PhilPaine.com

I just fin­ished read­ing Dean Mahomet’s Trav­els, an auto­bi­o­graph­i­cal account of a career in the East Indi­an Company’s armed forces dur­ing the eigh­teenth cen­tu­ry, by a self-edu­cat­ed Bihari Mus­lim who even­tu­al­ly immi­grat­ed to Ire­land [see Read­ing for March 2006]. There are many things to learn from this book, but I would like to use it as evi­dence for my views on the his­to­ry and nature of the Corporation.

Con­trary to what peo­ple are uni­ver­sal­ly taught, the Cor­po­ra­tion is not a “free mar­ket” enti­ty, and has no con­nec­tion what­so­ev­er with lais­sez-faire eco­nom­ics, pri­vate prop­er­ty, or free mar­ket prin­ci­ples. In a gen­uine free mar­ket, the Cor­po­ra­tion would not be per­mit­ted to exist. It is a spe­cial col­lec­tivist form of prop­er­ty “own­er­ship”, cre­at­ed by the State in order to cir­cum­vent free mar­ket prin­ci­ples, by sev­er­ing respon­si­bil­i­ty for debt from own­er­ship. That is what the “lim­it­ed lia­bil­i­ty” built into incor­po­ra­tion is all about. The ear­li­est cor­po­ra­tions were cre­at­ed entire­ly by gov­ern­ment action, and their pur­pose was to extend the pow­er of gov­ern­ment over long dis­tances. The first cor­po­ra­tions, such as the Hud­son’s Bay Com­pa­ny [the old­est con­tin­u­ous­ly exist­ing cor­po­ra­tion today], the East India Com­pa­ny, and the Dutch East India Com­pa­ny, were designed to exer­cise the pow­er of the State in the places they oper­at­ed. They had armies, police, courts, pris­ons, and the pow­er to seize prop­er­ty, to try and exe­cute peo­ple, and most impor­tant­ly to make war and col­lect tax­es. While “trade” may have been the excuse for the for­ma­tion of these cor­po­ra­tions, they were no more con­nect­ed to “trade” in its free mar­ket mean­ing than Hitler and Stal­in’s exchanges of vast resources did in the 1930’s, or the Chi­nese Com­mu­nist Par­ty’s “trad­ing” in the slave labour of its death camps with Nike and oth­er glob­al corporations.

This becomes per­fect­ly evi­dent in Dean Mohamet’s account. Though his loy­al­ty is firm­ly with the East India Com­pa­ny and its army, he could not help but notice that its con­quests brought vast suf­fer­ing to the Indi­an peo­ple. As I said, the Com­pa­ny had the pow­er to tax, and it taxed with a fierce­ness unpar­al­leled in Indi­an his­to­ry, using its army to back a class of zamin­dars  who squeezed the peas­ants for every last drop of blood. Ben­gal, which had been one of the most pros­per­ous places on earth, and had not expe­ri­enced food short­ages for cen­turies, was quick­ly reduced to abject star­va­tion by the pre­da­tions of the Company.

The most illu­mi­nat­ing fact is this: the por­tion of the East India Com­pa­ny’s bud­get devot­ed to pur­chas­ing trade goods was only a frac­tion of what it spent on equip­ping, train­ing, and deploy­ing its army. Its prin­ci­pal source of “cash flow” was not the buy­ing and sell­ing of goods (which was for the most part the sell­ing of opi­um), but the hir­ing out of its army to inde­pen­dent rulers, so that they could crush local revolts, or seize ter­ri­to­ry from rivals. It’s “mar­ket” activ­i­ties con­sist­ed of mil­i­tary oper­a­tions. It force­ful­ly sup­pressed free com­pe­ti­tion of any kind, in favour of cen­tral­ly con­trolled state man­age­ment of economies, and tax­a­tion. A typ­i­cal exam­ple of its tax­ing pow­er was the tax on salt, essen­tial to life, which it made a state monop­oly. For two cen­turies, the British Empire, act­ing through the com­pa­ny, used this bar­barous tax to con­trol the sub­con­ti­nent. Indi­ans could not gath­er salt, even from their own land, or from the sea. It is no won­der that Gand­hi chose, as his most dra­mat­ic protest, to walk to the seashore and pick up a hand­ful of salt — a seri­ous crime under British rule.