Crony Capitalism, 16th-Century Style: On Philip J. Stern’s “Empire, Incorporated”

IF YOU WALK down New Bond Street in Central London, you will come across a curious sight. There, between the rear end of a Zara outlet and a pocket-sized sushi bar, sits the East India Company. Is this the same East India Company, you might ask, that ruled and pillaged South Asia while presiding over an opium-smuggling regime that devastated China? Not quite. The brand was “revived” by an Indian-born businessman in 2005 and now styles itself as a high-end food and tea store. But there it is nonetheless, with its distinctive “EIC” merchant’s mark in a Mayfair shop window advertising £155 luxury wicker hampers.

The East India Company’s brand-name endurance is not such a strange thing. After all, thousands of Canadian shoppers flock daily to outlets of the Hudson’s Bay Company—a department store now trendily restyled as “The Bay.” Today, it offers flash sales on bath and kitchen items; not too long ago, it was violently dispossessing First Nations peoples of their land and lording over a transcontinental empire. In this sense, Philip J. Stern’s new book Empire, Incorporated: The Corporations That Built British Colonialism, which examines what he terms “portfolio colonialism,” makes for timely reading. From De Beers to HSBC, the global economy is still dominated by corporations that were birthed by empire. The fact that someone would want to revive the East India Company speaks volumes about how imperial nostalgia can often take the form of a corporate logo.

Empire, Incorporated chalks out a radically different perspective on the British Empire. Instead of explorers and imperial mandarins, Stern invites us to see empire as the product of investors, entrepreneurs, scamsters, hucksters, and an army of lawyers and publicists. Corporations, he tells us, were indispensable partners in the British national project of coloring the world map red. This, in turn, reveals a great deal about the evolution of ideas of governance, law, and the relationship between business and the state.

Stern focuses on specific types of corporations—those which, royal warrant in hand, believed that they could do a better job than the crown in colonizing and settling new territories. We might recognize something vaguely neoliberal in the notion that a group of committed private individuals, especially those who organized themselves into a joint-stock concern, could govern more effectively than the government. But in the early years of the empire, the line between private and public, and between corporation and crown, could be vanishingly thin—enough to make even the most committed libertarian blush. In the 16th century, Elizabeth I was an avid investor in corporate piracy targeting Spanish and Portuguese fleets. From Agra to Constantinople, the English state farmed out critical diplomatic functions to trading companies.

Overseas corporations began in what might perhaps be termed the Age of Rampant Geographical Confusion. As 16th-century English investors and entrepreneurs grasped an emerging map of the world, they flirted with imaginative ideas about shortcut routes to riches in Asia. Thus, the explorer Sebastian Cabot presided over a company established in 1553 that was tasked with finding a northeastern sea passage to China. The concern ultimately settled for a trading monopoly in Arkhangelsk in arctic Russia, becoming the Muscovy Company, but soon after harbored ambitions in Persia. As late as the 1620s, some members of the Virginia Company held out hope of discovering, somewhere within the folds of the Appalachians, a secret passage to India. Even the East India Company laid claim to expansive territories in the Americas and competed with the Muscovy Company for discovering the fabled Northwest Passage.

What is striking in Stern’s account is not just the bewildering geographic ambitions of these companies, but also how their finances and leadership cadres were intricately bound up with one another. Thomas Roe—who, as the East India Company’s ambassador in Agra, became the Mughal emperor Jahangir’s drinking buddy—led an endeavor to establish a plantation colony in Guiana. Thomas Smythe was a leader of the East India, Muscovy, and Virginia companies. Corporations regularly fought and competed for territory and finances, but they also contemplated mergers, entered into partnerships, and invested in one another. Empire, Incorporated demonstrates how London emerged as a fulcrum of international finance and globalization at a very early moment, a place where businesspeople, scam artists, and government officials busily discussed how to make money off places they had never seen and which might not even exist.

This emerging corporate landscape was sustained by a variety of actors. Lawyers play a dominant role in Stern’s book, since corporations required people adept in legal acrobatics to justify monopoly rights and sweeping powers in places the crown did not directly control. Slightly more unexpected is the galaxy of writers employed or encouraged by companies to churn out promotional literature: John Dee, Richard Hakluyt, Daniel Defoe, and Jonathan Swift. Skilled writers, Stern tells us, were the “greatest weapon[s]” of corporations.

Lastly, and most critically, were ordinary investors. Most corporations were joint stock, sustained by thousands of people who would never venture beyond England’s shores. Stockholding allowed individuals to “participate in empire at a remove” and, Stern argues, promoted “a kind of limited moral liability to support legal and physical violence in faraway places that may have been unthinkable otherwise.” By the early 1600s, an increasing number of women were investing in overseas companies, transforming financial autonomy in the English household. All of this hints at how corporations could radically upset traditional power dynamics in Britain. By the 19th century, defenders of corporations (cue to those armies of lawyers and writers) extolled them as bastions of the middle class, meritocracies immune to the pulls of rank, titles, and prestige that plagued the aristocracy.

As more realistic ideas of world geography gained popularity—and as the appeal of discovering get-rich-quick routes to Asia faded somewhat—corporate projects blossomed in a dizzying range of locations. Companies were at the forefront of some of the most sordid projects of the British Empire: plantation colonization in Ireland, the expropriation of land from Indigenous Americans, and the African slave trade. North America was particularly fertile ground for corporate projects, as joint-stock concerns morphed into entities like Massachusetts and New Jersey. By the eve of the American Revolution, land-hungry corporations had become adept at pushing back against the crown’s prerogative, sidestepping the Royal Proclamation of 1763 (George III’s diktat forbidding settlement west of the Appalachians). Corporations even took up arms against one another. Company adventurers backed by Connecticut marched into territory around the modern-day city of Scranton—territory they ambitiously dubbed Westmoreland County—and triggered warfare with irate Pennsylvanian defenders.

Half a world away, the East India Company was raising unsettling questions about corporate power. More than any other overseas venture, the company revealed the murky confluence of business and political interests. Edmund Burke and Adam Smith might have fulminated against it, but EIC defenders deftly pointed out that, by the late 1700s, it had become “a pillar of state finance” by holding millions of pounds of public debt—and therefore an entity to be treated with political caution.

One of the most eye-opening parts of Stern’s book is his description of how the East India Company was a model for other corporate ventures with ambitions to administer vast territories. The Hudson’s Bay Company tacked in that direction by envisioning colonial settlements across the Canadian Shield and the Pacific coast. And, Stern demonstrates, the appeal of the East India Company model did not go away after its rule was abrogated in 1858. Somewhat chillingly, corporate promoters across the world hankered after similar company-states right until the dawn of the 20th century. King Leopold II of Belgium studied both the East India and Hudson’s Bay companies before establishing his murderous regime in the Congo Free State. Cecil Rhodes (who has far too brief an appearance in this book) and his colleagues strove “to found a company that would become to South Africa what the East India Company had been to India.” Long before that Indian businessman opened his boutique outlet in Mayfair, it transpires, people had been trying to breathe new life into the “Honourable John Company.”

Empire, Incorporated offers a refreshingly new take on British imperialism, helping shift the locus of power and initiative from Whitehall to the City of London. But what might this book tell us about the development of capitalism in general? Historians like Sven Beckert, after all, have written about the state’s indispensable role in capitalist economies. And William Dalrymple has recently reminded us that corporations that are “too big to fail” are nothing new—once more, the East India Company was a trendsetter in this department.

Regrettably, Stern does not fully explore the links between corporate empire and today’s global capitalist economy. But there is enough material in this book to help us connect the dots. Stern briefly alludes to similarities with contemporary corporations like Facebook or India’s Tata Group that function “more like a government.” However, it might be more productive to think about how colonial corporations presaged the rise of crony capitalism in the era of neoliberalism. Officials in the British state happily leaned on their friends in Leadenhall and Lombard streets to carry out some of the grittier, more technical work of empire—and those friends knew that there were handsome profits to be made. How different was this, one may ask, from the cozy relationship between George W. Bush’s administration and certain corporations that received lucrative contracts during the American occupation of Iraq?

Corporate empire bears an even stronger resemblance to crony capitalism in some countries currently under the thumb of right-wing authoritarians. Here, the theater of action is not some far-flung colony but rather the domestic economy. Just as the British South Africa and British North Borneo companies took on critical state functions, including infrastructure development and natural resources management, so do oligarchs in Vladimir Putin’s Russia control (and profit from) vital state resources. In India, Narendra Modi has given Putin a run for his rubles: the scandal-ridden Adani Group continues to gobble up a number of ports, airports, and essential utilities. It helps that India’s notoriously “flailing state” has generated enduring public support for privatizing certain core government responsibilities. Centuries ago, British writers extolled the efficiency of corporations and their ability to govern better than government; today in India, Russia, Hungary, and elsewhere, a pliant media does the job.

Empire, Incorporated is a remarkably comprehensive account of how—from the reigns of Elizabeth I to Elizabeth II, and from some of the earliest plantation projects in Ireland to the Falklands War—corporations have played a defining role in the British Empire. Stern might shy away from direct consideration of how this history has shaped the current global economic landscape. His book, however, illuminates some striking parallels.

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Dinyar Patel is an assistant professor of history at the S. P. Jain Institute of Management and Research (SPJIMR) in Mumbai and a research affiliate at the Mittal South Asia Institute at Harvard University. He is the author of Naoroji: Pioneer of Indian Nationalism (Harvard University Press, 2020), which was awarded the 2021 Kamaladevi Chattopadhyay NIF Book Prize.