William Dalrymple’s “The Anarchy” provides a fascinating and comprehensive history of East India Company from the time of its incorporation in 1600 till its nationalisation in 1857. With his deep knowledge about British India, six years of research for writing the book with access to Company’s official record available in the British Library and the National Archives in Delhi, a highly engaging and thriller style writing, he has produced a masterpiece on the subject. In many ways The Anarchy is a historic epic as it not only tells the sensational tale of a private corporation which went on to conquer the richest part of the world, but it also chronicles the remarkable lives of Mughal Emperors, Nawabs, and local rulers of the times who came in contact with the Company. 

After the loss of America in the War of Independence in 1783, it was the Company which kept the British Empire afloat and gave it the financial and strategic strength to survive for another 150 years. During the heyday of the Company in the mid 18th century, its income from India accounted for 40% GDP of Great Britain and control over almost half the world’s trade. By 19th century, its private army of 200,000 soldiers was twice the size of British army and dwarfed that of many world powers. The Company had become an “empire within an empire.” Many of the British parliamentarians became investors in the Company whilst others were regularly bribed. It is indeed astonishing that a private corporation, comprising a few hundred individuals, with no cultural, geographical or religious links with India, was able to subjugate, own and control the richest polity of its times. Edmund Burke famously denounced the Company as “a state in disguise of a merchant.”

In the book, Dalrymple is fiercely critical of the Company. According to him, Robert Clive (1725-74), who laid the foundations for British rule in India, was “utterly ruthless and intermittently mentally unstable corporate predator.” It was Clive who, on behalf of the Company, for the first time declared war on an Indian prince, Siraj-ud-Daula (1733-57), the Nawab of Bengal. The defeat of the Nawab at the hands of a private corporation in the Battle of Plassey (1757) was a watershed moment for the future of India.  When Clive took control of the Company in the mid 18th century, the Company was already well entrenched in India having been around for more than a hundred years. On its establishment in 1600 by private investors, British government gave the Company exemption from custom duties for its first six voyages and exclusive rights for “trade to the East Indies” for 15 years. The Company’s first base for trading was Madras, which became the local headquarters of the Company. Mumbai, then a small-unknown town, was added later, which quickly became the Company’s major naval base. 

The Company filled a power vacuum in India left by a weakening Mughal Empire, which had started its decline after the death of Aurangzeb in 1707. Many local governors had become independent and stopped sending revenues to the Mughal Emperor, which was already devastated from the looting of the Persian conqueror Nadir Shah in 1739 who plundered all its treasure in a shocking raid at Delhi. He robbed Mughals of the famous Peacock Throne and went back to Persia with his booty worth £9.2 Billion in today’s currency. This raid also laid the way for the great Ahmad Shah Abdali, the revered founder of Afghanistan, to attack and loot Delhi in seven successive raids between 1748 and 1767 reducing the Mughals to mere figureheads with virtually no practical control over India. 

In the meantime, the Company in Bengal, and other local leaders, became more powerful than the Mughals. The Company especially become dominant which forced three local leaders in 1763, Mir Qasim of Bengal, the Mughal Emperor Shah Alam, and Shuja ud-Daula of Avadh, to jointly put up a fight with the Company. The Battle of Buxar (1764), which took place after seven years of Plassey, was the final nail in the coffin of Mughal Empire as the greatly outnumbered, but modern and disciplined force of the Company, annihilated the grand alliance and sealed the fate of Mughal Empire and the Nawabs of India. From henceforth, in a settlement called “Diwani,” the Company comprising of 250 clerks and 20,000 Indian sepoys, was officially given the control of Bengal, Bihar and Orissa. According to Dalrymple, it was an involuntary privatisation of land in which, “a trading corporation had become both colonial proprietor and corporate state, legally free, for the first time, to do all the things that government do: control the law, administer justice, assess taxes, mint coins, provide protection, impose punishment, make peace and wage war.” 

From a business point of view, the Company was now collecting money from Indians through taxes, with that revenue buying local Indian products, and then selling them in Europe! This Diwani also became the basis of the great Famine of Bengal five years later in which around 3 million locals died. In Britain, there was great uproar against the Company and Clive over the ruthless and unsympathetic handling of the famine. Clive’s image was damaged beyond repair and he committed suicide in 1770. 

Around the same time, there was financial depression in Britain leading to bankruptcy of many institutions. The Company also came into financial trouble and sought loan from the British Government. For the first time in the history, a bailout package was given to a private corporation subject to handing over the regulatory control of the Company to the Parliament. The Company was now governed by a Governor General and supervised by a Council of three Parliamentarians.  

After the Battle of Buxar in 1764, the only troublemakers for the British in India were the mighty Tiger of Mysore, Tipu Sultan, and the fierce Marathas of Pune. However, in 1792, the Company, Marathas and Nizam of Hyderabad (the Triple Alliance) joined hands and waged war against their common enemy Tipu Sultan. He valiantly defended his fort and famously said beforwe the battle “I would rather live a day like a lion than a lifetime like a sheep … die like a soldier than to live like a miserable dependent on infidels, and live on their pension like raja’s and Nawabs.” 

Thereafter, the Marathas were also swiftly neutralised and in 1803 the Company attacked Delhi on the pretext of liberating Emperor Shah Alam from the clutches of Maratha rule. In reality, the Company was only replacing the Marathas with its own rule over the Emperor, who was by then only a ceremonial Emperor. The Company decided to pay him a monthly stipend for his expenses and in return all the lands, revenue and army of India now belonged to the Company.  By the time the Company was nationalised in 1857, the British government had gradually acquired much of the control over the Company. Nevertheless, it was the War of Independence in 1857 and its aftermath in which the Company murdered thousands of locals in the bloodiest episode of British India that the British Parliament finally removed the Company from power, disbanded its navy, and took direct possession of India.


Muhammad Mumtaz Ali