Quick: Name the biggest company the world’s ever seen. Do you think it’s Apple? Amazon? Microsoft? Nope, it’s not a high-tech company. Did you name Bank of America, JP Morgan Chase or perhaps an up-and-coming Chinese bank? No, it’s not one of those ether. If you chose an energy company, retailer or real estate developer, you’re still off.
To answer correctly, you’d have to pick a company that went out of business in 1799. It might not be a going concern anymore, but at the height of its power, this company maintained a trade empire responsible, in large part, for bringing the world into the Modern Age. It bridged together cultures and continents and established both regional and transoceanic trade routes. Through its trade opportunities and stock shares, it generated wealth for thousands of families.
But it has a tragic history, too. Along with trade goods like oak and copper, it also exported colonialism to places like South Africa and Indonesia. Along with its sister company, it also became the largest player in the slave trade and brought immeasurable amounts of grief, despair and pain for generations.
The name of the company was the Dutch East India Company.
While the Dutch East India Company — the Vereenigde Oostindische Compagnie in Dutch, or more simply, the VOC — would become the greatest corporation of all time, it was not what we would recognize today as purely capitalist venture. That’s because it was organized by the government to state-sanctioned monopoly that would serve to stabilize spice prices, and thereby strengthen the Dutch economy.
The States General, the governing body of the federation of Dutch provinces in the 1600s, was eager to compete against stronger trading powers such as England, Portugal and Spain — the nation it had just fought a war to win its freedom. At the dawn of the 1600s, Portugal, a strong ally of Spain, was the dominant force in the spice trade. And since the Netherlands and Spain were on the outs, the Dutch knew they would have to find their own way to source their cinnamon.
A few years before the VOC was organized, several independent merchants had tried to find new or better ways of reaching the Spice Islands (what we now know as Indonesia). Some tried going north of Russia, which was a disaster. Other tried crossing by the North Atlantic, which is how New Amsterdam, and then New York, eventually came to be. But success was found by those who followed established Portuguese routes around the Cape of Good Hope in Africa. Soon, a burgeoning Dutch spice trade was on, but the many independent traders hopping into the game was making for wild fluctuations in spice prices. And that wasn’t good for anyone.
Except maybe the buyers, but who cared about that?
Amsterdam may have been the center of the Dutch republic, but it was far from the only part of it. The Netherlands consisted of seven provinces, and all of them wanted to have a share in the wealth this venture promised to generate. So when the States General, under the leadership of Johan van Oldenbarnevelt, convened to discuss sanctioning a spice monopoly, it was agreed the company would have six “chambers,” each responsible for raising funding for the venture and each with the right to appoint directors to govern the VOC. Those locations were Amsterdam, Middleberg, Delft, Rotterdam, Hoorn and Enkhuizen. However, it was set up so that Amsterdam would always have the strongest voice, and Middleberg, in Zeeland, would be the second-strongest chamber.
Funds were raised by selling shares, and I mean anyone, could get in on the action. According to The VOC Site, “the shareholders came from all walks of life: from wage laborers to doctors, pastors and great merchants.” And all of them stood to enjoy the riches that were about to pour in.
When all was said and done, 6,424,588 Guilders had been raised for the founding of the VOC. In 2019’s American dollars, that would be about $385.5 million.
I know what you’re thinking: pocket change. But things only got bigger from there. By 1637, the VOC had a market capitalization of about $7.9 trillion in today’s US dollars, making it the biggest company the world has ever known.
To get an idea of just how big that is, here are all companies listed by largest market capitalization in 2019 that you would have to add together just to get what the VOC was in 1637:
- Apple: $961.3 billion
- Microsoft: $946.5 billion
- Amazon: $916.1 billion
- Alphabet: $863.2 billion
- Berskshire Hathaway: $516.4 billion
- Facebook: $512 billion
- Alibaba: $480.8 billion
- Tencent Holdings: $471.2 billion
- JPMorgan Chase: $368.5 billion
- Johnson & Johnson: $366.2 billion
- Visa: $351.9 billion
- ExxonMobil: $343.4 billion
- ICBC: $305.1 billion
- Walmart: $291.6 billion
- Bank of America: $287.3 billion
- Nestlé: $281.3 billion
- Samsung Electronics: $272.4 billion
The original one-stop shop
So how did the VOC get all that money, anyhow? Was it all from cinnamon sticks and peppercorns, or was there something else going on?
The VOC is often called a trading company, and it certainly was that. But it was much, much more than that besides. In reality, the VOC was the world’s first conglomerate. Though it was organized to be a spice trading company, it would also become a ship builder, a system of ship repair yards, operator of a network of trading posts, developer of regional trade networks and a transportation company for Dutch residents moving to the colonies and back home again. Besides trading in spices, the VOC would also do trade in cloth, gems, lacquerware, porcelain, umbrellas, South African wines and many other commodities. But it would also become a leading force in the slave trade, both in the trans-Atlantic trade and on the Asian continent.
It’s actually understandable that a company chartered to do just one thing — monopolize spices — grew so large. First, realize that the trip from Amsterdam to Batavia, the Dutch headquarters in the Spice Islands, could easily take six months. If the ship did nothing but sail out to Batavia and back again, the ship would be gone from home for a year.
But that’s not how it worked at all. The nutmeg the Dutch wanted was in Batavia. But the local traders there didn’t want anything the Dutch had to offer. They wanted the chintz fabrics made in India. So, in order to facilitate trade, the Dutch had to establish regional trading networks — bringing copper from Europe to India to get their chintz, then taking the chintz to Indonesia to get the nutmeg, for example. Then, they needed soldiers to defend all this.
You start to see why it wasn’t rare for a sailor to be gone from home for years at a time. Ships away from home that long didn’t just need to stop to pick up new provisions, they needed to repair their rigging or fix more substantial damage from the long journey. And so the VOC got into the ship repair business (as well as building the dang things), too.
The ugly truth
Of course, running the biggest trade empire the world has ever known takes people. Lots and lots of people. And the Netherlands isn’t exactly a big place to begin with. To make it more challenging, word soon got out about just how dangerous a job it was to be a sailor with the VOC.
As many as 30 percent of all Dutch sailors shipping out with the VOC — they had to agree to a minimum three years of service, by the way — 30.2 percent never made it back home. For soldiers, that figure was 60.5 percent. Yikes. [(Lucassen, J. (2004). A Multinational and Its Labor Force: The Dutch East India Company, 1595-1795. International Labor and Working-Class History, (66), 12-39. Retrieved from http://www.jstor.org/stable/27672956%5D
The Netherlands turned on the Help Wanted sign and turned to neighbors. Germans responded, and soon learned the same lesson. A saying soon arose: “Holland is the graveyard of Germany.”
Still short-handed, the Dutch turned to slavery. While the trans-Atlantic trade is better known, and plan on talking about that more when I cover the Dutch WEST India Company, the Dutch EAST India Company was also involved, both in South Africa and in Asia.
In the Cape region of South Africa, slaves were brought in from the eastern coast of Africa and by droves from Indonesia, Sri Lanka and India. So many enslaved people were brought in that the enslaved population outnumbered the free population until the first quarter of the 19th Century. Slavery on the Cape was abolished after the British Empire had taken over the colony and banned the practice in 1834.
The Dutch also employed slavery in Indonesia, though it’s less talked about. Slavery had been in use by some people already living in the islands, but the Europeans industrialized and weaponized it. According to researchers, as many as 1 million Indonesians were enslaved by the Dutch, and many of them were sent off to Africa, far from their families. Others were kept in Batavia or other trading posts. They were forced into field and domestic work, and women were sometimes forced into sexual labor.
On a particularly depressing note, one researcher has found that the average age of slaves being traded by the Dutch in the Indian Ocean region was incredibly young: about 13 for boys and 15 for girls. The imagination recoils.
Officially, slavery was prohibited within the Dutch provinces. That said, it’s generally accepted that some of the African and Asian “servants” who returned from trading voyages with higher-ranking officers were not getting paid. Others say they were former slaves who were technically freed but had been “gifted” to a family. Some historians say there’s no way to know by today’s standards what their legal status was.
It’s one of the great paradoxes of the Dutch Golden Age — that a society on the vanguard of rationalism and tolerance could at the same time be the same force driving slavery around the globe. And it’s a lesson that it’s not just how much money a corporation makes that matters.