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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.

Footprint: The Impact of Troop Numbers

Charles W. King

President Trump has recently transferred responsibility for the number of American troops deployed to Afghanistan to the Pentagon, precipitating a likely increase in the number of American soldiers there. This dismays those who would like to see the United States draw down its presence in Afghanistan, which has cost the US a tremendous amount of blood and treasure since the invasion in 2001, but it is worth examining why American commanders in both Afghanistan and Iraq have been so insistent on the need for large deployments of American troops to those conflicts.

Historically, the United States has relied on quality instead of quantity as for its armed forces. The US Navy was founded on the backbone of six innovative and expensive frigates. Even during World War Two when the US instituted conscription American GIs had more training than their Allied counterparts and vastly more tons of war materiel per soldier than any other belligerent. Supplying American soldiers with excellent training and inexhaustible supplies of rations, rifles, tanks, destroyers, and planes increased the combat effectiveness American forces many times over. This contrasts with the Soviet Red Army during the early years of the war, which possessed legions of able fighting men, but scant resources with which to equip them. Since World War Two the US has only increased the amount of investment, in training and materiel, per soldier. It is estimated to cost nearly $10 million to train an American Special Forces soldier.

At first glance the quality of each American soldier is the obvious reason why American commanders constantly requested more of them during the conflicts in Iraq and Afghanistan. There are, after all, limits on the effect a single soldier can have, regardless of how much training and equipment they have. However this ignores the nature of the operations in Iraq and Afghanistan. Without front lines and traditional engagements they had less in common with like World War Two, the Korean War, or even Vietnam than they did with peacekeeping operations. The most successful peacekeeping operations in American history are the NATO operations in the Balkans in the 1990’s. They also have the highest ratio of troops to population of any peacekeeping operation.

Different of military operations have different requirements and increase or decrease the effect of different factors. Covert infiltrations are best performed by small groups of highly trained soldiers with extensive surveillance support. Fighting the Soviet Union in Europe would have required a great deal of anti-armor capabilities. Peacekeeping requires boots on the ground. This is because peacekeeping has more in common with policing than it does soldiering much of the time. American police chiefs have long understood that an increased visible presence reduces crime, while not necessarily affecting the arrest rate. This is because this visible presence has a deterrent effect. The same is true in peacekeeping operations. The more peacekeepers there are, the more deterrent value they have, and the less they have to engage in combat actions.

This is borne out not only by NATO operations in the Balkans, but also in the effects of past surges in Iraq and Afghanistan. The question American policy-makers are asking should not be whether or not to deploy more troops. More troops will increase the likelihood of achieving strategic objectives and reduce the rate of casualties. The question should be whether the United States is willing to spend the blood and treasure required to achieve the results it desires.

Rebuilding Infrastructure vs Building Institutions

Charles W. King

The enormous cost and dubious return on funds provided for reconstruction efforts in Iraq and Afghanistan have prompted another round of resistance to further ‘Nation Building’ by the United States. Previous resistance to nation building peaked after the NATO peacekeeping missions in the Balkans in the 1990’s and after the Vietnam War in the 1970’s. Many Americans are not aware of the massive efforts made to support the Republic of Vietnamese. The United States spent $1.5 billion on state building projects between 1954 and 1960. American contractors built not only military bases in South Vietnam, but massive infrastructure projects including harbors, airports, and highway networks. After the war the US government was reluctant to engage not only in the manner of warfare experienced in Vietnam, but also investments of the scale it had made in the South Vietnamese state.

The failures in Vietnam, Iraq, and Afghanistan contrast starkly with the unbridled successes of American rebuilding efforts in Western Europe and Japan after World War Two. In both Europe and Asia the US was able to turn devastated countries into strong allies and vibrant markets in just a few years. The fact that reconstruction efforts in West Germany and Japan were during peace time rather than in the midst of a conflict is an important factor, but it is not the only factor. In Germany and Japan the US was rebuilding the infrastructure of existing states. In Vietnam, Iraq, and Afghanistan the US was building, not rebuilding, infrastructure for a new state. Germany and Japan already possessed strong state institutions. Where they had been turned towards war, now these institutions were being turned to collective defense and the free market. The existence of these institutions meant what  Germany and Japan needed was institutional reform and to rebuild their broken infrastructure. This taught American policy-makers in the decades since an incorrect lesson, that rebuilding broken roads and power grids was enough to create a strong state.

It is institutions not infrastructure that facilitated Germany and Japan’s transition from fascist aggressors to keystones of the post-war liberal order. The inability of infrastructure investment to create strong institutions in Vietnam, Iraq, and Afghanistan should not be a surprise to policy-makers. It is essential to recognize what construction projects in states without strong institutions can and cannot accomplish. The question for policy-makers in cases such as Iraq and Afghanistan, where the United States has a vested interest in establishing stable states, is how to create institutions that will endure and be effective.

Further Reading

Eric Hobsbawm, The Age of Extremes: A History of the World, 1914-1991, (New York, NY: Vintage, 1996).

Mark Mazower, Dark Continent: Europe's Twentieth Century, (New York, NY: Vintage Books, 1998).

James A. Baker III, and Lee H. Hamilton, The Iraq Study Group Report, (New York, NY: Vintage Books, 2006).

James M. Carter, Inventing Vietnam: The United States and State Building, 1954-1968. (Cambridge UK: Cambridge University Press: 2008).