VOC: The Dutch East Indies Trading Company
Amazon,Apple, Google, IBM, and Microsoft. If you’re living in the first world you’ve definitely heard of all these companies and they probably help shape the way you interact with the world. It wouldn’t be a stretch of the imagination to think that the vast wealth behind these contemporary beacons of capitalism are undoubtedly among the most valuable companies of all time. So which one do you think is the most valuable? Amazon has hit the trillion dollar threshold but it still doesn’t hold a candle to the most valuable company of all time.
If you are a fan of history or economics the real answer shouldn’t surprise you.The Dutch East India Trading Company (Vereenigde Oostindische Compagnie or VOC) was the most valuable company of all time-creating the shoulders that future businesses would stand on. How much was it actually worth? Well now you’re presented with two options:
1) scroll all the way to the bottom, read the big number, shrug, and go back to whatever you were doing.
OR
2) Take a few minutes to learn about the Dutch East India Trading company and how they changed the face of economics and history forever.
The Choice is yours, choose wisely!
A Very Brief History
The Dutch East Indies [Trading] Company (Vereenigde Oost-Indische Compagnie in Dutch) was founded in 1602 to protect and expand Dutch trade in and around the Indian Ocean. It began as a conglomerate of trading and merchant companies (called the Voorcompagnie) coming together for the benefit of all involved (including the Dutch government). Before the government led conglomeration companies were financed privately and it wasn’t unusual for these companies to fight amongst each other to gain more power. The Dutch government offered them a 21 year monopoly on the Indian spice trade for their allegiance.
After the VOC’s founding the company helped secure Dutch Independence from the grips of Spain. The company was later granted a trade monopoly for marine trade ranging from the Cape of Good Hope (Modern South Africa) to the Straits of Magellan (modern day Chile). It became the very first international conglomerate in existence. The Dutch East India Trading Company began as a merchant and shipping company but would later branch out into all kinds of business including: shipbuilding, wine making (South Africa), international trade, sugarcane farming and production, and naval warfare (to some extent).
The VOC would rule the seas (and huge swaths of land across its territory) until 1799. The Dutch government dissolved the company, absorbed its assets, and the territories became Dutch colonies. If you like a more in depth look at the VOC click HERE. If you want some quick digestible facts to share over a pint or a fruity cocktail keep reading.
Ten Memorable Facts about the VOC
#1 BUY! SELL!BUY BUY BUY!
The VOC became the first publicly traded company- on the worlds first stock exchange. It is also considered the first real multinational company to exist. It started of as a “humble” spice trading company that would become the worlds biggest financial giant. Financing a company by issuing stocks and bonds was a new idea and had never before been taken such a large form. This form of collective funding is commonplace among the economic giants of the modern age-yet it was brand spanking new at the time of the VOC. Their ability to fundraise helped them to build larger fleets, hire more people (across the globe), and to provide economic infrastructure in lands far away from the Dutch motherland (with great social costs).
#2 The World of the VOC
The Dutch East India Trading Company at one time controlled half of the worlds trade industry. At its peak the East India Trading Company they controlled trade in and out of 10 Asiatic countries ! The expansive territory also involved the VOC in military conflicts and wars including the following (via wiki):
- Eighty Years’ War / Dutch War of Independence (1568–1648)
- Sino-Dutch conflicts (1620s–1662)
- Cambodian–Dutch War
- Trịnh–Nguyễn War
- Dutch–Portuguese War
- Javanese Wars of Succession
- Malayan–Portuguese War
- Sinhalese–Portuguese War
- Khoikhoi–Dutch Wars
- Travancore–Dutch War
- Fourth Anglo-Dutch War
#3 Now Hiring!
In the Dutch East India Trading Company’s lifetime it created nearly a million trade related jobs. In contrast the rest of Europe… the whole rest of Europe… ” the rest of Europe combined sent only 882,412 people from 1500 to 1795.” (source)
#4 Dividends
As many modern publicly traded companies do they also paid dividends. For just shy of 200 years the company paid and annual dividend ranging from 12%-63%. Not too shabby considering Microsoft’s current dividend is under 3%. and Amazon doesn’t even give a dividend.
#5 Monopoly !
For those of you who skipped the text at the beginning the VOC played the real life version of monopoly. In the early days of capitalism monopolies were the most lucrative way for those in a station of power to gain even more wealth and power. The VOC was given a royal charter allowing them to have a 21 year monopoly and special rights for any newly found territories to trade with. When their charter ran out they gave the government a healthy sum of money and renewed it. Today antitrust laws are meant to protect against such types of businesses existing.
#6 Run by the people,
mainly for the rich ones
IT should come as a little bit of a surprise that the Dutch Government didn’t actually own any shares of the VOC. After awhile it had only had the slightest bit of control in regards to their actions-but they did receive quite a bit of tax money. Most of the shares were own by wealthy or aristocratic people in the Netherlands.
#8 Private Army
At its peak the Dutch East India Trading Company had 40 ships outfitted for war with 10,000 soldiers on their payroll. This would help them defend shipments and stomp out any troubles they had in securing their goods in foreign lands. Along with its sister company, they quelled rebellions and secure trade for nearly two hundred years.
#9 Tulip Mania
Humans are simple creature that have placed value on things that turned out to not really be important. Tulip bulbs shipped into Europe from the Ottoman Empire by the boatload helped fuel the bubble. They quickly became a status symbol and soon tulip bulbs were being traded for 4, 5, even 6 times the annual salary of a normal working person. This incident has been named “Tulip Mania.” These bulbs were predominantly brought to the Europe by the Dutch East India Trading Company. This created the first “bubble market” that burst after a few years. The Dutch East India Trading Company weathered the storm with minimal financial losses.
#10 The Four Comma Club!
You remember watching Scrooge Mcduck as a child, right? He was the grand caricature of a rich and luxurious miser. Forbes estimated his net worth to be about $65.4 Billion. Not too shabby for a cartoon character. At the time of this post’s publication Apple and Amazon are battling for Trillion dollar stock market valuations. (**EDIT: Amazon is now valued at over $1 trillion)**! But the Dutch East Indian Trading Company would be roughly worth a magnificent
$7,900,000,000,000.00
Yes your read that correctly. Adjusted for inflation it would be worth $7.9 Trillion dollars. Enough money to fill a lake with gold coins like your favorite miser.
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