Network of Riches
The Dutch East India Company
Welcome to Cosmographia. This post is part of our Cartography of Networks series. For the full map of posts, see here.
The Dutch East India Company (Vereenigde Oostindische Compagnie, or VOC) was incorporated on 20th March 1602, with the aim of breaking the Portuguese monopoly on the spice trade. Over the course of the next two centuries, the proto-conglomerate, one of the first joint-stock companies in history, shipped over 2.5 million tons of goods, launched almost 5000 different ships, and carried nearly a million Europeans into Asian waters. For context, the VOC’s nearest competitor, the British East India Company, trafficked a mere 2700 ships and only a fifth of the total tonnage.
To carry out its trade, the VOC was given permission to wage war, sign treaties with foreign governments, establish colonies, and even mint its own currency. At the peak of its powers, the company’s stock was worth 78 million Dutch guilders — some $1 billion in today’s money — making it the richest private company the world had ever seen.1 This is all the more impressive when you consider it was achieved by the people of a nation only a few decades old at the turn of the 17th century.
How did the Dutch turn a bold new experiment in limited liability into the most formidable mercantile enterprise in history? The answer is threefold: financial innovation, military autonomy, and by building the most sophisticated trade network the world had ever seen.
They are greedy and cunning. […] For profit they do not even hesitate to jeopardise their own lives, and no place is too distant for them to try and reach it. […] Who meets them at sea, will certainly be robbed.
— Thai-Wan Hoe Tsi on the Dutch (1898)
The spice trade had its roots in deepest antiquity. Ancient Austronesian sailors traded incense and spices as far away as Sri Lanka, India, and China as early as the second millennium BC. Later these routes were taken over by Indian merchants who brought cinnamon, cassia, cardamon, ginger, pepper, nutmeg, star anise, clove, and turmeric to ports in Persia, Arabia, and the Red Sea. Some spices continued on overland to cities in the Middle East and North Africa, before entering the Mediterranean trade network and reaching Europe. The High Middle Ages saw the rise of mercantile republics like Venice and Genoa who enriched themselves by monopolising the last leg of this 7000-mile journey, which at its greatest extent stretched from the Philippines to Britain. It’s thought that by the time pepper reached Europe, consumers were paying up to twenty or thirty times the cost at its point of production.
But the patterns of trade changed when Vasco da Gama pioneered the Cape Route in 1498, connecting the Atlantic seaboard directly to India, and then later the Spice Islands themselves. By cutting out the middlemen, and with a more efficient carrying capacity than those routes requiring a land leg, the Portuguese were able to sell their wares with a hefty 90% profit margin back in Europe, while still undercutting the Venetians.2 The profits soon attracted the Spanish, who came to the East Indies via their American colonies, crossing the Pacific on what was the first circumnavigation trade route in history.3
The success of the Cape Route soon attracted other seafaring European nations; England’s Sir Francis Drake circumnavigated the globe between 1577 and 1580, making sure he stopped off in the Spice Islands en route to fill his hold with cloves. But it was the Dutch who would mount the most serious challenge to Portuguese hegemony.
