How Corporate Started & East India Company

For many in the 3^rd world especially the Muslim world, Multinational companies such as Coca Cola, McDonalds, and General Electric represent awe inspiring success stories of Capitalism. The rulers regularly distribute contracts to foreign companies who extract oil, minerals, build infrastructure, hospitals, and provide services such as banking and insurance as well as production plants which produce food and goods. The corporate global reach & thousands of workers who churn out billions in profits every year for many are aspects of the success that invite imitation. Let’s see how it all started.

(Click photos to enlarge)

Organisations History:

Companies have been around for a few centuries, the earliest of which existed around the sixteenth century in England and Holland. Originally a corporation, as they were known at the time, was an invention of the state. The state granted a corporate charter, permitting private financial resources being used for public purposes. This initial creation of private finance and the merchants was to aid in the colonial expansion of the then super power Great Britain. Corporations had therefore the potential, from the onset, to become very powerful. As predicted by Abraham Lincoln:

“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. … corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavour to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”

How True Lincoln was!

Companies Go Global:

As long-distance trade continued to grow, this gave rise to multinational corporations. The industrial revolution made Europe the centre for international trade. The growth of industrial production was accompanied by a rapid expansion of trade. To ensure this status quo remained, nations began to use the corporations to dominate international trade. In the 17^th century making money became the major focus for corporations. Their wealth was used to finance European colonial expansion, or, in simple words to invade foreign countries in Asia, Africa and the Americas with intention of sucking their resources.

Do you Remember East India Company?

– EIC (East India Company) was the First Ever Commercial Corporation established by British merchant adventurers. It was granted the Royal Charter by Queen Elizabeth I in 1600.

– It shipped out gold and silver to Asia in return for spices, textiles and luxury goods. It introduced Tea from Chinese to British and Indians.

– It was the most powerful commercial organisation that the world has ever seen.

– EIC ruled Fifth of the World Population and had quarter a million private army as well as support from British Army.

– EIC issued its own Currency

– Established itself in India and conquered nearly 50%. As a result India was ruled by 24 merchants sitting in company boardrooms in London.

– In India the Company benefited from ‘gifts’ from local (mostly Muslim) rulers. Between 1757 and 1765 some estimates put the total received at close to £2 million.

– Cricket was introduced in Asia by the servants of EIC.

– Kashmir shawls, imported by EIC, were made from shawl goat pashmina. They were so fine they could pass through a ring. Much sought after, English customers could pay £300 for one shawl – the cost of a house then in a good area of London.

Corporations were given Rights as Humans based on 14^th Amendment:

Fourteenth Amendment was added to US Constitution in 1868 to protect the rights of freed slaves. Referring to it, the Court ruled that a private corporation is a natural person under the US Constitution, and consequently has the same rights and protection extended to persons by the Bill of Rights, including the right to free speech.

Control the Politicians Conquer the Country – Welcome to DemoCracy:

Thus corporations were given the same “rights” to influence the government for their interests as were extended to individual citizens, thus paving the way for corporations to use their wealth to dominate public opinions and lifestyle. Corporate started to “Donate” millions of dollars to political candidates & parties. Do I need to tell you why? So that politicians could make rules in the favour of companies. Many big politicians became executives, or had shares in these companies. Government resources & mass media was dominated and used to control masses. As a consequence, corporate were issued with a Free License to sell; Sell whatever you can to make profit, be it tobacco, alcohol, pornography, guns or junk food.

Kickbacks, Bribery & Corruption in 3^rd World by Ruler & Companies

We all know the role big companies play in national economies of the Third world. Their influence and control over resources are seen as the prominent aspect of modern day colonialism; also known as neo-colonialism. The rights given to them make them very powerful and able to influence policies. IMF and World Bank play a role also by imposing conditions on creating free markets and privatising key industries which foreign multinationals have been all too happy to snap up. In the pursuit of corporate interests wide scale abuse and corruption have commonly been uncovered by many multinationals in the third world. Kickback & corruption is a common knowledge in Pakistan to hand lucrative contracts to ‘friendly’ foreign companies.

Also, there are numerous bloody conflicts virtually everywhere in the 3^rd world. Did you ever wonder where weapons come from for these wars?

Not All is Bad:

We should make a distinction between the greedy concept behind the establishment of corporate i.e. “make money by hook or crook”, and new technology and good processes & procedures to yield high productivity. It developed & introduced smart processes; such as yielding high productivity, economies of scale, automation, Research & Development, and above a Good Management principals.

And there are many new technologies invented due to Research & Development by corporate as well as new drugs. It was made possible because the corporate have resources to pursue these. These useful concepts & technologies should be learned and adopted wherever possible.

Does Islam have a solution? Let’s look at the Fundamental Rules of Selling in Islam.