Companies and Trade
This book is a third volume in the series "Comparative Studies in Overseas History" and contains a number of essays regarding the function of the great Companies of trade in the European expansion in Asia and the Atlantic World during the 17th and 18th centuries. The central question of this book concerns how the Companies actually achieved the opening of new markets and the widening of the economic boundaries of the world of the ancien regime. Some themes explored are the organization of the Companies, their relations with the state, their trade-policy, and their ability to make use of the economic potentialities in the overseas world. Though the essays are focused on a specific subject, this study is treated in a comparative way within the broad spectrum of overseas history. The companies were thus institutions designed to be expedient to further trade interests of the European nations during the Ancien Regime.
The maritime joint-stock company with its charter from the national government was a Janus-headed creature. On the European side the features of each company reflected more or less the interest groups, nation and its particular period. Overseas, the company displayed another countenance, owing to the fact that it had to adapt its trading methods and policies to the local institutions and customs of the people with whom it was dealing. Thus, it was the local conditions overseas which eventually dictated the point at which the relations between the Europeans and non-Europeans settled on the scale between dominance and servitude.
Scope (Topics Covered, Time Period)
The primary form of organization in this book is its division into two major themes. 1) the Companies acting as instruments of trade and expansion, and 2) the adaptation of the Companies to the trading world in Asia. A topic frequently broached is the placement of company history into the framework of expansion history and discussing how trade became the tool of expansion. The book revolves around themes that go beyond the surface questions, exploring the debate surrounding economic benefits of Asian and Western countries. According to liberal economists, Europe may not have profited as much as was possible, but Asia did not profit as much as was reasonable. This conviction has led some historians to discuss the question of whether and from what moment this unequal relationship, in which each step forwards for Europe meant a step backwards for Asia, led irreversibly to the division of the present world into developed and undeveloped countries.
Thus, studying the structures of the trading companies entails the need to examine and analyze the larger framework within which management and trade policy was executed. Themes such as the role of government are discussed, since it had remained limited in terms of the initial expansion of controlled by the Dutch and English East India Companies. The examination of the relationships of merchants and the state in the French Companies also highlight that merchants operating under the Company could make their own private fortunes, such that when in the eighteenth century the government tries to turn the tables on the merchants to acquire financial aid, it found itself deserted. In examining the organization of the Companies, it is important that the variance within the European agency has an effect on the interaction with the local traditional prevailing economic networks in the territories that they claim as their own sphere of influence.
Argument (Methodology, Significance)
The question that was persistently asked was not why the companies did not survive, but under what conditions were the companies able to compete successfully in the market?
Arguments such as those of O. Prakash presents a different outlook to problematize the statement that when Europeans arrive in Asia they either dominate the existing trade networks or interfere with the indigenous economic system. It is perhaps more accurate to assess the situation as localized to different areas depending on the amount of privileges the Companies can obtain: While in Bengal where no special grants or exclusive privileges can be extracted, the Companies had to keep a low profile and exerted little influence. Here the indigenous populations derived decided benefits from the presence of the Europeans. However, in Ceylon and Malabar, the companies interfered with the indigenous economy in order to get a monopolistic hold of the market. Such that by excluding other parties from reaping the fruits of the economy, it introduced a new, negative aspect.
Particularly, the integrative stage of the commercial activities of the companies in the Asian trade pattern is seen in the case of Japan. The Dutch could offer a wide variety of goods obtained throughout their vast trading network and without political implications, leading the Shogunate to believe that trading with the Dutch was to the interest of Japan. Seen from the European perspective, the companies appear to have been dynamic powers establishing a new stage in the international trade: but authors argue that when viewed within the Asian context they were viewed as mere newcomers making uncertain attempts to find their way into existing structures. A contentious point is that the companies' adaptation was not a point of weakness, but on the contrary the basis of their success.
The interest in Company history as a gateway towards knowing the history of non-European countries meant that this should be studied as components in a global process of expansion and reaction; not to be viewed in isolation. The Companies could not dominate the world and the cultures they met, the conquered, traded, adapted themselves or subordinated themselves according to the environment they met, but everywhere they added something to the world they found. Another argument is that the companies were successful in maintaining the balance between the forces of the market and the power of their government. Their unplanned losses became unexpected investments in the process that led from the discoveries to the existence of a modern world market.
Thus, the author concludes with the argument that companies were able to do well in the Asia trade because their specific form of organization was well suited to solve problems in the long distance trade, allowing them to prove their efficiency in the world market.
Annotated by Michelle Djong