The Economics of the Dutch East India Company
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- Опубликовано: 27 апр 2024
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Trillion-dollar mega corporations are a very big deal these days. Only about 2 or 3 exist in the modern world and they're primarily tech companies that have achieved this status by capitalizing on cutting edge modern technology (and probably a bit of optimistic speculation). But there is one corporation that has snaked its way through history and may have very well been the largest corporation in history.
This was a company that laid the foundations for modern multinationals and created systems, procedures, and expectations that we take for granted today.
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📚 Want to learn more about the economics of the Dutch East India Company? We recommend reading "The Anarchy: The East India Company, Corporate Violence, and the Pillage of an Empire ", by William Dalrymple 👉 amzn.to/30lHLvH (as an Amazon Associate, we earn from qualifying purchases)
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Sources & Citations -
Lucassen, J., 2004. A multinational and its labor force: the Dutch East India Company, 1595-1795. International Labor and Working-Class History
Landwehr, J., 1991. VOC: a bibliography of publications relating to the Dutch East India Company, 1602-1800. Brill Hes & De Graaf.
Van Dyke, P.A., 1997. How and why the Dutch East India Company became competitive in intra-Asian trade in East Asia in the 1630s. Itinerario
Robertson, J. and Funnell, W., 2012. The Dutch East-India Company and accounting for social capital at the dawn of modern capitalism 1602-1623. Accounting, Organizations and Society
Gerstell, D., 1991. Administrative Adaptability: The Dutch East India Company and Its Rise to Power. Journal of Political Economy
Gelderblom, O., De Jong, A. and Jonker, J., 2013. The formative years of the modern corporation: The Dutch East India Company VOC, 1602-1623. The journal of economic history
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Economics explained: values 17th century economics with today’s values! Idiots!
Hey, love the channel. But can the good people of land Commentsection get some feedback on the reasoning behind the valuation? Thanks!
I'm really sorry, even the reference you use for this video and you recommend if someone want to learn more about the Dutch East India Company is not valid. The Anarchy: The East India Company, Corporate Violence, and the Pillage of an Empire ", by William Dalrymple is the book related to the British East India Company which operated in India, not the Dutch East India Company which operated mainly in the area well known as Indonesia today.
Can we get a standard oil video?
They should do the British East India company.
I find the valuing at the end to be rather... weird.
Saying those ships would be worthless today and the spices too seems utterly irrelevant to me. Because its not about how much its holdings would be worth today, but how big the company would be in todays money. And that is a significant difference.
Imagine doing this to apple from 1980 and saying "well all that technology is hella outdated and basically worthless so 1980's apple would be worthless today". I mean, its true, but its also completely NOT what people mean when they say "what x would be worth today".
"wasnt that wealthy because it came from a time that was extremely poor".
Imagine going 100 years into the future and saying "well google wasnt that wealth because today we are way wealthier".
It does feel like you kinda forget to focus on putting it into the perspective of the time.
It would have been interesting to see for example how big of a percentage of the world economy the VOC was and to extrapolate that to today to give a more realistic view of how powerful it was for its day.
They owned 1 5th of the world's gold reserve so you do the math.
@@therobotics1rthegreat157 well yeah exactly, seems kinda unfair to then say "yeah but today they would only be worth only a couple billion".
Agreed
@Bangbabangbabangbang True. However, the answer would've been different if the statement if "The RELATIVE wealth of the VOC to the Modern times". Scaling up the control of the VOC back then of the world's GDP (Let's say 20% for fun's sake), then its value would be around 16 Trillion Dollars today.
It's all about the questions and statements, people
Absolutely, the logic he follows would basically mean the wealthiest company ever is always the wealthiest today, no matter how far in the future we go. I always thought the idea was to try and value old companies relatively to their times not bring them to our.
Random topics suggested for future videos:
- Economics of the slave trade triangle
-Economics of war
-Economics of Fascist Italy or Nazi Germany
-Economics of the 1929 crisis
-Economy of Argentina
-Economics of Mercosur
-Economy of Drug Cartels (and what cartel mean)
-Economy of Ireland
-Economy of the silk road
-Economy of Hong Kong
The Nazis wanted to colonize Ukraine with Germans to produce more food. The problem is that the US did the same decades ago and end up producing so much food until it became unprofitable. People can eat only so much.
@@Surteronarto true, I've studied for years the slave trade triangle in school but nothing at all from the Islamic slave trade
@@Surteronarto Which Islamic slave trade ? Turks and Russians under the Mamelouks ? Africans under the first Caliphates ? Cricassians and Christians under the Ottomans ?
Islamic slave trade cover 1000 years, and has different aspects. A young turkish boy kidnapped in Ukraine and raised as an elite soldiers in Cordoba has very few in commun with an african boy sold in Mali and working in the fields of Fes and Marakesh.
@@kevinclass2010 you obviously havent seen the obesity crisis in america
Oh, the economics of both Fascist Italy and Nazi Germany would be a very interesting video. We know very little about this subject on those two countries.
Say what you will about this channel, but they're extremely creative with their use of stock footage
G O E D E N D A G
@@Holland1994D Hee een andere Nederlander :P
I wish I could "haha" respond to this :P
Gino Garzolini haha, there
@@isaactaylor7100 Breathtaking 🤩
The issue with any comparison, it will be flawed:
The 40 warships, are little museum and tourist ships if transplanted today as they were. But the same time the UK fleet was around 100 warships, so we also could transplant it as 40% of the largest fleet in today, that would mean 4 carrier and 100 other ships, valuing around 500-1000 billion USD. And anything in between.
@Mansuba's Counseling User East India referred to ALL of India because it was a term created alongside the term West Indies. That's why in the western world especially in Canada. East Indians refer to all Indians. Yes, geographically speaking, East India would include Bengal, Assam etc. Most of these so-called "East India Companies" never controlled Bengal and Assam. Only one did, the British. Others had small colonies and some had none at all in these parts. The Portuguese East India Company had nothing to do with the eastern part of India for example but it was called the East India Company.
yes
@Mansuba's Counseling User Wrong Dutch East India company wasn't located in the India peninsula. it was located in southeast Asia, which now become Indonesia.
Indeed. He also makes the same mistake every time he says, "people today have more than the kings of the past." No, they don't! If those kings had survived in their positions to the present day, they'd absolutely have washing machines, cars and other modern conveniences aplenty. In fact we know this for certain because we DO have kings that've survived to the present day, and they absolutely have a lot more wealth than the average person (and don't live like they did hundreds of years ago). You have to take their positions in their time and extrapolate that to the present day, not imagine them as basically unchanged in 2020 while the rest benefit from centuries of progress.
Lùzia and Mendicant
It depends on what we are comparing. There are two important distinct terms: Absolute and relative wealth. Relative wealth only considers how much wealth you have compared to your peers in your time (how big your share of the pie is), while absolute wealth does not and only look at your total wealth (depending on how big the whole pie is). By relative wealth the kings of the past were much more wealthy than the common person today, probably even wealthier than the kings of today (as most royalty have lost a lot of influence and power). By absolute standards the common man today is wealthier in many regards compared to past royalty. However it depends on how you measure it. If we measure the size of their homes or their number of servants, they had vastly more than any commoner today, but commoners today have access to technology the ancient royals could only dream of. A small house today has more convenience and comfortability than royal palaces of the past. We also have a lot of machines that can do many jobs servants would do in the past, but of course not all. Some machines can do better, some the servants can do better. In general though servants can do more convenient labour that machines of today still can't do. However in terms of information, transportation we are far ahead.
+4 Gold.
-Trade routes with other players made to a city with an East India Company will generate an extra 4 Gold for the city owner and the trade route owner gains an additional 2 Gold for the trade route.
Must have a market in all cities. The cost goes up the more cities there are in the empire.
Or a harbour and lighthouse pmsl
Gajah Mada is offering nutmeg for 8 coins per turn
what game is it a referrence to?
@@jasicjan civ v
You know what they say:
_If it ain’t Dutch,_
_it ain’t much._
**looks down at my British micropeepee**
@Mansuba's Counseling User
In Dutch we called Indonesia Oost-Indië or East-india.
en.wikipedia.org/wiki/Dutch_East_Indies
@Mansuba's Counseling User no problem bro
As a finishing touch
God created the Dutch
Funny how they use American slang.
Something really expensive is still called "pepper expensive" in Dutch
Peperduur
Again, you're valuing 1670 assets with 2020 prices; even if you believe accounting for inflation gives an unfair picture, wouldn't it be also unfair to not value their assets at book values of 1670?
exactly. having been so distantly removed from our current economy, only using a few of these parameters and factors is not gonna yield accurate valuations. All institutions of the economy were just so small
I would argue that The Hudson’s Bay Company which is one of the oldest corporations in the world if not the oldest had all the land of Canada is far bigger. The land values of Canada including oil and other resources would be worth trillions today. Hudson Bay was a British Crown Corporation.
The Hudson's Bay Company (HBC), chartered 2 May 1670, is the oldest incorporated joint-stock merchandising company in the English-speaking world. HBC was a fur trading business for most of its history, a past that is entwined with the colonization of British North America and the development of Canada.
It seemed a bit silly the comparison was made that having 40 warships then. Would be equal to wallmart owning 10 aircraft carriers. But wrote them off as worthless wood tubs. While the newest USS Gerald R. Ford class carriers have a unit cost of almost 13 billion.
@@calidude1114 Land in Indonesia is worth much more than that of Canada(only prices in the biggest cities are higher and only for residential and office use). Industrial land in today's Indonesia goes for around 2.5k USD as of 2017. Industrial land in Canada goes for 1.4k USD as of 2018. Indonesia has one of the cheapest prices for industrial plots in Asia(only Vietnam is lower and it is still 2.3k USD). So no even if Hudson bay owned Canada as a whole it would not come close to the prices of the industrial land. I even did you a solid to look for industrial plots which are always more expensive than recreational/hunting and agricultural plots. Those kinds of plots are very cheap in Canada. In other words if there was nothing underneath the ground the Dutch east India company would be much better off.
You forget about natural resources like rare earth minerals. Some of which are only found in Asia and cost a few hundred times more than oil. In the end, I think that they both had around the same value in the land owned. Quite frankly, it does not matter because both did not exactly make money off the land. They would still be very wealthy even if they had none of that and only transported the goods and sold them. Their only reason for ownership of the land was to monopolize the trade.
That's literally his point
Will you ever do "The Economics of the Hanseatic League?"
What is Hanseatic League, just league
@@satyamprakash7030 it was a kind of union of cities and merchants in the baltic and north sea
@@chickenusgoddus464 Thanks👍
@@satyamprakash7030 Hamburg is still part of it !
@@lorenzzoklein9178 Yes, in fact many major Cities in northern Germany are still part of it (of course only formally. It has no real effect at all anymore)
My knowledge of history may be lacking, but wasn't it the Portuguese who imported the spices from Asia, while the Spanish got their wealth primarily from precious stones and gold mined from their south american colonies?
Pretty much
Not just the Portuguese
Maby they made more profit, but they weren't compagnies.
(sorry for my dutch accent)
Yes and no, actually in Spanish colonies there were huge plantations(think about cuba) and also, at the time, Spain wasn't only Spanish peninsula, but also part of Italy and Netherlands, also German's traders used Spanish routes, because Spanish kings and HRE emperors were both augsburg. But Spain nobility get lot of wealth from precious metal mining in new world, that's absolutely true
we dutch kinda maybe just pushed the portuguese out of their own spice trade routes
Greetings from The East Indies. The Dutch played us good for 350 years.
F brother. Maybe you can colonize them back in the next 350 years.. you know, vengeance..
@@doraorak no we can't, Netherland is a NATO member we will get destroyed if we mess with NATO
@@budisoemantri2303 Without Soviet Union, NATO members were too busy bickering about everything than actually supporting each other
@@doraorak dont worry man we'll just wreck their econs for 3 century this time
We'll be back again, soon. ;)
The whole premise here is flawed.
When they say it's worth $7 billion they're comparing how much wealth the company had compared to the global wealth at the time. If they controlled 12% of the world's GDP at the time, they would COMPARATIVELY be worth ~$85*.12 or $7 trillion today if they controlled 12% of the global GDP today. Which makes sense when you consider they were basically Amazon on steroids and Amazon is valued at trillions today.
Obviously their goods wouldn't be worth $7 trillion today , so taking the "book value" of their rink-a-dink ships means nothing.
I think what he's doing is comparing total assets with today's pricing, versus actual market power of that time, I agree with you, the fact that he disregards the inflation adjustment is contradictory when inflation is there for that exact reason, I subscribed and then just unsubscribed
This company even had its own military, made law in the region that it exploited.
Even its own coin
@Stevie Rios That's the British East India Company.
@@andresiniesta9955 Ah, yes. The OGs of drug dealing.
@@firstnamelastname489 as an Indian , I found it way too funny 😂
@@andresiniesta9955 The VOC had their own coin as well.
www.specialsale.nl/a-53372241/munten-voor-2002-guldens/ned-indie-voc-duit-1790-utrecht-met-ster-pracht/#description
here you go.
last time I was this early nutmeg was an investment.
same
He who rules the nutmeg, rules 1700th century dinners
hey never been so early to a video before so second ? i guess
Nut
Your Australian why are you uploading at 12 am
Instead of splitting hairs about how much the East India Company was really worth, could you instead create a more comprehensive video about how it operated, its history and other peculiarities?
Yeah, I was really excited for this video because I wanted to learn about the company. Pretty disappointed in what it actually was.
The main winning factor of the Vereenigde Oost-Indische Compagnie (VOC) was that it was united (Verenigd).
All foreign trade companies were seperate entities not run by their respective governments so they had to compete with each other, as well as with the foreign companies.
This meant lower prices for the customer but that was exactly *not* the aim of the VOC.
Keep everything under government rule, with public funding etc. etc. to maximise profits.
Also, even though the Dutch Republic was often allies with the English, the VOC was a seperate entity that would not hesitate to attack the English (or other) competition with a fiery and murderous resolve.
"It's business, nothing personal!" Speak businessly, act warly and above all, maintain a trade monopoly.
Even its own ships' crews were strictly forbidden to take spices home to sell for themselves.
Flogging, and of course keelhauling were all proper VOC methods of running their company and keeping their employees in line.
Also: trade with the enemy (whose colonies/trade stations you stole including their spices but if they offer good money for the spices, why not). Trade with the enemy also included selling cannon and powder because Some Day, This War Will End...
No wonder we kept it going for Eighty Years.
Economics
@@AudieHolland so would it be safe to assume it was a form of socialism ?
@@someshdevkar5387 Was the United Fruit Company socialist?
Just reading a $20 book about the history of VOC can give more knowledge about corporations and management than an average $20,000 MBA
Any specific book which you would suggest?
What's the book called
What’s the book then
@@rishabhagarwal9871 joseph de la vega confusion of confusions. The godfather of finance
"Land and gold appreciated value over time"
Shows a stock video of croissants baking....
Yeah cause the yeast was rising
Inflation... Of bread
Because this is Turkey.
Remember gold is rare. Just not enough stock image of the gold stock.
Sort of irrelevant side note: the croissant was created by an Austrian (who just so happened to be living in France) who based it off existing Austrian pastries.
G E K O L O N I S E E R D
persoon Z E G M A K K E R
*K O K O S N O T E N Z I J N G E E N S P E C E R I J E N*
@@JanSanono *G O E D E N D A G*
Kijken jullie dit altijd of nu alleen omdat het over Voc gaat?
AUDI RSQ8 neen, maar het is wel een bijkomend voordeel
15:50 I like it when he’s talking about gold appreciating in value, then there’s just a croissant being baked
Fun fact: the Dutch word for insurance is verzekering. The word can be split up in ver-zee-kering roughly translating to far sea return.
is that true? in german the word is versicherung which means reassurance = insurance
@@peterheinzo515 yes insurance means verzekering. but i am not sure about what he says after wards though. i am dutch never heard of what he said.
@@peterheinzo515 This is BS this person sees too much into that word. It is basically just the same as German Versicherung, that comes from Sicherheit (Security).
The correct way to compare, would be to compare it's value at the time with the total world economy at the time. What percentage of the world economy were they valued. And then translate that percentage to the world economy today
Not really because the world was poorer that time
@@shalyfemusic read the comment again
@@shalyfemusic how does that matter? Relativity
The summary at the end makes no sense to me at all. You shouldn't just compare the gold price of more than 200 years ago and the value it has today. You should have compared how much you could have bought with 1 gram of gold.
If i buy 1000kgs of gold today, i'd be a rich man. If the price crashes down to practacly zero in 200 years from now, the same 1000kgs of gold would be worthless.
But you can't say that I, the guy with 1000kgs of gold in 2020 was poor or less wealthy because of the price in 200 years is lower or because the people are wealthier in the future so gold is easier to obtain.
And there is the comparison of the ships. Todays battleships are going to be useless in 100 years from now, this doens't mean that it is worthless in todays market.
So saying 30 billion is a generous estimate is kind of weird in my opinion.
You are right that if they had the same business model in this modern time, it would have failed. But if microsoft or google didn't move along with the time it wouldn't have existed today eighter.
I think he kind of hit on that at the end tho, maybe unknowingly. I think that if they carried their business into the 21st century they would be like owning a majo ports in every nation most of the world's shipping trade, air cargo major logistics companies and potentially amazon
I'm just speculating but. Depending on how you interpret being wealthy. Being rich could be difined on how much you have compared to everyone else. The dutch east india company might have been a lot richer relative to the avrege person during the time, than what Apple is to the average person today. Maybe calculate the percentage of the world's GDP it made up during the time compared to what percentage some big company we have today.
Indeed. He also makes the same mistake every time he says, "people today have more than the kings of the past." No, they don't! If those kings had survived in their positions to the present day, they'd absolutely have washing machines, cars and other modern conveniences aplenty. In fact we know this for certain because we DO have kings that've survived to the present day, and they absolutely have a lot more wealth than the average person (and don't live like they did hundreds of years ago). You have to take their positions in their time and extrapolate that to the present day, not imagine them as basically unchanged in 2020 while the rest benefit from centuries of progress.
When he mentioned the world's GDP at that time, I fully expected him to do that.
@Mendicant Bias - that's a dubious analogy, because BOTH versions of it are correct.
-The kings of the past would have more than we do IF THEY WERE IN THE MODERN WORLD. - true.
- We would have less than the kings of the past if we were in the past; true.
- We have more right now than the kings of the past had back then. - Also true.
Do you see why your claim here makes no sense?
You're arguing that point 1 overrules the other, but all 3 of these are true simultaneously. You can't use one interpretation to invalidate the other two, because they're all correct in their own way.
The claim you're making doesn't hold up, because you're trying to say your point is correct and the others are not, even though the other points are also correct.
@@KuraIthys Do we have more then kings of the past? Servants, horses, carriages, huge amounts of lands and castles, a kitchen staff just for your family. But yeah, they didn't have facebook, poor them...
Land ownership because they are not making any more land. I would argue that The Hudson’s Bay Company which is one of the oldest corporations in the world if not the oldest had all the land of Canada is far bigger. The land values of Canada including oil and other resources would be worth trillions today. Hudson Bay was a British Crown Corporation.
The Hudson's Bay Company (HBC), chartered 2 May 1670, is the oldest incorporated joint-stock merchandising company in the English-speaking world. HBC was a fur trading business for most of its history, a past that is entwined with the colonization of British North America and the development of Canada.
Awesome, since you've done a video on Dutch-colonised Indonesia, perhaps you could do a video on Modern-Day Indonesia?
The scientifically accurate *Megacoorporation*
Dutch stock market was actually a refinement of Venetian trader's risk management
Isn't everything a refinement of something else?
Most Northern Italian merchant republics and cities had similar systems.
@@markhenley3097 Indeed, however I was informed that Venice was the first among them. Dutch recognized a good invention and refined it only to be followed by the British who in similar circumstances of desperate conflict founded the Bank of England along the similar lines the Dutch East Indies Company was created.
Cant help but wonder if it is accidental that all of them were maritime/merchant powers of their time. Maybe because trade was conducted mainly on the seas.
Evilsamar Trade was easier to be conducted by sea. The ocean is vast, whereas commerce by land requires roads that can easily be attacked by bandits or heavily taxed (if it goes across several borders). At sea, you just need to go from port A to port B.
Sure, if the ship got shipwrecked, there’s little of chance of survival of both goods and people. That’s why they create those traveler insurance.
@@alexanderchristopher6237 while generally I would agree with you, it is worth remembering that Europe had the best road system in the world since Roman times. Europe is also the smallest continent in the world, bar Australia and Antarctica. Additionally Mediterranean was prone to extensive pirate (most notably Berber pirates) acitvity which was only curbed in times of powerful state navies (Romans, Venice+Genoa, Ottomans, Spain, France and currently everyone).
I would also argue local rulers (barons, dukes, even kings) would have vested interest in keeping local trade safe from bandits in order to promote trade and prosperity of their realm and thus themselves. But generally I agree, merchant marine was usually the way to go.
Amazing video! While on the Dutch economy, can you make a video on the infamous Tulipmania? The VOC peak valuation in 1637 was also the peak of the tulips.
The netherlands did not gain the majority of their wealth through the VOC. They actually did through trade within the Baltic sea. As you said the Dutch land consisted mainly out of marshes so most grain had to be imported. Poland was a big supplier. Instead of crops the Dutch focussed on cows, giving them butter and milk which were luxury goods at that time. Because the netherlands had no feudal traditions they did not produce for their lords, but for themselfs. Because no one else bought a lot of grain, they had a monopoly. So they started buying more than needed. When for example italy had a bad harvest, the Dutch sold them their grain for a way higher price. Later this was also done with fish and wood from Scandinavia. Because the netherlands were the main trading country at the time, the international banks moved to Amsterdam which gave additional profits. Because of all of this the Dutch became so rich and experienced a golden century. The VOC was responsible for only 10% of the income. As a company it was amazing, but it was not a money machine. The more you know.
last time i was this early indonesia was the dutch east indies
You are so much late, Dutch East Indies was formed after Dutch East India Company is bankrupt
@Aji Anugrah I never say about any corrupt. I say bankrupt, read carefully
*Former dutch east indies
The Dutch had exclusive trade rights with Japan, considering Japan's modern economy that right today would be absurdly valuable.
The netherlands was very important to the japanese economy. we even had ninjas protecting us no joke you can look it up.
It's amazing that some modern business practices today, such as stocks, started with the VOC.
we created the whole world system that we still use today. in fact we created the whole system that america uses today. Capitalism is the number 1 system in america. we created that
considering IP as part of evaluation having a government backed monopoly on trade with a continent would probably form a decent percentage of any accurate evaluation. Also would there be even enough high grade lumber to make that many big ships that hasn't already been deforested or made inaccessible via environmental protections?
IP is a very modern concept. It's largely meaningless in the way the modern world looks at it prior to about the 1960's...
And largely meaningless in ANY modern sense prior to about 150 years ago.
It's copyright because that's literally what it is. The right to copy.
Something that did not originally belong to the authors of a work, but to people that ran printing presses.
Trading rights were generally granted by royal authority, and had more to do with favouritism than anything else...
'intellectual property' - the very term is propaganda that completely bastardises the original meaning of things like patents and copyright.
(look up original copyright laws and try to figure out where it says you get 'ownership' of your ideas. These laws pretty much say the exact opposite of that. - you get compensation for giving up any pretense of ownership.)
Copyrights, trademarks and patents are pretty alien ideas historically.
Or at least, what existed in the past frequently has very little in common with modern understanding...
I was expecting a video about the trade routes, spices they grew and things relating to the actual economics of running that company. This video should be "The Estimated Value of the Dutch East India Company".
Please consider making a video about the actual workings of the company, their most profitable routes, some interesting events etc. That would be interesting to watch, not explaining speculations on their overall "price".
A miner thing but the Netherlands wasn't a "colony" of spain they were more like an inherited throne
Yea they were inherited from the austrian habsburgs to the spanish habsburgs.
And more like a vassle.
And it ownly got into spains hand because it wassen’t part of the HRE realm of germania aka germany.
And that is something you can find out by studiying midevil law and right’s.
Mansuba's Counseling User no it doesn’t?
This video is utter bullshit. Though as someone else pointed out, quite creative with stock images.
The Lowlands were basically a province of the Spanish Habsburg empire.
And it all started during the MiddleAges, with independent states like Holland, Zeeland, Utrecht, etc. making war on each other untill the Burgundian Empire conquered each of the Dutch states and they had to stop making war against each other under the Pax Burgundia.
The Burgundian Empire was 'willed' to (inherited by) the Habsburg Empire and after the Habsburg Empire split into the Austrian and Spanish Habsburg Empires, the Low Countries (today's The Netherlands + Belgium) went to the Spanish crown.
Which also explains the Stadtholders (stadhouders or Lieutenants who acted in place of 'en lieu de' the Spanish crown). Untill a certain Stadtholder William the Silent (of Orange) decided it would be in the Dutch states' best interest to part ways with their Spanish overlord. Something to do with not wishing to pay taxes, freedom of religion but it was mainly a business thing.
I love this video already! I'm actually playing an EU4 game right now as the Netherlands/Holland, and I got +30 monthly balance by 1494! They really were rich back then, weren't they...
they where the richest
Yeah, the Dutch Republic government along with plutocratic ideas makes creating a trade empire quite fun.
Damn I’ve got to give the Netherlands a try
@@nickduch6214 To be fair, I was playing with some mods that add more missions just to spice up the game. Missions Expanded offers really unique mission trees that are fun and rewarding to complete.
Szymon Ewertowski is Mission Expanders available in the Steam Workhsop? 😍
The Spanish: Let's hoard all the gold (S T O N K S)
The Dutch: actual stocks
The gold made spain so poor (inflation$
My great great great grandfather was a VOC sailor. It's a weird feeling, knowing all the bad stuff the VOC caused. It was a military superpower of it's own. It's pretty baffling to think of it now. If something like that would be set up in the modern world - people would lose their minds. It's like Apple or Microsoft with it's own carrier battle groups and infantry divisions. It scared the English so bad they would make up scary ghost stories of an evil dutch ship sailing around the seas draggin all down to the bottom of the seas.
Isn't that Samsung?
last time i was this early, the sun hadnt yet set on the british empire
It still hasn't set tho
*cries in Hong Kong*
Just a small correction: at the time the VOC was founded the Dutch were at war with the Spanish, they had been for almost 40 years. With Holland having been a trading hub for quite a while because of their central position in Europe, their was enough money to fund a revolutionary army. By the time the VOC came around the Netherlands was pretty much an independent nation, only a colony by name.
Under Spanish rule the city of Antwerp was also a very important centre of trade. The war with Spain also allowed the VOC to attack Portuguese colonies in the Indian Ocean and take their position as the dominant trader of spices.
Its "there" not "their" in this context
@@s_for_short2400 it's "it's"not "its" in every context.
This is a great video! Thanks so much for explaining it so thoroughly:)
Nice, would love to see a documentary of the current whole Dutch economy sometime. it's still quite a performer.
Video ideas: "Economics of the Dark/Deep Web"
"Economics of Fiscal Havens"
"Economics of hidden money"
One of the best youtube channels tbh. Thank you for all the effort you put into these videos!
Love the video! Very informative as always!!
Apple: im the wealthiest company ever
Dutch East India Company: hold my spices
india's spices
"You first need to understand the dutch"
Oh Boy this is getting too complicated for me
Ikr nobody understand the dutch people
very well researched, very nice and visual, very interesting, good presented. My new favorite yt channel :)
Love how he said "a for profit nation" the first time (assuming it's on accident).
If Prussia was an army with a country, were we dutch a fleet with a country?
Never heard a person say mercantilism like "merKAntilism" and not "merkntilism"
Same, it took me a while to realize what he was talking about
@@liammcdonnell5632 most of my teachers say MERCHANTilism
I'm used to hearing it pronounced MERE-chant-tile-izm here in the USA. Less often, I've heard MURK-n-tile-izm.
Hearing it pronounced mure-KANT-tile-izm in this video was odd. Is that normal Aussie pronunciation?
@@bradypostma5167 in my economic classes (here in the netherlands) we also say merKantilism (our classes are in english)
@@davidmartineztorres8731 - Maybe it's another case where the United States does it defferently than everybody else and is oblivious to the possibility that it could be done any other way.
Aside from the weird valuation of the company you make at the end of the video, I would also like to point out that the history segment is pretty off. Spain had very little stakes in the Spice trade, they were more about extracting silver from the new world. Portugal on the other hand, did have the trade routes to bring spices from the far East to Europe by sea.
Also, the Dutch weren't in a bad place economically. Dutch agriculturural technology was at the cutting edge of Europe and Flemish cities were a big trade hub of European trade in the high middle ages. You can't make ridiculously expensive trade voyages if you don't already have a strong economic backbone to support it and the technologic and mercantile know-how to support it. Dutch traders have been very active in the Baltic sea even before they took the spice market from Portugal.
I found out, after researching when the first dividend was mentioned or issued, that the dutch east india company was the first public company to do so and that they managed to consistently achieve an 18% dividend yield based on the price of their shares for almost 200 years. I would venture to say that you would need a really solid water tight financial statement with very little debt and/or the (VOC) felt that they couldn't invest the extra cash from earnings to make a better return from it so they dealt the extra earnings to shareholders in the form of dividends. Idk, thought that needed to be mentioned.
You mention around 3:20 that Spain was the most powerful nation. I know they grew huge wealth and then crashed somehow, but I'd love a video about how they grew and then fell, and the reasons they were able to do both. Thanks for all you do!
“BaHt!”- Economics Explained. Absolutely love your videos man
there is some timeline confusion here. the VOC wasnt a thing at the time that the 'netherlands' was governed by spain
It was still during the war with spain... i guess it's a grey area
@@DrTheRich thats true, but its a significant fact. the difference is that they were enabled by the government to start this company. its not clear to me what factor the profits played in deciding the outcome of the 80 years war but that is another factor of significance
I love how in the movies "Pirates of the caribbean", everything is related to the Netherlands. You have the Dutch East India Company, you have the flying Dutchman, etc. and this shows how big of a deal the Netherlands was in the world.
Oh... How we have fallen...
The "East india company" in the POTC refers to the British one, not the Dutch one except for the one time Beckett explicitly refers to the Dutch counterpart company
Awesome video! Future topic idea: economics of the Roman Empire? Economics of ancient Egypt?
I would say the 7.9t comes from inflating that pie that was 900 times smaller 900 times.
I wonder about two questions: 1 by their sob of the spice trade, what would their evaluation be today?
2. If we look at the current book value of property, then it is easy to find the most expensive company in history: brittish east India company, which basicly conquered a lot of India. Property prices in Mumbai are quite steep
When you own multiple countries, then all of the companies operating on those colonies & people, business man would have to pay you tax - then I believe you can count in the colonies GDP as part of your profit book.
The Dutch be like "Gekoloniseerd!!!!"
I N D E R D A A D G E K O L O N I S E E R D
artinya apa sih?
Just like the Britts after us
@@galihwicaksana250 Meme, kayak fbi open up tp versi belanda
@@Fylnnn no it doesnt mean that lol. it means colonised.like you were once :>
I would really like to see a video on an anarchist economies, like:
-Economy of Revolutionary Catalonia (and modern Catalonia)
-Economy of Anarchist Ukraine (and modern Ukraine)
-Economy of Rojava (Kurdistan)
It's bullshit
Topic:
Economics of a perfect economy(Like a thought experiment about hwta qualities you guys think that makes a good economy)
They already did a video wanking off both Norway and Sweden
Anolyso I have to admit there was a lot of jerking
@@ilyankhan6795 this channel is left-leaning anyway
@@kalamay not exactly, but he is keynesian.
I wonder why this popped up on my feed without my seeking it, though just when I need information on the VOC. Very informative.
Great video! Please, do “The Economics of the Dutch West India Company” as well! Thanks!
Can your background video just be different types of bread being made. It’s quite soothing.
Yes please.
It still seems that gold should be taken as being far more valuable in those times. After all, it was the stuff everyone wanted.
A few suggestions that sound interesting to me:
Economy of Ecuador (the introduction of US$)
Economy of the Spanish Empire
Economics of shipping during WWII
Economy of Panama
Economics of global tourism
Economics of micro loans
you should put these on spotify. im always driving down the highway VERY early in the morning and get a new video message on discord. since im driving id like to be able to just push play on spotiify
I'm pretty sure that the whole point of adjusting prices for inflation is to keep the same slice % size of the pie one had in the past and apply it to the pie we currently have to get an idea of how relevant that item was in the past. I just think that you spent a bit too much time comparing the absolute sizes of the pie slices and kinda lost track of the whole point at the end.
While I appreciate that you mentioned the estimated amounts of gold in circulation now and then, if you really wanted to get your point across you should have compared how much that gold was worth then to how much it is worth today, in both absolute and relative terms.
Very interesting and insightful!
I cant wait to watch this video every since you said you where making it!!
last time i was this early Dutch East India Company still has an army
Edit : larger than pepsi
@@dasasian6799 pepsi didn't have an army but a navy.
There employee is there army
@@alexandrub8786 there employee are there army
@@alexandrub8786 navy is part of the army lol...
Companies with its own navy:
1. VOC
2. Pepsi
Stephan Stefanus yes Pepsi was Half Dutch too 👍🏻👍🏻👍🏻 so it had a navy.
Did you google that or....... are you just a stupid Millennial?
You should Google. You would be ashamed 😇😇😇🤣🤣🤣🤣
@@vranco tf are you saying
The VOC had 140 merchant ships, around 1650 the entire Dutch merchant fleet consisted of about 20.000 ships, so that's 0,7% of the Dutch sea trade of that time. Sea trade was a huge part of the Dutch economy, but just a part. So it's fair to say that the VOC was never more than 0.5% of the Dutch Republic's economy. But the Dutch Republic's economy was huge, the world was poor but the Dutch were extremely rich. So the VOC's part of the world economy might have been over 0.1% at it's peak. It wasn't in a time before proper economics existed, the VOC was a result of 'proper economics' taking off.
At the VOC's peak, it was still significantly smaller than the Dutch herring trade of that time. It's turnover and profit was dwarfed by the Baltic Sea trade in particular, the 'mothernegotion', and the Dutch trade on the North Sea and Mediterranean. But they weren't organized in one company because there was no military necessity and the routes were shorter and safer.
At the time of the foundation of the VOC the Dutch Republic wasn't a colony of Spain anymore, it was an independent republic for about 30 years and was already extremely wealthy. The kings of Spain, France, Germany and England beeing in denial doesn't change the factual situation. Many shareholders of the VOC were normal people, craftsmen, bakers, maids who had savings to invest as the records show. It wasn't an insignifacnt power either, it's just that the Spanish, French, British and Germans didn't understand yet what power was to be about in the late 16th and 17th century: trade, not land. Armies were for rent and the Dutch general Maurice of Nassau developped 'modern' warfare in the last decades of the 16th century to get and keep the Spanish out, well before the VOC.
The historical importance is political and military because it was part of the war effort, a globalized war effort, to remain independent and keep freedom of religion, speech and press while showing Europe that absolute monarchy isn't the way to go. Also stocks were something new but related to other banking innovations, and the shareholder model was also used to create farmland by pumping water out around the same time, the Beemsterpolder. The VOC's economic value was very modest.
So these anglo YT-video's should stop obsessing about the VOC, and start taking an interest in the Dutch Republic, much more interesting and truly a turning point in history. Not just economic history.
I think I might have mentioned it before but this is a great channel.
You say the VOC had 100 merchant ships and 40 warships at its disposal, but a quick Google search reveals that it's actually some 4,700 ships over the VOC's lifetime.
Also, the best way to value the VOC by today's standards is to look at what fraction of total global wealth was owned by the VOC back in its day and then extrapolate to today's economy.
i just imagined walmart actually having aircraft carriers. made me chuckle
I think Coca-Cola during the cold war had one of the largest fleets in the world because of trade complications with the Soviet Union since the American company wasn't able to take money exactly from them or something. look it up
@@revbladez5773 Thank you for correcting me, could never remember exactly why so thank you! :)
Your videos are educative. Thank you.
This channel has the best montage of stock videos EVER.
You can't take xy company and take it into another time that just doesn't work.
For example if you take Apple as it is back in time, let's say to 1500, they wouldn't hardly be worth anything cause all of their stuff wouldn't work, their brand doesn't mean shit and their properties would be in no man's land. Sure it's fun to think about but it's never a fair comparison to value a company without the context of the time they were in.
Yeah but the point was that it's really, really difficult to estimate what a company in 1670 was actually worth in relation to the world economy back then because how differently everything in the world worked back then. There are just so many variables to take to account.
@@aabens sure, still those boats would be way more valueable than he estimated... Pretty hard to get ships like those nowadys!
But yeah such comparisons are realy difficult no matter what
You forgot to add the fact they ownd ports. How much is the port of Amsterdam worth by today money. If you add the ports I belive the value will rise by a lot
port of amsterdam is not that big or important. its rotterdam that got the most important port of europe. and one of the most important ports of the world
@@metalvideos1961 bruh the port of Amsterdam is the fourth busiest port in Europe. You don’t know what your saying
Topic Suggestion: Economics of the Netherlands Antilles (1954-2010)
Great Video! You mentioned an interesting topic that may be a good idea for a separate video, but how did spices go from something that were in the same conversations with gold and precious metals to something that is basically free in today’s world with a notable exception of Saffron
Most of them are now grown in almost every farm across the world.
More accurately, we live in a time that's extremely rich
If my whole fortune of $1mil was invested in a single company stock on monday, a stock with a liquid market. But the company went bust on wednesday, you are arguing my net worth on monday should actually be $0 retroactively, because the company would later go bankrupt, regardless if I could or even would have sold my shares before the price plumeted? That seems how you valued the assets of East India Trading Company.
Sort of agree with the comparison, but we’re looking at the value of the company from the POV of the future, so it’s not completely unfair to devalue its assets based on what they’d be worth today (if your investment became $0, then your net worth would also become $0 the next day, we’re valuing it at that point in time so we could value it at $0)
But in spirit I agree with you. When we value the company the goal of adjusting for inflation is to show how rich the company was relative to its time, not to predict how inflation would actually impact the company over time. Scaling for inflation is just a way to give perspective and compare to current companies. So the size of the company at the time, would be like a company worth $8 trillion if it existed today.
We'll all companies eventually go to 0. The thing keeping them valuable are the cashflows they produce over their life.
Great video and great channel. One of the best on RUclips. I have an BA in Economics. At my university, Economics is part of the College of Liberal Arts along with Literature, History, Classics, Art, Philosophy, Government, Writing and Rhetoric, etc. I'm fortunate that my Economics education was viewed as part of the Liberal Arts versus a Social Science or a Business degree. Can you do a video examining the foundational human aspect of Economics - e.g. how most of our relationships revolve around trading with each other and how our society advanced through more efficient ways of trading?
We were not a colony of Spain, we were part of the Spanish Empire through inheritance. We were the Habsburg Netherlands ruled by the Spanish branch of the Habsburgs from 1556 to 1714 as a collection of States of the Holy Roman Empire held in personal union by the Spanish Crown. Big difference.
Do the economy's of the Ottoman Empire and other Islamic empires such as the Ummayad and Abbasid caliphates .
Welcome to the Dutch East
We've got all you need
We've got all the goods you want
Spices, furs, and teas
One of my favorite channels released a video about one of my favorite topics
Loved the video. I do think that the most "fair" comparison is the last one. Taking the Dutch East India Company market share, trade dominance and their income as a percentage of Europe's GDP in today's terms would indeed yield a Trillion Dollar valuation.
My only issue with your valuation of the company is that you've been talking about its comparable value in absolute terms rather than relative. There's no issue with that overall, except you never explicitly state you're making an absolute comparison in its valuation.
That being said, its worth within the trillions makes complete sense if we're talking in relative terms when we account for, among other factors, the value of spices, the world's gold reserves and the prices of their assets during that time period.
the most hated 3 set of words in my great grandfather era
Wahyu Setiawan Suck on it.
This whole video is the equivalent of a full semester economics course. At a minimum.
We've got to look at one more aspect beyond valuing the specific assets and cash from this company in the 17th century and adjusting for Inflation. This is the fact that a company which owned so much of the pie of the valuable assets from those times (ships, ports, spices etc) means that they would have had the power to keep buying into whatever new valuable assets that prop up with the change of times. So we can't just assume that this company would have only held on to those assets and just find an inflation adjusted way to put a value to that. We also have to consider the buying power and influence of such a company and extrapolate on to what other trade monopolies they would have gone on to enjoy if projected towards modern times.
It is a fact that the company did not eventually go on to capitalize on their huge influence and instead broke apart at a certain point. However if we are doing a theoretical evaluation, we need to factor in some amount the new businesses they could have controlled if they had continued.
Not surprising content though, me and other indonesian learn all of that in history book. But they almost never tell the real story to the world...kind of, because it's an old tale and began almost centuries ago.
12:27 You're missing a zero there
are you using music from the old risk game? I guess its also used somewhere else but me and my childhood friends played that game so much i remember this theme by heart
Proud that my ancestors worked for the VOC!