History of Europe

How the East India Company conquered the sea, trade and all of England

England is on an island. This isn't big news. The sea is omnipresent there and unsurprisingly - one would think - the people of England began to use the sea for themselves at an early age. A direct line from British geography via merchant shipping, the East India Company to the British Empire? No, it's not that simple. For a long time, England did not see itself as a maritime nation. Trade didn't go much further than across the English Channel to France or Flanders, and for a long time the country didn't have a large navy either. After all, England with its possessions on the continent was also a European land power!

The turn to the sea came much later and was not without controversy within England. But this change very soon brought about its first consequences, which still characterize England to this day. Within just a few decades of trade and the military turning to the sea, the country and its economy were completely turned upside down! At the forefront of this transformation was the English and later British East India Company. The largest private company in the world.

The road from the East India Company to colonialism

So England was not a seafaring nation for a long time. Rather, it was the sacrifice of other seafaring peoples. The Viking Age is a prime example of how hard such attacks from the sea could hit England in the Middle Ages. A rethinking did not take place on the island until much later. There were several reasons for this. On the one hand, other European states from the 15th century showed how a powerful navy could be used over long distances. In the Mediterranean, this had been known for a long time in cities like Venice or Genoa, but it was only with the rise of Spain and Portugal that there were major maritime powers on the Atlantic. On the other hand, the internal conditions in England changed fundamentally in the 15th century. In the middle of the century the Hundred Years' War came to an end and the English lands on the European mainland were almost completely lost to France. The English kingdom became an island.

It was Henry VIII who formally established the English navy in the early 16th century. Within just a few decades, however, this was already able to prove itself. Their earliest and greatest triumph here is defeating the Spanish Armada in 1588, albeit with luck and weather fighting on the side of the English. At that point at the latest, it dawned on the English establishment and Queen Elizabeth that a strong navy had to be an elementary part of the country's defence. But the ambitions quickly soared even further and very soon exceeded the purpose of self-defense. Then, as early as 1600, Queen Elizabeth signed a charter for an organization that would completely dominate England's fortunes in the world for the next 200 years:the East India Company.

It all started quite unspectacularly. Originally, Elizabeth granted this new limited company a monopoly on English trade east of the Cape of Good Hope for only 15 years. In addition to the time limit, this monopoly granted by England was not worth very much in reality. Trade in that area was almost entirely dominated by Portugal and the Netherlands at the time. But the East India Company managed a surprising and important coup in the first years of its activity. The company was able to secure the right to set up trading posts from the Great Mogul, who ruled large parts of India at the time. The time-limited monopoly was soon extended indefinitely. The course was set for a prosperous future. But the situation was to escalate very soon...

When a trading company becomes a state

At that time, English long-distance trade was struggling with a significant problem. The members of the East India Company constantly came into conflict with their competitors from Portugal, France and the Netherlands! The easiest way to assert your interests in the region was to build up a military yourself. And it was precisely this right that the English King Charles II granted to the East India Company in the 1660s. He allowed her even more! The company was not only allowed to set up its own troops, no, it was also allowed to mint its own money, declare wars independently and assume jurisdiction in its areas. The company thus became a de facto state and behaved as such in the parts of India it controlled. When the Indian Mughal Empire collapsed a little later, the East India Company sensed their chance and brought large parts of the Indian subcontinent and their control - their political control! Not something you'd want to leave to a private trading company either.

Over time, the activities of the now British East India Company took on ever greater proportions. In the 18th century, its shareholders held many important political reins in their hands, even in motherland Great Britain. At the time, more and more members of the company were buying into the British upper class. These so-called nabobs - people who had become wealthy abroad working for the East India Company - returned to Britain and won seats in Parliament. It wasn't that difficult back then. An ambitious nabob didn't have to do much more than buy as much land as possible in an electoral district with as few residents as possible. At that time there were many such “Rotten Boroughs” in which a member of parliament could get a seat in Westminster with sometimes fewer than a hundred votes. To top it all off, these elections were also public by show of hands. Needless to say, a large landowner, and thus landlord, has a pretty good chance of voting for most local voters.

With this, the British East India Company and the British state moved towards a vicious circle. The Company behaved like a state in India itself, bringing in hefty revenues for its shareholders and the mother country. They therefore had an interest in further strengthening the company. The old shareholders, who often sat in the House of Lords, were joined by the nabobs in the House of Commons. Thus, it became increasingly difficult to get anti-East India Company bills through Parliament. So the Company's political system renewed itself. Until the bubble eventually burst...

Too big to fail

The East India Company was primarily a trading company. Their purpose and function was first and foremost trade. Their mission was to bring in money for their shareholders. However, over time it became much more than that. With its own military, its own administration and even its own judiciary, the company's tasks in India continued to grow. Needless to say, the local Indian population did not particularly benefit from this. But even the company itself got overwhelmed at some point. Their spending was simply too high, demand slacked at times due to the economy, and by the early 1770s the East India Company, the most powerful private company in the world, was finally on the brink of bankruptcy. So the company did what big companies still do today:they asked the British government for a bailout. After all, and everyone in the British East India Company knew that, they had long been too big to fail.

Instead of a simple cash injection, however, Parliament in London decided to grant the East India Company further privileges and thus make their business more lucrative again. In addition, London gave her the right to organize the tea trade in the North American colonies without state interference, in order to lower the cost of tea in America. Why the government didn't simply abolish its own tariffs on tea imports to America instead will probably remain a mystery forever. The American settlers didn't take it too well and responded with the Boston Tea Party. So Britain soon lost its first colony, but that's another story. This episode also marked the start of a slow decline for the East India Company. With a regulation law in 1773, Parliament handed over numerous Company rights directly to the Crown, and over the next few decades the East India Company increasingly lost political influence. In 1858 the state finally took over the Company's lands in India itself. The country also became a de jure colony.

You can learn more about the history of England in my new book! I have summarized all the information about "Brexit as the final destination" on this page. By the way, I am writing this article as part of the blog parade “Europe and the Sea” from the German Historical Museum. I always think these actions by the DHM are great and last autumn I took part in a DHM blog parade with an article on the Glorious Revolution. There are always many participants and it's just fun to approach a topic together and from different perspectives. Feel free to take a look there if you are in Berlin.