Boston Tea Party, engraving in W. D. Cooper’s The History of North America, London: E. Newberry, 1789
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…
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.
Thomas R. Wells on something to remember in these times of international conflict…
As any map will show you, the world is divided by political borders into spaces called countries. People and things can live in, come from, or go to these places.
But countries are not any more than that.
Firstly and most obviously, countries are merely a social construction. They are collectively produced fictions (like money, or religions) rather than mind-independent objects (like stones). Being fictional does not mean that countries do not matter, but it does mean that they only exist so long as enough people agree to act as if they do.
Secondly and more significantly, countries are places not agents. Places on a map cannot have interests or goals or take actions to achieve them. To think otherwise is to confuse the properties of one kind of thing with another. This category error infects not only general talk, but also much otherwise careful journalism and even academic analysis. For example, the influential Realistschool of international relations is founded on the axiom that countries do (or ought to) act only in their national interest. This trades on two category errors: that countries (rather than governments) can act and that they have interests. The result is confusing and unfalsifiable nonsense about buffer zones, access to resources and so forth that is about as helpful for understanding, predicting, and managing conflicts as an astrological map.
What lies behind this error is the eliding of spaces on a map with the organisations that rule them. Organisations are collective agents like armies or corporations in which groups of human individuals are converted into a hierarchically coordinated and powerful actor in their own right. Unlike countries, organisations are a kind of collectively produced fiction about which it does make sense to attribute interests and which can actually do things, often very significant things. What we call governments are a particular kind of organisation, one that has achieved the power to make and enforce rules over the inhabitants of a country, for example by hurting those who dare to disagree with it and by preventing outsiders from entering. In Max Weber’s famous definition, it “successfully claims a monopoly of the legitimate use of violence”. This power is called sovereignty and it is an attribute of governments, not countries.
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People live in countries and are ruled over by governments. It is important to keep each of these three elements distinct and clear so that we can prevent the relentless category errors that confuse public discussion of international affairs. In particular, we should pay more credence to actual people and less to the organisations who claim to be their legitimate representatives merely because they have the power to hurt them. There are many tyrannical governments in this world. Their leaders may declare that they act in the name of the populations and territories they rule but they remain the ones responsible, the ones who should be held to account…
As we steer clear of stereotypes, we recall that it was on this date in 1602 that Vereenigde Oost-Indische Compagnie (VOC, or The Dutch East India Company, as it’s known in the Anglophone world) was born. Generally considered the world’s first trans-national corporation and the first publicly to issue stocks and bonds (and the first company to be ever actually listed on an official stock exchange), it began with a 21-year monopoly on the Dutch spice trade. The VOC also prefigured the mega-corporation of today in that it had quasi-governmental powers, including the ability to wage war, imprison and execute convicts, negotiate treaties, strike its own coins, and establish colonies. Considered by many to be the greatest corporation in history, the VOC eclipsed all of its rivals in international trade (and many nations in power) for almost 200 years.
Portrait of Luca Bartolomeo de Pacioli, attributed to Jacopo de’ Barbari
Modern capitalism began among the European merchant families of the early Renaissance—the Fuggers of Augsburg, Medicis of Florence and, in Venice, one Antonio de Rompiasi, who in 1464 hired a tutor in mathematics for his three sons. Like any sensible teacher, young Luca Pacioli aimed to make his lessons memorable and clear. Good humanist that he was, 30 years later he gathered all the world’s knowledge of the subject into a single massive volume.
His “Summa de Arithmetica, Geometria, Proportioni et Proportionalita” was the 615-page work of a mature professor who had spent decades working across northern Italy. The book was revolutionary on more than one count. It integrated computation using Hindu-Arabic numerals with the logic of classic Greek geometry; it was written in the Italian of the marketplace rather than Latin; and it was circulated in large numbers thanks to the new technology of printing. Yet its greatest significance lay in a slim ‘how to’ chapter that described the double-entry accounting system used by Venetian merchants.
With examples from dealers in butter to lemons to silk, Pacioli set out the method for tracking income and expenditure and the calculation of net profit or loss, which for the first time allowed an immediate snapshot of a firm’s financial position. This slim section would facilitate the birth of the modern corporation.
“Without order there is chaos,” Pacioli observed in a breezy style that is still in vogue in business books today. His manual is stuffed with quotes from scripture and Dante and pithy advice such as “Don’t learn from ignoramuses who have more leaves than grapes.” He wrote the accounting chapter to help would-be traders in Venice, then the capital of the financial world, “sleep easily at night”. Without double-entry book-keeping, “their minds would keep them awake with worry”. He could not suspect that what might be called “Book-keeping for Dummies” would become the backbone of business for centuries.
Like many monumental works of 15th-century printing, Pacioli’s treatise has survived in its original form. Some 120 copies still exist, from an initial run of about 1,000. Now today’s moguls have a chance to own this first folio of finance. Christie’s, the auction house, is offering a first edition in its original vellum binding for sale in New York on June 12th. The starting price is $1m for what it unabashedly calls “the most influential work in the history of capitalism.”
Pacioli’s later life augments the glamour of the first printed use of ‘plus’ and ‘minus’ signs. Impressed by the book, Leonardo da Vinci convinced his patron Lodovico Sforza to hire Pacioli to teach at the court of Milan. Pacioli and Leonardo collaborated on the treatise “Divina Proportione,” which married maths with art through the study of perspective. Not one, but two Renaissance masters were thus responsible for the exquisite harmony of “The Last Supper”…
As we count carefully, we might recall that it was on this date in 1902 that a US patent (#701,839) was issued to Americus F. Callahan of Chicago, Ill., which he called the outlook envelope– what we call the window envelope.
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