Memo on Trading Companies
Julian Go
Boston University
My knowledge of early modern merchant companies is next to nothing. But my interest is
not. My interest is two-fold. First, I am interested in how the modern merchant
companies stood a potential alternative to the colonial states and associated political
empires that eventually dominated the world; that is, how they might stand as an
alternative historical modality of Western European expansion as well as a form of
sociopolitical organization. Second, I am interested in how chartered companies in
particular served, if not as an alternative, then as a strategic supplement to the state; an
organizational form that states might have employed as part of larger imperial repertoire
of power. For clearly the establishment and deployment of chartered trading companies
was uneven: certain states initiated them at certain times and certain places. Nor was this
only an early modern phenomenon. It is well known that in the nineteenth and early
twentieth centuries European states reinitiated the chartered company form amidst their
expansionary drive. These included the British South Africa Company. Also included is
the Portugese Companhia de Moçambique (Mozambique Company). This latter company
is especially comparable to some of the early modern trading companies. Established in
1891, it was granted a concession of lands within Portuguese Mozambique. It collected
taxes, settled Portuguese families, set up an educational system and generally
administered the territory as a state would. The concession ended in 1942.
So chartered companies can be seen as an alternative or supplement. But exactly
when, where, and why were they used by states? Just to give one sense of the issue, we
can take a look at the longue durée. Figure 1 shows the annual number of chartered
companies established by European states from 1600 to 1950 (see Table 2 for list). What
can we tell from this?
Surely the early modern period has the most. But we also see that a notable wave
in the late nineteenth century. These are periods of mercantilist competition, which is
probably not surprising. But this suggests that states may have used chartered companies
as a tactic for expansion and control especially during heightened periods of global
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economic competition. Unlike the proliferation of transnational companies and export
processing zones today, chartered companies are not the mark of liberal global trading
regimes.
We can explore other possible correlates. As an exploratory device I modeled the
annual counts using a negative binomial regression (a common method for count data,
negative binomial is a generalization of Poisson-based regression, with the same mean
structure, but is preferred to Poisson because it corrects for overdispersion by introducing
a stochastic component to the model). The following are the independent variables:
a. Total annual number of colonies established by European states (year of
establishment). Years entered: 1700-1944. Source: Henige.
b. Economic Long Wave (Kondratiev). Dummy variable: 1=expansion, 0 =
contraction. Years entered: 1650-1944
c. British relative sea power capabilities. This is a measure of Britain’s relative
naval capabilities compared to other powerful states. Developed by Thompson
and Modelski, it is captures the relative distribution of naval power. The lower the
score, the less is Britain’s global share of naval power; the higher the score, the
more is Britain’s share. Years entered: 1607-1944. Source: Modelski and
Thompson
d. Cycles of Hegemony. Using Wallerstein’s periodization of phases of
hegemony, we can arrange world history years into periods of hegemonic stability
when one state predominates the world economy (coded “0”) and those of
competition when the hegemon declines and global share of economic production
is multipolar (coded “1”). Years entered: 1648-1944. Source: Wallerstein.
If companies are established amidst periods of heightened economic competition, then we
would expect the hegemony variable to be positive and significant. The sea power
variable captures superpower competition, not economic competition, and we would
expect this not to be significant. The economic long wave variable assesses whether
company establishment is driven by economic impetus – that is, a way for states feeling
economic stagnation to turn to companies to help: we would expect companies to be
established in periods of contraction. Table 1 shows the results. The only significant
predictor is number of colonies in the system. If this is telling at all, it suggests that states
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use chartered companies in conjunction with colonization as part of an expansionist
strategy – not as an alternative. The findings are surely limited (for instance there is no
time trend variable) but nonetheless they might be worth a chat.
FIGURE 1. Number of Chartered Companies established per year (1600-1944)
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2.5!
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1.5!
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0.5!
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1600
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1630
1660
1690
1720
1750
1780
1810
1840
1870
1900
1930
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TABLE 1
Negative Binomial Regression Coefficients for Estimating Counts of Company
Establishment in the World-System
VARIABLE
B
Number of Colonies
Established in the
System
.312*
(.1173)
Hegemony
-.528
(.3832)
Economic Long Wave
British Share of World
Seapower
(Intercept)
.538
(.4085)
1.371
(2.362)
-3.227*
(1.1105)
Standard errors in parentheses
*sig. at <.05; **sig. at <.01; ***sig. at <.001 (two-tailed)
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Table 2
Chartered Companies, 1600YEAR COMPANY
1600 East India Company
1602 Dutch East India Company
1604 New River Company
1605 Levant Companyb
1606 Virginia Company
1609 French Company
1610 London and Bristol Company
1613 Company of One Hundred Associates
1614 New Netherland Company
1614 Noordsche Compagnie
1614 Nordic Company
1616 Danish East India Companya
1616 Somers Isles Company
1621 Dutch West India Company
1625 Compagnie de Saint-Christophe
1628 Portuguese East India Company
1629 Massachusetts Bay Company
1629 Providence Island Company
1634 Guinea Company of Scotland
1635 Compagnie des Îles de l'Amérique
1635 Courteen association
1638 New Sweden Company
1649 Swedish Africa Company
1660 Compagnie de Chine
1664 Compagnie de l'Occident
1664 Compagnie des Indes occidentales
1664 Compagnie des Indes Orientales
1664–1674 Royal West Indian Company
1670 Hudson's Bay Company
1671 Danish West India Company
1672 Royal African Company
1682 Brandenburg African Company
1693 Greenland Company
1698 Company of Scotland
1711 South Sea Company
1717 Compagnie du Mississippi
1717 Ostend Companya
1720 Society of Berbice
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COUNTRY
England
Belgium/Netherlands/Luxembourg
England
England
England
England
England
France
Belgium/Netherlands/Luxembourg
Belgium/Netherlands/Luxembourg
Belgium/Netherlands/Luxembourg
Scandinavia
England
Belgium/Netherlands/Luxembourg
France
Portugal
England
England
Scotland
France
England
Scandinavia
Scandinavia
France
France
France
France
England
England
Scandinavia
England
Germany
England
Scotland
England
France
Belgium/Netherlands/Luxembourg
Belgium/Netherlands/Luxembourg
5!
1721 Bergen Greenland Company
1731 Swedish East India Company
1738 Swedish Levant Companye
1749 General Trade Company
1752 African Company of Merchants
1752 Emden Company
1774 Royal Greenland Trading Department
1786 Swedish West India Companyd
1792 Sierra Leone Company
1799 Russian American Company
1824 Van Diemen's Land Company
1835 South Australian Company
1839 New Zealand Company
1847 Eastern Archipelago Company
1881 British North Borneo Company
1882 German West African Company
1884 German East Africa Company
1884 German New Guinea Company
1886 Royal Niger Company
1888 Companhia de Moçambique
1889 British South Africa Company
1891 Astrolabe Company
1891 Companhia do Niassa
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Scandinavia
Scandinavia
Scandinavia
Scandinavia
England
Germany
Scandinavia
Scandinavia
England
Russia
England
England
England
England
England
Germany
Germany
Germany
England
Portugal
England
Germany
Portugal
6!