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Company Rule: The British East India Company

Charles W. King

Recently President Trump reaffirmed the United States’ commitment to the war in Afghanistan and pledged to send 4,000 troops to supplement the approximately 8,000 American and 6,000 allied troops in Afghanistan. While the President did not ultimately adopt it, there was an alternative which has received significant attention over the past few weeks. This alternative, advocated by Eirk Prince of Blackwater fame, is explicitly modeled on that of the British East India Company. According to Prince replacing American troops with private contractors could save the United States billions and defeat the Afghan Taliban. He claims to have thousands of retired American and NATO Special Forces ready to do this work, but experts contend that the potential talent pool of available Western Special Forces is nowhere near deep enough to supply Prince’s proposal. Also worth highlighting is that according to sources inside the White House, as reported by Foreign Policy, the thing that may have change the President’s mind on Afghanistan is the presence of extensive mineral deposits now being developed by Chinese companies, companies which may have links to Prince. While these reasons alone should be enough to give pause to anyone examine Prince’s proposal, it is also worth examining the model that he proposes.

The British East India Company was granted a Royal Charter by Queen Elizabeth I on December 30th, 1600 for the purpose of establishing trade between Britain and the Far East. At the time the protections of incorporation were only granted to ventures that advanced government agendas. Frequently, as in the case of the EIC, incorporation came with monopoly rights as well. The EIC’s most important monopolies were tea and saltpeter; the former being an inciting cause of the American Revolution, the latter being a key strategic resource. The Company would rule India for almost one hundred years before being stripped of its control of India in response to the Indian Rebellion of 1857.

In addition to the proximate causes of the 1857 rebellion (British attempts to change social norms of both the military and civilian population, and the adoption of greased rifle cartridges) company rule in India and well as later administration by the British Raj which replaced it, witnessed large scale famines as the result of typical drought seasons. One third of the population of Bengal died in 1770 as a result of Company rule. Tens of millions of Indians died as a result of these famines; meanwhile India was a net exporter of cereal grains, a subject we have touched upon before.

The British East India Company was not a successful business venture. The British Parliament was forced to bail it out numerous times between 1600 and 1857. It was a brutal instrument of imperial power. It exercised control of the Indian subcontinent thought violence, subject to little to no oversight from London. The Company facilitated control over the economies of the British Empire’s other possessions, including the Thirteen Colonies and the Empire’s African colonies. It was an engine for the extraction of resources and wealth from the colonies for the benefit of London, and it demonstrated phenomenal disregard for the value of human life in doing so. It is not an example that the United States should seek to emulate.

Walking Away from a Win: The Office of Global Criminal Justice

Charles W. King

The impending closure of the Office of Global Criminal Justice, formerly the Office of War Crimes Issues, is a dangerous move away from one of the most important hallmarks of American post-World War Two foreign policy. This little known office of the State Department represents one of the essential facets of the post-war world: the establishment of new international norms. It is possible to draw a direct line from President Abraham Lincoln’s General Order Number 100, known as the “Lieber Code” through the Hague Conventions of 1899 and 1907, the Geneva Conventions of 1926 and 1949, and the Nuremburg and Tokyo War Crimes Trials.

It must be recognized that it is not possible to prevent atrocities in warfare, but these orders, international agreements, and trials have effectively established international norms against genocide and other crimes against humanity. No body of law assumes total compliance, otherwise no system of prosecution and punishment would be necessary. This does not prevent laws from effectively what is and is not acceptable behavior. It is in the interests of the United States to participate in international conventions on what behaviors should be forbidden both because it protects American soldiers and civilians and because it is beneficial for American foreign policy.

In Erich Maria Remarque’s magnum opus All Quiet on the Western Front fresh German reinforcements arriving on the Western Front of World War One are admonished by veterans for serrating the edges of their bayonets. The veterans explain that because the wounds of such weapons are so horrific there exists an unspoken agreement between the two sides not to use them, with violators being punished harshly. This anecdote demonstrates how compliance with limitations in warfare benefits nations, by protecting their soldiers. Codifying these proscriptions enhances the extent of compliance.

American participation in the establishment of post-war norms against genocide and war crimes is not without controversy. The United States resists international pressure to outlaw both land mines and cluster munitions. Not only is the United States not a signatory to the Rome Treaty that established the International Criminal Court, in 2002 President George W. Bush signed the American Service-Members Protection Act. This act prohibits American cooperation with ICC investigations and permits the President to use, “all means necessary and appropriate to bring about the release of any U.S. or allied personnel being detained or imprisoned by, on behalf of, or at the request of the International Criminal Court."

Despite the reticence of some in Congress and the Pentagon the United States has for decades successfully used post-war international norms for the benefit of the American people. Proscriptions against genocide and aggressive war have significantly reduced the frequency of both since 1945. The peace and stability engendered by has allowed for unprecedented prosperity in the United States and across the world. That there exist international taboos against attacking civilians makes terrorism galling to people in the 21st century, but that kind of brutality was normal and frequent recently in human history. The State Department’s active role in establishing international norms, not just against genocide and war crimes, but also in favor of personal freedom and international trade, is one of the great accomplishments of American democracy. The shuttering of the Office of Global Criminal Justice is not a step backwards, but an about-face and stride the wrong direction.

Freedom of the Riders: The British Empire, United States, and Defense Spending

Charles W. King

For decades now the United States’ European allies have been criticized by some American politicians and policy-makers for failing to maintain their defense spending at 2% of Gross Domestic Product, as stipulated by NATO. These countries are derided as ‘Free Riders’. Some Americans complain about subsiding European nations by taking on their defense burden for them. The United State has in effect taken much of Europe’s defense burden upon itself, but that is not a reason to be critical. Like the Marshall plan, American defense spending was essential for Europe to become a healthy market for American goods after World War Two. The burden of defending themselves from the Soviet Union and Warsaw pact after 1945 could easily have been too cumbersome for Western Europe, and it certainly would have crowded consumer spending out of the economy for defense. The United States has let its European allies flourish under its defensive umbrella for decades and has flourished because of it, and it is not the first superpower to benefit from such an arrangement.

When the Monroe Doctrine was issued in 1823 the United States did not possess the naval strength to enforce it. The US Navy had grown significantly from the original six frigates laid down in 1794, but would still be no match for the naval forces of a European great power like France, Spain, or Great Britain. Throughout much of Europe the doctrine was received with disregard and contempt. Its saving grace was British insistence upon Freedom of the Seas. The nineteenth century was the height of Pax Britannia, and the British economy of was booming as a result of increasing industrialization and trade. Spanish re-conquest of Latin America would have been detrimental to British interests. The United States and its still nascent Navy did not have to invest in enforcing the Monroe Doctrine, because the Royal Navy already was. In a very real way the Monroe Doctrine was an American declaration of an existing British policy. From the War of 1812 to the Spanish American War in 1898 the US was a ‘Free Rider’ on the Royal Navy and British maritime and free trade policy. The British did not implement these policies or invest in the Royal Navy for American benefit. They were beneficial to Great Britain itself.

American policy-makers who are critical of the defense burden that the US bears for its European allies should consider how this spending benefits the United States. Investing in defense abroad makes a war in the American home waters or continent less plausible. The American government spends the money on American made equipment and the training of American personnel, developing domestic industry and increasing readiness in ways that would not be pressing without forward deployed troops. Allied nations who rely on the United States for defense also purchase American made goods and American services. The ability of foreign markets to afford American consumer goods is what made the Dollar the reserve currency of the world for the twentieth century. There may be ‘free riders’ on American defense spending, but that does not mean that it is a waste of money. The British Empire, and the early United States, would not have prospered if not for the Royal Navy and Freedom of the Seas. Investing in ‘free riders’ will protect American prosperity into the twenty first century.

Expanding Tension: The State vs. Colonists

Charles W. King

Taxation without representation, the presence of the Royal Army in colonist’s homes, and the suspension of trade and English Common Law are the most well-known of the grievances levied by the Continental Congress against King George III. The Royal Proclamation of 1763 was another, and like the statutes against trading with foreign powers and their colonies it was violated repeatedly by American colonists. Issued after the French & Indian War, known in Europe as the Seven Years War, the Proclamation forbade American settlers from expanding past the Appalachian Mountains, establishing the Ohio River Valley and the lands beyond at native territory. For many Americans access to the other side of the Appalachians was the point of going to war against France and her native allies. The British Government had promised large swathes of land west of the Appalachians in exchange for American service against the French, which the Proclamation nullified without compensation. The Crown sought to avoid another war by forbidding further encroachment by the Thirteen Colonies against neighbors, which is understandable even if how they thought they’d enforce such a measure is not.

The tension between adventurous trappers, prospectors, and settlers and the government was one of the enduring tensions of for the Thirteen Colonies and the United States during the 18th and 19th centuries. Settlers’ going beyond the lands that the central government intended to protect was not exclusive to the colonial period. It would happen repeatedly and was the cause of conflicts between the United States and Mexico and dozens of Native American tribes whose lands were promised protection by the government only to be violated by settlers. Knowing that if they needed to they could rely on the protection of the Royal Army or the US Cavalry, Americans continued to push west ahead of their governments.

Neither is this phenomenon unique to the United States. Deriving from English Common Law principle of ‘Improvement’ that facilitated the Enclosure of common lands in the United Kingdom, this kind of settler colonialism was typical of the British Empire’s possessions in Africa and Australia as well. The British Raj is the exception; its history has much more in common with French methods of colonization. In Australia, South Africa, and Kenya the British Empire was drawn into repeated conflicts by settlers expanding past the established borders of imperial rule and turning to the Empire when conflicts arose.

The story of settler colonization is to a straightforward one of government sanctioned expansion into native lands. The history of the Thirteen Colonies and of other British settler colonies demonstrates an ongoing tension between settlers and their governments. It may appear to modern-policy makers that these tensions have little bearing on a world that has been blanketed with human civilization. This is not the case; there remain important swathes of land that humanity is only just beginning to explore. Brazilians are getting deeper and deeper into the Amazon jungle, against the wishes of their government. The possibility of creating new lands out of sand and steel in the oceans is becoming closer and closer to reality. As people reach deeper into the unpopulated places of the world and make previously inhospitable places prosperous policy-makers will have to be cognizant of how their own citizens and those of other nations will not only push the envelope, but beyond it.

Further Reading

John C. Weaver, The Great Land Rush and the Making of the Modern World, 1650-1900 (Montreal, Quebec: McGill-Queen's University Press, 2003)

History by Numbers: The Importance and Risks of Economic History

Charles W. King

As the field of economics has developed better methods for understanding economic systems, scholars have used them to both look both forwards and back. For economists applying historical data allows them to refine and improve their models and theses. For historians economic methods facilitate big picture history. Tools like Gross Domestic Product (GDP) and Consumer Price Indices (CPI’s) are as useful to historians as they are to economists and policymakers. They allow historians to compare and contrast the economic history and development of technologies and politics in disparate parts of the world that were difficult to compare based on narrative history.

One of the most important questions for historians and social scientists for the past two centuries has been the rise of Europe; what was it that led Europe—particularly Great Britain—to become the power that it was in the 19th and 20th centuries? For decades the predominant historical narrative was one of the “Protestant Work Ethic” and market capitalism. Historians reached further and further back into European history to find the roots of industrial capitalism in the most rudimentary medieval markets.

This narrative was upended by economic histories of Europe, Asia, and the Middle East. Comparisons of agricultural productivity in the richest parts of Europe (Great Britain, Holland, and Italy) and the richest part of China (the Lower Yangtze Delta) found that they were roughly equal through 1800. Court documents and merchant’s ledgers in reveal that the commoditization of land occurred simultaneously in both England and Ottoman Palestine. These revelations have helped historians better understand how economies and nations have developed.

Innovation in economic history has not been without controversy.  Robert William Fogel and Stanley L. Engerman’s 1974 book Time on the Cross: The Economics of American Negro Slavery attempted to revise the narrative of American chattel slavery, arguing that it was both more productive and less harsh than historians and the public at large had previously believed. Fogel and Engerman rely on the measurement of Total Factor Productivity (TFP) to demonstrate slavery’s productivity. TFP cannot be measured. It is found by measuring total output, labor input, and capital input, weighting the importance of capital and labor, and deriving TFP from those numbers. It is the fuzziest of fuzzy maths. To show the quality of food each slave received Fogel & Engerman used the weight of pork each slave was given per week, failing to consider the cut and quality of pork. The result is a tremendously important but problematic work.

Economic history is an innovative and important field of history with ramifications for policy-makers as well as historians. Understanding long term trends in economics and what caused the European breakout will help formulate new policies. But historians, economists, and policy-makers must resist the temptation to use economic methods to distill history down to a single statistic. Doing so ignores important variables and human factors that will continue to make both academic research and governance difficult, but without them history and policy will become myopic, less illuminating, and less useful.

Further Reading

"A not-so-golden age," The Economist, June 15, 2017, accessed June 15, 2017, http://www.economist.com/news/china/21723459-how-will-affect-xis-chinese-dream-china-has-been-poorer-europe-longer-party.

Kenneth Pomeranz, The Great Divergence: China, Europe, and the Making of the Modern World Economy (Princeton, NJ: Princeton University Press, 2000).

Max Weber, The Protestant Ethic and the Spirit of Capitalism trans. Talcott Parsons, (London, UK: Allen and Unwin, 1930).

Fernand Braudel, The Mediterranean and the Mediterranean World in the Age of Philip II (Berkeley: University of California Press, 1996)

Beshara Doumani, Rediscovering Palestine: Merchants and Peasats in Jabal Nablus, 1700-1900 (Berkeley, CA: University of California Pres: 1995).

Robert William Fogel & Stanley L. Engerman, Time on the Cross: The Economics of American Negro Slavery (New York, NY: W.W. Norton and Company, 1974).