East India Companies and Corruption Chris Nierstrasz (University of Warwick)

Corruption and probity English (EIC) and Dutch (VOC) East India Companies ( ): Associated with corruption Profits and fortunes Companies and the state

Corruption and probity Both the English (EIC) and Dutch (VOC) East India Companies were strongly associated with corruption

EIC and Corruption: the Nabobs

‘In India, all the vices operate by which sudden fortune is acquired … Arrived in England, the destroyers of the nobility and gentry of a whole kingdom will find the best company in this nation, at a board of elegance and hospitality. Here the manufacturer and the husbandman will bless the just and punctual hand, that in India has torn the cloth from the loom, or wrested the scanty portion of rice and salt from the peasants of Bengal, or wrung from him the very opium in which he forgot his oppressions and his oppressor. They marry into your families; they enter into your estates by loans; they raise their value by demand; they cherish and protect your relations which lie heavy in your patronage.’ Edmund Burke speech in parliament (1783)

VOC and Corruption: the state Accronime VOC: ‘Vergaan Onder Corruptie’ or Perished under Corruption Servants in Asia mismanaged the VOC monopoly in spices, while the Dutch state had to nationalise VOC debts (1796)

Profits and Fortunes Problem with defining corruption: East India Companies were not states, so those working for the Companies did not hold a Public Office East India Companies were geared towards the pursuit of both profits and fortunes

Profits and Fortunes Company Problems: Had to motivate servants without paying them Hard to control from Europe Servants protected by patrons Servants Problems: Die at astonishing rates Depend on entrepreneurship for fortune No capital to start their own business

Profits and Fortunes

Quickest way to a fortune for a servant: 1)Spoils from war 2)Government 3)Private trade Problem: Once fortune was achieved, the question was how to get fortune home...

Profits and Fortunes Company Optimize profits: Monopoly on trade Servants Optimize fortunes: Private trade

Profits and Fortunes Monopoly by definition limited, ‘left-overs’ left to private trade

Private trade Problem for servant with private trade: Required investment capital Risk of losing money Took a substantial amount of time to make a fortune Possibilities for private trade related to company hierarchy Own interest vs. interest of the Company

Government With the government of Asian subjects came possibilities of Paresse, Hadat and other customary ‘rewards’ for favorable decissions

Government Positive sides of income from Government: No investment capital needed No risk of losing money Negatives: Takes a substantial amount of time Requires patronage who want their share when goal is achieved

Spoils of war When Company went to war, possibility of spoils for servants who are involved Positive: Instant fortune on victory Enough to go home Capital for other exploits Problem: the Company does not want to go to war, too expensive

Entrance of the State VOC hardly any state support (One Naval squadron in 1783) English state offered the EIC substantial support in the form of the Royal Navy and armies from 1745 onwards

Profits and Fortunes Who decided on war? Servants VOC

Profits and Fortunes Who wanted war? Servants EIC Army and Royal Navy

Conclusion