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The Dutch East India Co was richer than Apple, Google, Facebook combined (2017) (dutchreview.com)
259 points by sytelus on Apr 10, 2019 | hide | past | favorite | 154 comments

This is a non-sensical article, relying on some obfuscating math hidden behind "Infl. Adjusted".

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.)

As another reference point, an annual salary for low-to-medium skilled labour in mid-17th century Holland was around 100 to 200 guilders, which would be about 20 million USD according to the implied "Infl. Adjusted" conversion in the article (upon which the entire premise of the article rests).

It does make you wonder what the inflation-adjusted figures are purported to mean even, given that they result in completely ridiculous results.

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?

Inflation is usually measured as the change over time in the prices of a "representative" basket of goods (and which goods in which proportion is a pretty subjective choice). Over time, the costs of particular goods diverge a lot, especially with respect to wages, and how important those goods are to the economy also varies a lot.

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)

Excellent point. So it sounds like the basket of goods wasn't chosen correctly, or not changed often enough to be representative across each time line, or something? Because it simply cannot be a valid result that a typical wage way back then (when standards of living were much lower) is worth millions of dollars today.

Inflation is a geometric process, so any errors will greatly compound over long periods of time.

One aspect to it is that today a smartphone costs a few hundred dollars. Back in the day, no amount of money would allow you to buy one. Maybe to compare East India to current top companies, you'd need to compare the percentage of global GDP to estimate how big they are (and how large they'd most likely be if they continued to exist.)

The base/average salary comparison also makes a lot of sense.

This is great analysis. If you think about the amount of global trade that was controlled by the Dutch East India Co, there is no modern company even close. Apple isn't even close, the have a small sliver of a small part of the global economy. Even Exxon, is only one small part of the economy.

I think using annual salary is a reasonably fair assessment. Assuming it was $50k in today's dollar, the the company's valuation is more reasonable at $20 billion.

I agree with the spirit of what you are getting at.

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.

As one example, the power loom didn't exist until the late 18th century. Before then, clothing was really expensive because an unbelievable amount of hand labor had to go into it. The average person did not own a lot of clothing, and the clothing they did have cost them relatively a lot of money.

Which is also where the term "selling the shirt off your back" came from. Back in the days when clothing was worth a lot more, you could actually trade your clothes for stuff in a pinch. Nowadays clothing ain't worth much.

I finally get to ask someone directly: in “the a few centuries,” are the two articles considered valid English or is it a mistake?

It is a mistake.

It's a mistake


Now for the mystery of “the the” which I sometimes encounter...

I would assume a typography error unless it is a band name. I've typo'd "the the" more than once.

dutch architecture consisted of nothing but gold in the middle ages. post-independence we painted everything brown to fit in with the rest of europe.

From this other source [0], I see a min/max historical Guilder in 1600-1700 to 2016 Euro rate of 1 guilder to 8-18 Euro. That would be 800-3200 Euro per year for a laborer, which is comparable with the poorest nations today. That seems accurate for a pre-industrial time.

Using that source, 78m Guilders would be 624m-1.4b Euro today.

[0] http://www.iisg.nl/hpw/calculate.php

I think the best measure would be what percentage of the total world's wealth (valuation?) does a company represent at some point.

Good luck estimating both 17th-century world wealth in Dutch guilders and 21st-century world wealth in USD, both within an order of magnitude. That's at leasts several months, if not years worth of research work in there.

Oh I'm sure it's a lot of work. But that's the whole point right? Getting a proper answer. Guesstimates and half calculations are also imprecise enough to make such articles basically just an exercise in imagination rather than an accurate representation of the facts.

There is a tremendous amount of work by economists measuring these things, which is why this article is so irritating.

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.

But is it click bait or fake news?

From what I’ve seen, these claims seem to be based on the assumption that there has been an average annual inflation rate of 3% since the 1600s. That assumption works in the 20th century, but by 17th century theories on monetary policy, a 3% inflation rate would have likely been cause for panic.

Another reason for considering it a pointless measure is that it is from the peak of tulip mania. What was it valued at after the bust?

Adjust inflation down for productivity growth - there is a prize out there for this idea kids!

It is impossible to compare wealth across centuries. Even really difficult across decades.

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.

Can you dig into that more and explain why it is so difficult to compare wealth across centuries? It would seem to me that you would just find some basic unit to divide against (a dozen eggs; a liter of milk; a sq kilometer of land), and then scale?

Whats wrong with my presumption? I know there must be quite a bit wrong with it, but I'm not familiar with economics whatsoever.

Because inflation doesn't take into account all the improvements that have been made. A liter of milk or a dozen eggs may almost be the same in 1630 and 2019. A square kilometer of farm land is not, since the crop yield today far exceeds that of 1630 (it has increased almost tenfold since 1930 due to mechanization, fertilizers and new grain types). So the same piece of land that could feed a family in 1930 now almost feeds 10 families. And, more importantly, land has many more applications now than back then: Factories, sky scrapers, airports, gardens, etc.

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.

> The very richest king in 1630 was dead poor compared to you.

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.

im not sure i agree, the romans had running hot and cold water, onboard their luxury ships, not just in a house. so the richest king in 1630 probably had a lot more luxuries than you are giving credit for.

Also there were many simple remedies for things like headaches dating back to the BC years.

That would be the right approach to try, but essentially the problem is, if you want to try and compare wealth, then you have to do it without reference to the monetary unit. Even average working wage is tricky, because most people in that era didn't work for money - they lived off the land, possibly got paid annually with "in kind" payments of housing, food etc. as apprentices or servants.

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.

There are many problems, all interrelated.

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.

And breeding, I wouldn't be surprised to see that a normal chicken egg is 3 times more heavy today, compared to the 17th century. Are we really still talking about the same product?

Dutch East India Company had its own colonies and army. Practically speaking, it was a branch of the Dutch government, so comparing it to the contemporary companies doesn't make much sense.

There are several companies working, especially in the middle East and Africa, who have private armies (sometimes naively called security companies). The comparison hold up here. And until the government took possession of the company in the early 19th century, it was controlled by it's board, not the government. So yes, it was a company. Sanctioned by, but not reporting to, the government.

Having private security companies makes sense to protect your operations in certain areas where police is deficient. But you will not really see companies invading territories using force these days. That is pretty much the monopoly of government forces.

I wouldn't be surprised if they would, if only there still were nonsovereign territories (in the sense of "having a flag" [1]) around for taking.

[1] https://youtu.be/uEx5G-GOS1k

It's still being done, it just looks a little different. Instead of sending our own army in, you arm/fund rebel groups to invade and then do your bidding. Or, if you're really powerful, you ask the US government and they will send in the CIA/army to "topple a corrupt regime" that was stymying your business pursuits.

Was the VOC a branch of the Dutch government, or was the Dutch government a branch of the VOC? The Dutch government was extremely trade-oriented during the 17th century, and the army would be deployed to protect the trade interests of the VOC.

The Dutch government at the time was sort of an anomaly in the sense that after kicking out the Spanish army, it sort of accidentally became a federation of provinces without a proper monarch and a relatively strong navy. Also, a lot of oppressed jews, protestants, etc. found refuge in Amsterdam bringing in a lot of capital. So in that climate of relative peace, tolerance, cultural intermingling, and trading, a lot of innovative stuff (financially, scientifically, etc.) happened in a short span of time.

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.

The real innovation of the VOC was how they financed things. Prior to the VOC exploration was funded by monarchs. The VOC brought in the concept of banking and share holding. Later on this spawned things like risk management and the insurance industry.

One of the VOC's innovations was permanent capitalization. Prior to them, spice trading enterprises to the Indies were literally venture capital. Money was put up at the the start of the voyage and all assets were liquidated at the return. The enterprise lasted only as long as the voyage there and back. Some traders started putting together packages of voyages, again always with the stipulation that assets would be liquidated at a certain point. The bold innovation of the VOC was allow shares to be tradable, with claims on profits, and thus the enterprise could be permanently capitalized.

I believe it started out as an independent company, but was later taken over by the Dutch government.

There were other private colonial enterprises - British India Company, Kingdom of Sarawak, Kongo Abir Company.

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

Even crazier, Abir operated in Congo Free State (the present-day Democratic Republic of the Congo). That was a private, personally owned colony of King Leopold II of Belgium. At the end of the 19th century. Congo is enormous.

Interestingly enough, the GDP of the Netherlands today is "only" $800 billion, which is a tenth of what the article claims the Dutch East India company is worth.

Practically speaking some of today's big companies are branches of the government too.

Not sure why you got down-voted, as I remember that as recently as the early 2010s some US agencies were still involved in industrial espionage on behalf of US companies. From a 2014 Snowden interview [1]:

> 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.

[1] https://www.reuters.com/article/us-security-snowden-germany/...

Outside of company towns in a few industries, and maybe some multi-national resource extraction companies that operate in lawless areas, how is this true?

There aren't too many, but Saudi Aramco, Statoil (until 2007, when it became the multinational Equinor), China Petrochemical, and a few other giant corporations exist (or in the case of Statoil, recently existed). Corporations wholly owned by nations. I think that qualifies.

Although I believe the parent was perhaps making a cynical comment about how e.g. Lockheed is basically a branch of the US military.

Statoil became Equinor in 2018, not 2007. Also, Equinor is still largely owned by the Norwegian government (67% as of 2017)

Name one?

It's probably reasonable to consider regulatory capture the same thing, in practice. For instance this [1] was who the former president appointed to a newly created post, which he himself (the president) referred to as 'The Czar of Foods'. He was the effective head of the FDA's food division. He was a Monsanto VP and lobbyist who had argued for such things as allowing companies to knowingly allow at least a minimal amount of carcinogenic material into processed foods. Great guy to be in charge of food safety. It meant that Monsanto was effectively in charge of food safety in the US.

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.

[1] - https://en.wikipedia.org/wiki/Michael_R._Taylor

[2] - https://www.gao.gov/products/GAO-15-38

[3] - https://www.reuters.com/article/us-food-agriculture-glyphosa...

Blackwater/Xe/Academi/whatever they will whitewash their name to next.

Mercenary outfits are by definition not part of the government. That's what makes them mercenaries.

Petrobras, the Brazilian oil company is the largest company in the country by number of employees and revenue. Two of the largest banks here, Banco do Brasil and Caixa Economica Federal are both federally owned and both are larger than their private competitors, thanks to a couple of monopolie they hold (BB has a stranglehold on financing agriculture, and CEF operates the lotteries).

Renault is partially owned by the French Government I believe

The government holds only 15.01% of the company, according to Euronext, just 0.01% more than the second largest investor.

Google?? Excuse me, Alphabet!


Disney is mostly responsible for copyright in the US being extended to ludicrous lengths. They changed the law so they could keep making money.

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.

disney is a publicly traded company. i own stock in disney :)

There were bonds issued by Dutch East India Company


Bonds are just a debt instrument, they don't give control over companies like stocks. The VOC also had publicly tradable stocks though.

The Dutch East India Company was the first company in the history of the world to issue shares to the public. They paid an 18% dividend for over 200 years.

The Dutch East India Company was publicly traded too.

It was in fact the first company in the world that was publicly traded at the world's first stock exchange.

Goldman Sachs

Not really, what you see rather is Crony capitalism which is when government and large corporations work together to further their interests, often in what should be considered an illegal way.

The problem is that the wealthy people are the one's who govern. (they define what is and what isn't legal)

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.

Another difference is that slavery was not an issue for them.

As in "You don’t know it, but you’re working for Facebook. For free."[1]?

[1] https://www.washingtonpost.com/news/the-intersect/wp/2015/07...


It looks like slaves were more like merchandise for the VOC. And not really that significant for their trade. They were bought from existing slave markets. Slaves were mainly captured by local Africans (from other tribes).

> 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.


Additional information about the companies use of slaves.


Slaves aren’t hired.

The Mississippi Company was never really worth $6.5T in any meaningful sense. Unlike Dutch East India, Mississippi was purely a speculative bubble. It only hit that value for a few weeks at the end before the whole thing imploded.

South sea company too.

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.

Apple's value isn't just dividends. They have literally hundreds of billions in cash, about 25% of their market cap. They have vast other assets, both material and otherwise (the brand alone is worth real money). Their revenue is over $300B per year, and net profit is nearly $100B. And they post numbers like this year after year. Apple's value is real and obvious, and given the liquidity and sustained numbers, it's also correct. There's no bubble component at all.

What is value?

In the article they seem to use the maximum attained market capitalization during its existence indexed to current day dollars.

Are markets fair, efficient, omniscient, and/or rational?

What alternatives exist for defining value?

What do we mean by value?

That's not a good definition of value if you enter into a phase of speculation.

He never said it was a good definition of value.

What's a better one?

These comparisons of wealth across different eras seem kind of stupid:

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?

One thing that hasn't changed, though, in comparisons of wealth, is the size of one's house.

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).

Everybody can go to almost anywhere in the world within basically 24 hours? I will have to disagree with that. I'm a citizen of a certain "developing" country and I can't get a tourist visa to more than half of the world, and 100% of Western countries.

Yes, I meant technically, not politically. In the latter, there is less freedom now than there used to be, but there are more means now than there were, to escape the bracket one was born into.

Means to escape from bracket of being born in some no-name Belgium city to California, sure. Means of escaping from a savage country no one even knows the name of? Haha, no.

Most people that escape from worst countries don't escape on the basis of merit, but luck.

or money/connections/asylum?

Those count as luck, as I said.

It does seem really difficult. You have to pay people enough to live a normal life, which has changed dramatically over time. Now we expect disposable income, savings, healthcare, car purchase, devices etc. Back then, enough to eat daily may have been enough.

I'd settle for the previous generation which could afford to buy a house and own it in full before their kids became adults.

I wonder how the British East India Company compared to its Dutch equivalent. I am too tired to write a comprehensive post right now, but with the Opium Wars and the monopoly on the Indian Subcontinent, I think the British EIC would be more powerful (and wealthier) than the Dutch EIC. Here are some (probably low quality) sources [0], [1]. Will write a better comment tomorrow after work.

[0] https://www.quora.com/What-is-the-difference-between-the-Dut... [1] https://indonesiaexpat.biz/travel/history-culture/colonies-d...

You are comparing apples to oranges ie. VOC at XVII/XVII century to British EIC at end of XVIII/XIX century.

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 VOC’s stocks pushed the company’s worth to a massive 78 million Dutch guilders, which is a pretty solid business even today, but translates to a whopping $7,9 trillion dollar worth today… Yes, really, trillion. That’s 7,900 billion – or 79,000 million!

The math doesn't seem right.

VOC (Dutch East India Company) was more powerful than most nations at the time. I asked this question on Quora once and got interesting answers [0]. VOC was an incredible enterprise, and there are a few today too, imo, they exist as conglomerates (Samsung, P&G, Amazon), political entities (CIA, CPC), monopolies (Maersk, Google), syndicates (DeBeers [1], NeoAristocrats [2], BigPharma, BigBank, BigSugar, BigOil), and cults (ISIS). These select few have an immeasurable and uncontrolled sway over the globe-- its environment [3], its inhabitants [4], its future [5], its past [6], its present [7].

The greed unrelenting [8], the game rigged [9][10].


[0] https://www.quora.com/What-are-some-companies-that-are-power...

[1] http://www.theatlantic.com/magazine/archive/1982/02/have-you...

[2] https://youtu.be/d_zt3kGW1NM

[3] https://theintercept.com/2015/08/11/dupont-chemistry-decepti...

[4] https://en.wikipedia.org/wiki/Global_surveillance_disclosure...

[5] https://news.ycombinator.com/item?id=16208421

[6] https://www.amazon.com/dp/B00ICN066A

[7] http://money.com/money/3994949/wikipedia-paid-editors/

[8] https://en.wikipedia.org/wiki/Oil-storage_trade

[9] https://www.amazon.com/dp/1593764278

[10] https://en.wikipedia.org/wiki/Panama_Papers

edit: links

The VOC were indeed powerful, but the British East India Company was another level entirely.

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 not Ferguson's research. He reports on this research in his book -- though the citation is not very prominent. It is from a book by Erikson, Between Monopoly and Free Trade, and an article by Erikson and Bearman, Malfeasance and the Foundation of Global Trade

> VOC (Dutch East India Company) was more powerful than most nations at the time

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.

How is P&G a conglomerate? Samsung and most large Japanese companies are conglomerates but P&G does not fit the bill at all.

It was just the wrong word choice. OP is just talking about very large companies in general.

The comparison of GDP with revenue is a comparison of apples with oranges. The GDP is the sum of all values created in an economy, the turnover is just how much stuff was moved around. A better comparison would be GDP vs. value added. For example, Volkswagen has a turnover of 236 billion euros, but the value added is just 25 billion euros.

>VOC was an incredible enterprise

It's easy to be incredible on the backs and dead bodies of slaves...

I'm seeing a strong correlation with modern-day companies like Amazon - hugely profitable, wealthy company that exploit their hands-on workers in the warehouses.

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.

This should not be downvoted, it is historically accurate, the VOC imported 10's of thousands of slaves to do work that they were not prepared to pay for.

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.

Slaves were merchandise for the VOC but they did not import many slaves to do work [1]. They typically (ab)used the local population to do that. Still nothing to be proud of, but it is a different story than slaves that were brought to the Americas to work on plantations. Exploitation of the local people would certainly be unethical by today's standards, it wasn't unethical back then and it also wasn't a crime (although you probably meant the word "crime" figuratively).

[1]> 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. https://www.history.ac.uk/reviews/review/545

It's an interesting discussion. Liverpool was a huge trading port and a powerful city for a long time, mostly built from the slave trade. No local slaves, but plenty of people who became rich from slavery.

"Overall, Liverpool ships transported half of the 3 million Africans carried across the Atlantic by British slavers."


> 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.

Last Week Tonight discussed this from US Civil War PoV: https://youtu.be/J5b_-TZwQ0I

Yes, and not just the black slaves.

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...

It wasn’t a crime at the time.

The fact that something is 'not a crime' does not mean it can not be obviously wrong.

I don't agree. Why are you so sure that you know what is obviously right and obviously wrong? That is a viewpoint which is both arrogant, and also has no objective grounding to talk about.

Murder, slavery, child molestation... some things are obviously wrong. If you feel that you need a societal framework to determine whether those are wrong or not then there is an ethical issue.

You might find it interesting to read this:


Seems like a very naive point of view.

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.

Also mentioned: The south sea company was basically a huge banking bubble scam. It is quite an interesting tale: https://www.youtube.com/watch?v=k1kndKWJKB8

Hello? Bitcoin? Is that you? Nah just a ghost of poor banking decisions past. Spooky.

I think Bitcoin resembles the Mississippi company a bit more. https://en.wikipedia.org/wiki/Mississippi_Company

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.

Scotland agreed to merger with England in 1707 after the country was financially ruined by another crazy scheme in the Americas. They had tried to create a colony in Panama, in an area which is "virtually uninhabited" today.

Although many can see Bitcoin as a scam, I think the South Sea bubble is in a different league altogether. Financial schemes such as introducing crazy loans, coupled with the (essentially) full backing of the government at the time lured in even people like Isaac Newton. Bitcoin in comparison does not even match the hype the South Sea had at the time (nor will it have the power to carry a nation in debt for more than 100 years)

Even if the inflation figures arent 100% accurate, there is no doubt this was the reason behind the British calling India the "jewel" in the crown, so many countries looted India, including the Portuguese, Dutch and British. They had spices and cotton, the modern day "oil" now that there is nothing more to be gained from India they have moved onto the middle east, then onto the services sector blah blah wherever the next area that can be exploited with greed.

I didn't check the math but it doesn't surprise me. These guilds were quite often in the business of war making and colonisation, selling ads seem paltry in comparison.

I don't know, today they can sell ads targetting the more than 4 billion people that are on Internet. Back then the total population was half a billion and most weren't potential targets for any market.

> For while Smith might be publicly lauded by those who put their faith in private capitalist enterprise, and who decry the state as the chief threat to liberty and prosperity, the real Adam Smith painted a rather different picture. According to Smith, the most pressing dangers came not from the state acting alone, but the state when captured by merchant elites.

> 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.

I don’t think it’s a valid comparison. Comparing a company which had an army and used force to occupy and obtain its wealth is not how corporates work today. Today there is deceptive advertising and marketing which are not the same as army and force.

Saudi-Aramco might be something that comes very close to the VOC: a for-profit company protected by armed forces, arguably for hire.

There are plenty of companies using de-facto militaries for their wealth extraction, e.g. in African mines: https://projects.icij.org/fatalextraction/

Colonialism is still alive and kicking

I bet there are a couple of armies and corrupt goverments on the payroll of some corporations, tracked down as business expenses.

And Adam and Eve were together richer than the USA.

What do you even mean? It sounds like a witty metaphor for something, but even for what?

DEIco is a real historical enterprise with well-documented operations.

I assume he meant to decry the use of inflation adjusting and similar shenanigans to be able to compare two groups in vastly different ages. It is similar to saying that a peasant in today's world eats/lives better then a king a thousand years ago.

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).

In general I agree with the sentiment but in the case of the VOC they owned the entire nation of Indonesia. Jakarta was a trading post they founded (nee Batavia). First company in the history of the world to issue shares to the public and an 18% divided for 200 years. They owned 2000 ships (more than Maersk, which has “just” 786) It’s probably fair to compare them to the conglomerates of today in inflation adjusted dollars.

I doubt a peasant today eats as well as a King of even 1000 years ago.

Lives better, maybe. Eats better? Hell no.

I am not sure who would eat better... consider:

- 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.

And same but differently I doubt a king of today eats as well as a peasant of a thousand years ago - aside from famine times. Today we all eat just a few plant and (for most) animal species. This is bad for the gut microbiome, health and our enjoyment of life in general - and its prob true for even the most wealthy.

That's assuming they ever existed.

I think the closest modern day equivalent to the Dutch East India Co, at least in regards to their financial and strategic ties to a nation state, is the relation of Emaar (a state owned and funded global property developer) and the UAE (which in current times is basically Saudi Arabia).

For reference Emaar was the company that built the Burj Khalifa (formerly the Burj Dubai before funding ran out), Dubai Mall, Skii Dubai etc...

The history of these companies (also the British east India company, and the various British and French companies of the Americas) is a massive part of modern history, and how the world got to where we are.

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.

And to think that this great company was defeated once and for all at the Battle of Colachel by Travancore King Marthanda Varma and faded away soon after :)


Were the pyramids also taller than the Burj Khalifa? That stretches the definition of “tall” dangerously thin.

So where did all that money go? To the British crown?

how can you compare money from befor bretton woods and after, though?

"Modern-day Companies Don’t Even Compare! (And That’s a Good Thing!)" Nope, it's not a good thing; but a step in right direction.

Are Apple Google and Facebook so rich? And how do you measure it? (Have not read the link).

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.

> Rockefeller was the first man in history to ever accumulate more than $1 billion (nominal dollars) in total wealth.

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.

When comparing people like that, there's an important differentiation - was it Augustus' personal wealth, or was his wealth and the country's wealth considered the same? A lot of monarchs from the times before the monarchy and state were separate entities like they usually are nowadays have a whole country's wealth.

But I hope an economist or historian can answer that.

> 232 billion

I mean, there's a guy coming pretty close to that right now.

He just lost 25% of his money.

How was it "his" money?

To explain: My wife founded a startup and owns it. But we both worked really hard in the beginning, and I've lost quite some income as an opportunity. So the value of Amazon if this is the same rightfully to some part belongs to his wife and that part not "his" to lose.

Nowadays wealth is no longer really hoarded by individuals, but shared with employees and shareholders in the form of stocks and whatnot.

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