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Last Saturday was the 250th anniversary of The Boston Tea Party, a protest against the Tea Act (“no taxation without representation”) and an accelerant of colonial support for the American Revolution. But as Deb Chachra and Robert Martello explain, there’s more to the story than we typically hear…

It’s a familiar story to many Americans. On the evening of December 16th, 1773, Massachusetts patriots, including some disguised as ‘Mohawk warriors’, boarded three vessels in Boston Harbor and dumped thousands of pounds of tea into the sea. This act of civil disobedience in protest of heavy-handed British colonial policies, including taxation and monopoly protections, is what we now know as “The Boston Tea Party.”

But behind this story lies another, of where that tea came from and why. For the American patriots, the tea itself was tangible evidence of the British government’s willingness to put profit and imperial control over the well-being, and even the lives, of its colonial subjects.

That tea was the property of the British East India Company which, in the years leading up to the American Revolution, was a massive, highly profitable corporation that held trading rights all over south and east Asia, including what is now India, Pakistan, Bangladesh, Myanmar, and China. As Nick Robins describes in his book The Corporation That Changed the World, those rights were acquired by systematically undermining local governance, and were enforced by the East India Company’s huge private army, which it used to seize and control territory. In 1757, Company soldiers fought and won the Battle of Plassey against the Nawab of Bengal and his French allies. In its wake, they installed a series of rulers who implemented a treaty in which the East India Company was granted the diwani, the right to collect taxes, while the puppet-Nawabs nominally remained responsible for political and judicial oversight, called the nizamat.

In the 18th century, Bengal was a prosperous textile hub, and its skilled workers were producing a wide array of some of the finest fabrics in the world. Selling these valuable goods had already generated enormous profits for the East India Company, and now taxation provided another revenue stream. Then, in 1768, a severe drought led to crop failures. Even as the Bengalis began to go hungry, company officers continued to collect taxes – at the point of a bayonet if necessary. The East India Company made virtually no provision for famine relief, and after decades of weakened local authority and with tax monies sent off to fill company coffers in London, there was little on-the-ground financial and administrative capacity to address the crisis. Worse, company agents saw hunger and starvation as money-making opportunities, and bought up grain in order to sell it at an enormous profit. Had the available food been redistributed, more residents would have survived. Instead, farms went unplanted, the drought was followed by flooding, disease spread through the weakened populace, and the situation went from dangerous to disastrous. Contemporary estimates put the death toll of the Great Bengal Famine of 1770 at between seven and ten million people – between a quarter and a third of the population.

The enormous human suffering that resulted from the actions of the East India Company, and the Company’s depraved indifference to it, were so horrifying that, as historian William Dalrymple describes, they created the first whistleblowers. Employees wrote to publications in London to detail the atrocities they had observed in Bengal. Their accounts prompted an enormous outcry and ongoing news coverage, with magazines and newspapers carrying cover-to-cover stories on the actions of the East India Company and the response of the British government. And the uproar was not limited to England – print publications routinely crossed the Atlantic… By the time of the Boston Tea Party, the Massachusetts colonists had been discussing, for years, this brutal demonstration of what can happen when a community lacks a voice in their own governance. They learned that even in times of direst need, a colony’s domestically produced resources can be extracted by outsiders in the name of greater profits. Diwani without nizamat is, quite literally, taxation without representation.

The colonists had also begun to experience the economic fallout of this crisis. Two years into the famine, and as a predictable consequence of the humanitarian disaster they were largely responsible for creating, the East India Company’s tax and trade revenues had collapsed. This precipitated a credit crisis in British banks that reverberated across the Empire, including the American colonies. But the East India Company did have some ready assets it could sell to raise much-needed cash: its warehouses in London were full of tea from China.

Rather than censure the East India Company, the British Parliament gave them a bailout. In addition to a government loan, the Tea Act of 1773 granted the struggling Company the monopoly right to sell their tea in the American colonies, cheaply and to a captive market, in order to quickly bring in some revenue and stabilize their finances. Parliament also took the opportunity to apply a three-pence tax on the tea to fund imperial oversight and control, including paying for customs inspectors, royally appointed governors, and occupying troops. If the New England colonists allowed this tea to leave the ships and enter the marketplace, this is what their labor would be paying for. No matter how cheap the tea was, it wasn’t worth this. 

The Parliamentary response to the Bengali Famine demonstrated how the British Empire’s appetite for revenue could trump any amount of colonial suffering. What’s more, if it could happen in Bengal, what’s to say it couldn’t happen in Boston?…

Motivated by anger, outrage, and fear, the patriots took decisive steps on a moonlit December night in 1773, dumping the hated tea into the harbor while making a point of leaving the ships themselves and the other cargo untouched…

The wages of colonialism: “Tea and Famine,” @debcha

* Emma Rothschild

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As we commiserate with the Irish, we might recall that the American colonist’s reaction to the East India Company was not the first. Prior to the establishment of the British behemoth in 1600, “companies” were formed and funded (in England, Holland, the Italian City-States, et al.) only for the duration of a single voyage and liquidated upon the return of the fleet– a very risky, all or nothing, proposition. The English East India Company demonstrated that pooling risk across a larger, ultimately open-ended series of voyages was a more bankable proposition.

Threatened with ruin, their Dutch competitors followed suit, forming their East India Company– United East India Company or VOC– in 1602. It was the first joint-stock company in the world; and as shares in the company could be bought by any resident of the United Provinces and then subsequently bought and sold in open-air secondary markets (one of which became the Amsterdam Stock Exchange), it is sometimes considered to have been the first multinational corporation.

Statistically, the VOC eclipsed all of its rivals in the Asia trade. Between 1602 and 1796 the VOC sent almost a million Europeans to work in the Asia trade on 4,785 ships and netted for their efforts more than 2.5 million tons of Asian trade goods and slaves. By contrast, the rest of Europe combined sent only 882,412 people from 1500 to 1795, and the fleet of the English (later British) East India Company, the VOC’s nearest competitor, was a distant second to its total traffic with 2,690 ships and a mere one-fifth the tonnage of goods carried by the VOC. The VOC enjoyed huge profits from its spice monopoly and slave trading activities through most of the 17th century. At its peak, VOC was worth almost $8 trillion dollars at current currency values.

On this date in 1603, its first fleet, under Admiral Steven van der Haghen, departed for the East-Indies.

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