The rule of empires : those who built them, those who endured them, and why they always fall (36 page)

of institution equipped to run a growing overseas empire.

Its court of directors therefore worried that Clive’s stroke at

Plassey had saddled them with unsustainable military and administrative expenses. Most directors remained focused on commerce and

maintaining the monopoly on Asian trade that fi nally had begun to

produce impressive returns. Company stock paid annual dividends

ranging from 6 to 10 percent, and between 1738 and 1742 its Asian

commercial activities generated an average yearly profi t of 1.1 million pounds. This made it the second-most-lucrative stock company

in Britain, after the Bank of England, even before Clive emerged victorious at Plassey.10

The proprietors were understandably committed to protecting

their charter. Facing challenges from antimercantilist critics who

charged that monopolies stifl ed trade, they made regular loans and

outright presents worth tens of thousands of pounds to the Crown.

At the turn of the eighteenth century, they temporarily lost their

monopoly when rival investors won permission to trade in the Indies

by bribing King George I with a low-interest two-million-pound loan.

Company directors responded by buying out the new company and

paying the Crown 3.2 million pounds to recognize the two merged

companies as the United Company of Merchants of England Trading

to the East Indies.

This enormous sum amounted to the EIC’s entire capital reserve.

Anxious to block future challenges, the proprietors turned to politics.

Company directors acquired seats in the House of Commons, where

they wielded considerable infl uence through generous gifts and loans.

Other members of Parliament also invested directly in Company

184 THE RULE OF EMPIRES

stock. Over time, a network of intermarriage, kinship, and patronage

developed that linked the directors with the landed elites who dominated British politics and society. Sometimes the EIC went too far

and occasionally found itself caught up in insider trading and bribery

scandals. Nevertheless, the Company’s strong political and personal

ties to the men who ran Britain safeguarded its claim to India.

Yet the real reason that the East India Company exerted such a

strong hold on Bengal and the rest of South Asia was because, as in the

Andes, it built on the work of imperial predecessors. Clive and his colleagues made extensive use of Mughal institutions, but the Mughals

themselves were heirs to a long history of empire building on the

South Asian subcontinent. Alexander the Great and a succession of

ruling dynasties, petty kings, and foreign invaders did the heavy lifting of setting up stratifi ed systems of governance, tax collection, and

military recruiting. Lasting from 1526 to the end of Company rule in

1857, the Mughal Empire’s imperial genius lay in its ability to adapt,

expand, and systematize these indigenous institutions of exploitation. Although the EIC represented a new kind of empire, it was also

a direct descendant of these earlier Indian imperial states.

The Mughals were Central Asians who invaded northern India

from Afghanistan in the early sixteenth century. Muslims had been

a signifi cant presence in the region since the Umayyad general

Muhammad ibn al-Qasim overran Sind in 712, and for almost a

millennium Arab, Afghan, and Turkish conquerors had founded a

series of imperial successor states. These Islamic empire builders

ruled Hindu majorities that ranged from simple peasants to warrior

castes who grudgingly accepted subject status after numerous failed

rebellions. Led by Zahir-ud-din Muhammad Babur, the Mughals

overthrew the Delhi Sultanate, a once-powerful Central Asian conquest state that had shattered into autonomous Afghan and Turkish

fi efdoms by the sixteenth century.

Babur’s grandson Jalal-ud-din Muhammad Akbar was the true

architect of the Mughal Empire. Working from his base in the rich lands

between the Indus and Ganges rivers, he brought most of Bengal under

Mughal control by the 1580s. At its high point under Akbar’s grandson

Shah Jahan, the Mughal Empire ruled over approximately 1.2 million

square miles and more than one hundred million subjects. This made it

comparable in size and scope to Ming China, and its twenty-two provinces generated annual revenues of 220 million rupees.11

Company

India 185

The Mughals extracted this fantastic wealth by imposing a rational but fl exible administrative framework on the mosaic of Muslim conquest states, Hindu kingdoms, and small rural polities that

made up northern and central India. Akbar and his heirs controlled

the empire’s nobility, which was a highly diverse mixture of Turks,

Uzbeks, Indian Muslims, Shi’a Persians, and Hindu Rajputs, through

a hierarchical system that rewarded loyal service with administrative

posts, generous stipends, and titles. Mughal notables held a personal

rank or
zat
based on the number of troops they commanded. These

warrior aristocrats were Akbar’s governors, generals, and ministers.

This also made them
mansabdars
, a term for a Mughal offi cial holding a specifi c administrative post.

Not all
mansabdars
were nobles, but only nobles were entitled

to a direct share of imperial revenues in the form of a
jagir
. Based

on the Turkish military fi efdom, this concession gave its holder the

right to keep a portion of the collected taxes from a specifi c village or

region.
Jagir
holders did not own the land itself and were entitled to

keep only enough revenue to support themselves and their military

retainers; they remitted the surplus to the imperial treasury. Nevertheless, a
jagir
was a signifi cant perquisite that gave Mughal notables

a strong personal stake in the empire, but they did not have to trouble

themselves personally with the messy details of revenue gathering.

Instead, this was the responsibility of lesser functionaries (known as

zamindars
in Bengal) who in turned passed the obligation on down

to a ranked hierarchy of subordinate collectors ending in “village

zamindars
” or headmen.

The Mughals codifi ed these local arrangements, but they generally remained aloof from rural affairs so long as the
zamindars
met

their quotas and the
jagir
holders passed on suffi cient wealth to the

treasury. Provincial governors answered directly to the emperor, but

their authority over common Indians was relatively circumscribed.

The main political unit of the Mughal Empire was the
pargana
(subdistrict), consisting of anywhere from twenty to two hundred villages

where chiefs,
rajas
, clan leaders, and community elites had the greatest infl uence on daily life. The Mughals relied on these local authorities to extract the rural surplus.

As in all preindustrial empires, the wealth of Mughal India lay in the

countryside. Land was relatively plentiful in most agricultural communities in early eighteenth-century Bengal, which meant that there was

186 THE RULE OF EMPIRES

little incentive to develop a system of private ownership. Labor mobilization was as central to prosperity and social advance there as it was in

the Andes. Far from being the egalitarian “rural republics” envisioned

by later generations of British revenue collectors, Bengali villages were

dominated by those who had the means to expand production by owning oxen or hiring salaried workers. These entrepreneurs loaned grain

or money to poorer farmers in diffi cult times and were best equipped to

invest in cash crops. Rural Bengali economies also supported a sophisticated handicraft sector that produced many of the fi ne textiles that drew

foreign merchants to India. The
zamindars
and their subordinates tapped

into this rural wealth, but the power of local authorities placed limits on

what they could demand. Negotiated custom set tribute rates, and the

wise collector did not meddle too deeply in village affairs. Moreover, agricultural laborers usually could move to fi nd more favorable terms if the

zamindars
’ demands became excessive.

There were enormous local variations in agricultural production

throughout South Asia, but the Mughals’ prosperity rested on their

success in capturing local tribute systems and tying them to a dense

continental web of commerce and investment. In 1585, Akbar’s Hindu

fi nance minister created the
zabt
revenue system, which aimed to

survey all the
jagirs
throughout the empire, set tribute obligations,

and mandated that payments be made in coin. By collecting revenues

in currency the Mughals accelerated the monetization and commercialization of local economies, which gave the empire better access to

rural wealth and allowed traders and speculators to move commodities and capital throughout South Asia. The
zabt
system failed in its

ambitious attempt to draft an accurate and complete survey of tax

collection throughout the empire, but it helped the Mughals build

a sophisticated imperial economy that produced high-value export

crops and fi ne silks and woven textiles that brought the European

chartered companies to India.

These westerners played a key role in the Mughal economy by

importing American and Japanese silver. This kept the economy liquid

and provided the means for Indian merchants to buy Chinese goods.

In the 1660s, the European chartered companies shipped thirty-four

tons of silver to India each year, thereby linking the Mughal imperial

economy to the Andes. In time, these commercial contacts became so

well established that the Dutch and British sent unopened boxes of

Peruvian silver reales directly to Indian imperial mints.12

Company

India 187

The Mughals were thus indirect benefi ciaries of the Spanish empire

in the Americas, but it was only a matter of time before they joined

the Andeans in subjecthood. Like the Inkas, they laid the groundwork

for imperial conquest by setting up effi cient and easily co-optable

administrative and extractive systems. But the Mughal Empire was

the more valuable prize. Although they lacked as much easily lootable

wealth as the Inkas, the Mughals’ effi cient tribute collection systems

and monetized economy gave British empire builders much greater

access to the collective wealth of rural Indian communities. Where

the Spanish had to take most of their tribute as
encomienda
labor

because Andean economies were not fully commercial, the EIC captured a sophisticated integrated imperial economy that banked much

of its wealth in easily accessible currency.

Clive and his allies accomplished this feat because the Mughals

were as isolated and alienated from their subjects as the Inkans

were from common Andeans. Akbar’s heirs were Muslim emperors ruling a population that was roughly 80 percent Hindu. At the

elite level, this was not as problematical as it might seem, for the

Mughals co-opted Rajput Hindu kings by marrying their daughters and recognizing their authority over their own lands. The

Rajput warrior elite thus accepted the Mughal emperors as legitimate sovereigns even though they were Muslims. But in doing so

they set a precedent that allowed Christian Britons to step into the

Mughals’ shoes.

Religious toleration brought Akbar and his son Jahangir a measure of stability, but the Mughals’ dependence on new sources of

imperial tribute dictated a never-ending series of campaigns that

fatally weakened the empire by the turn of the eighteenth century.

The
zabt
revenue survey was one of the most impressive systems of

imperial extraction to emerge in the early modern era, but it never

captured enough rural wealth to meet the needs of the empire. The

heavily stratifi ed layers of nested revenue collection that connected

local producers to the imperial court were highly ineffi cient and prevented the imperial authorities from fully exploiting the increasing

commercialization of South Asian economies. Seeking ways to overcome local resistance, Mughal treasury offi cials gave revenue collectors more coercive authority by allowing them to turn their holdings

into minor fi efdoms. It was only a matter of time before these wellentrenched
jagir
holders asserted their autonomy.

188 THE RULE OF EMPIRES

The decline of the
zabt
system meant that new conquests became

the surest and most effective means of acquiring the new streams

of wealth that the Mughals needed to sustain their expanding court

and patronage system. Emperor Aurangzeb, who came to power in

1658 by overthrowing his elderly father and vanquishing rival siblings, tried to expand the empire into the southern Deccan Plateau

through a series of ambitious but ultimately disastrous campaigns

against the region’s independent sultanates. Lasting off and on for

decades, Aurangzeb’s wars created a new danger to the empire by

allowing the Hindu warrior elites who served the Deccan Muslim

states to assert their autonomy. Known collectively as the Marathas,

these independent but allied chiefdoms evolved from a nagging irritant into a signifi cant threat as they raided northward in the fi rst half