On Edmund Burke’s criticism:
Born in Dublin in 1729, Edmund Burke is widely seen as the father of modern conservatism for his passionate defence of the ancien régime during the French Revolution. His Reflections on the Revolution in France quickly became the handbook of reactionaries across Europe in their battle for the ‘rights of property’ against the ‘rights of man’. Yet Burke was by no means a natural supporter of unchecked monarchical power. Indeed, for much of his political career with the Whigs, Burke sought to check tyranny and uphold the balance of powers between Crown and Parliament that had been achieved at the Glorious Revolution. In 1779-80, for example, he launched a campaign for ’economical reform’, seeking to curb the corrupt use of public money by the royal court. Burke also took a resolutely pro-American line in Britain’s struggles with the 13 colonies, and backed religious toleration for Catholics in his native Ireland. His stance towards the East India Company was also consistent with his philosophy of respect and duty. As long as the Company could demonstrate that it had fulfilled the terms of its charter, Burke would support its independence. But as soon as he had concluded that it had become a tool of oppression, he would press for root-and-branch remedies.
Initially, Burke had opposed the efforts taken by Lord North to regulate the Company, seeing these as unjustified infringements of the Company’s chartered status. This hostility to North’s policies towards the Company also chimed with the political expediency of the opposition Whigs. But this all changed with the fall of North in 1782. Burke’s own position was also shifting as the conclusions of his intensive Indian investigations became clear. In the south, leading Company executives in Madras had abused their position to make a series of private loans to local rulers, notably the Nawab of Arcot and the Rajah of Tanjore. Burke’s close friend and namesake, William Burke, had become the agent for the Rajah of Tanjore in 1778, and the two Burkes collaborated in a 1779 pamphlet revealing the scandal of these odious debts, amounting to more than £3 million. In the east, Burke’s knowledge of Bengal had been enhanced by a close collaboration with Philip Francis on his return from Calcutta. These two streams came together in the summer of 1783 with the publication of the Select Committee’s Ninth Report, a masterpiece of political economy, largely authored by Burke.
The reason why the Regulating Act had so catastrophically failed, according to Burke, was its inability to ‘follow the Tracks of the Abuse’ and apply ‘an appropriate Remedy to a particular Distemper’. The Bengal Revolution had broken ’the commercial circle’, which had ensured that trade between Britain and India had brought mutual benefit. Using his words with precision, Burke described this model of exchange as ‘Intercourse - for it is not Commerce’, with India suffering ‘what is tantamount to an Annual Plunder of its Manufactures and its Produce to the Value of Twelve hundred thousand Pounds’. In effect, India was being screwed.
Not only was Burke indignant at the way in which the Company’s revolution had harmed the traditional rights of Indian traders and producers, but he also revealed how it had failed in providing any long-term benefit for the corporation either. A business model that rested on such unequal exchange inevitably reduced the productive capacity of Bengal, requiring increasingly ‘casual and extraordinary measures to extract financial resources. And on the expenditure side, the Company’s involvement in ‘an endless Chain of Wars’ substantially increased the amount that Hastings needed to raise through trade and taxation. In December 1780, Hastings was confidentially telling the directors that the gap was too great and there would have to be a ’total Suspension of their Investment in the year ahead. The Company’s commercial system lay in ruins. The only way it could send back any goods for sale at the Company’s quarterly auctions was to let out space on its East Indiamen to its own executives, who purchased Bengal goods on their own account. This was a trading mirage, with no hope of any profit for the Company once costs were deducted.
By this extraordinary scheme, [Burke wrote] the Company is totally overturned, and all its Relations inverted. From being a body concerned in Trade on their own account, and employing their Servants as Factors, the Servants have at One Stroke taken the whole Trade into their own Hands, on their own Capital, at their own Risque; and the Company are become Agents and Factors to them, to sell by Commission their Goods for their Profit.
“This Continual Drain”, p126-128
