6 September 26
Lessons from the East India Company
In my last post I wrote about William Dalrymple’s Return of a King: The Battle for Afghanistan, 1839-1842. This is the second book I’ve read by Dalrymple, the first being The Anarchy: The Relentless Rise of the East India Company, published in 2019. Dalrymple recently wrote an opinion piece for the New York Times entitled “What It Took to Dismantle the Most Powerful Company in the World” discussing the parallels between the East India Company and today’s Big Tech.
The East India Company did a really good job of subverting the British state. But in 1772 the East India Company ran out of money, and started asking for bailouts. The company was too big to fail, and its stock was owned by 40% of the House of Commons. In 1773 trying to claw some money back the British state came up with the Tea Act, shipping the tea to America to undercut the colonial merchants. This provoked the American Revolution. Dalrymple cites John Dickinson:
This “almost bankrupt company,” having been occupied in wreaking “the most unparalleled barbarities, extortions and monopolies” in Bengal, had now “cast their eyes on America, as a new theater, whereon to exercise their talents of rapine, oppression and cruelty,” wrote the American John Dickinson. Within three years, America declared independence.
In 1788 Parliament impeached Warren Hastings, former governor-general of Bengal, but he was eventually acquitted. It took another 70 years before the British tamed the East India Company, only after the Indian Rebellion of 1857 with 800,000+ lives lost. At that point the state dissolved the company’s navy and absorbed its army into the Crown.
When Dalrymple finished The Anarchy in 2019 he noted thankfully that today’s corporations did not have private armies. Things aren’t quite as clearcut in 2026. Starlink operates at the whims of Elon Musk, technology that has played a significant role in the fighting in Ukraine. Palantir holds a $1.3 billion contract with the Pentagon for its AI targeting program. Google and Amazon hold a $1.2 billion contract to supply AI and cloud services to the Israeli government.
But the British state did in the end tame the East India Company. In our own times, the Chinese state has cracked down on its big corporations, e.g. Alibaba and Tencent. Still, as Dalrymple says:
History shows that when a company starts acquiring the attributes of a state — the revenues, the courts, the treaties, the capacity to make war and peace — its transformation can damage the parent country at least as much as the territories it exploits. Its lobbying corrupts the legislature. It captures the treasury, because the corporation’s solvency becomes a public interest. It converts foreign policy into an extension of a balance sheet. And it shows that the threshold, once crossed, is astonishingly hard to recross. The window in which any of this can be undone closes fast.
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