In the Shadow of the Companies
Empires of trade in the orient and
informal entrepreneurship, 1600-1800
Chris Nierstrasz (University of Warwick)
In the Shadow of the Companies
VOC and EIC and their presence in
Asia
In the Shadow of the Company
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Part I: Power and Trade
Part II: Monopoly and Private Trade
Part III: Profits and fortunes
Part IV: Dutch Decline and British Dominance
In the Shadow of the Company
Based on:
Official VOC documentation
Private Correspondence
In the Shadow of the Company
Portfolio capitalists
Increase in entrepreneurship?
VOC
Increase in bills of exchange for Europe
More people stay in Asia
EIC
Increase in bills of exchange for Europe
Nabobs
Increase in entrepreneurship?
140000000
120000000
100000000
Value of Invoice
80000000
Sales
60000000
Export of silver and bills of
exchange
40000000
20000000
0
VOC, invoice and sale values in relation to exports of silver
and bills of exchange
Increase in entrepreneurship?
140000000
120000000
100000000
Invoice value of the Imports by
the VOC
Sales
80000000
Bills of exchange
60000000
40000000
20000000
0
VOC, invoice and sale values in relation to export of silver
and bills of exchange
exports of precious metals
The Erosion of Monopoly (1740-1796)
Regulations
VOC
1740: reorganisation of its intra-Asian trade, no longer a
strict monopoly, private trade allowed
EIC
1680: allows private trade in intra-Asian trade
Around 1770: first Agency houses appear
The Erosion of Monopoly (1740-1796)
Regulations
VOC
Three phases in the regulation of private trade in the
intra-Asian trade
1) Freedom of trade (1743-1751), except some
monopoly goods
2) Increasing restriction on the trade close to monopoly
(1751-1771)
3) Reversal of restrictive policy: freedom of trade (17711796)
The Erosion of Monopoly (1740-1796)
Regulations
EIC
Two phases :
1) Freedom of trade (1680-1773)
2) Servants no longer allowed private trade
(1773- ), Agency houses take over
Freedom of trade in practice
Private correspondence
VOC
Private trade a privilege related to hierarchy
Private trade regionally specialised
Private trade strongly related to goods from and
too Batavia
Freedom of trade in practice
Secondary literature
EIC
Same system as with VOC used as explanation of
the exceptional position of the British in
Bengal before Empire
Evolves away from servants to a new system:
Agency houses
Freedom of trade in practice
Why did the English evolve to this new stage and
the Dutch not?
Profits and fortunes
Ways to make a fortune for a servant:
Private trade
Government
War
Profits and fortunes
Correspondence:
VOC, comparison Ceylon and the Coromandel coast
Private trade: high risk, high investment and
doubtful success
Government: no risk, initial high investment and
quite successful
War: fastest way to fortune, but VOC better able to
control its servants to follow its orders
Profits and fortunes
Secondary literature
EIC, comparison before and after Empire
Servant move out of private trade
Most Nabobs made their fortunes in government
Servants more able to manipulate war as a way to
make a fortune
Profits and fortunes
Why were English servants better able to
manipulate war for their own good?
Power and trade
VOC: no state support in Asia until 1783
EIC strong support of the State since 1740s
The result of this support for the balance of
power became clear during the Battle of
Bedara (1759)
Power and trade
VOC: the Dutch servants solely depended on the
Company to reinforce them during conflict and
thus the directors and high government were
better able to contain conflict
EIC: The presence of both state and company
priorities, was easier for the English servants to
manipulate as well as making them far more
powerfull
Conclusion