The Big Business of the British Empire

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From The Wall Street Journal:

Those of us who went to school before our past was rewritten as a catalog of the White Man’s crimes were taught that empire—with all its vices and virtues—was built by monarchs and statesmen. In “Empire, Incorporated,” Philip J. Stern tells us that this picture, while not inaccurate, is quite incomplete.

British colonialism in particular, Mr. Stern says, was conceived by investors, creditors, entrepreneurs and, lest we forget, parvenus and embezzlers. This cast of men-on-the-make flourished alongside sovereigns and their ministers and produced what Mr. Stern calls “venture colonialism”—a form of overseas expansion that was driven by a belief that “the public business of empire was and had always been best done by private enterprise.”

The history of British colonialism is really the history of the joint-stock corporation. A novel strategy in the mid-16th century, this form of enterprise procured capital from an array of investors with ownership shares or profit-sharing and created a single legal entity, often granted special privileges. Among much else, the joint-stock corporation made undertakings on a global scale newly possible.

But what made joint stocks so appealing also made them “unsettling,” Mr. Stern writes, and a faction in Parliament worried about the clout of these companies in far-flung places. There was, no doubt, a class component to the apprehension. The original investors in the East India Co.—the pre-eminent joint stock, from its founding in 1600 to well into the 19th century—were all merchants, with only one aristocrat among them.

By the 1620s, the East India Co.’s demographics had changed, its successes attracting a posher class of investor. But the company ingeniously—and audaciously—refused to admit the king himself, “fearing the loss of independence it would entail,” Mr. Stern explains. The public justification for this apparent irreverence was that it was unseemly for the king to enter into commercial partnerships with his subjects.tells us how the joint-stock corporation shaped British colonialism. As a narrative, the author says, “it is like a novel that places an originally supporting character in the center of the story,” elevating fortune-hunters into fabled men. Robert Clive, that most infamous of the nabobs enriched by the East India Co. in the mid-18th century, and Sir Humphrey Gilbert, a mass killer of rebellious Irishmen who took possession of Newfoundland for the crown in 1583, were both VCs, or venture colonialists. As were Thomas Smythe, the first governor of the East India Co. and later treasurer of the Virginia Co., whose tobacco yielded great riches; and Sir Thomas Roe, who went as the ambassador of James I to the court of the Mughal Emperor Jahangir even as his true purpose was to secure a trade monopoly in India.

England’s “portfolio colonialism” came into existence through royal charters, by which the sovereign doled out juicy commercial advantages to those who petitioned for them. These plums ranged from exemptions from duties and taxes to the prerogative to claim territory overseas in the name of the crown (as Gilbert did in Newfoundland). The terms could be audacious, Mr. Stern observes, allowing companies to run all sorts of enterprises over “ill-defined geographic spaces insouciantly superimposed over indigenous sovereignty.” Breathtaking claims to territory or jurisdiction resulted in assertions of rights to “sacrosanct” private property that were enforceable in British courts. The charters redrew the maps of the world.

The first such charter was granted to the Muscovy Co. in 1555. Mr. Stern writes that the company effectively became “the English government over Anglo-Russian commerce” and, as a conduit of relations between England and Russia, exercised “de facto command over Anglo-Russian diplomacy.”

Link to the rest at The Wall Street Journal