Douglas & McIntyre
Merchant Kings

Book details:

September 2009
ISBN 978-1-55365-342-4
6" x 9"
256 pages
$34.95 CAD

Douglas & McIntyre

Merchant Kings

When Companies Ruled the World, 1600–1900

Excerpt / Additional Content

from The Introduction

The Age of Heroic Commerce

“Whosoever commands the trade of the world, commands the riches of the world and consequently the world itself.” —Sir Walter Raleigh, c. 1600

The Age of Heroic Commerce, from the early 1600s to the late 1800s, was an era when monopoly trading companies were the unofficial agents of European colonial expansion, seizing control over vast territories and peoples and acquiring auxiliary governmental and military functions in the wake of their commercial success. Granting monopoly trading rights was a convenient way for European nations to bankroll the astronomical cost of colonial expansion by tapping private capital. As each of these enterprises grew they first assumed civil authority over all Europeans in their employment overseas, and then expanded their authority as they subjugated local peoples, working toward political objectives but using the merchant trading company as their vehicle. They maintained their own police forces or standing armies and either controlled the local governments or became the sole government. Their territories were managed as business interests, with the people as either employees, customers or competitors. Beginning as trading enterprises, the leaders of these companies, the Merchant Kings, ended up with unaccountable dictatorial political power over millions of people.

Jan Pieterszoon Coen was the violent, autocratic, ruthless pioneer of the Dutch East India Company in Indonesia, the trading enterprise that within its first two decades was in conflict with nearly every maritime nation in the world while becoming the foundation of the wealth of the Netherlands’s golden age by supplying most of Europe with exotic spices. “Despair not,” he claimed in a letter to his subordinates in 1618, “spare your enemies not, for God is with us.” Sometimes his enemies were his customers – when they did not want to trade with his agents, or preferred the wares of his rivals the English or the Portuguese, he ordered his Company troops to attack. Coen tolerated no competitors or challenges to his authority.

Pieter Stuyvesant was the autocratic, narrow-minded, one-legged governor of the Dutch West India Company’s colony at Manhattan. He resisted for decades all attempts at responsible government by the increasing numbers of non-employee citizens of the expanding colony. Stuyvesant ultimately placed his Company’s interests ahead of those of his country, resulting in the loss of the entire territory to a foreign power. When British war ships anchored off Manhattan in 1664 during the third Anglo-Dutch war and offered the people of New Netherland civil government free from the dictates of the Company if they surrendered, the entire militia laid down their arms without firing a shot.

Robert Clive rose from a lowly company clerk to head the military arm of the neophyte British East India Company in the mid-eighteenth century. Despite having no formal training, Clive was a military genius who transformed the company’s fortunes with a series of astonishing military victories, with Company troops, over the French East India Company and various local rulers in India during the dying days of the Mughal empire. He created the foundation for the British East India Company’s wealth and political power – after Clive’s work the Company was both the monopoly trading enterprise and the source of civil and taxation authority over thirty million people. Clive later was made a baron and became one of the wealthiest men in Britain. When questioned about his possible corruption and the source of his wealth by parliament in 1772 he indignantly proclaimed “By God...I stand astonished at my own moderation.”

Autocratic and efficient, Alexandr Baranov was an itinerant merchant and trader who migrated east to Siberia and then to Russian America. In 1799 he assumed command of the Russian American Company, a semi-official monopoly colonial trading company amalgamated from the numerous competing smaller enterprises, chartered by Czar Paul I. Aggressive and ruthless Baronov pushed Russian enterprise and colonization further south along the Alaskan coast warring with native tribes and competing businesses in the name of his Company. In 1804, he bombarded a Tlingit village for days from a Russian warship, forcing the natives to accept the authority of the Russian American Company. He died after twenty seven years on the frontier solidifying his country’s territorial claims and extracting vast quantities of sea otter furs for his shareholders and directors in St. Petersburg.

Haughty, impatient, and self-important, George Simpson was the financial and structural genius who steered the Hudson’s Bay Company to its greatest financial success and greatest territorial dominion in the early 19th century. The Little Emperor, as he was known, the unaccountable (except to company directors in London) dictator over a good chunk of North America responsible for shipping to London hundreds of thousands of beaver furs a year, was chauffeured about his vast fur domain perched in the back of a giant canoe exhorting his exhausted voyageurs to paddle harder so he could set speed records – claiming all the credit for himself, naturally. Soon after he died in 1860, most of his domain passed from the Company’s power and became part of the country of Canada.

Cecil John Rhodes was a British-born South African mining magnate, politician, businessman and racist promoter of British colonialism. He was the founder of the diamond company De Beers and other business interests in south and central Africa. In 1889 he secured British government support for the creation of the British South Africa Company to operate in Rhodesia, a territory he created and named after himself. The Company was the monopoly trading enterprise with the right to raise its own private army, regulate banking, and manage and govern land while theoretically respecting the rights of native Africans. In reality the Company used its power to enrich its shareholders through shady and violent land seizures until 1923 when its charter was revoked. Rhodes and the British South Africa Company became rich exploiting southern Africa’s mineral resources under the pretext of government. He founded the Rhodes Scholarship upon his death. “All of these stars,” he claimed “. . . these vast worlds that remain out of reach. If I could, I would annex other planets.” Whether he desired to annex them to his country or his company is not known.

From seemingly inconspicuous and unlikely beginnings these Merchant Kings faced similar dilemmas after they rose to authority in their respective companies. They were vested with enormous powers by their Company and their country. Yet the Merchant Kings were in a clear conflict of interest between advancing the business interests of their respective company, and acting as the civil authority. They were monopolists, not capitalists. Their enterprises would have been and were abhorrent to free market thinkers like Adam Smith – occupying that hazy grey zone between political power and mercantile power, combining the ruthless, pitiless, aggressive tactics of despots yet operating within the legal structure of a profit-seeking shareholder-driven joint stock corporation. It was a difficult job being both the monopoly trader and the only civil government, and the temptation to submerge one of these roles under the other is obvious. By making decisions according to their conscience, the Merchant Kings had a profound impact on the outcome of the history of the world. Yet companies are hardly known for having this type of sweeping political control. Over decades in power trying to balance the interests of their Company with the interests of their Country the Merchant Kings, through their mighty monopoly enterprises, changed history as significantly as the most celebrated military generals, political leaders and technological innovators.

The seven deadly sins. Each of us is guilty of one or more of them at some time in our lives: Pride, Avarice, Sloth, Lust, Envy, Anger and Covetousness. But for most people the seven deadly sins are balanced by the seven virtues: Justice, Charity, Faith, Hope, Prudence, Temperance and Fortitude. Amongst the Merchant Kings of the Age of Heroic Commerce the seven sins might seem to be over represented – the absolute unaccountable power they wielded drew out their more unsavoury characteristics – but there was goodness in most of them too. Complicated, complex and intriguing characters, the Merchant Kings were not heroes and they were not angels. Placed in the unique historical setting of societies on the cusp of great upheaval or change, they seized opportunity and had an impact on the world as great as the most famous monarchs, despots and generals. As with famous military and political leaders, the Merchant Kings had their flaws and imperfections amplified by power and success making them larger than life. They were the right people at the right time to transform commercial trading entities into political entities, with feet firmly anchored in both worlds. Merchant Kings follows the rise and decline of Company rule in the Age of Heroic Commerce, by tracing the fortunes of the greatest corporations the world has ever known and the men who made them so. These were the men who truly fought for their markets.