lecture 8 - the crucial role of mercantile companies Flashcards
main point
contra idea of state monopoly on the legitimate means of violence (Weber):
imperial expansion was largely carried out by armed entrepreneurs and private-enterprise ventures
mercantile companies
= hybrid private-public entities chartered by a state (vs. state armies)
Dutch VOC and British EIC = most important agents of early modern European empires
- ! not under direct control of their states
false assumption of the conventional understanding of mercantile companies
+ why is it false
= British EIC was founded merely as a trading corporation, it became an imperial political power only with acquisition of Indian territory in mid-C18 (after Battle of Plassey, 1757, until ~1858)
- sharp distinction between ‘‘trading’’ and ‘‘imperial’’ periods of British India
- C18 territorial interest bc Mughal empire gained power
!!anachronistic: regarding EIC/VOC as mere ‘‘trading’’ companies before they assumed direct control in late C18 reflects C20C21 ideology of political state vs. non-political business, not the C18 reality
janus-faced mercantile companies
had defining features of a private company
- owned by private shareholders
- in the business of trade
- primary goal of maximizing profit (shareholder value)
but also had sovereign prerogatives
- right to engage in diplomacy and war
- large army and navy forces (e.g. ca 1800 the EIC army was 2x bigger than the British army)
the British East India Company
- time
- views
- structure and principles
- sources of legitimacy
formed in 1600 to conduct trade with the East Indies (*when they got New Amsterdam from NL, NL got access to trade East Indies as well)
- ended up trading mainly with Qing China and seizing territorial control over the Indian subcontinent
- C17-C18: EIC viewed as typical form of merchant organization + legitimate agent of British imperial interests
- C19: EIC was criticized as a ‘‘state in the disguise of a merchant’’ or a ‘‘strange absurdity’’
*Macaulay (famous statesman, author)1833: it is strange how such a company should be / was trusted with sovereignty over a larger population
structure and principles
executive council: court of directors (elected by stockholders), general court would vote on major decisions
headquarters in London
- a real political system: hierarchical structure, bureaucratic decision-making, interacting councils
- company politics NOT a mere subset of C17 European and English politics etc., it was its own thing
sources of political legitimacy:
- charters and powers from British home gov.
- grants, treaties, alliances, agreements with local rulers of Asian polities (i.e. insinuation and deference)
!this hybrid structure (non-state sovereignty) -> flexible and robust (e.g. borrowing and balancing flexible) BUT authority could be volatile/fragile, depending on local circumstances and shifts in home gov. policy
Stern
'’The Company State’’
= key scholarship
approaches the early EIC differently:
form of gov, a corporation, a jurisdiction, a colonial proprietor
company state = proposition and an experiment in the notion that companies, corporations and other non-national bodies often act as political communities in their own right
- EIC claimed jurisdiction over all English subjects in Asia and Eurasian populations residing in settlements network
- grant after grant from English monarchs allowed for greater EIC autonomy
- EIC develops all the main attributes of a state (makes law, wages war, mints money, etc.)
= typical attributes of a state -> EIC a state of its own, not a ‘state-like’ entity
corporate micro-sovereignty
sometimes used in neoliberal circles, but also in scifi (Gibson, Stephenson)
= (tech) companies that are build p into small gated off communities reserved for their workers, in between these islands there are areas of poverty, wasteland
e.g. Apple Park, Googleplex, Facebook/Meta Headquarters (has e.g. public services as transportation)
overlapping and composite forms of sovereignty
early modern world = variety of corporate bodies-politic + hyphenated, hybrid, and composite forms of sovereignty (not only or primarily centralized state sovereignty)
- contra myth of 1648/Westphalia
Carl Schmitt: imperium vs dominium = world of states operates across different space and time than world of property
the central role of corporations
corporations (corporate people, commonwealth, mercantile companies etc.)
formed bedrock of political and associational life in early modern Europe, purpose was to bind a multitude of people together into a legal singularity/artificial person
- national territorial states were still in formation: states were just another type of corporation
- early modern European empires = competing and overlapping political/constitutional forms in both alliance and tension with the national state
- modern state and empires formed by incorporating, co-opting, and undermining legitimacy of earlier institutions: monopolization of sovereignty by the state
the Dutch East India Company (VOC)
- 1602 - 1799 (charter issued by State Governor)
- largest global corporations in C17
- dominated Asia-Europe spice trade from 1600 to mid-C18
- gained monopoly on nutmeg, mace, cloves, cinnamon, displaced Portuguese, excluded British + were only ones accessing Japan
conventional view: VOC was a multinational corporation and non-state colonial actor acting according to market strategies
new history: even in early days, commercial character of VOC was attenuated by continuous at territorial expansion (is it quasi-public? state-like?) -> not merely agent of the Dutch state: VOC had actual non-state sovereign powers (e.g. wage war, mint coins)
!!Westeijn 2014: contemporaries described/criticized the VOC as a political power, the criticism grew later in C19
were trading monopolies a myth?
monopolies were really a European thing: little relevance to Asian merchants (except pepper)
beyond spice trade, official monopolies collapsed
in exceptional cases when an official VOC was still in place, bypassed through the black market
(Helen Paul - podcast)
'’when they are outside European waters, they really are the state. and they start demanding that other foreign ships eventually have to salute their ships, and this sort of thing, as if they are really a sovereign national power’’
later protest against Dutch direct imperial rule
Edwin Douwes Dekker / Multatuli (lived in/on Java)
1860 Max Havelaar
- said to have a direct influence on Dutch anti-imperialist movement + colonial policy
*multatili = i suffer greatly (Latin)
from the book:
Dutch Java divided into tribes (kings and prices are contibutaries to Holland, contained direct gov on land), total/direct subject to Holland
mercantile companies, so what?
had important role in rise European empires C16-C18
built foundation of direct imperial rule C19-C20
= non-state form of political organization and sovereignty that underpinned a completely different international order
- universal state systems emerged recently in context of decolonization (1950s-80s); it is historical new, contingent, and perhaps will be replaced again in the future
some food for thought
- is the rise of corporations today as a private power that challenges the public power of state sovereignty something fundamentally new about our C21 international order
- is in fact the primacy of state-sovereignty itself in the late C20 and early C21 that makes our time so different?
- aren’t corporations today actually still weak relative to the power of states?
e.g. EIC and VOC were much stronger until C19
