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From Traders to Rulers

In early 18th century the flow of silver from Europe to Asia:


The internal contradictions in the economy and politics of India in late 18 th century and the
withdrawal of support by commercial and financial magnates to the successor states contributed
in the British quest to control India financially and politically.
Military fiscalism of the Sultans brought a congruence of interests between the English East India
Company and Indian merchant capitalists.
European dominance over external trade and shipping, and hence over long-distance cash flows, as
well as their slight edge in military technology, contributed to the wrecking of the 18 th century
Indian state system.
Anglo-French proxy wars.
Lack of effective support from the metropolis and the superiority of the English at sea ensured
that the French were eventually checkmated.
Indigenous Collaborators:
But there was also a strong strand of collaboration by Indian social groups, especially merchant
capitalists, who helped undermine the regional states which they had bankrolled in the past.
Sirajuddaulas defeat-fall of Bengal 1757.
Colonel Robert Clive conspiracy with the local Bengali merchant bankers Jagat Seth and
Omichand, who in turn intrigued with Sirajs disaffected general, Mir Jaffar.
The battle of Buxar (1764) saw the company breaking the back of the last organized armed
resistance to their control over eastern India.
In 1765 the British obtained from the Mughal emperor the diwani, or the right to collect all the
revenues, from Bengal. It was an apt conclusion to the colonial transiton in Bengal since it was
the streamlined flow of revenues from the great zamindars, organized in the days of the Mughal
subadar Murshid Auli Khan, which had made Bengal such an attractive proposition for the

English in the first place. The availability of land revenue conveniently obviated the reed to bring
in silver from Europe.
The state of Mysore: As late as the 1790s Mysore had a growing economy both in the rural and
urban sectors. Mysore was also closing the gap in military technology between Europeans and
Indians. Mysor had artillery and infantry abilities
But it was not until 1799 that the faster expanding economic resources of the British, who
controlled the more productive coastal areas and had the use of fractions of indigenous capital,
tilted the balance decisively against a defiant Mysore.
Maratha confederacy: defeated in 1818
Speech in the commons:
Robert Clive is speaking to the house of commons about the situation in India and more specifically
talking about corruption in Bengal. He feels the system of Government where the lower classes
presents the higher classes with gifts is corrupted by the middle men. He talks about how the middle
men will apply any means necessary to secure these gifts for the upper classes. What Clive is most
concerned about is the effect the middle men will have on the young Englishmen sent over to
Bengal. He is afraid that these young men will yearn for wealth and will let the middle men corrupt
them to get it from the lower classes. What he is most concerned about is these young men
returning to England having learned these methods and applying them to life in England.

In seventeenth and eighteenth century, overseas trading between European countries and the
colonies greatly expanded, and India was one of England's most important sources of income.
Although India was a profitable colony, Robert Clive pointed out the problems of
colonisation/imperialism in his speech for the House of Commons; he reported the degenerate
situation in Bengal which created habitual bribery between the "inferiors" and the "superiors." Clive
also indicated that the gift-giving relationship with the English gave therefore banyans power --power to inflict violence and oppression "under the pretended sanction and authority of the [East

India] Company's servant." Here, Clive deliberately suggested that bribery had corrupted the
colony, and the banyans were abusing the power; therefore, England must recognize and deal with
the problem.