The Netherlands: a tiny European country
that is actually one of the wealthiest and most important economic centres of the continent.
The surprising success of the Dutch is invariably tied to one company,
which was arguably the greatest and most successful one in history.
Today, we’ll see how the Netherlands transformed
from swampy backwater into a global trading empire-
thanks to the Dutch East India Company.
This video is brought to you by Cheddar
who made a video about a different kind of spice
than the ones the Dutch were trading,
but when you’ve finished here, make sure to check out their channel.
The Netherlands today might be an economic powerhouse,
but back in the 16th century,
well, it wasn’t doing too great.
To start things off, it wasn’t even independent.
instead it was under the domain of the Spanish Empire.
As one of the earliest European colonizers,
the Spanish Empire controlled vast territories across the world
and used the money it gained from slavery trade
to fund numerous wars of conquest and suppression.
The Netherlands ultimately became victim of one such war.
They had become part of the empire unwittingly due to marriage
and spent the next 80 years trying to break free.
But the Dutch independence effort ran into a big problem very early on.
You see, the Dutch were a seafaring people
fishing and mercantile shipping was their thing
and they had been doing it for centuries.
The main goods they shipped were spices coming from the Far East,
but this was before the Dutch had any colonies of their own.
Back then Portugal held a virtual monopoly on the spice trade,
controlling all the major trade routes to Asia and back.
Thus, what the Dutch did was to buy all their spices from Lisbon
and then ship them around Europe to sell them at a profit.
But Portugal was absorbed into the Spanish Empire in 1580,
and of course, the first thing the Spanish did
was to close off Lisbon to the Dutch merchants.
Suddenly the main artery of the Dutch economy had been cut off
and there was really only one thing the Dutch merchants could do
they had to sail to Far East and build their own trading network.
At first this effort was very decentralized
merchants from various Dutch cities would establish companies for single voyages.
Essentially, they would fund a few ships and their sailors
and they would send them off to find a new trade route to the Far East.
Some missions were successful and came back with lots of spices,
but most did not go very smoothly.
During the first six years of the expedition effort
a total of 65 ships were sent out.
1 in 10 never made it back,
and those that did came back with only a third of their crew on average.
Suffice to say, being a sailor in these early fleets wasn’t a very safe job.
Nevertheless these early voyages gave the Dutch the knowledge and experience
on how to establish a more permanent trading network.
But coordinating individual merchants,
each of whom was competing with the rest, is difficult to say the least
and with the English, Spanish and Portuguese all trying to create their own trading empires,
the Dutch knew that they had to band together.
In 1602 under the patronage of the Prime Minister of Holland,
the various expedition companies united into a single company with vast sovereign power.
It’s name wasn’t the Dutch East India Company,
even though that’s how we call it today.
It was actually the United East India Company, or VOC for short
and its creation marked a new chapter in the history of the Netherlands.
The political motivations were clear:
the Dutch needed a new economic engine to fight off the Spanish
and to restore their wartorn country.
The VOC was their only hope
which is why it was granted not only a monopoly on trade,
but also the ability to train its own army,
具有谈判和宣战权 还能占领土地 甚至实施奴隶制
to negotiate and declare war, to occupy land and even to enforce slavery.
But just getting permission to do all these things meant nothing
if the VOC couldn’t actually do them,
and to conquer the Far East would require a lot of capital.
The VOC, however, figured out an ingenious solution,
which would later on become the cornerstone of modern capitalism.
In the center of Amsterdam, the VOC built a trading house,
where every Dutch citizen could go and buy shares of the company,
effectively giving the VOC money now
in exchange for a claim on its profits in the future.
The VOC had effectively created the world’s first stock market
and the VOC itself had become the first publicly-traded company in history.
Pretty much every rich man in the Netherlands invested in the VOC
and even many immigrants did so.
In total, the VOC’s initial public offering raised over 6 million guilders,
which is equivalent to about $110 million today.
And keep in mind,
this is coming from a country that’s half-occupied by Spain
and whose economy had been in the drain for a decade.
Of course, circumstances were favorable to the Dutch:
the Spanish Empire was at war with England at the time,
allowing the Dutch to sweep into the Far East
and kick out the Portuguese establishment.
The first victim of the VOC’s colonial ambitions was Indonesia:
the Dutch conquered modern-day Jakarta in 1611,
slaughtering the locals and building vast spice plantations on nearby islands.
With the island of Java as its headquarters,
the VOC spread throughout the Far East.
Their factories in India produced exquisite silks and fabrics,
which the VOC then shipped to Japan
to trade for their famous and crucial supply of silver.
The VOC got silk from China as well, which also produced valuable porcelain.
What matters though, is that the profits margins the VOC earned
by monopolizing these trade routes were as high as 1500%,
and all of this money was of course being funneled into the Netherlands.
They finally won their independence in 1648
and with that out of the way
the VOC’s profits were invested in one type of project unique to the Netherlands: land reclamation.
你知道 荷兰地势非常平坦 而且陆地在海平面之下
You see, the Netherlands is extremely flat and is below sea level,
which makes it prone to flooding;
but if you build dikes and keep the water out,
you can turn swamps into farmland
and that’s exactly what the Dutch did withtheir VOC profits.
Just by looking at the geography
you can tell when the VOC was running at full force.
In total, over one and a half thousand ships sailed for the VOC
during its two centuries of existence and its influence is still felt to this day.
Many former Dutch colonies for example,
still bear the scars of the oppression they suffered.
But the VOC has other interesting legaciesthat few people know.
Cape Town, for instance, started out as a VOC resting station in 1652.
A decade earlier,
a VOC merchant discovered two big land masses south of the Dutch Indies.
He called them New Holland and New Zeeland
and you can guess which name stuck and which one didn’t.
But in any case,
just as the ideal set of circumstances gave the Dutch the opportunity to become a colonial empire,
a perfect storm in the late 18th century ended up destroying the VOC.
To start things off,
the Dutch lost a disastrous war against the British in 1784
which disrupted the VOC’s network in Asia.
Then, just a decade later,
the newly-created French Republic invaded the Netherlands and conquered them.
WIth the British attacking in Asia and the French attacking at home,
the VOC really had no chance and officially went into bankruptcy in 1799.
Sadly, without the spice trade the Netherlands lost their status as a global power.
And speaking of spice,
Cheddar, who were kind enough to sponsor this episode,
made a great video on how Old Spice was saved
by one of the most iconic marketing campaigns in recent history.
If you don’t know,
Cheddar’s channel covers business and technology
in fun bite-sized videos that leave you craving for more.
So if you haven’t seen them, go check out their channel,
watch the video and consider subscribing if you wanna see more.
In any case, thank you for watching.
If you like the story of the VOC,
consider liking the video and subscribing if you haven’t already.
We’re gonna be seeing each other again in two weeks,
and until then, stay smart.