Sea Control - Sea Control 375 - The East India Company and Modern State Sovereignty

Episode Date: August 28, 2022

Links1. "Corporate Sovereign Awakening and the making of Modern State Sovereignty: New Archival Evidence from the English East India Company," by Dr. Swati Srivastava, International Organization, March 4, 2022.2. Dr. Srivastava's webpage.

Hey folks, it's Jared. My guest today is Dr. Swati Srivastav, and we'll discuss an article she's written on the East India Company and modern state sovereignty. One correction for you before we begin, though. In the show intro, you'll hear me say that the article was published by Cambridge University Press, and that's not entirely accurate. The journal in which it appears is International Organization. So this episode was edited and produced by Jim Jarvie. I'd like to pause here to highlight our local chapters, whether you're in South Korea, Egypt, Singapore, France, New York, India, or the Caribbean. Chances are there's a SimSec local chapter near you. You can find a full listing of local chapters and contact information

on our website, simsec.org, so if you're interested, please reach out. Finally, I want to take the opportunity to recommend our partners in the SimSec podcast network, The Bilge Bumps. You can find Alex, Jamie, Drack, and a pot of Iron Brew bottles wherever you download your podcasts. With that, Kimber's Men. You're listening to Sea Control, hosted by the Center for International Maritime Security. Aloha, Shoemates, and welcome back aboard Sea Control. My guest today is Dr. Swati Srivastava, and we're discussing her article, Sovereign Awakening and the Making of Modern State Sovereignty, New Archival Evidence from the English East India Company, And it was published in March by Cambridge University Press.

Swati, thank you so much for joining us. Could you tell the audience a little bit more about your background, please? Yeah, so I'm a political science professor at Purdue University. I got my Ph.D. from Northwestern, also in political science. And I thought originally I might, you know, get a master's and just sort of work for the government or international organizations. But then I really got interested in research at the University of Chicago. and then I decided I would do a PhD. And so it's not like I wanted to be a professor

when I was little, but I kind of fell in love with research, especially historical archival research. And yeah, so now I teach political science, international relations at Purdue and I'm excited to be here. Well, thank you so much again for coming on. As a reminder to the listeners,

all opinions are our own and not representative of any institutions with which we might be otherwise associated. So how are you defining sovereignty in the context of your paper? Yes, the sovereignty is one of these concepts that is not just used in academic line of work, but also out in the real world. Right. And so Putin is talking about sovereignty. Right. The Europe is talking about AI sovereignty. So it gets thrown around a lot. And, you know, surprise, surprise. We don't have an obvious consensus on what that means.

But generally, we think about, you know, somebody who's sovereign, it's the final decision maker, right? The absolute authority. But then actually, outside of that, there's a lot of contention in international relations, and when we can meaningfully talk about sovereignty, we didn't have nation states forever. So did we have different types of sovereignty before that? But and so mostly what I'm speaking of is sovereignty in the legal sense of entities who claim and articulate legal rights of being, again, this final, final authority. And in that sense, it's not just about whether or not somebody gets to make the decision to go to war or peace, although that's oftentimes what we think about as sovereign functions. But sovereignty is, again, the ability to make this claim to be considered the final authority. Why do you refer to the East India Company as a company state? Yeah. So, you know, as we had the era of nation states emerge over the last 200 years or so, there were other entities before that. You know, we had city states, we had city leagues, we had empires. And then we also had these sort of large merchant charter companies who are basically running entire populations.

Right. And they were performing the roles that we now think of from states. They were going to war. They were capturing territory. They were taxing people. They were governing them through laws. They were sentencing people to die. Like all the kinds of examples we think of about life and death that we think sovereigns do. So the company, the East India Company, was created in 1600, and it took about 100 years or so for it to really get its market share. As you might remember, usually the Portuguese and the Dutch were kind of ruling the seas in the 1500s. But then they sort of dipped a little bit for various reasons. And so the English decided that this is a great moment for them to compete.

And so initially, the company was created as just another vehicle for going out and finding, you know, new products and spices, especially. But then they realized, well, you know, why pay for spices if you can just extract it? But if you turn extractive from a commercial relationship, it becomes much more violent because you have to now suppress people. You're not just paying them, right? You're taking stuff. And violence means you need to start creating more infrastructure. You need to create the bureaucracy. So all of the stuff that we know about state making and war making. And so essentially, the company did not start out as a state. It became a state over time because it became more extractive and more violent. And that version of war making and state making is how we got to a company state.

You wrote, and I quote, the period between incorporation in the late 1600s and regulatory scrutiny in the late 1700s is pivotal for both the East India Company's emergence as a company state and the delegitimization of non-state actors from the international system, end quote. Why was that the case? Yeah, so again, you know, we had this period where we just didn't have nation states. We had a bunch of these other forms of actors who were all mingling together. And it was not obvious that, you know, we would actually end up in a place like today where we have mostly countries talking to each other as sovereign equals. And it took basically a couple of centuries for other sorts of non-state actors or other forms of power to go away. when it no longer became appropriate for city leagues to stay around or city states to stay along or empires to stay around or company states to stay around and so over time you know we call

this the post-Westphalian moment based on the Treaty of Westphalia which was in 1648 and we know that it didn't happen right in 1649 right it was a process that took you know many many centuries to where we are today and in that post-Westphalian period is when state actors sovereign actors started to assert more control over the fact that only they have the exclusive right to be considered the main international actors it's not you know if you're not a sovereign state with you know that looks like France or looks like England at a certain point then you can be part of our club um we call that a sovereignty cartel right you basically create something and you said if you want to be in the club you have to look like us or we won't play

with you and so that that process happened over time of saying okay we're not going to be hiring privateers we're not going to be hiring mercenaries we used to do that kind of stuff you know we would hire pirates as privateers as i'm sure people in this podcast know And as that same logic of when it no longer became appropriate to do that, you would just start actually having your own navies do the work. That was also playing out with the company states where it was no longer appropriate for England to send out, you know, these company directors to do the work for them in India. They had to assume the actual governance of empire themselves. And so non-state actors became a little bit more suspect in this period. So I'm talking basically 1700s and early 1800s is the time period when this happened.

And as that's happening, lo and behold, some of this is also because the company states are becoming powerful, right? Right. So it's a company has so much money and so much revenue from all the spices and textiles that it's extracting that it has now becoming richer than a lot of the powerful people who were already powerful before. So it became a threat to sovereigns. OK, what does it mean to have this oligopoly that has political power, economic power, might? It has its own Navy. It's even stronger in some ways than the British Navy at the time. And so it became this sort of non-state threat that people had to take seriously. And so it was also important to kind of cast them out for that purpose, because otherwise they could have become like a legitimate rival to nation states. And so the East India Company was then more strongly regulated. They had more oversight. They started creating this dual structure where England had to send its own governor and its own oversight board.

And a lot of what we see of sort of corporate governance and corporate regulation was initially experimented on these charter companies because they were the first joint stock companies in the world. So that's kind of what happened in the overall historical period where states assumed more and more control over their cartel and started to regulate these companies as companies and stopped assuming that it's okay that there are company states running around the world. What is the new archival evidence that you referenced? Yeah, so to study the company or any powerful actors, it's important to look at the records, right? And the East India Company, one reason why we know they were a company state is they kept good records. And again, we know we have this idea of record keeping that helps bureaucracies, right? Help you raise revenue. We want to know who's paid taxes and who hasn't. And so we got pretty fortunate that they've been very good at keeping records.

And because they were not regulated for a very long time, they were very good at keeping records because they weren't worried it's going to be used against them. And companies today are not really taking minute detail of their, you know, shareholder meetings because they think everything can be exposure. But in the 16, 1700s, a company was not worried about legal exposure. So actually what we see is really detailed sort of meeting minutes about how these executives are planning their strategy, what their budget is, you know, how they're dealing with Indian powers and the Mughals and how they're dealing with the king and the queen in England. So we have all of these, you know, daily meeting minutes of how you run a company. So imagine if, you know, you had access to how Elon Musk is talking to his executives every day, like all his emails, all his texts, you know, all his calls are recorded. And that's

basically the kind of archival evidence we have for the East India Company. We have these daily meeting minutes of their directors. We have letters, correspondence, we have drafts. And all of this is in the British Library in London. And for the longest time, you would have to go in London and physically sit in the East India Archive room and kind of absorb this information. But, you know, a little bit less than a decade ago, they finally allowed people to bring in cameras. And when you allow people to bring cameras that changes how much, you know, data you can capture and what you can study. And so I was allowed to basically capture almost 100 years of these detailed minutes of company executives from 1678 to 1780, which is this period where the company became powerful

and a threat to the state. And again, so you were able to read all this detail about how the companies operating, when turning from, again, this commercial enterprise to more violent enterprise. You can capture a lot of that. And so the evidence itself is not necessarily new, but the fact that we can now process large amounts of it by photographing it and by creating copies that you can read online more quickly than you could in person. It's also less expensive. You don't have to spend three years in London, right? You can spend three years in West Lafayette, Indiana. So all of that actually matters. So it makes it easier to access the data, it's cheaper, and then it's easy to share it with people if they're also doing research on it.

So when did the East India Company transition to, quote, sovereignty as a self-possessed right? Yeah, so one thing that I've noticed is how the company thought of itself as a sovereign. So So many centuries later, we can sit and talk about whether or not the company was a company state, whether or not it was a sovereign. But I wanted to see how this company thought of itself. Right. So imagine 200 years from now, people researching how Elon Musk thought of himself. They think of himself as a, you know, Marshall overlord or what. And you had access to the data, but how he thought about it. And so similarly, I wanted to see if these guys were just out there, you know, trying to make money and they happened to also do some state building, or they thought about themselves as actual state builders, actual sovereign.

And a lot of historians, it was mostly the former, that's been the conventional story told is that these were accidental sovereigns, right? They didn't really want this. It just came, you know, it sort of came to the territory of getting all these resources. But there's been this emergent other history, which is more the second. It's like, no, no, no, these people actually really wanted to govern. They wanted to rule. They wanted that power. It wasn't just about a commercial enterprise term sovereign. And my research validates that second claim that there was this idea of creating a sovereign state in India. But along with that desire, it was also that they wanted to now keep in mind the company was created by a charter in 1600. So a charter meant that at the time it was Queen Elizabeth, but later on it also became parliament. And so both the monarch and the parliament had to keep renewing the company charter. Now, the duration became longer.

It was not like every year it was renewed. It was sometimes a 30-year gap. But still, there were negotiations around charter negotiations. So the company still had this connection to the Crown and the Parliament. And so it was, again, what I call a hybrid. It was public, publicly constituted, but also private merchants. And the relationship between the Crown and Parliament changed over this 100-year period as the company became stronger, it won more battles or won Bengal in sort of a major battle

and started getting a lot of revenues. And so the point was, well, why should we have to keep going back on this charter? We have now survived 150 years since the original charter. And so maybe we should just be able to live on our own terms. And so that's how the company started. Initially, they were thinking about their sovereign authority, like basically on whose basis is the company acting in India, right? Is it acting on its own basis when it's talking to like the Mughals or is it talking on behalf of the crown? Is it just like a delegated sovereignty or are they doing something a little bit more entrepreneurial? And for the first hundred years or so of the company's existence, it claimed to be under the umbrella protection of the crown.

But then as it became, again, more powerful, they waged more wars, they got more territory, they started going in this other direction of, actually, this is not delegated sovereignty, this is a self-possessed sovereignty. We are the ones who conquered this territory, not the crown. We're the ones who are collecting taxes. We're the ones that are governing the people. It's our ships, it's our men, like, you know, it's us. like the crown is not doing anything except they gave us the original charter and so then this relationship became much more contentious because all of a sudden the crown's like wait i delegated stuff to you right now you're claiming you're your own sovereign what does that mean um and so that's basically what happened when the company in all of its minutes it's um it's legal arguments it's going after interlopers right it's going after these unlicensed traders on trips um who don't have their license to trade and it's capturing them and it's trying them and it's saying that

you're not violating crown law you're violating company law and so that's what it means when the company moved from this delegated umbrella sovereignty to a self-possessed right excellent transition so what point did parliament seek to check the east india company's power so about But 1757 is when there was this major battle in Bengal, which the company won the Battle of Plassey. And that's the turning point when we assume the company became this major sovereign threat. So for now, it had been doing pretty well. It had gained market share in terms of commercial trading. But in the mid 18th century is when it started to actually become a political rival as well. And so for a while, Parliament said, okay, you just give us more money. So it really upped the cost of sort of renewing the charter, right? So it's just asking for more rent to be paid. But then eventually, the company had some financial problems. There were a whole bunch of things going on. Now, keep in mind, this is also during the revolutionary period in the US, and these things are connected.

So when you went to Boston and there was a Boston Tea Party, it was the company tea that was being thrown in the harbor. And the company was trying to take over market share in America. It didn't work. It was a very risky strategy. There was a drought in India and there was a lot of like malfeasance as well. And so there was a financial crisis and the company was not able to pay the parliament this rent. And so as a result of financial problems, the fact that the company was getting too politically connected and strong, finally, some parliamentarians decided it's time to regulate them. And a similar dynamic you would see in the US 100 years after that with the antitrust and going after JP Morgan and sort of all those people in the sort of the idea of robber barons. Right. So similarly, we kind of let people go for a little bit and then at some point we're like, all right, this is it.

And so same thing with the company. We had these major hearings on Parliament. We had an impeachment. You know, that impeachment actually lasted seven years as opposed to the one we saw here. And so these were really public events that were going after, you know, what was the biggest company at the time. And they mostly succeeded because by the 1800s, the mid-1800s, the company's independence was sort of clawed back. They were still running operations on the ground, but they were no longer as autonomous as they used to be sort of in the previous two centuries. So that was sort of the move. It was post-1757, and especially after a series of financial crises, when the company was not able to pay its rent, basically. And what ultimately caused the East India Company's dissolution?

I think having a sort of combination of things. One was that it was no longer as cost effective for them to continue to use violence in this imperial capacity. We saw a lot more resistance movements, a lot more organized resistance movements. And so that became less cost efficient. Right. And the second part was, even though we had, you know, Crown and Parliament saying, OK, so we should be the only ones that are out there and governing because we are nation states and it's not acceptable for non-state actors to be governing. But the company had spent a lot of resources figuring out how to do this stuff. And eventually they were still on the ground, but they were not making the actual decisions. They were just implementing them. So some people, you know, say that, look, like if the company had never been stripped away of its autonomy, it could have survived longer, could have made better decisions.

It knew what was going on because eventually it was still a commercial enterprise. They were still extracting for commerce. Yeah, there was there were wars, there were fighting, you know, there were some political games going on. But for the longest time, they were successful because they were able to extract resources. And once that flipped to mostly a governmental enterprise and once it became clear that there were much more much more organized resistance, we had the mutiny in 1857 in India. So as a result of that, it became harder and harder to sustain a large company enterprise. And so it dissolved. But after 274 years. Right. So a company that was around for a very long time, longer than a lot of nation states. But eventually, again, it was a combination of not being efficient anymore,

as well as being sort of taken in with the organized protests that were happening in India. Well, unfortunately, that's all that we have time for today. I'd like to thank my guest, Dr. Swati Srivastava. Swati, where can we find you online and what are you working on next? Yeah, so you can find me on Twitter. I'm on Swati Srivastava. Also, my full name, dot com. That's my website.

and this article is part of a book which is called hybrid sovereignty in world politics and that's coming out with cambridge university press in november so the english university or the english east india company is just one of many cases i also studied blackwater which is a contemporary case of course might be of interest and i compare what's happening you know today with east india company tactics um and i also study embassy international and geo but that also has something in common with the East India Company and with Blackwater. So it's kind of interesting for readers to read all these non-state actors and how their state relations have changed over time. And my next book I'm working on is about big tech. So again, perhaps not a surprise that

I kept mentioning Elon Musk, but I think a little bit of tech companies as sort of mini corporate sovereign empires today. We see them governing the world. You know, we see them acting sort of state-like, figuring out what we can say, what we can't say. And so there are some versions of the East India Company story that is repeating in big tech companies like Facebook, Google, and in sort of Musk's idea of what he wants in outer space.

Well, thank you again for joining us. To listeners, thanks for tuning in. We'll see you next time. Thank you. Thank you for watching.