Assess the strengths and weaknesses of the Dutch and English East india Companies as colonial powers

The Dutch and English East Companies were formed in the early 1600s with the common aim of eliminating competition at home and to break the Portuguese monopoly in Asia. They eventually grew in power so much so that they were regarded as ‘colonial powers’, their presence strongly felt throughout the Asian nations. The following essay shall discuss the strengths and weaknesses of the Companies, and how these gave them the edge over the colonial bureaucracies that later replaced them. The factors, which led to their downfall, shall also be analysed.

Both the Dutch and English East India Companies were granted authority by their respective governments to venture and explore Asia. The field was left open to them as the governments lacked the resources to undertake colonization. Given military power by the European governments, they were ’empowered to make war or treaties’ which allowed them to earn profits through trade and gain territories through establishments of ports. In a sense they were separate entities from their government, having much freedom in the making of decisions yet at the same time under the protection of their governments, such as military backing.

Intervention was limited since the Companies were, after all, founded with private capital and thus private companies. Economically, both companies enjoyed monopoly of trade. The Dutch East India Company (VOC), for instance, had a strong unbreakable monopoly over the spice trade and was very well established in Java by the time the English arrived. Rivals that came along the way were often frustrated and eliminated without much effort. The monopolies brought the Companies enormous profits.

In addition, the development of shipping equipment and later the industrial Revolution back in Europe gave the Companies technological advantage over their European and Asian counterparts, enabling them to maintain monopoly and control territory. The rise of Dutch power was initially due to their superiority in naval warfare over the Portuguese, whereas later in the case of the English East India Company (EIC), their unchallenged naval power gave them predominance in Asia. Military organization and technology developed back home also gave the Company ‘unforeseen advantages in its confrontations with the Indian states’.

Their ability to protect the Indians from banditry also won them support over the local rulers. In the political aspect, the VOC practiced indirect ruling, governing through indigenous authorities and native forms, which was effective in overcoming cultural and language barriers as well as reducing their administration costs. It preserved the social hierarchy and the status of the native chiefs, which the Javanese regarded highly, at least in the early years. Furthermore the Dutch showed tolerance towards religion and native culture, showing marked racial consciousness and no strong form of missionary.

These policies saved them from much trouble and possible hostility from the local community. On the other hand, the EIC displayed their strength in their ability to control the local people. As compared to the VOC, the English were able to exert their influence and make know their presence as a colonial power. This could be seen by their success in imposing their laws and regulations in their territories, especially India, whereas the VOC were never really able to displace the existing system of customs.

Another weakness of the VOC was reflected in the wage system for the Company officials. The Company always underpaid its servants, resulting in widespread private trading and corruption, at the expense of Company profits or native peoples. Much inefficiency resulted. At the social level, the English had considerable national pride and sense of superiority, as most clearly seen in India, where they were rather insensitive and lacked consideration for the locals. They were ‘under the illusion that all was going well’ when in fact they were unaware that the impact of their actions.

The vast changes being implemented in India as well as British prejudice towards the Indians had aroused discontentment and nationalistic sentiments within the colony. However the British had always assumed a position of self-righteousness and blamelessness, which prevented them from responding accordingly to uprisings and checking their own misdoings. This naivety proved to be extremely costly to the Company as well as the British control over India. The EIC officials were also, like the VOC officials, very much focused on self-interest later during their rule.

The Company’s own political interests were allotted more importance than the welfare of the Indian states. Its attitude hardened towards the Indian states. In spite of the weaknesses, the Companies did have some advantages over the colonial bureaucracies that replaced them, which will be discussed below. Firstly, the main motive of the Companies was to trade, and the element of making profits remained important throughout their existence. Being private companies, they in fact had no obligations to take care of the administration of the colonies and could focus entirely on trade.

On the flip side of the coin, the central government on one hand had to look after the affairs back home in Europe and at the same time oversee the ruling of the territories in Asia. As such the resources available had to be divided between these two concerns, and there would always the issue over which to give more priority. This could be a possible source of inefficiency. Secondly, the goal of the Companies to trade was much less intrusive for the locals. The colonial bureaucracies came for the purpose of setting laws and regulations.

This did not go down well with the local community as they already had their own set of customs, which often were quite different from the Europeans’. The implementations of conflicting rules were cause for discontentment and potential unrest. Since it was never the intention of the Companies to be involved in local politics in the first place, the administration system that resulted was much simpler, conforming to the principle that it should ‘rather trade than govern’.

The Companies had fewer staff and thus lower administration costs. The fact that officials recruited back from home ‘entered for life’ also meant that there was little change of personnel. The officials would be able to adapt to the local cultures and learn the native languages, which probably aided governance of the people. On the other hand the colonial government experienced a change of governor every few years, consequently the officials were never able to gain a fuller understanding of the way the locals function.

Lastly was the distance factor. As the colonial bureaucracy ruled through the central government back in Europe, instructions and commands took a long time to get through. Whereas for the Companies, as mentioned, the administration system was much less complicated and fewer personnel were involved, hence decisions were made very fast. The officials based within the colonies took care of most of their management. The way the Companies functioned was such that efficiency could have been achieved, but it was not to be.

The Dutch faced competition from the French and British in the 18th century when their monopoly was broken. This was compounded by the Industrial Revolution that saw demand for the spice market drop drastically. As mentioned earlier, the rampant corruption due to underpayment and greed of the officials resulted in reduced profits. Increasing costs of administration eventually led to bankruptcy of the VOC in 1795 and the republic had to take over the possessions and debts of the Company.

The downfall of the EIC was very much due to the British themselves. As described, pride, over-confidence and a lack of consideration for the Indian people created nationalistic sentiments within the colony. They believed that the Indians would be grateful and thus loyal to them for all their efforts for the country. There was also too much propagation of Christianity and interference from the English, which all led to the Indian Mutiny in 1857, after which British power in India never really recovered.

The EIC was made the ‘scapegoat of the whole business’, and thought to be ‘a symbol of monopoly, backwardness, and enemy of the Christian improvement of the land’. Abolition of the Company was deemed necessary, enabling the British to have a fresh start towards reconciliation with the Indians. In 1858, the Crown assumed all governmental responsibilities held by the Company that was later dissolved. hi conclusion, to a certain extent the Dutch and English India Companies were successful in their reign as ‘colonial powers’.

Their original policy founded on principles of ‘trade than govern’ and respect for the local community worked well and gave them advantage over the central government that took over them. However these eventually gave way to self-interests for individual and Company, without regard for the locals. This, together with circumstances not within control of the Companies, caused the downfall of the institutions. Yet one cannot deny the impact by the Companies during their existence, both to development and influence on Asia as a whole.