Inflation adjustments gets pretty fuzzy even in the same nation across a few decades, let alone between different nations across centuries.
The article equates the 1637 peak valuation of 78 million guilders with current day 7,900,000 million dollars (not the 79,000 million according to the bad math in the article!). Now consider that the initial capital raised for the company was 6.4 million guilders in 1602. That would be around 600 billion USD. (I'm neglecting inflation between 1602 and 1637 here, that doesn't change my point.) This was raised around 1800 families, with share varying from 50 to 85,000 guilders, which according to the implied inflation/currency conversion is between 5 million and 8.6 billion USD. How credible is is this conversion factor?
Consider as another reference that the nominal value increased 12 fold over 35 years. Todays elite PE/VC/incubators would probably scoff at such low ambitions. (Though the East India Co was pretty profitable and paid handsome dividends, so the returns are higher than capital gains.)
By contrast, an inflation calculator tells me that $100 one hundred years ago is worth around $2,500 now (so 25X). And according to this article https://www.jstor.org/stable/1820827?seq=1#metadata_info_tab... , a pretty typical wage back then was $0.50 per hour. 25X that is $12.50, which sounds about right as a typical median wage nowadays (perhaps a bit low; there is a real increase in standard of living over this time period too). So the inflation figures going back at least a hundred years do make sense. What causes them to break down when you try to go back much farther, then? Are the inflation figures simply wrong? Are there compounding errors that, over enough time, make the result completely ridiculous?
The purchasing power of a typical weekly wage in 1800 or 1637 looks very different depending on whether you express it in terms of bread rolls, non-leather settees or bluetooth speakers (all of which are constituent parts of the modern UK CPI index)
The base/average salary comparison also makes a lot of sense.
Except that it's not fair to simply assume that a good salary was roughly similar in terms of purchasing power across the a few centuries. In fact at that time middle income people were much poorer in terms of what they were able to consume, purchase, and barter.
Now for the mystery of “the the” which I sometimes encounter...
Using that source, 78m Guilders would be 624m-1.4b Euro today.
The point that the Dutch were an economic superpower in the 17th century is not off base: they were only country to maintain colonies in North & South America, Africa and Asia.
The point that the Dutch East India Company was probably the first company set up under a system of modern financial capitalism, that is a permanently capitalized enterprise with a professional managerial class, separate from tradable claims on the profits of that enterprise, is also well taken.
But this article is a load of twaddle.
The owners of the Dutch East India Company endured conditions poor Europeans would find appalling today. I'd say the average welfare client lives a far more powerful, peaceful, safe and comfortable life today.
And if by wealth we mean power or abilities, at the height of it's power, whether we talk shipping, trading or ship production, the combined manpower of the Dutch East India Company could't produce an output greater than that of a tiny company today.
Whats wrong with my presumption? I know there must be quite a bit wrong with it, but I'm not familiar with economics whatsoever.
Take our homes. In the 1630s, homes had almost no insulation, no electricity, no central heat, no air conditioning, no shower, actually no running water, not even cold. The people who lived there inhaled smoke from the fireplace all day. They had no toilets or sewers, no internet, no cable TV or radio or cell phone connection. From evening until morning they sat in almost complete darkness since candles or oil lamps or whatever they used were crazy expensive. Houses weren't fire proof, barely water proof, wind proof or earth quake safe.
What I describe was true for the richest too. The very richest king or business owner in 1630 lived in a home, which fits my description. How do you even begin to compare his wealth to your wealth? 1,000 servants still couldn't bring him a tiny fraction of the comfort we enjoy. The very richest king in 1630 was dead poor compared to you. And that's just the material part. People were also exposed to crime in a way that we cannot even begin to imagine, and which you wouldn't even find today in our poorest neighborhoods. And their life would likely end decades before ours, and be a lot more painful. Even the richest business owner would not be able to stop his headache with a pill the way you or I can. Or tooth aches. Or fix a broken leg. A small wound could kill him. Most would see a number of their children die, maybe also wife in child birth.
Inflation numbers capture none of this.
I guess it depends on how and what you compare things.
All you say is arguably true. Yet I can guarantee that in one manner, those people were as wealthy or potentially wealthier than most of the ultra-wealthy of today:
Because they owned land.
If you look at the sheer square footage of their "houses" (palaces) - not including the surrounding estate land - they tend to be very large and grandiose sprawling things.
While the ultra-wealthy of today do own a lot of land (and in some cases, perhaps more than the richest of kings back then) - the majority of people have little to none (and of those that do, most don't have the mineral rights to their land).
In that manner, there isn't much comparison. The question of whether or what is the better trade-off can be quibbled over; after all, all the land in the world back then couldn't transport one halfway across the world in hours - but some today might see that tradeoff as fair, and others back then might have traded all of their land in order to be able to stream youtube to a handheld "magical" device.
But the ultra-wealthy of today are able to have virtually everything the ultra-wealthy back then had (and in some cases, that even includes a "standing army" more or less), plus all the extras normal people have access to today.
Also there were many simple remedies for things like headaches dating back to the BC years.
The monetary unit is very misbehaved, still a problem today, and doesn't behave like other units of measurement. In particular between 1600 and today, you have fractional reserve banking coming in, and playing merry havoc with the money supply; whilst at the same time, the industrialisation that the banking system enables, rapidly increases production, and plays equal havoc with the amount of goods and services being produced. The former increases inflation, the latter reduces it.
If you turn the question round, and ask which company was more powerful - well the East India company and its competitors in their day opened up the sea lanes enabling the propagation of information and people around the world, for good and evil - and Apple and similar are doing exactly the same today. So they're certainly comparable, but simplistically asking which company is richer, is probably missing the point.
First, how do you compare eggs? 1 egg cost X then Y now is one measure. A different measure is what % of an average person's wages did would it cost to buy the egg. Oh wait, the average person was a farmer who didn't buy eggs they went to the check coop to get them (even city folks are likely to have kept chickens): the only people buying eggs were rich who may not have paid real value prices. Then we have to ask what egg to compare to today - the common white egg, a brown egg, organic, pasture raised, a farm fresh egg delivered that morning...
Then there is efficiency improvements. Feed is cheap today because one farmer can raise thousands of acres of feed. Automation can feed millions of chickens in a barn...
Then there is supply and demand. A few years ago there was an avian bird flu epidemic and egg prices went up 3x over a matter of a few months and then back down. We know from history that there were famine years which would raise prices. Both of these factors exist outside of inflation and are sometimes not recorded well (do you remember the epidemic?)
Now take the above - any measure - and compare a liter of milk: the differences will not be the same.
That is just trying to compare Apples to Apples. However there is an additional problem: advancing technology. Today most on welfare (this limits us to rich countries, there are still villages of mud huts) have things like air conditioning and fast cars: luxuries that in the past the rich couldn't get any form of equivalent of. Then there are things where there was an analog but it was obviously inferior: TV (500 channels 24/7 as opposed to a live play), washing machines (the maids did laundry but the cost was much higher even if they were slaves)... That is the poor, middle class can afford airplanes trips once in a while.
Trade was indeed a big driver and the VoC basically was one of the first companies/multinationals that used the stock market to raise capital to build an enormous amount of ships that definitely had a lot of defensive/offensive capability. So the VoC was its own navy effectively. Ship building at the time was labor and capital intensive and required access to a lot of resources (e.g. timber). So capital and easy access to local trade routes (the rhine, baltics, etc.) was essential.
When these ships started bringing back goods from Africa and the Indian Ocean regions, people started making lots of money. Dominating the channel militarily and being able to deal with the French, Spanish, and British navies also was key. The scale of the VoC was simply unprecedented.
1 - https://en.wikipedia.org/wiki/East_India_Company
2 - https://en.wikipedia.org/wiki/Abir_Congo_Company
3 - https://en.wikipedia.org/wiki/Kingdom_of_Sarawak
> The U.S. National Security Agency is involved in industrial espionage and will grab any intelligence it can get its hands on regardless of its value to national security, former NSA contractor Edward Snowden told a German TV network. (...) “If there’s information at Siemens that’s beneficial to U.S. national interests - even if it doesn’t have anything to do with national security - then they’ll take that information nevertheless,” Snowden said, according to ARD, which recorded the interview in Russia where he has claimed asylum.
Although I believe the parent was perhaps making a cynical comment about how e.g. Lockheed is basically a branch of the US military.
This led to things such as the FDA not even testing foodstuffs for excessive levels of glyphosate until a Government Accountability Report publicized this [2,3], federal legislation prohibiting state labeling requirements for genetically engineered foodstuffs, the FDA opting for no regulations whatsoever specific to genetic engineering instead offering a purely voluntary consultation process and otherwise relying on self regulation, etc. Monsanto's contemporary success was largely a product of government engineering.
The epilogue also feels somehow political. Shortly after Bayer (a German company) bought Monsanto, they suddenly started losing critical court cases in the US. In particular they've now lost two cases in the US with the courts deciding that Monsanto's glyphosate was the cause of the plaintiff's cancer. This, in turn, has now set the precedent and opened the door for some 11,200 more lawsuits against Bayer for glyphosate causing cancer. In something like 3 years we went from 'This product is so safe, we don't even need to test for it.' to 'This product undoubtedly causes cancer and you now owe billions of dollars in damages to thousands of plaintiffs.' The acquisition was a modern day Trojan Horse.
 - https://en.wikipedia.org/wiki/Michael_R._Taylor
 - https://www.gao.gov/products/GAO-15-38
 - https://www.reuters.com/article/us-food-agriculture-glyphosa...
Also these copyright companies seem to get special treatment by the government. Notice how they are able to use police to "raid" data centres etc.? In the UK a young guy who ran a torrent site was raided by police in the early hours only to be released without charge months later. These companies have special powers in government, hence practically they are a part of the government.
This is interconnected and to change it would mean to break it up somehow.
Therefor you'd need to change the premise that "wealth is power" which is a basic equation of our global system since centuries.
> the Dutch had only a relatively insignificant share in the Atlantic slave trade—never averaging much more than 5–6 per cent of the total.
That said, you could make a similar case about apple. If you measure by dividends, I think the VOC's lead over all those companies grows by a lot.
What alternatives exist for defining value?
What do we mean by value?
I, a barely-middle-class individual, can own and have access to things and services that the richest nobility of 100 years ago wouldn't have been able to even dream of.
Everybody can go to almost anywhere in the world within basically 24 hours, whereas a century ago long-distance journeys were measured in weeks and months. In a couple generations, hopefully, ordinary people may even be able to take trips to the moon, and at least into orbit during this generation.
How do you account for that in these kinds of comparisons?
While a high-ranking official or royalty in the middle ages couldn't travel anywhere in 24 hours, if you look at their house(s), many of them compare favorably to what the ultra-rich are able to purchase/build today in square feet (though today, the wealthy - and the lesser folk - have better materials to build with when it comes to insulation, plus central HVAC and other amenities of course). They also had an equivalent amount of hired labor (perhaps in some cases, even more, because they didn't have amenities we take for granted today, like indoor running water).
But just in raw square footage under roof, some of those places that are still standing today are pretty amazing, and would be amazing to own today (provided you could afford the maintenance and upkeep). This holds almost as far back in history as you want to go.
Height, though - we have them beat, there. An ultra-wealthy person, if they wanted to (there are few today that I have read about) - could have a modern skyscraper built for a home (or renovate one into a personal home, provided zoning allows for it - which I am sure, if you are wealthy enough, you can get a waiver for).
Most people that escape from worst countries don't escape on the basis of merit, but luck.
Dutch had been able/lucky to grab/monopolize the most profitable trading route and hold to it. But at some point spice trade lost its appeal.
British had been unable to muscle into Dutch controlled trade (they have invented 'free trade' to justify their attempts).
But in their 2nd best trading posts in India British EIC had to built up military (because Indian and French presented tough military opposition) and find creative ways to finance its presence there (textiles, opium). As a results after 200 years British EIC became a force to recon with while Dutch VOC had been in decline.
The math doesn't seem right.
The greed unrelenting , the game rigged .
And the reasons why are quite interesting. Here's Niall Ferguson's explanation -
Formally, the directors of the East India Company (EIC) in London controlled a substantial part of the trade between India and western Europe.
In reality, as the records of over 4,500 voyages by Company traders show, ship’s captains often made illicit side trips, buying and selling on their own account. By the late eighteenth century the number of ports in the resulting trade network was more than a hundred, ranging from open emporia such as Madras to regulated markets such as Canton (Guangzhou). In effect, private trading provided the weak links that knitted together otherwise disconnected regional clusters. This network had a life of its own that the Company’s directors in London simply did not control. Indeed, that was one of the keys to the success of the EIC: it was more a network than a hierarchy. Significantly, its Dutch rival banned private trade by its employees. This may explain why it ended up being superseded.
This is simply not true. VOC at the beggining was extremly profitable but never had that much of military muscle. They were able to hold to some important trading posts but never been able or interested to expand their holdings.
Also in their most valuable possesion (Banda Islands and in Java/Sumatra) they had been challenged by small British force. As a result VOC have swaped Riu Island for New Amsterdam/New York.
Latter attempts at military expansion made VOC bancrupt. British India Company in comparision had been doing way better in this regard financing their private armies via taxing Indian subjects and profitable drug dealings. VOC simply lacked enough profit/tax base to keep up significant military presence.
It's easy to be incredible on the backs and dead bodies of slaves...
It's a nice example of there being a huge crime at the foundation of huge riches, the VOC was definitely not a clean company by any stretch of the imagination and to this day the names of those who were responsible for the worst atrocities are proudly on display in the streets of various Dutch cities. Nothing to be proud of.
> the Dutch had only a relatively insignificant share in the Atlantic slave trade—never averaging much more than 5–6 per cent of the total.
"Overall, Liverpool ships transported half of the 3 million Africans carried across the Atlantic by British slavers."
Last Week Tonight discussed this from US Civil War PoV: https://youtu.be/J5b_-TZwQ0I
We should include the enslaved countries (in Asia, Africa, etc), and whole nations made to work for them and their pockets. 2/3rds of the world were subjects to the East India companies and related colonizers...
The other correlation, for which both Amazon and the VOC deserve praise for, is their huge infrastructural reach and development. That is, the VOC helped mostly Europe access the products from the east-indies at the time, and made intercontinental trade a thing. In terms of scale it's probably still nothing compared to modern-day transport, but still.
At that time and place almost all societies had slaves or similar. The VOC was part of a cultural change in the world that ultimately led to the abolishment of slavery.
Slavery was certainly not the reason why they were successful.
TLDR: Scottish gambler becomes the most influential financial state official in France and uses his power to create an impossible financial scheme, makes everyone crazy for stocks for a colony that is mostly composed of colonists dying of hardship, resulting in an implosion of French Economy. Scottish, oh how they've been around. This is a funny sidenote to one of the founding fathers of US, Alexander Hamilton, who was as well of scottish heritage but created a financial system that did not implode.
> The context of Smith’s intervention in The Wealth of Nations was what he called ‘the mercantile system’. By this Smith meant the network of monopolies that characterised the economic affairs of early modern Europe. Under such arrangements, private companies lobbied governments for the right to operate exclusive trade routes, or to be the only importers or exporters of goods, while closed guilds controlled the flow of products and employment within domestic markets.
The real Adam Smith: https://aeon.co/essays/we-should-look-closely-at-what-adam-s...
Still as relevant today I believe.
Colonialism is still alive and kicking
DEIco is a real historical enterprise with well-documented operations.
For instance if you use percentage of world wealth as ameasure, then Adam controlled 50% of the world's wealth, arguably the richest person to ever live (or mythologically live at least).
Lives better, maybe. Eats better? Hell no.
- the variety of foods available today is far greater, especially in winter
- Spices available 1000 years ago were quite limited, today any supermarket will have 100 varieties from all around the world for like $2/satchel
- refrigeration allows safe storage of food
- Things like ice cream, chocolate, popcorn etc etc just did not exist.
So I think a "peasant" today CAN eat tastier and healthier food than kings of 1000 years ago... whether or not they choose to is another matter.
For reference Emaar was the company that built the Burj Khalifa (formerly the Burj Dubai before funding ran out), Dubai Mall, Skii Dubai etc...
They were richer than monarchies, had armies, controlled massive colonies, founded cities, printed money, made international trade deals/wars. They ran circles around the older form of monarchy-run-empires like the Portuguese and Spanish. Late European colonial empires inherited their empires.
When Marx wrote about international capitalism (eg capitalism as a "fourth estate") in the 1840s, this is what he was referring to.
t the time of his death in 1937, John D. Rockefeller was worth an estimated $1.4 billion. Rockefeller was the first man in history to ever accumulate more than $1 billion (nominal dollars) in total wealth.
Rockefeller's $1.4 billion net worth in 1937 was 1/65th of the total GDP of the United States. In 2011, the total GDP of the United States was $15.09 trillion. If somebody currently had 1/65th of the total GDP of the United States, they would have a fortune of over $232 billion.
It's also important to note that Rockefeller gave away over $500 million (nominal dollars) over his lifetime, which helped to significantly shrink his net worth.
The first person to reach $1 billion USD isn't that impressive, since USD has only been around for a short period of time.
Other people before Rockefeller were richer, including a large number of monarchs, emperors, etc.
Augustus Caesar, for instance, was once estimated to have a personal net worth of $4.7 trillion, substantially more than Rockefeller.
But I hope an economist or historian can answer that.
I mean, there's a guy coming pretty close to that right now.