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1  Economy / Economics / Re: A Resource Based Economy on: December 30, 2015, 09:17:10 AM
Thats what humans are. If you look for a paradise, you are not going to get it with humans, because we are corrupt by design.

wrong answer, try ask any scientist or academician.

Robert Morris Sapolsky - professor of biology, neuroscience, and neurosurgery at Stanford University
Dr Gabor Maté - professor in the Faculty of Criminology, Simon Fraser University.
Richard Gerald Wilkinson -  Professor Emeritus of Social Epidemiology at the University of Nottingham
Dr. James Gilligan - Psychiatrist & Expert on Violence,  New York University, professor  of psychiatry in  the  School  of  Medicine

to save your time, here is the brief summary

Modern psychological and sociological study has found that human actions are susceptible to environmental influence. What is rewarded by the culture tends to be perpetuated. For example, it is commonly considered a "moral" issue when a corporation engages in deliberate pollution to save money. Many outcry that the corporation's people must be "corrupt" who would allow for such a thing. The flaw, however, is in the assumption. If we exist in a system that allows us to "save money" and hence be more "economically efficient" by being exploitation, abusive or indifferent, why should we not expect it to occur, especially in a system based on competition where advantage is always sought?

In other words, "corruption" is being reinforced. Therefore the solution is not more "laws" to try and stop this behavior. The solution is to create a social system (Replace capitalism with RBE) that doesn't reinforce or reward such behavior at all. Laws are mere "patches" that work against the internal logic of the system as it stands.
2  Economy / Economics / Re: A Resource Based Economy on: December 29, 2015, 09:24:08 AM
because humans are negligent,stupid and evil.

answer this, where do you think those traits coming from?
3  Economy / Economics / Re: A Resource Based Economy on: December 24, 2015, 04:51:56 AM


Capitalism is based on competition, those that cant compete will become employees, those that do will become employers.

If you think your "evil capitalist employer" is abusive, create your own business, and if you provide value, all his employees will go to work for you.


Simple as that. If you need capital: bank loan, crowdfunding,stock market, or savings.


There is no excuse for not having capitalism, except from the crying sheeps that want everything for free, like you. Sorry that is impossible.

I used to work with biggest multinational companies in the country, the reason why the company succeed in capitalism is because they bribe/lobbying with the politician, they will push certain law and legislation that favors our business. we also buy up the rest of the possible competitor company so we are able to maintain the dominant market share

once you are the major players in the market, you can easily influence and decide how much you should charge the customer. adjust the tariff, etc..

you are too naive to say as long as you are able to provide best product, your business will succeed. this is plain wrong, mcdonald do not make the best burger yet theyre continue to expand and growing. in business you must have connections, and backed by organized crime.

shareholders do not care about how CEO treat their employees, only about profit. the worst you treat the employee the better it is. from business point of view it is just business. its best if you can get away with paying least amount of salary and employee contribute most of their effort.

we also teach the employee to lie at customers in professional manners. etc..

when you have competition, this is what happen. suppose im selling "product A", and you are also selling the same thing. when a customer asked me which seller has the best product? i cant be honest and tell customer they should go to your shop, my survival depends on this. so it is logical for me to lie at others, in fact if i can destroy your business, my chances to make more money would be greater. hows that sound?
4  Economy / Economics / Re: A Resource Based Economy on: December 22, 2015, 07:02:14 AM
That is not capitalism morons, the east indian company was a government tool (a pseudo government) to enslave India.

Damnit you guys have no clue, no wonder you are communists.

How about learn some mises books before commenting bullshit.


Start here:
https://www.mises.org/


RealBitcoin,

Quote
QUESTION:

Dear peter,
I have been talking to libertarians about an RBE and get frustrated countering their weird arguments. I have included some points brought up I would like help with, if you have time.

About resource abuse and exploitation, he says:

“If you own something, you want to maintain it in good condition. Private property means people will care about their property, including resources and employees… Those employee are also there voluntarily in a free market, so it is their choice.”

When I talk about poverty and imbalance, he says things like:

“People who give other more value in voluntary trades, end up with the most resources. Incompetent people quickly lose their resources to more competent people in efficient markets. This makes sure resources are used in an effective manner.”

or

“Capitalism tells us what kind of work is highly valuable. If you want to make money, study to do that kind of work. With internet, anyone can study almost anything. There are no excuses.”

When I talk about how the monetary-market preserves scarcity and hence more people suffer unessesarily, he says:

“Scarcity is a fact if life. End of story”

SO Peter – How do you deal with these people?!?!
thx
David

ANSWER:
David,

I feel ya.

I had an exchange with a libertarian/ancap a while back and after about 40 min of listening to this person talk, I was so irritated I spent the rest of the 2 hour conversation biting my tongue in anger given how offensive and self-serving he was in his ideology.

I can honestly say there is no economic philosophy more narcissistic and detached from reality than the Austrian/Chicago/Anarcho-Cap folks. It’s Adam Smith’s “invisible hand” on crack.

They see everything in theory, with little reality.

Overall, the central problem is this:
Everything they say is partially true but they defend the ideas as though they are empirical and universal.

I will quickly run down your noted quotes:

>”If you own something, you want to maintain it in good condition. Private property means people will care about their property, including resources and employees…

Regarding “If you own something, you want to maintain it in good condition.”

This is true because you don’t want to have to buy another one. Sure. But this argument only embraces a narrow fraction of market commerce as a system. (FYI, “system” is an idea the Austrians have a very, very hard time with!)

An “owner of a business” does not share the same value when it comes to employees or even land use for profit in many cases. It depends on the circumstance.

Unless an employee’s ability is so rare the owner has to keep them and pay them very well to do so (“maintaining in good condition”), the person is just another service to use and “cost efficiency” or saving money means they (the employer) will seek to pay as little as possible to the employee, disregarding his or her well being more often than not.

It is a dictatorship, not a partnership. Employees are coerced by the need for money to submit to this covert slavery. Given the unemployment crisis due to automation (also due to saving money), many people with PHDs are now currently under or unemployed in this world.

As far as land, as I mentioned, you could argue the owner of a home’s front yard wishes to take care of it, sure – one doesn’t want to have to pay to fix things.

But in the resource/business context, the shortsighted nature of use very often creates the condition of abuse. The owner of a forest plot to harvest lumber might very well have zero concern regarding what such action has on the ecosystem and environment in general and see the lumber as the only important issue in order to gain profit. Therefore, they are not “taking care” of anything in effect when it comes to what “taking care” means – as we have seen for decades with deforestation and the tragic loss of biodiversity globally.

As far as “Those employee are also there voluntarily in a free market, so it is their choice.”

Statements like this really piss me off.

It’s a good thing libertarianism didn’t exist in the same capacity during abject slavery as these people would likely be writing books about how the slaves must really like their servitude since they must have “chosen” to be African. This is truncated reductionistic thought gone berserk.

Completely absent any sense of causality outside of the “snapshot” of the single market interaction. Again, they have no clue about systems theory, network interactions and chains of causality. Just like African slaves were put into a condition (system) that forced their labor by force, so is the pressure of the existence of the market economy itself, which forces all humans into submission in one form or another to survive.

I will debunk it this way:
A woman walks into a pawn shop. She puts a ring on the counter and the guy on the other side says he can offer only $500 for the exchange. She accepts and the exchange is made. No gun to anyones head, right? It’s “voluntary”!

This is all the Austrians would see. They call it “Praxeology” which is, like all of this, partially correct, but ignoring the systemic nature of causality in a complex social system and the pressures that emerge that influence behavior.

It turns out that the ring is her dead husband’s wedding ring. Her husband died a month before from a heart attack, unexpectedly. With two young children, she now has to find a way to get money to pay rent since her husband was the one gaining income before and she helped the kids. So, she had no other option to keep financially afloat but to sell a dear possession to a pawn shop.

Praxeologically, it is a “voluntary” exchange. But in reality is a last resort act of desperation and deeply unnecessary(!) if society had basic, non-market systems to support people on the structural level. The same goes for most women who fall into prostitution.

Now, if you say this to an Austrian, they would say something like “well, that’s why we have charity!” Well, if you (speaking to the Austrian) agree with the need for charity, which is non-market in the act of acquisition, then you are not a true believer in the “free-market” as a truly effective universal model now are you?

Also, a quick statistical assessment of polls on human labor satisfaction proves the vast majority do not like their jobs. A 2013 Gallup poll “found that only 13% of workers feel engaged by their jobs” worldwide. Hmm… why dont they just leave? It’s voluntary right?

It’s painfully stupid. Moving on:

>”People who give other more value in voluntary trades, end up with the most resources. Incompetent people quickly lose their resources to more competent people in efficient markets. This makes sure resources are used in an effective manner.”

Again, it is true in an isolated way. However, not everyone is equal in capacities and it is impossible in many cases to decide if a person has natural limitations (ie. low IQ) or is just “incompetent”. There is no black and white to the human condition. Everyone is different and my view is that every human being deserves to live a decent life without deprivation since it is technically possible and feasible. In this you also remove about 90% of crime by meeting human needs directly as well, as per the interests of TZM. (see the book to the stats)

A well meaning, hard working person might very well fail miserably… or maybe they do not have the cut-throat mentality or have an ethical disagreement with the way competition works in the market. There are many, many other variations than “incompetence” to justify a person’s lack of ability in the economic context and to think it is hence justified to remove people’s ability to have a quality standard of living because they don’t “fit” the model – is structural bigotry, pure and simple.

As far as:
>”Capitalism tells us what kind of work is highly valuable. If you want to make money, study to do that kind of work. With internet, anyone can study almost anything. There are no excuses.”<

There are no excuses? What if you had a disease that made you quadriplegic or you had exposure to a toxic chemical that harmed your brain functions? Competition in the market is also about angling and hustling as much as it is about “working hard”. What if you can’t afford the internet?

Once again, it assumes everyone is the same – an equal playing field – and have the same capacities in the arena of market competition. This isn’t so and it is deeply twisted to say the market itself should be the judge of people’s self-worth.

As far as:
“Scarcity is a fact of life. End of story!”

Last I checked the entire point of an economic system is to manage scarcity. However, declaring “scarcity is a fact of life” does not mean achieving an abundance in terms of use (meaning there is substantially more than enough over time to meet the needs of everyone), is thus irrelevant.

I would hope that would be partly the goal of any economy from the standpoint of well-being, right? The difference between the market system and an NLRBE is the focus. The market likes scarcity as it creates increased profits. It is a scarcity preserving system because if there was an abundance, the market would fail.

A NLRBE is hence not “scarcity focused” like the market. It is “abundance focused”. It sees abundance as a goal and hence real technical efficiency (non-market) is key, along with sustainability… as without sustainability principles being technically applied, abundance simply would not happen, by definition.

Anyway. That’s all I have time for. In the end, try to be patient, if you can.
~p
5  Economy / Economics / Re: A Resource Based Economy on: December 18, 2015, 07:48:57 AM
Game of Capitalism :

"Today's system is just a 19th century model applied to a 21st century society. I mean - a room full of men making decisions about how much money to print? It's so antiquated it's almost comical.

But given that the majority of Western governments borrow money just to pay interest on money they've already borrowed, it's obvious the current game is almost finished."


Quote

NASA-funded study: Over 32 advanced civilizations have collapsed before us, and we're next in line - Simon Black

As any long-time reader of this column knows, we routinely draw from historical lessons to highlight that this time is not different.

Throughout the 18th century, for example, France was the greatest superpower in Europe, if not the world.

But they became complacent, believing that they had some sort of 'divine right' to reign supreme, and that they could be as fiscally irresponsible as they liked.

The French government spent money like drunken sailors; they had substantial welfare programs, free hospitals, and grand monuments.

They held vast territories overseas, engaged in constant warfare, and even had their own intrusive intelligence service that spied on King and subject alike.

Of course, they couldn't pay for any of this.

French budget deficits were out of control, and they resorted to going heavily into debt and rapidly debasing their currency.

Stop me when this sounds familiar.

The French economy ultimately failed, bringing with it a 26-year period of hyperinflation, civil war, military conquest, and genocide.

History is full of examples, from ancient Mesopotamia to the Soviet Union, which show that whenever societies reach unsustainable levels of resource consumption and allocation, they collapse.

I've been writing about this for years, and the idea is now hitting mainstream.

A recent research paper funded by NASA highlights this same premise. According to the authors:

    "Collapses of even advanced civilizations have occurred many times in the past five thousand years, and they were frequently followed by centuries of population and cultural decline and economic regression."

The results of their experiments show that some of the very clear trends which exist today - unsustainable resource consumption, and economic stratification that favors the elite - can very easily result in collapse.

In fact, they write that "collapse is very difficult to avoid and requires major policy changes."

This isn't exactly good news.

But here's the thing - between massive debts, deficits, money printing, war, resource depletion, etc., our modern society seems riddled with these risks.

And history certainly shows that dominant powers are always changing.

Empires rise and fall. The global monetary system is always changing. The prevailing social contract is always changing.

But there is one FAR greater trend across history that supercedes all of the rest... and that trend is the RISE of humanity.

Human beings are fundamentally tool creators. We take problems and turn them into opportunities. We find solutions. We adapt and overcome.

The world is not coming to an end. It's going to reset. There's a huge difference between the two.

Think about the system that we're living under.

A tiny elite has total control of the money supply. They wield intrusive spy networks and weapons of mass destruction. The can confiscate the wealth of others in their sole discretion. They can indebt unborn generations.

Curiously, these are the same people who are so incompetent they can't put a website together.

It's not working. And just about everyone knows it.

We're taught growing up that 'We the People' have the power to affect radical change in the voting booth. But this is another fairy tale.

Voting only changes the players. It doesn't change the game.

Technology is one major game changer. The technology exists today to completely revolutionize the way we live and govern ourselves.

Today's system is just a 19th century model applied to a 21st century society. I mean - a room full of men making decisions about how much money to print? It's so antiquated it's almost comical.

But given that the majority of Western governments borrow money just to pay interest on money they've already borrowed, it's obvious the current game is almost finished.

When it ends, there will be a reset... potentially a tumultuous one.

This is why you want to have a plan B, and why you don't want to have all of your eggs in one basket.

After all, why bother working so hard if everything you've ever achieved or provided for your children is tied up in a country with dismal fundamentals?

If you agree with me, then feel free to share this article with your friends below so they also can get a plan B in place. They'll be glad they did.

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

http://www.sott.net/article/307756-NASA-funded-study-Over-32-advanced-civilizations-have-collapsed-before-us-and-we-re-next-in-line
6  Economy / Economics / Re: A Resource Based Economy on: December 18, 2015, 07:30:47 AM
this is what capitalism system has done

Quote
It will take 100 years for the world’s poorest people to earn $1.25 a day - Jason Hickel

Title : The sustainable development goals will aim to eradicate poverty by 2030 but our current economic model, built on GDP, could never be inclusive or sustainable

If you follow international news you will be accustomed to headlines announcing that world leaders have succeeded in cutting global poverty in half over the past couple of decades. Its sounds like brilliant news, but it’s just not true. The numbers have been furtively manipulated to make it seem as though our economic system is working for the majority of humanity when in fact it is not.

The sustainable development goals, to be decided in September, will take this dubious good-news story a step further. This time, the main goal is not just to further reduce extreme poverty, but to eradicate it entirely – and to do so by no later than 2030. This is a welcome move: it’s about time we finally got around to putting poverty eradication firmly on the agenda. But it also raises some tough questions. Is it possible to end poverty under our current economic system?

A few weeks ago economist David Woodward tackled this question in an article published in the World Economic Review. His findings are shocking. He shows that, given our existing economic model, poverty eradication can’t happen. Not that it probably won’t happen, but that it physically can’t. It’s a structural impossibility.

Let’s assume that we can maintain the fastest rate of income growth that the poorest 10% of the world’s population have ever enjoyed over the past few decades. That was between 1993 and 2008 – after the debt crisis of the 1980s that crippled much of the developing world and before the banking collapse of 2008. During that period, their incomes increased at a rate of 1.29% each year.

So how long will it take to eradicate poverty if we extrapolate this trend? 100 years.

That’s what it will require to bring the world’s poorest above the standard poverty line of $1.25/day. Compare that with the SDGs’ 2030 target. And keep in mind that Woodward’s methodology is not able to capture the poorest 1% of the world’s population, who will still remain in poverty even at the end of this period. That’s 90 million people, more than the entire population of Germany today, who will remain in poverty forever. Whatever the SDGs will achieve, poverty “eradication” won’t be one of those things.

Even this extremely optimistic, best-possible scenario does not account for the slowdown in income growth since the financial crash. It doesn’t factor in the spikes in food prices that have effectively wiped out the incomes of the poor over the past few years, or the fact that climate change is already unravelling development gains across the global south. It imagines all of this away, and assumes that no further economic or ecological crises will happen in the next 100 years – which is a very big assumption indeed.

As if the 100-year timeline isn’t disappointing enough, it gets worse. A growing number of scholars are beginning to point out that $1.25/day – which is the official poverty line of the SDGs – is actually not adequate for people to survive on. In reality, if people are to meet their most basic needs and achieve normal human life expectancy, they need closer to $5/day. How long would it take to eradicate poverty at this more accurate line? 207 years.

Progress is woefully slow because to date the only strategy for reducing poverty is to increase global GDP growth. Politicians, economists and the development industry all have no other ideas. But GDP growth doesn’t really benefit the poor – or the majority of humanity, for that matter. Of all the income generated by global GDP growth between 1999 and 2008, the poorest 60% of humanity received only 5% of it. The richest 40%, by contrast, received the rest – a whopping 95%. So much for the trickle-down effect.

To eradicate poverty global GDP would have to increase to 175 times its present size if we go with $5/day. In other words, if we want to eradicate poverty with our current model of economic development, we need to extract, produce, and consume 175 times more commodities than we presently do. This is horrifying to contemplate. And even if such outlandish growth were possible, it would drive climate change to unimaginable levels and wipe out any gains in poverty reduction.

It’s a farcical proposition – a cruel joke played at the expense of the poor. And, as if to add insult to injury, to achieve this level of GDP growth, global per capita income would have to be no less than $1.3 million. In other words, the average income would have to be $1.3 million per year simply so that the poorest two-thirds of humanity could earn $5 per day. It’s completely absurd, but shows just how deeply inequality is hardwired into our economic system.

But it is in fact possible to eradicate poverty in fewer than 207 years, and to do so without destroying our ability to inhabit this planet. We need to abolish debts owed by developing countries, close down the tax havens, install a global minimum wage, place a moratorium on land grabs, and put an end to the structural adjustment programmes that allow rich countries to control the fates of poor countries. On top of all this, we need to dethrone the GDP measure and replace it with something more rational – like the Genuine Progress Indicator or the Happy Planet Index.

Unfortunately, the SDGs do not provide the answer, because they are not allowed to challenge dominant economic interests. Despite the fact that we’re already overshooting our planet’s total biocapacity by about 50% each year, growth, production, and consumption remain at the centre of their agenda. Yes, it’s all qualified by terms like “inclusive” and “sustainable”, but there are no clear commitments on what this is supposed to look like.

Of course, the corporations and rich-country governments that control the SDG process are very unlikely to adopt the change needed to truly eradicate poverty, because it would threaten the interests of the global 1%. But that’s exactly the point, and we need to be making it every chance we get.

http://www.theguardian.com/global-development-professionals-network/2015/mar/30/it-will-take-100-years-for-the-worlds-poorest-people-to-earn-125-a-day




and the capitalism is founded by Pirates and Organized Crime

Quote
The East India Company: The original corporate raiders

For a century, the East India Company conquered, subjugated and plundered vast tracts of south Asia. The lessons of its brutal reign have never been more relevant


One of the very first Indian words to enter the English language was the Hindustani slang for plunder: “loot”. According to the Oxford English Dictionary, this word was rarely heard outside the plains of north India until the late 18th century, when it suddenly became a common term across Britain. To understand how and why it took root and flourished in so distant a landscape, one need only visit Powis Castle.

The last hereditary Welsh prince, Owain Gruffydd ap Gwenwynwyn, built Powis castle as a craggy fort in the 13th century; the estate was his reward for abandoning Wales to the rule of the English monarchy. But its most spectacular treasures date from a much later period of English conquest and appropriation: Powis is simply awash with loot from India, room after room of imperial plunder, extracted by the East India Company in the 18th century.

There are more Mughal artefacts stacked in this private house in the Welsh countryside than are on display at any one place in India – even the National Museum in Delhi. The riches include hookahs of burnished gold inlaid with empurpled ebony; superbly inscribed spinels and jewelled daggers; gleaming rubies the colour of pigeon’s blood and scatterings of lizard-green emeralds. There are talwars set with yellow topaz, ornaments of jade and ivory; silken hangings, statues of Hindu gods and coats of elephant armour.
The audio long read Listen to William Dalrymple's long read on The East India Company: The original corporate raiders - Podcast

The latest in our audio long reads examines how, for a century, the East India Company conquered, subjugated and plundered vast tracts of south Asia. The lessons of its brutal reign have never been more relevant.
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Such is the dazzle of these treasures that, as a visitor last summer, I nearly missed the huge framed canvas that explains how they came to be here. The picture hangs in the shadows at the top of a dark, oak-panelled staircase. It is not a masterpiece, but it does repay close study. An effete Indian prince, wearing cloth of gold, sits high on his throne under a silken canopy. On his left stand scimitar and spear carrying officers from his own army; to his right, a group of powdered and periwigged Georgian gentlemen. The prince is eagerly thrusting a scroll into the hands of a statesmanlike, slightly overweight Englishman in a red frock coat.

The painting shows a scene from August 1765, when the young Mughal emperor Shah Alam, exiled from Delhi and defeated by East India Company troops, was forced into what we would now call an act of involuntary privatisation. The scroll is an order to dismiss his own Mughal revenue officials in Bengal, Bihar and Orissa, and replace them with a set of English traders appointed by Robert Clive – the new governor of Bengal – and the directors of the EIC, who the document describes as “the high and mighty, the noblest of exalted nobles, the chief of illustrious warriors, our faithful servants and sincere well-wishers, worthy of our royal favours, the English Company”. The collecting of Mughal taxes was henceforth subcontracted to a powerful multinational corporation – whose revenue-collecting operations were protected by its own private army.

It was at this moment that the East India Company (EIC) ceased to be a conventional corporation, trading and silks and spices, and became something much more unusual. Within a few years, 250 company clerks backed by the military force of 20,000 locally recruited Indian soldiers had become the effective rulers of Bengal. An international corporation was transforming itself into an aggressive colonial power.

Using its rapidly growing security force – its army had grown to 260,000 men by 1803 – it swiftly subdued and seized an entire subcontinent. Astonishingly, this took less than half a century. The first serious territorial conquests began in Bengal in 1756; 47 years later, the company’s reach extended as far north as the Mughal capital of Delhi, and almost all of India south of that city was by then effectively ruled from a boardroom in the City of London. “What honour is left to us?” asked a Mughal official named Narayan Singh, shortly after 1765, “when we have to take orders from a handful of traders who have not yet learned to wash their bottoms?”

    It was not the British government that seized India, but a private company, run by an unstable sociopath

We still talk about the British conquering India, but that phrase disguises a more sinister reality. It was not the British government that seized India at the end of the 18th century, but a dangerously unregulated private company headquartered in one small office, five windows wide, in London, and managed in India by an unstable sociopath – Clive.

In many ways the EIC was a model of corporate efficiency: 100 years into its history, it had only 35 permanent employees in its head office. Nevertheless, that skeleton staff executed a corporate coup unparalleled in history: the military conquest, subjugation and plunder of vast tracts of southern Asia. It almost certainly remains the supreme act of corporate violence in world history. For all the power wielded today by the world’s largest corporations – whether ExxonMobil, Walmart or Google – they are tame beasts compared with the ravaging territorial appetites of the militarised East India Company. Yet if history shows anything, it is that in the intimate dance between the power of the state and that of the corporation, while the latter can be regulated, it will use all the resources in its power to resist.

When it suited, the EIC made much of its legal separation from the government. It argued forcefully, and successfully, that the document signed by Shah Alam – known as the Diwani – was the legal property of the company, not the Crown, even though the government had spent a massive sum on naval and military operations protecting the EIC’s Indian acquisitions. But the MPs who voted to uphold this legal distinction were not exactly neutral: nearly a quarter of them held company stock, which would have plummeted in value had the Crown taken over. For the same reason, the need to protect the company from foreign competition became a major aim of British foreign policy.


The transaction depicted in the painting was to have catastrophic consequences. As with all such corporations, then as now, the EIC was answerable only to its shareholders. With no stake in the just governance of the region, or its long-term wellbeing, the company’s rule quickly turned into the straightforward pillage of Bengal, and the rapid transfer westwards of its wealth.

Before long the province, already devastated by war, was struck down by the famine of 1769, then further ruined by high taxation. Company tax collectors were guilty of what today would be described as human rights violations. A senior official of the old Mughal regime in Bengal wrote in his diaries: “Indians were tortured to disclose their treasure; cities, towns and villages ransacked; jaghires and provinces purloined: these were the ‘delights’ and ‘religions’ of the directors and their servants.”

Bengal’s wealth rapidly drained into Britain, while its prosperous weavers and artisans were coerced “like so many slaves” by their new masters, and its markets flooded with British products. A proportion of the loot of Bengal went directly into Clive’s pocket. He returned to Britain with a personal fortune – then valued at £234,000 – that made him the richest self-made man in Europe. After the Battle of Plassey in 1757, a victory that owed more to treachery, forged contracts, bankers and bribes than military prowess, he transferred to the EIC treasury no less than £2.5m seized from the defeated rulers of Bengal – in today’s currency, around £23m for Clive and £250m for the company.

No great sophistication was required. The entire contents of the Bengal treasury were simply loaded into 100 boats and punted down the Ganges from the Nawab of Bengal’s palace to Fort William, the company’s Calcutta headquarters. A portion of the proceeds was later spent rebuilding Powis.

The painting at Powis that shows the granting of the Diwani is suitably deceptive: the painter, Benjamin West, had never been to India. Even at the time, a reviewer noted that the mosque in the background bore a suspiciously strong resemblance “to our venerable dome of St Paul”. In reality, there had been no grand public ceremony. The transfer took place privately, inside Clive’s tent, which had just been erected on the parade ground of the newly seized Mughal fort at Allahabad. As for Shah Alam’s silken throne, it was in fact Clive’s armchair, which for the occasion had been hoisted on to his dining room table and covered with a chintz bedspread.
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Later, the British dignified the document by calling it the Treaty of Allahabad, though Clive had dictated the terms and a terrified Shah Alam had simply waved them through. As the contemporary Mughal historian Sayyid Ghulam Husain Khan put it: “A business of such magnitude, as left neither pretence nor subterfuge, and which at any other time would have required the sending of wise ambassadors and able negotiators, as well as much parley and conference with the East India Company and the King of England, and much negotiation and contention with the ministers, was done and finished in less time than would usually have been taken up for the sale of a jack-ass, or a beast of burden, or a head of cattle.”

By the time the original painting was shown at the Royal Academy in 1795, however, no Englishman who had witnessed the scene was alive to point this out. Clive, hounded by envious parliamentary colleagues and widely reviled for corruption, committed suicide in 1774 by slitting his own throat with a paperknife some months before the canvas was completed. He was buried in secret, on a frosty November night, in an unmarked vault in the Shropshire village of Morton Say. Many years ago, workmen digging up the parquet floor came across Clive’s bones, and after some discussion it was decided to quietly put them to rest again where they lay. Here they remain, marked today by a small, discreet wall plaque inscribed: “PRIMUS IN INDIS.”

Today, as the company’s most articulate recent critic, Nick Robins, has pointed out, the site of the company’s headquarters in Leadenhall Street lies underneath Richard Rogers’s glass and metal Lloyd’s building. Unlike Clive’s burial place, no blue plaque marks the site of what Macaulay called “the greatest corporation in the world”, and certainly the only one to equal the Mughals by seizing political power across wide swaths of south Asia. But anyone seeking a monument to the company’s legacy need only look around. No contemporary corporation could duplicate its brutality, but many have attempted to match its success at bending state power to their own ends.

The people of Allahabad have also chosen to forget this episode in their history. The red sandstone Mughal fort where the treaty was extracted from Shah Alam – a much larger fort than those visited by tourists in Lahore, Agra or Delhi – is still a closed-off military zone and, when I visited it late last year, neither the guards at the gate nor their officers knew anything of the events that had taken place there; none of the sentries had even heard of the company whose cannons still dot the parade ground where Clive’s tent was erected.

Instead, all their conversation was focused firmly on the future, and the reception India’s prime minister, Narendra Modi, had just received on his trip to America. One of the guards proudly showed me the headlines in the local edition of the Times of India, announcing that Allahabad had been among the subjects discussed in the White House by Modi and President Obama. The sentries were optimistic. India was finally coming back into its own, they said, “after 800 years of slavery”. The Mughals, the EIC and the Raj had all receded into memory and Allahabad was now going to be part of India’s resurrection. “Soon we will be a great country,” said one of the sentries, “and our Allahabad also will be a great city.”
***

At the height of the Victorian period there was a strong sense of embarrassment about the shady mercantile way the British had founded the Raj. The Victorians thought the real stuff of history was the politics of the nation state. This, not the economics of corrupt corporations, they believed was the fundamental unit of analysis and the major driver of change in human affairs. Moreover, they liked to think of the empire as a mission civilisatrice: a benign national transfer of knowledge, railways and the arts of civilisation from west to east, and there was a calculated and deliberate amnesia about the corporate looting that opened British rule in India.

A second picture, this one commissioned to hang in the House of Commons, shows how the official memory of this process was spun and subtly reworked. It hangs now in St Stephen’s Hall, the echoing reception area of parliament. I came across it by chance late this summer, while waiting there to see an MP.

The painting was part of a series of murals entitled the Building of Britain. It features what the hanging committee at the time regarded as the highlights and turning points of British history: King Alfred defeating the Danes in 877, the parliamentary union of England and Scotland in 1707, and so on. The image in this series which deals with India does not, however, show the handing over of the Diwani but an earlier scene, where again a Mughal prince is sitting on a raised dais, under a canopy. Again, we are in a court setting, with bowing attendants on all sides and trumpets blowing, and again an Englishman is standing in front of the Mughal. But this time the balance of power is very different.

Sir Thomas Roe, the ambassador sent by James I to the Mughal court, is shown appearing before the Emperor Jahangir in 1614 – at a time when the Mughal empire was still at its richest and most powerful. Jahangir inherited from his father Akbar one of the two wealthiest polities in the world, rivalled only by Ming China. His lands stretched through most of India, all of what is now Pakistan and Bangladesh, and most of Afghanistan. He ruled over five times the population commanded by the Ottomans – roughly 100 million people. His capitals were the megacities of their day.

In Milton’s Paradise Lost, the great Mughal cities of Jahangir’s India are shown to Adam as future marvels of divine design. This was no understatement: Agra, with a population approaching 700,000, dwarfed all of the cities of Europe, while Lahore was larger than London, Paris, Lisbon, Madrid and Rome combined. This was a time when India accounted for around a quarter of all global manufacturing. In contrast, Britain then contributed less than 2% to global GDP, and the East India Company was so small that it was still operating from the home of its governor, Sir Thomas Smythe, with a permanent staff of only six. It did, however, already possess 30 tall ships and own its own dockyard at Deptford on the Thames.



Jahangir’s father Akbar had flirted with a project to civilise India’s European immigrants, whom he described as “an assemblage of savages”, but later dropped the plan as unworkable. Jahangir, who had a taste for exotica and wild beasts, welcomed Sir Thomas Roe with the same enthusiasm he had shown for the arrival of the first turkey in India, and questioned Roe closely on the distant, foggy island he came from, and the strange things that went on there.

For the committee who planned the House of Commons paintings, this marked the beginning of British engagement with India: two nation states coming into direct contact for the first time. Yet, in reality, British relations with India began not with diplomacy and the meeting of envoys, but with trade. On 24 September, 1599, 80 merchants and adventurers met at the Founders Hall in the City of London and agreed to petition Queen Elizabeth I to start up a company. A year later, the Governor and Company of Merchants trading to the East Indies, a group of 218 men, received a royal charter, giving them a monopoly for 15 years over “trade to the East”.

The charter authorised the setting up of what was then a radical new type of business: not a family partnership – until then the norm over most of the globe – but a joint-stock company that could issue tradeable shares on the open market to any number of investors, a mechanism capable of realising much larger amounts of capital. The first chartered joint-stock company was the Muscovy Company, which received its charter in 1555. The East India Company was founded 44 years later. No mention was made in the charter of the EIC holding overseas territory, but it did give the company the right “to wage war” where necessary.

Six years before Roe’s expedition, on 28 August 1608, William Hawkins had landed at Surat, the first commander of a company vessel to set foot on Indian soil. Hawkins, a bibulous sea dog, made his way to Agra, where he accepted a wife offered to him by the emperor, and brought her back to England. This was a version of history the House of Commons hanging committee chose to forget.

The rapid rise of the East India Company was made possible by the catastrophically rapid decline of the Mughals during the 18th century. As late as 1739, when Clive was only 14 years old, the Mughals still ruled a vast empire that stretched from Kabul to Madras. But in that year, the Persian adventurer Nadir Shah descended the Khyber Pass with 150,000 of his cavalry and defeated a Mughal army of 1.5 million men. Three months later, Nadir Shah returned to Persia carrying the pick of the treasures the Mughal empire had amassed in its 200 years of conquest: a caravan of riches that included Shah Jahan’s magnificent peacock throne, the Koh-i-Noor, the largest diamond in the world, as well as its “sister”, the Darya Nur, and “700 elephants, 4,000 camels and 12,000 horses carrying wagons all laden with gold, silver and precious stones”, worth an estimated £87.5m in the currency of the time. This haul was many times more valuable than that later extracted by Clive from the peripheral province of Bengal.

The destruction of Mughal power by Nadir Shah, and his removal of the funds that had financed it, quickly led to the disintegration of the empire. That same year, the French Compagnie des Indes began minting its own coins, and soon, without anyone to stop them, both the French and the English were drilling their own sepoys and militarising their operations. Before long the EIC was straddling the globe. Almost single-handedly, it reversed the balance of trade, which from Roman times on had led to a continual drain of western bullion eastwards. The EIC ferried opium to China, and in due course fought the opium wars in order to seize an offshore base at Hong Kong and safeguard its profitable monopoly in narcotics. To the west it shipped Chinese tea to Massachusetts, where its dumping in Boston harbour triggered the American war of independence.

By 1803, when the EIC captured the Mughal capital of Delhi, it had trained up a private security force of around 260,000- twice the size of the British army – and marshalled more firepower than any nation state in Asia. It was “an empire within an empire”, as one of its directors admitted. It had also by this stage created a vast and sophisticated administration and civil service, built much of London’s docklands and come close to generating nearly half of Britain’s trade. No wonder that the EIC now referred to itself as “the grandest society of merchants in the Universe”.

Yet, like more recent mega-corporations, the EIC proved at once hugely powerful and oddly vulnerable to economic uncertainty. Only seven years after the granting of the Diwani, when the company’s share price had doubled overnight after it acquired the wealth of the treasury of Bengal, the East India bubble burst after plunder and famine in Bengal led to massive shortfalls in expected land revenues. The EIC was left with debts of £1.5m and a bill of £1m unpaid tax owed to the Crown. When knowledge of this became public, 30 banks collapsed like dominoes across Europe, bringing trade to a standstill.

In a scene that seems horribly familiar to us today, this hyper-aggressive corporation had to come clean and ask for a massive government bailout. On 15 July 1772, the directors of the East India Company applied to the Bank of England for a loan of £400,000. A fortnight later, they returned, asking for an additional £300,000. The bank raised only £200,000. By August, the directors were whispering to the government that they would actually need an unprecedented sum of a further £1m. The official report the following year, written by Edmund Burke, foresaw that the EIC’s financial problems could potentially “like a mill-stone, drag [the government] down into an unfathomable abyss … This cursed Company would, at last, like a viper, be the destruction of the country which fostered it at its bosom.”

    The East India Company really was too big to fail. So it was that in 1773 it was saved by history’s first mega-bailout

But unlike Lehman Brothers, the East India Company really was too big to fail. So it was that in 1773, the world’s first aggressive multinational corporation was saved by history’s first mega-bailout – the first example of a nation state extracting, as its price for saving a failing corporation, the right to regulate and severely rein it in.
***

In Allahabad, I hired a small dinghy from beneath the fort’s walls and asked the boatman to row me upstream. It was that beautiful moment, an hour before sunset, that north Indians call godhulibela – cow-dust time – and the Yamuna glittered in the evening light as brightly as any of the gems of Powis. Egrets picked their way along the banks, past pilgrims taking a dip near the auspicious point of confluence, where the Yamuna meets the Ganges. Ranks of little boys with fishing lines stood among the holy men and the pilgrims, engaged in the less mystical task of trying to hook catfish. Parakeets swooped out of cavities in the battlements, mynahs called to roost.

For 40 minutes we drifted slowly, the water gently lapping against the sides of the boat, past the mile-long succession of mighty towers and projecting bastions of the fort, each decorated with superb Mughal kiosks, lattices and finials. It seemed impossible that a single London corporation, however ruthless and aggressive, could have conquered an empire that was so magnificently strong, so confident in its own strength and brilliance and effortless sense of beauty.

Historians propose many reasons: the fracturing of Mughal India into tiny, competing states; the military edge that the industrial revolution had given the European powers. But perhaps most crucial was the support that the East India Company enjoyed from the British parliament. The relationship between them grew steadily more symbiotic throughout the 18th century. Returned nabobs like Clive used their wealth to buy both MPs and parliamentary seats – the famous Rotten Boroughs. In turn, parliament backed the company with state power: the ships and soldiers that were needed when the French and British East India Companies trained their guns on each other.

As I drifted on past the fort walls, I thought about the nexus between corporations and politicians in India today – which has delivered individual fortunes to rival those amassed by Clive and his fellow company directors. The country today has 6.9% of the world’s thousand or so billionaires, though its gross domestic product is only 2.1% of world GDP. The total wealth of India’s billionaires is equivalent to around 10% of the nation’s GDP – while the comparable ratio for China’s billionaires is less than 3%. More importantly, many of these fortunes have been created by manipulating state power – using political influence to secure rights to land and minerals, “flexibility” in regulation, and protection from foreign competition.

Multinationals still have villainous reputations in India, and with good reason; the many thousands of dead and injured in the Bhopal gas disaster of 1984 cannot be easily forgotten; the gas plant’s owner, the American multinational, Union Carbide, has managed to avoid prosecution or the payment of any meaningful compensation in the 30 years since. But the biggest Indian corporations, such as Reliance, Tata, DLF and Adani have shown themselves far more skilled than their foreign competitors in influencing Indian policymakers and the media. Reliance is now India’s biggest media company, as well as its biggest conglomerate; its owner, Mukesh Ambani, has unprecedented political access and power.

The last five years of India’s Congress party government were marked by a succession of corruption scandals that ranged from land and mineral giveaways to the corrupt sale of mobile phone spectrum at a fraction of its value. The consequent public disgust was the principal reason for the Congress party’s catastrophic defeat in the general election last May, though the country’s crony capitalists are unlikely to suffer as a result.

Estimated to have cost $4.9bn – perhaps the second most expensive ballot in democratic history after the US presidential election in 2012 – it brought Narendra Modi to power on a tidal wave of corporate donations. Exact figures are hard to come by, but Modi’s Bharatiya Janata party (BJP), is estimated to have spent at least $1bn on print and broadcast advertising alone. Of these donations, around 90% comes from unlisted corporate sources, given in return for who knows what undeclared promises of access and favours. The sheer strength of Modi’s new government means that those corporate backers may not be able to extract all they had hoped for, but there will certainly be rewards for the money donated.

In September, the governor of India’s central bank, Raghuram Rajan, made a speech in Mumbai expressing his anxieties about corporate money eroding the integrity of parliament: “Even as our democracy and our economy have become more vibrant,” he said, “an important issue in the recent election was whether we had substituted the crony socialism of the past with crony capitalism, where the rich and the influential are alleged to have received land, natural resources and spectrum in return for payoffs to venal politicians. By killing transparency and competition, crony capitalism is harmful to free enterprise, and economic growth. And by substituting special interests for the public interest, it is harmful to democratic expression.”

His anxieties were remarkably like those expressed in Britain more than 200 years earlier, when the East India Company had become synonymous with ostentatious wealth and political corruption: “What is England now?” fumed the Whig litterateur Horace Walpole, “A sink of Indian wealth.” In 1767 the company bought off parliamentary opposition by donating £400,000 to the Crown in return for its continued right to govern Bengal. But the anger against it finally reached ignition point on 13 February 1788, at the impeachment, for looting and corruption, of Clive’s successor as governor of Bengal, Warren Hastings. It was the nearest the British ever got to putting the EIC on trial, and they did so with one of their greatest orators at the helm – Edmund Burke.


Burke, leading the prosecution, railed against the way the returned company “nabobs” (or “nobs”, both corruptions of the Urdu word “Nawab”) were buying parliamentary influence, not just by bribing MPs to vote for their interests, but by corruptly using their Indian plunder to bribe their way into parliamentary office: “To-day the Commons of Great Britain prosecutes the delinquents of India,” thundered Burke, referring to the returned nabobs. “Tomorrow these delinquents of India may be the Commons of Great Britain.”

Burke thus correctly identified what remains today one of the great anxieties of modern liberal democracies: the ability of a ruthless corporation corruptly to buy a legislature. And just as corporations now recruit retired politicians in order to exploit their establishment contacts and use their influence, so did the East India Company. So it was, for example, that Lord Cornwallis, the man who oversaw the loss of the American colonies to Washington, was recruited by the EIC to oversee its Indian territories. As one observer wrote: “Of all human conditions, perhaps the most brilliant and at the same time the most anomalous, is that of the Governor General of British India. A private English gentleman, and the servant of a joint-stock company, during the brief period of his government he is the deputed sovereign of the greatest empire in the world; the ruler of a hundred million men; while dependant kings and princes bow down to him with a deferential awe and submission. There is nothing in history analogous to this position …”

Hastings survived his impeachment, but parliament did finally remove the EIC from power following the great Indian Uprising of 1857, some 90 years after the granting of the Diwani and 60 years after Hastings’s own trial. On 10 May 1857, the EIC’s own security forces rose up against their employer and on successfully crushing the insurgency, after nine uncertain months, the company distinguished itself for a final time by hanging and murdering tens of thousands of suspected rebels in the bazaar towns that lined the Ganges – probably the most bloody episode in the entire history of British colonialism.

Enough was enough. The same parliament that had done so much to enable the EIC to rise to unprecedented power, finally gobbled up its own baby. The British state, alerted to the dangers posed by corporate greed and incompetence, successfully tamed history’s most voracious corporation. In 1859, it was again within the walls of Allahabad Fort that the governor general, Lord Canning, formally announced that the company’s Indian possessions would be nationalised and pass into the control of the British Crown. Queen Victoria, rather than the directors of the EIC would henceforth be ruler of India.

The East India Company limped on in its amputated form for another 15 years, finally shutting down in 1874. Its brand name is now owned by a Gujarati businessman who uses it to sell “condiments and fine foods” from a showroom in London’s West End. Meanwhile, in a nice piece of historical and karmic symmetry, the current occupant of Powis Castle is married to a Bengali woman and photographs of a very Indian wedding were proudly on show in the Powis tearoom. This means that Clive’s descendants and inheritors will be half-Indian.
***

Today we are back to a world that would be familiar to Sir Thomas Roe, where the wealth of the west has begun again to drain eastwards, in the way it did from Roman times until the birth of the East India Company. When a British prime minister (or French president) visits India, he no longer comes as Clive did, to dictate terms. In fact, negotiation of any kind has passed from the agenda. Like Roe, he comes as a supplicant begging for business, and with him come the CEOs of his country’s biggest corporations.

    The idea of the joint-stock company is arguably one of Britain’s most important exports to India

For the corporation – a revolutionary European invention contemporaneous with the beginnings of European colonialism, and which helped give Europe its competitive edge – has continued to thrive long after the collapse of European imperialism. When historians discuss the legacy of British colonialism in India, they usually mention democracy, the rule of law, railways, tea and cricket. Yet the idea of the joint-stock company is arguably one of Britain’s most important exports to India, and the one that has for better or worse changed South Asia as much any other European idea. Its influence certainly outweighs that of communism and Protestant Christianity, and possibly even that of democracy.

Companies and corporations now occupy the time and energy of more Indians than any institution other than the family. This should come as no surprise: as Ira Jackson, the former director of Harvard’s Centre for Business and Government, recently noted, corporations and their leaders have today “displaced politics and politicians as … the new high priests and oligarchs of our system”. Covertly, companies still govern the lives of a significant proportion of the human race.

The 300-year-old question of how to cope with the power and perils of large multinational corporations remains today without a clear answer: it is not clear how a nation state can adequately protect itself and its citizens from corporate excess. As the international subprime bubble and bank collapses of 2007-2009 have so recently demonstrated, just as corporations can shape the destiny of nations, they can also drag down their economies. In all, US and European banks lost more than $1tn on toxic assets from January 2007 to September 2009. What Burke feared the East India Company would do to England in 1772 actually happened to Iceland in 2008-11, when the systemic collapse of all three of the country’s major privately owned commercial banks brought the country to the brink of complete bankruptcy. A powerful corporation can still overwhelm or subvert a state every bit as effectively as the East India Company did in Bengal in 1765.

Corporate influence, with its fatal mix of power, money and unaccountability, is particularly potent and dangerous in frail states where corporations are insufficiently or ineffectually regulated, and where the purchasing power of a large company can outbid or overwhelm an underfunded government. This would seem to have been the case under the Congress government that ruled India until last year. Yet as we have seen in London, media organisations can still bend under the influence of corporations such as HSBC – while Sir Malcolm Rifkind’s boast about opening British embassies for the benefit of Chinese firms shows that the nexus between business and politics is as tight as it has ever been.

The East India Company no longer exists, and it has, thankfully, no exact modern equivalent. Walmart, which is the world’s largest corporation in revenue terms, does not number among its assets a fleet of nuclear submarines; neither Facebook nor Shell possesses regiments of infantry. Yet the East India Company – the first great multinational corporation, and the first to run amok – was the ultimate model for many of today’s joint-stock corporations. The most powerful among them do not need their own armies: they can rely on governments to protect their interests and bail them out. The East India Company remains history’s most terrifying warning about the potential for the abuse of corporate power – and the insidious means by which the interests of shareholders become those of the state. Three hundred and fifteen years after its founding, its story has never been more current.


http://www.theguardian.com/world/2015/mar/04/east-india-company-original-corporate-raiders

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