AUA Why Nations Fail - Daron Acemoglu | Page 313

European markets and were traded throughout Asia and even eastern Africa. The main agent that carried them to the British Isles was the English East India Company. Founded in 1600, two years before its Dutch version, the English East India Company spent the seventeenth century trying to establish a monopoly on the valuable exports from India. It had to compete with the Portuguese, who had bases in Goa, Chittagong, and Bombay, and the French with bases at Pondicherry, Chandernagore, Yanam, and Karaikal. Worse still for the East India Company was the Glorious Revolution, as we saw in chapter 7. The monopoly of the East India Company had been granted by the Stuart kings and was immediately challenged after 1688, and even abolished for over a decade. The loss of power was significant, as we saw earlier (this page–this page), because British textile producers were able to induce Parliament to ban the import of calicoes, the East India Company’s most profitable item of trade. In the eighteenth century, under the leadership of Robert Clive, the East India Company switched strategies and began to develop a continental empire. At the time, India was split into many competing polities, though many were still nominally under the control of the Mughal emperor in Delhi. The East India Company first expanded in Bengal in the east, vanquishing the local powers at the battles of Plassey in 1757 and Buxar in 1764. The East India Company looted local wealth and took over, and perhaps even intensified, the extractive taxation institutions of the Mughal rulers of India. This expansion coincided with the massive contraction of the Indian textile industry, since, after all, there was no longer a market for these goods in Britain. The contraction went along with de-urbanization and increased poverty. It initiated a long period of reversed development in India. Soon, instead of producing textiles, Indians were buying them from Britain and growing opium for the East India Company to sell in China. The Atlantic slave trade repeated the same pattern in Africa, even if starting from less developed conditions than in Southeast Asia and India. Many African states were turned into war machines intent on capturing and selling slaves to Europeans. As conflict between different polities and states grew into continuous warfare, state institutions,