Books: The East India Companies: Reorientation And The Expansion Age

 (Drivebycuriosity) - There is a lot talk about the power of multinational companies. Huge globally acting companies are not new. Already in the 17the century existed companies which traded goods between Europe and Asia & the Americas. But there is a huge difference. Today´s global giants like Google, Apple, Amazon & Microsoft are based on their efficiency and superior products & services, the giants of the 17th and 18th century where - at least - based on military power.

The little book "The East India Companies: Reorientation And The Expansion Age" by Bradley Diminno (35 pages) takes a quick glance on the rise & fall of one the early giants (amazon ). The Dutch East India Company, formally the United East India Company (Dutch: Vereenigde Oostindische Compagnie; VOC), the topic of the booklet, was founded in the year 1602 by wealthy Dutch merchants. 

The Dutch merchants followed the model of the English East India Company, founded in 1600, which focused on the Indian subcontinent. They pooled their enterprises and finances together with the aim to overtake the highly profitable South-East Asia business from the Portuguese, who once had overtaken the business from Venice. The VOC collected additional capital by selling stocks on the Amsterdam Stock Exchange where the company was traded. The backing by the stock market gave VOC a lot of fresh capital and allowed the company to employ labor and talents from all over Europe and Asia. The VOC also benefited from Dutch expertise & tradition in seafaring and international trading.

Like the English model the VOC was part of the colonization of South East Asia & the Americas by Spain, Portugal, England, France & the Netherlands. The Dutch government "gave the organization the right to a syndication over the exchange Asia, including the option to fabricate fortresses, field armed forces, and manufacture settlements with rulers in the east". Asia and East meant mainly today´s Indonesia, which became a Dutch colony.

The Dutch government lend VOC armies and the organization employed own mercenaries as well. With military power the VOC overtook ports in the East, especially in today`s Indonesia, and ousted the Portuguese, Arabs and other competitors. Military power gave VOC a monopolist position in the import of East Asian goods like cinnamon, pepper, tea, silk, porcelain, sandalwood and other precious materials. Being the only importer of these goods the VOC could demand high prices and amassed enormous profits.

"At its zenith around the year 1669, the VOC controlled almost 150 transporting ships, 40 warship., 50,000 representatives, and a 10,000-in number confidential armed forces". Motherland Netherlands also benefited from the success of the VOC: "Craftmanship, science, reasonoing, and engineering all thrived in the Dutch society". The new wealth turned the Netherlands into a global super power.

But England & France had similar corporations and supported them also with their armies. Over time the VOC lost her monopolistic power. Changing markets in Europe, growing competition and rising resistance from the exploited Asian markets lead to climbing costs and shrinking revenues and finally to the bankruptcy of the VOC in the year 1780.

Today the situation is very different. Global corporations like Google, Amazon or Apple are not supported by their government. Quite contrary: Governments curb them with high taxes, fines, fees and are strangulating them with more and more antitrust regulations (described her drivebycuriosity ).

 

PS. The text is hard to read and sometimes strange. Maybe pieces got lost in translation and digitization. There are certainly much better books on this topic. But it`s a very quick read and the Kindle book cost just about $5. The booklet is good enough to give a first glance.