fbpx

William Dalrymple: The formation of the East India Company

Reading Time: 4 minutes

Pawan Luthra: William, take us back to 1599, and paint us a picture of how the East India Company came into being, and how over a period of time the aims of this private company changed.

William Dalrymple talks about the formation of East India Company
William Dalrymple talks about the formation of East India Company

William Dalrymple: In 1599, Shakespeare’s writing Hamlet somewhere just downriver from the Globe Theatre. At the same time, we had a classic Tudor entrepreneur called Customer Smythe.

Customer, because he’d been for the last ten years in charge of the London Customs and made a fortune out of that. He then made another fortune by founding something called the Levant Company, a group of 30 very rich merchants and ship-owners who pooled their capital and started buying spices from Aleppo, Cairo and Venice. And they did very well for about 10 – 15 years.

And then in 1595-96, their whole business model was put to nothing by the fact that the Dutch realised that you can just sail around the cape and go to what we would now call Indonesia, particularly the Island of Run, and buy all the stuff at a fraction of the price, cutting out the Arab middlemen. And so Smythe appeals to the patriotic spirit of the businessmen of Elizabethan London and calls upon them to try out a new business model that had only been tried out three times before.

It’s something that’s very obvious to us today and probably affects almost everyone in this room in one way or another, but which was a new invention at the time.

This is the joint-stock company, the corporation. The difference between the joint-stock corporation and the guild system by which he had run the Levant Company, was that rather than a closed board of 35 investors, all of whom were involved in the running of the company, in a joint-stock company, you have a small board, you keep the investment completely separate and anyone can invest.

So as well as the big shipowners putting in a thousand pounds, five hundred pounds and so on, you have small London businessmen who contributed five pounds, 10 pounds, 15 pounds. And they didn’t expect to be consulted about whether a voyage will take place or not.

They just knew that they will get a share of the profits if it’s successful. And this is a new invention. Today we take a corporation, the joint-stock model, for granted, but this was a new invention of this period. They set sail to Indonesia. It doesn’t initially look like it is going to be a great success because they’ve just got as far as Dover when the wind dies down and there’s this strange summer calm and the expedition just sits bobbing off the White Cliffs for a month and everyone comes and laughs at them.

They eventually make it to the Island of Run, and there they see a Portuguese ship coming in the opposite direction. As they’re all ex-pirates, they just board the Portuguese ship, transfer the contents into their hold, and sail back to London, where they sell the contents for one million pounds. And that’s enough to make all their fortunes. It does literally begin as an entirely piratical exercise, they make no bones about this.

A lot of the seamen who had invested and who actually staffed these ships had been with Drake and Raleigh, Pirates of the Caribbean, think Jack Sparrow, it’s this sort of world.

Initially, they are always one step behind the Dutch. The Dutch have already been there. They’ve got better financial instruments. They can raise more money, they’ve got bigger ships. And in 1630, they actually beat the English out of the East Indies, which means Java, Indonesia.

There’s this famous face-saving treaty whereby the English hand over to the Dutch, the Island of Run, which is then considered to be the most valuable property in the world, where all the nutmeg comes from. And as a face-saving device, the British get given a muddy island in the Hudson River called Manhattan, which, of course, isn’t a bad investment in the long run. But at the time, it’s considered rather a humiliation and by default, the English fall back on the textile trade, the second-best option.

And that turns out to be their lucky break, because this is just the moment when the Mughals are rising up, with the same eye for aesthetic beauty which informs the Taj Mahal and those incredible textiles that we see in the miniatures.

Their work genuinely changes the nature of textile design and makes these textiles incredibly beautiful objects that everyone in any culture, whether Mexican, Frenchman, Dutchman, Chinaman or in the East Indies, wants to buy. And the East India Company rises up, on the back of the Mughal Empire. It’s only in the 1750s that the whole thing changes gear and turns from an empire of business, into the business of empire.

Photo Credit: Rinto Antony

Continue reading: William Dalrymple’s The Anarchy: A story of how far corporations can change the world

- Advertisement -
Pawan Luthra
Pawan Luthra
Pawan is the publisher of Indian Link and is one of Indian Link's founders. He writes the Editorial section.

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -
- Advertisement -

Podcasts

Let’s Talk Boosters: Indian Link podcast

0
  In LET'S TALK BOOSTERS, a new podcast series by Indian Link, host Ekta Sharma quizzes Dr Kritman Dhamoon of Blacktown Hospital Sydney about booster...
Frontline worker Parita Patel (inset). Image supplied

‘Serving the community’: COVID testing in remote NSW

0
  The past two years have been a rollercoaster of COVID-19 related turmoil; from isolating lockdowns, closed borders, to trying to help Indians in the...

Ep 9: What do young Indians want from love?

0
  Growing up in Indian culture, most of us know that love has never been as popular as marriage. Even in the movies, the main...
- Advertisement -

Latest News

new normal still isha and appu

REVIEW: New Normal

0
  A pivotal conversation that surrounds LGBTQIA+ discourse is the need to normalise queer relationships, as that is what they are — normal. In late April,...

India, Australia review cooperation under Comprehensive Strategic Partnership

0
  Prime Minister Narendra Modi and his Australian counterpart Anthony Albanese on Tuesday reviewed the multi-dimensional cooperation under the Comprehensive Strategic Partnership. Cooperation under the partnership...
HIYAAN kapil

Hiyaan Kapil, 5, dies hours after being discharged from QLD hospital

0
  A review will be launched by the local health department of Logan, Queensland after a young boy died hours after being discharged from the...
ahaan dani

Labor’s better: Year 5 student’s view

0
  As the 2022 Australian election looms, Australia has a choice: Liberals and Scott Morrison OR Labor and Anthony Albanese. I argue that Labor deserves...
khurram pervez and gautam adani

Adani, Khurram Parvez among TIME’s most influential people of 2022

0
  Industrialist Gautam Adani, Supreme Court lawyer Karuna Nundy and Kashmiri rights activist Khurram Parvez are amongst the TIME Magazine's list of 100 Most Influential...