May 18, 2013 by calamity3039
The Bengal famine of 1770 had dire consequences for the rest of the world. The Bengal providence first became trading partners with the British Empire in the early eighteenth century. Through force, the British military overthrew the government. Since the British East India Company had influence in the region they became the de facto rulers. They had a military, the right to make and enforce laws, and the right to tax the people.
Before the famine began, the land taxes in the region rose sharply. Taxes had gone from 10% to 50% within a decade. To oppress the people more, the Company imposed harsh tariffs on the region. Not being able to compete with the Company, their local economy eroded. Within six months people began to starve. During the same time the Company’s profits grew by 50 percent.
As the famine worsened, the Company started to lose revenue because of a declining tax base. To remedy this problem, they decide to increase the land taxes. The people who hadn’t starved to death saw their taxes go up another 10 percent. Despite a good harvest the people’s starvation increase. The death wave accelerated.
At this point the Company had a serious problem on their hands. They didn’t care about starving people, but they found that dead people are bad for business. They started to realize that dead people don’t pay taxes. The don’t make the best slaves either. Also, dead people are quite costly. Not only do they require resources to be buried, but they tend to spread disease. Unable to bury the dead quickly tends to result in more dead people.
It wasn’t so bad for the Company though, another business venture was presented to them. The Chinese government had banned the growing of poppy plants. This was good for the Company because the Chinese population had an addiction problem. So they decided the best solution to their revenue problems were to expand into the opium market. With limited labor they decided cut back on growing crops. So more Bengals died in the millions.
Even though the Company thought the opium trade was a good idea, they underestimated the Chinese. Despite being addicted to narcotics, but they were very clever businessmen. Instead of trading with the Company based on good faith, they had all commodity prices based in silver. This hindered the Company, they had a hard time making money at fair market prices. They assumed that they would be able to get cheap tea from the Chinese for the West. In exchange, they wanted to make money off the Chinese by hyper inflating the price of opium.
It didn’t work out in their favor. They were going bankrupt. Their influence in the East was deteriorating rapidly. Even though they kept all the Bengals tax money for themselves, they had to be bailed out by their government. To pay for the bailout a tax increase on tea went into effect for all British subjects. The Colonists were paying for the bailout the most. Harsh tariffs on the colonies were imposed at the same time. Just like the Chinese, the Colonists weren’t idiots either. They started a rebellion against their government.