The great tragedy of Rhodes is that a man of such intelligence, charisma, power and wealth should have squandered his talents and fortune on an ever-spiralling series of acquisitions and expansions, making more and more money, far beyond the point of needing it, and doing this by restricting the rights of workers, pursuing a policy of violent annexation of vast territories and subjugating their peoples, all to gain access to more mineral deposits and expand his own commercial empire and the British political empire. In the end, his business consumed his life, narrowing it to the adrenaline rush of scheming and victory over rivals. Although Rhodes put himself forward as the great champion of empire, in the end his policies served only to eliminate the possibility of a bright future for southern Africa for generations, heaping enormous moral debts and a tarnished legacy on the generations to come. Like many merchant kings, Rhodes was consumed by the contest and forgot that there could be—indeed, should be—a purpose to his life other than the continued struggle to conquer and expand.
Epilogue
WHEN COMPANIES RULED THE WORLD
“Monopoly . . . is a great enemy to good management.”
ADAM SMITH , The Wealth of Nations, 1776
“OF COURSE, THE WHOLE ENTERPRISE WAS IN THE LONG run a scheme to enrich a few on the blood and guts of a subject people,” Hector Chevigny wrote of the Russian American Company. The same could be said about any of the mighty commercial monopolies of the Age of Heroic Commerce. But all corporate behaviour does not lead to this; indeed, the desire to barter and exchange products is as old as humanity itself. The merchant kings and their monopoly corporations epitomize the nightmare of unscrutinized and unchallenged power combined with ideology—in this case, controlling whole civilizations and societies for the maximum gain of distant shareholders. These monolithic corporate entities were less the product of free-market capitalism than the commercial extension of European national wars and struggles for cultural and economic supremacy. They occupied the muddy grey zone that exists between government and enterprise.
Initially, granting monopoly trading rights was a convenient way for European governments to bankroll the astronomical costs of colonial expansion and commercial wars by tapping private capital. The policy failed, however, when home governments allowed the companies to become the only local civil authority as the trading outposts grew in population. By offloading the responsibility for their own citizens and by claiming power over the indigenous residents of the territories absorbed by their enterprises, European governments created the conditions that had often horrific consequences. In other cases, the use by monopoly corporations of their home nation’s goodwill for their own personal gain resulted in substantial losses for the mother country, such as the Netherlands’ loss of control over Manhattan and New Netherland and Britain’s loss of control over Old Oregon, or the use of national revenues to fund the military defence of the companies’ territories and privileges.
The monopolies provided great benefits to their host nations for a limited time, but like all institutions they outlived their usefulness and caused great damage when their powers were not curtailed. The fact that many of these entities ended up relying on government bailouts has relevance to modern times. As with the giant multinational financial institutions and manufacturers during our current area, many of the great historical monopolies became so large and complex, and employed so many people— overshadowing economies and occasionally being wielded as a tool of foreign policy—that to allow their failure or collapse would have been devastating to the national morale as well as the national economy. They became too big and important to be allowed to collapse. The profits were enjoyed disproportionately by a few individuals for decades, but the cost of failure was borne equally by the whole society through taxes.
The merchant kings led their enterprises away from their purely commercial origins and towards the social exploitation and political subjugation of entire societies. The incredible distance between their home countries and the arena of their commercial activity enabled the merchant kings to pursue their grand overriding visions: once their sailing ships left port for voyages lasting up to a year or more, they and their officers were not subject to the laws of their home nations. Yet neither were they subject to the rules governing foreign societies because of their technological prowess and the incapacity of those local governments to police them. Once they were far from home, in a world without reliable communication or even trustworthy charts of the regions being exploited by their enterprises, the merchant kings could do business as they pleased, with free rein to indulge their impulses, impose dictatorial power and plunder rapaciously. They were able to do so because they were free of the moral and legal strictures that would have bound or at least tempered their behaviour and business activities at home. Most Europeans, apart from a select few insiders, had no idea how abusive some of these companies were in their overseas practices or that they routinely flouted the laws and customs that bound society in Europe.
The merchant kings and their monopoly corporations show us the potential danger of our current trends of globalization: the greater the distance between the product and the consumer, the less opportunity for consumers to oversee production, to ensure that in the producing countries the producers adhere to the laws and recognize the same rights enjoyed by the citizens of the nations where their products are sold. This is equally applicable to the spice trade in the seventeenth century, and the fur trade in the nineteenth century, as it is to footwear or electronics manufacturing in the twenty-first century.
The great theorist of free markets, Adam Smith, was very aware of the drawbacks of monopolies, of the dangers they presented both to their customers and to the societies in which they operated. A company will always act in what it believes are the best interests, sometimes only short-term, of itself and its shareholders; that is its purpose. A monopoly can operate without checks and balances—without a second set of eyes, those of the competition, in the same field and region. The merchant kings went even further by seizing political power in addition to possessing their commercial monopoly; we have seen the Dutch East India Company’s dominance throughout Indonesia, the Dutch West India Company’s control over New Nether-land, the English East India Company’s rule of Bengal, the Russian American Company’s hold on Alaska, the Hudson’s Bay Company’s governance of much of North America, and the British South Africa Company’s power in southern Africa.
In the Western world we have reached a point, however, where nothing like those great monopolies could exist in the same manner any more. There are at present no completely unregulated enterprises that can engage in cultural and environmental annihilation with impunity.
Western societies strive for a separation of religion and the state, but what ought to be the relationship between commercial enterprise and the state? It seems clear from studying these merchant kings and their monopoly companies that the conjoining of commerce and the state during the Age of Heroic Commerce produced a series of “bad marriages,” which can be seen as cautionary tales about how such relationships can go drastically wrong. These historical examples demonstrate that corporate enterprise as political authority eventually runs counter to the interests of the people and the state, even though they may seem compatible for a time. Ultimately, commerce and responsible government are working towards different goals, and for the benefit of different people. Commercial enterprise is vital to the prosperity of peoples and thus is a primary facet of society, but it must operate under the auspices and political control of the governing society, rather than compelling that society to act subserviently, as the merchant kings sought to do. The monopoly corporations described in this book failed their host nations when they resisted the transition to true government: people cannot be kept indefinitely as employees, customers or competitors without being granted personal freedoms and civil rights. In any event, the great monopolies that imposed political control on subject peoples were eventually faced with the reality that gover
ning people responsibly was not an inherently profitable field of enterprise. In the short run, exploitation certainly could be profitable, but eventually it tainted the exploiters morally. Even when they were good companies, they made for bad governments; the ultimate objectives of government and commerce were shown to be inherently incompatible.
The leaders of these successful companies shared a variety of characteristics: they could be extremely competitive and ruthlessly determined to get their way, to impose their will on others in order to increase their power. None of them were born into wealth, social status or power, but the struggle to win the contest, as they perceived it, was of paramount concern. The merchant kings were also tactically brilliant and possessed an expansive vision that directed the activities of millions. These traits, however, led them to make unsavoury decisions. Was it a corrupt personality, however brilliant and decisive, that led these merchant kings to the pinnacle of their success, or did their meteoric success give rise to the less flattering aspects of their personalities? Should we overlook their moral failings because they effected revolutionary changes in the course of world history? Many of them were celebrated as heroes during their lifetimes but are viewed much less favourably today.
Even certain brutal kings, emperors and generals have the word “great” appended to their names, yet the merchant kings as a group fail to elicit this kind of historical respect.
The merchant kings of the Age of Heroic Commerce were a rogue’s gallery of larger-than-life merchant-adventurers who, during a period of three hundred years, expanded their far-flung commercial enterprises over a good portion of the world for no other purpose than to generate revenue for their shareholders, feather their own nests and satisfy their vanity. Heroes or scoundrels; patriots or thieves; sagacious administrators or greedy plunderers—these are often flip sides of the same coin.
Squint your eyes or shed light elsewhere to shift the shadows, and one can become the other. Contemplating the merchant kings of those earlier times is like looking in a rear-view mirror: remove the cultural veneer, and the same sorts of people, mixing business and politics, are making our world even today.
Sources
I APPROACHED THIS PROJECT AS AN INTERESTED GENERALIST with a background in history. The book is written for other interested generalists, as a history of individual merchant kings and their monopoly companies rather than as a technical history of global trade or colonial expansion. I stick to generally established chronologies and facts, and the key sources are referenced in the text. My focus is on the people and personalities that drove these commercial enterprises to seize political power, rather than on the minutiae of trade statistics, profit margins and so forth. I wanted to tell the stories of the merchant kings’ lives, the stories of what motivated them, what gave them pleasure or drove them into a fury, why they pushed themselves and their companies to dominate others and then to crush all competition. Was it merely money that motivated these actions? I think not, and the stories show that something more unfathomably intangible, yet human, drove these complicated and intriguing individuals.
With the exception of Coen, and to a lesser extent Baranov, the merchant kings whose stories appear here have been profiled in numerous biographies over the decades, although they have never been considered together as a group. The companies they headed are also well documented and studied. Whole books have been written on each of these individuals, and whole books on each of these mighty monopoly corporations. Because I cover six of them in one volume, much detail, technical and personal, has been omitted. The complex interactions of generations of company men, whether in Indonesia, Africa, India or North America, could easily fill an entire book. In preparing the selected bibliography I have only listed those resources that I found useful and relied upon as authoritative, insightful or both. Most of the contemporary quotes of the merchant kings come from collected volumes of their correspondence, speeches and memoirs or have been reproduced in the appendices of scholarly works.
For further reading on Coen and the Dutch East India Company, consult Femme S. Gaastra’s The Dutch East India Company: Expansion and Decline. Giles Milton’s Nathaniel’s Nutmeg: How One Man’s Courage Changed the Course of History is a colourful narrative of the struggle between the Dutch and English companies to control the Indonesian spice trade. The best book to further an interest in Stuyvesant and corporate Dutch Manhattan is Russell Shorto’s fascinating work The Island at the Center of the World: The Epic Story of Dutch Manhattan and the Forgotten Colony that Shaped America.
Regarding Clive and the English East India Company, a veritable mountain of literature has been written. Start with Michael Edwardes’s Clive: The Heaven-Born General or Robert Harvey’s Clive: The Life and Death of a British Emperor. John Keay’s The Honourable Company: A History of the English East India Company is a highly readable, thorough and lucid overview of the company’s activities over the centuries. Baranov, and Russian America in general, have been less studied, but a good overview is contained in Lydia Black’s Russians in Alaska, 1732–1867, whereas Hector Chevigny’s Lord of Alaska: Baranov and the Russian Adventure is a colourful, if not entirely trustworthy, narrative of Baranov’s life. For a thorough and lively account of Simpson’s life and the later history of the Hudson’s Bay Company, consult James Raffan’s Emperor of the North: Sir George Simpson and the Remarkable Story of the Hudson’s Bay Company. Shelves of books have been written about Cecil Rhodes, many of them scarcely veiled hagiographies from the early twentieth century. I found the most readable and nuanced general account to be Antony Thomas’s relatively recent Rhodes: The Race for Africa.
Selected Bibliography
Alekseev, Aleksandr Ivanovich. The Destiny of Russian America, 1741–1867. Edited by R.A. Pierce. Translated by Maria Ramsay. Kingston, on: Limestone Press, 1990.
Black, Lydia. Russians in Alaska, 1732–1867. Fairbanks: University of Alaska Press, 2004 .
Bowen, H.V. The Business of Empire: The East India Company and Imperial Britain, 1756–1833. New York: Cambridge University Press, 2006.
Bown, Stephen R. A Most Damnable Invention: Dynamite, Nitrates and the Making of the Modern World. Toronto: Viking, 2005.
Boxer, C.R. The Dutch Seaborne Empire, 1600–1800. New York: Knopf, 1965.
Braudel, Ferdinand. Civilization and Capitalism, 15th–18th Century. New York: Harper & Row, 1984 .
Brierly, Joanna Hall. Spices: The Story of Indonesia’s Spice Trade. Oxford: Viking, 1942 . Oxford University Press, 1994 .
Burrows, Edwin G., and Mike Wallace. Gotham: A History of New York City to 1898. New York: Oxford University Press, 1999. Cawston, George. The Early Chartered Companies, a.d. 1296–1858. London: Edward Arnold, 1896.
Chevigny, Hector. Lord of Alaska: Baranov and the Russian Adventure. New York: . Russian America: The Great Alaskan Venture, 1741–1867. New York: Viking Press, 1965.
Clive, Robert. Lord Clive’s Speech, in the House of Commons, 30th March 1772, on the Motion Made for Leave to Bring in a Bill, for the Better Regulation of the Affairs of the East India Company, and of Their Servants in India, and for the Due Administration of Justice in Bengal. London: J. Walter, 1772 .
Condon, Thomas J. New York Beginnings: The Commercial Origins of New Netherland. New York: New York University Press, 1968.
Curtin, Philip D. Cross-Cultural Trade in World History. Cambridge: Cambridge University Press, 1984 .Davies, D.W. A Primer of Dutch Seventeenth Century Overseas Trade. The Hague: Martinus Hijhoff, 1961.
Dodwell, Henry. Dupleix and Clive: The Beginning of Empire. London: Archon Books, 1968.
Edwardes, Michael. Clive: The Heaven-Born General. London: Hart-Davis, MacGibbon, 1977.
Furber, Holden. Rival Empires of Trade in the Orient, 1600–1800. Minneapolis: University of Minnesota Press, 1976.
Gaastra, Femme S. The Dutch East India Company: Expansion and Decline. Zutphen: Walburg Pers, 2003 .
Galbraith, John S. Crown and Charter: The Early Years of the British So
uth Africa Company. Berkeley: University of California Press, 1974 . University of Toronto Press, 1957. . The Hudson’s Bay Company as an Imperial Factor. Toronto: . The Little Emperor: Governor Simpson of the Hudson’s Bay Company. Toronto: Macmillan of Canada, 1976. Gehring, Charles, trans. Laws and Writs of Appeal, 1647–1663. Syracuse: Syracuse University Press, 1991.
Gibson, James R. Imperial Russia in Frontier America: The Changing Geography of Supply of Russian America, 1784–1867. New York: Oxford University Press, 1976.
Griffiths, Sir Percival. A Licence to Trade: The History of English Chartered Companies. London: Ernest Benn, 1974 .
Hagemeister, Leontii Andreianovich. The Russian American Company: Correspondence of the Governors, Communications Sent, 1818. Translated and with an introduction by Richard A. Pierce. Kingston, on: Limestone Press, 1984 .
Hanna, Willard Anderson. Indonesian Banda: Colonialism and Its Aftermath in the Nutmeg Islands. Philadelphia: Institute for the Study of Human Issues, 1978.
Hart, Simon. The Prehistory of the New Netherland Company: Amsterdam Notarial Records of the First Dutch Voyages to the Hudson. Amsterdam: City of Amsterdam Press, 1959.
Harvey, Robert. Clive: The Life and Death of a British Emperor. New York: Thomas Dunne Books, 2000.
Hearne, Samuel. A Journey to the Northern Ocean: The Adventures of Samuel Hearne. Surrey, bc: TouchWood, 2007.
Jacobs, Jaap. New Netherland: A Dutch Colony in Seventeenth-Century America. Hakluyt Society, 1905. Leiden: Brill, 2005.
Jourdain, John. The Journal of John Jourdain, 1608–1617: Describing His Experiences in Arabia, and the Malay Archipelago. Edited by William Foster. London:
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