The question has long preoccupied historians of international trade and capitalism: what are the reasons for the domination exercised by Dutch trading companies (VOC) and English (EIC) on trade between Europe and Asia from XVIIe century?
Historiographic overview
In a book published in 1973, the Danish historian Niels Steensgaard proposed seeing in the establishment of these companies in Asia the sign of a commercial revolution which, from a Weberian perspective, he perceived as the advent of a form of economic rationality oriented towards profit maximization. He contrasted the practices of these companies, which operated in a centralized manner, with those of Asian merchants who belonged to the category of peddlers (hawkers), because they physically accompanied their goods and carried out a multitude of one-off transactions (spot transactions), whose results were random, given the degree of uncertainty and risk that characterized them. His analysis took into account the Asian context at the beginning of the XVIIe century, and he adopted as his chronological point of departure the capture of Hormuz, an ally of the Portuguese in 1622 by a combined Anglo-Persian expedition, which according to him coincided with the beginning of a decisive decline in caravan trade in favor of maritime trade. His analysis was widely accepted and acquired the status of a paradigm, although it attracted criticism from some Indian historians.
A new look at the commercial revolution of XVIIe century
Legal historian Ron Harris, professor at Tel Aviv University, takes up this question again. Harris, while reaching conclusions almost identical to those of Steensgaard, considerably broadens the focus, both in terms of space, because he takes into account the whole of Eurasia, and in chronology, because he considers the period of three centuries (1400-1700 ), corresponding to the first modernity, which saw the considerable expansion of trade between Europe and Asia. Abandoning the Weberian framework of thought in which Steensgaard situated himself, he is primarily interested in the legal forms of the organization of commerce. For him, the commercial revolution consisted of the adoption of a particular type of organization, the business corporation (without exact equivalent in French, but which can be translated as commercial corporation), including the VOC Dutch andEIC English constituted for two centuries the most accomplished examples.
He actually asks two distinct questions to which he provides two types of answers. The first concerns the nature of the business corporation and its unique ability to organize long-term trade in an impersonal way, unlike all other forms of organization that preceded it. This first question is coupled with another: why did this form of organization appear only in Northern Europe, and not in other regions of Eurasia?? The second question concerns the causal link between the legal form and the exercise of domination by these companies. The author considers that his answer to the first question is definitive, while the answer he gives to the second is, according to him, likely to give rise to a debate.
The origins of the corporation
It is the subject of a meticulous and rudimentary investigation, based on extensive readings concerning the whole of Eurasia (Europe, Islamic Middle East, India, China) and the examination of some original documents. The discussion of each form is accompanied by a series of illustrative micro-studies. The organizing principle of the discussion is the distinction between different modalities of circulation of legal forms of commercial organization. Harris distinguishes between forms migratory which circulate between different areas, such as the commanded (limited bilateral partnership agreement generally concluded for travel), Italian version barely modifies the mudaraba Or qirad of the Islamic world (see the discussion on this controversial point p. 140-147), universally widespread forms such as the family firm, illustrated by three examples borrowed respectively from India, China and Europe (p. 174-197) or the merchant network , illustrated by two examples of Jewish networks and one of an Armenian network (p. 198-225) which we find with minimal variations under all the skies and finally forms which he calls embedded (recessed), which remain confined to a particular area.
The corporation constitutes a case in point, but there are other examples such as the Chinese lineage firm. To explain the adoption by a given society at a given time of a given legal form, Harris uses a conceptual framework of the type challenge-response (challenge and response), which is strongly reminiscent of that popularized by the British historian Arnold Toynbee, although he does not cite it anywhere. Toynbee explained the rise and fall of civilizations by their greater or lesser capacity to respond to the challenges they faced, such as environmental disasters or wars and invasions. on a more modest scale, Harris shows that the adoption by the Dutch and the English at the beginning of the XVIIe century of the corporation, a legal form developed in Europe during the medieval period, first within the framework of the Catholic Church, then extended to other areas, responded to the particularly severe challenges that these merchants, latecomers to Eurasian trade and faced with the need to operate on the longest journeys. Neither the family firm, even a large firm with multiple branches like that of the Fuggers of Augsburg, nor the merchant network, nor the commanded, could not have allowed them to resolve the problems of mobilizing capital and circulating information that they faced. They therefore invented a new form, the business corporation which made it possible to combine impersonality (legal existence of the organization independent of that of the individuals who composed it) and pooling of capital through the stock seal (social capital), which offered great flexibility to operators. According to Harris, the VOC constituted an unfinished form of the corporation due to its very close links with the authorities of the Republic of the United Provinces, which still linked it in a certain way to the model of Portuguese state commerce represented by the Casa da Indi. It is with theEIC it reached its full potential due to the greater independence of the English Company from the British Crown. We see from this that there is a certain teleology in Harris, although he defends it and it appears masked. To explain the adoption of this form in these two Northern European countries, and not in other countries on the continent, he rejects the trail of Protestantism dear Weber, which he considers played no role in the affair, and favors the political context, the existence in these two countries of fixed limits to the power of rulers and sovereigns, which made credible the implicit commitment of non-expropriation of company assets, which seemed less credible in the context of an absolutist monarchy like that of Portugal (during the period of union with Spain) or France. As far as England is concerned at least, the turbulence that this country experienced in XVIIe century leads us to question the relevance of this argument: we do not see what would have prevented Cromwell from expropriating theEIC if that had been his intention. That it was not can be explained in various ways, but the institutional barriers to the arbitrariness of power were greatly weakened under the (short) reign of the Lord Protectorwith a Rump Parliament (Rump Parliament) (from 1648 to 1653), incapable of opposing him.
about company success
Concerning the (second) question of the success of these companies during the XVIIe century (survey stopping at the date of 1700), Harris clearly highlights the difference in size between the two, the Dutch clearly prevailing over the English, which will clearly surpass its rival only from 1720, but his survey is much more summary and spends a little quickly on the failures, in particular on the difficulties of the English Company take off. Certainly its objective was not to rewrite the history of the companies, but to emphasize the legal form they had adopted. However, he does not definitively rule out other avenues put forward by numerous authors to explain the success of the companies, such as the use of violence (in particular through VOC against the natives of the Banda and its English rivals in the Moluccas) and technological superiority in terms of navigation. Which leads him to recognize that his conclusions on this point are provisional in nature.
Conclusion
In the end, we are torn between admiration for the enormous work done by Harris, and the richness of his observations (we learn a lot in this book, even if the author of this report cannot claim to be a specialist of the period) and a a certain disappointment in the face of the fairly conventional nature of its conclusion. In some ways, we can say that it is old wine in new wineskins. But, on the other hand, the approach is original, compared to other recent works, such as that of Emily Erikson, which poses the problem in the classic terms of a tension between monopoly and freedom of trade. The global comparative method adopted by the author to establish the superiority of a European institution is significant of a turning point in historiography: we can no longer be content to take European superiority for granted, it must be based on a careful analysis of the forms of commercial organization throughout the space. Eurasian, which reveals the existence of various potentialities, of unrealized paths whose exploration undoubtedly deserves to be further explored.