American foreign policy.
In addition to making the Company seem more unique than it perhaps is, Bowen also paints far too rosy a picture of the outfit. He repeatedly defends the Directors against criticisms by contemporaries that they were only concerned about the bottom line. The company’s critics are depicted as either shrewd businessmen with vested interests in the weakening of Company privileges, disgruntled former employees with axes to grind, or eccentrics who enjoyed making scenes at stockholder meetings. The most surprising statement made by Bowen in defense of the Company is that, “The directors were undoubtedly concerned about the well-being of those who lived under the company’s administration” (255). If the Directors were truly concerned about the Indians they were ruling over, then they certainly had a major conflict of interest, since they were actively engaged in extracting as much “surplus revenue” from India as possible. In addition to being benevolent, the East India Company is also depicted as a highly efficient bureaucratic system. After surviving an awkward initial adjustment period, the Company is described by Bowen as having evolved into the paragon of imperial management. But the Great Mutiny against Company rule in 1857 is barely mentioned, and its causes are not addressed. The reader comes away without a clue as to how such a benevolent and efficient system could come crashing down so quickly.
Although the uniqueness of the Company’s transformation is overemphasized and Company imperialism is perhaps sugarcoated to a degree, it must be stressed that Bowen’s book is on the whole an outstanding work of scholarship. The most impressive aspect of The Business of Empire is the skillful incorporation of quantitative data. According to Bowen, the book features the “tip of a large statistical iceberg.” Drawn largely from records in the British Library’s Oriental and India Office Collections, the complete “iceberg” compiled by Bowen will be deposited with both the British Library and the UK Data Archive for the benefit of future scholars. The choice bits of data he does provide in the book go a long way to revealing the metamorphosis of the Company and the Company’s impact on Britain during the period in question.
The data is very effectively displayed in over twenty charts and graphs all of which are clearly described within the text. One illuminating graph reveals the pronounced increase of stockholder participation in Company elections following the acquisition of territory in India in the late 1750s (62). As Bowen explains, stockholder elections became hotly contested once the Company had proceeded down the controversial path to empire. Accordingly, the graph displays a sharp jump in stockholder voting in the 1760s.
But Bowen’s analysis probes deeper into this trend of increased stockholder participation, and a related set of graphs reveals a practice referred to as “stock-splitting” which became common in the politically charged 1760s. In anticipation of stockholder elections, holders of large quantities of stock would split their holdings into bundles that met the minimum voting qualification and then distribute these bundles to like-minded associates. The three graphs dealing with this phenomenon display with remarkable clarity the evidence of splitting as well as the effectiveness of government regulations designed to limit the practice. Corresponding with the change in Parliamentary law that required that stockholders own the required amount of stock sixth months before the election in order to vote, the noticeable spike in stock transfers, which occurs a month before the election in the first graph, is pushed back exactly six months before the election in the second. As Bowen explains, “the well-organized factions were able to ‘split’ their holdings six months before the annual election” (70). Showing the effect of Parliament’s Regulating Act of 1773, which changed the required time to twelve months and doubled the number of required shares, the spike in stock transfers disappears altogether in the third graph as did, presumably, the practice of stock-splitting (61). Bowen describes these efforts by Parliament as part of a trend of “reform,” “regulation,” and “control” that characterized the Company’s relationship with the British state following the acquisition of territory in India (69).
Of all the charts and graphs, the most notable display what the author labels as the Company’s “administrative structure.” The chart helps the reader conceptualize the division of responsibility within the Company as well as the Company’s developing relationship with the government. Unfortunately, other than these charts and graphs and the cover illustration of the India House’s “Sale Room” there are no other illustrations in the book. A depiction of the floor plan of the East India House would have helped the reader better understand the inner workings of the Company. Also useful would have been a map showing the position of the East India House and the other company facilities in relation to the financial and political landmarks of London, such as the Bank of England and Parliament. Since Bowen stresses the importance of the Company to the metropolitan economy as well as its developing relationship with the national government, a visual representation of the Company’s physical presence in London would have been helpful.
However, although lacking in illustrations, The Business of Empire does contain extensive commentary by contemporary observers that helps bring life to Bowen’s numbers. Adam Smith, whose critique of the Company’s monopoly privileges is well known today, is also cited as a critic of the Company’s dual role as trader and sovereign. Bowen quotes the personal remarks of essayist Charles Lamb, whose stressful desk-job in the Accountant’s Office at the East India House once drove him to tell a friend that God should “curse the India House and fire it to the ground” (148). Various perspectives from lower-profile sources are also included: statements made by Directors and other Company officials, speeches made by concerned stockholders in General Court meetings, speeches made in Parliament regarding the Company, and arguments made by London’s many pamphleteers. In every chapter, these varied contemporary accounts complement the data upon which the main arguments are based, serving to flesh out the book’s quantitative skeleton.
In spite of a few minor flaws, it must be recognized that this book is a tremendous asset for all students of the East India Company, the British Empire, and the British economy. Thoughtful, thorough, and clearly written, it goes a long way to explaining what happened in Britain as the Company’s empire was established in India. By redirecting the spotlight from the imperial periphery to the metropolitan heart of the Company, Bowen is able to shine new light on the business of empire.
