Braudel's Three Floors

The Dutch East India Company invited residents of the United Provinces to subscribe a little money or a great deal. If more was offered than the company needed, the largest subscriptions were to be reduced to make room for others. In the Amsterdam register of 1602, Grietgen Dirkx subscribed sixty guilders. A cross stands beside her entry.¹

The mark does not tell us what she expected of the investment. It records something both smaller and more definite: she could enter the undertaking without equipping a voyage herself. Her money would be joined to other money, and people elsewhere would arrange the ships, purchases and voyages. The invitation made the enterprise accessible without making its conduct a common possession. Elsewhere in the charter, the directors were named. Subsequent vacancies were to be filled through nominations and public authorities, not by asking everyone whose money was aboard what should happen next.²

There is an achievement here which the language of extraction can too readily conceal. Combining resources allows people to do together what none could undertake alone; assigning decisions makes it possible to act without waiting for each contributor to become a merchant, navigator or diplomat. The division can enlarge participation. It can also leave a participant with very little say over the enterprise in which she participates. Those consequences begin together, before a profit has been made and before we have decided whether any part of it deserves to be called rent.

The charter was attentive to smaller subscribers. Directors were to swear that they would administer honestly and not favor the large investors over the small in collecting contributions and distributing proceeds. Such a promise has substance. It does not promise that a small investor will become a director. Nor does being a director simply mean owning more of the same thing. The director decides on the employment of resources supplied by others; the subscriber owns a claim whose fortunes depend on those decisions. A larger pot of money does not explain how that difference acquired its particular form.

Even the company’s apparent unity had to be arranged. Its chambers were based in six cities. Amsterdam supplied half the undertaking, Zeeland a quarter, and the remaining shares were divided between the other regions. A board of seventeen was to decide the equipping and destinations of fleets, while the chambers carried out its decisions. The charter went so far as to settle where the board would meet, which journeys entitled a director to expenses, and who should deal with a cargo that wind or weather brought into the wrong port. An oceanic company required rules about an inconvenient arrival as well as rights over a distant ocean.

These modest provisions belong beside the famous ones. For twenty-one years the States General reserved to the company the specified voyages from the United Provinces east of the Cape of Good Hope or through the Straits of Magellan, subject to a transitional provision for existing permissions. Ships and cargoes could be confiscated for infringing the grant. The company could also make agreements with rulers in the name of the States General, build forts and appoint officers. Appointments were to be reported for public ratification. The document created an authorized undertaking, not an independent power released from every superior, and certainly not an uncontested Dutch dominion over everyone living within the enormous space its routes described.³

Someone who could not mount a voyage could subscribe to the company. Someone who could mount one could be forbidden to sail independently. The same charter widened one entrance and closed another. That is a more exact beginning than dividing the company’s assets into useful ships and useless privileges. The ships could trade because people financed, supplied and directed them; their owners could seek to restrict other ships because public authority had made a different grant. Neither service nor exclusion was imaginary. The problem is to understand the powers joined in their exercise without allowing the usefulness of one to settle the legitimacy of the other.

The promised reckoning

The charter did not initially ask subscribers to surrender their money indefinitely. It provided for general accounts after ten years and an opportunity to depart with capital, with special treatment for voyages still in preparation or under way. Notices were to announce the reckoning. The company’s public term lasted twenty-one years, but the first investor’s commitment was not simply identical to that term. Continuity had to accommodate the possibility that the people who had financed the first undertaking would decline to finance the next.

What would an account at that boundary have done? It would have enabled more than a calculation of individual gain. It would have brought the employment of the first contributions to a point at which the contributor could make another choice. This does not mean that every ship had to be sold on the same afternoon. The charter itself recognized unfinished business. It means that the directors’ ability to continue using the resources was not supposed to be entirely theirs to decide.

The historical company developed otherwise. Oscar Gelderblom, Abe de Jong and Joost Jonker reconstruct an enterprise strained by its continuing commercial and military operations. Resources remained committed abroad while new expeditions needed funding at home. In July 1612 the States General allowed the company to forgo the scheduled liquidation. Its capital became permanent, but the change did not cure the need for cash. Dividends could still be owed without being paid.⁴

It is easy to read this backward from the successful institution and make the original right of withdrawal look like a mistake awaiting correction. A continuing establishment cannot be financed as though everything ends with the arrival of a cargo. A ship that remains overseas may supply another voyage; knowledge of a route and relations at a port can be used again; the next operation need not be rebuilt from nothing. The economic argument for continuity is formidable. Yet the right being displaced had done work too. It had given the contributor a decision at a stated boundary. Making the enterprise less vulnerable to withdrawal also made its direction less dependent on obtaining that contributor’s renewed agreement.

Shares offered another way out. Selling a share changes the person entitled to its proceeds. It need not take a ship out of service or empty the company’s treasury. This is one of the real accomplishments of transferable investment: an undertaking can continue while its owners change. But the price of the share, the resources available to the company and the authority of the people directing it are different matters. A market in claims does not itself give a dissatisfied holder the power to redirect what those claims concern. It offers a buyer, if one can be found on acceptable terms.⁵

Arrighi’s distinction between liquid wealth and money committed to a particular use becomes interesting at this smaller scale. The freedom to turn wealth toward another opportunity need not mean that the productive undertaking itself has become free to move. A shareholder may sell; the company continues to require crews, stores and decisions about where its ships shall go. Financial flexibility and organizational persistence can support each other, while belonging to different people.

When renewal approached, the question of direction returned. During 1621–1622 dissatisfied shareholders campaigned for accounts and greater influence over company policy. The charter was renewed from January 1623; a promise of shareholder involvement in preparing accounts did not give them the control they sought.⁶ Public authorization had helped make continuity possible. It could also help preserve the directors’ position against the people who supplied capital. The word investor no longer does enough work if it encourages us to imagine that all those on its side of the ledger possessed one interest, one choice or one power.

Nor were directors simply insulated beneficiaries. Their personal exposure on company debt changed during these formative years; the protections later associated with the corporation were not all present at its birth. Financing and governing were being worked out under pressure. We lose that history if we imagine an omnipotent company merely collecting returns on a privilege. We lose something else if every contested power becomes reasonable because we can explain the difficulty that prompted it. The difficulty explains why a decision was needed. It does not appoint the person entitled to make it.

Fernand Braudel’s three levels of economic life help bring that second loss into view. Beneath the visible exchanges lie the material routines by which people live; above them are markets in which goods and services meet buyers; above those markets, in Braudel’s deliberately narrower sense of capitalism, stand actors whose reach allows them to influence the conditions of exchange. His question concerns the advantage of being able to choose between opportunities, command credit or obtain a privilege while others must accept the terms available to them.⁷

It is a mistake to read this as a distinction between people who produce and people who do nothing. Braudel’s commercial world contains the work of carrying, storing, financing and maintaining connections. His great companies also concern the state, whose demands do not invariably coincide with those of capital. The productive and the commanding relations run through the same undertaking. They cannot be separated by sending the ship to one floor and the charter to another.

The ships in the postscript

The company had to procure something worth carrying. Its right to exclude another Dutch voyage did not supply the nutmeg. Nor had the arrival of European companies brought exchange into being in the Banda Islands. Merchants already came with rice and textiles; Bandanese sellers could seek another buyer when one failed to supply what they wanted. The VOC’s effort to secure exclusive dealing entered an existing commerce and attempted to change the choices within it. Local leaders negotiated, allied, resisted and disagreed among themselves. A Dutch grant could authorize an expedition from the Netherlands. It could not settle those relationships by being carried ashore.⁸

In Banda, the effort to secure trade became a war against the people who supplied it. In a letter dated 6 May 1621, Jan Pieterszoon Coen and Martinus Sonck reported from Banda to the directors. Their postscript describes a force sent into the mountains, a counterattack and a disordered Dutch retreat along a narrow ridge. The defenders were difficult to dislodge. The proposed answer was to drive them out through hunger. Even in this report written by the attacking power, resistance remains an activity, not an impediment politely abstracted out of the history.⁹

Men were needed to hold the islands, but leaving more men meant holding back ships whose crews were needed elsewhere. The letter puts the problem in terms the directors could recognize: the company suffered from the shortage. The authors also reported that Bandanese who had fled wanted peace, while refusing first to surrender their weapons. The company’s officers refused to make peace before disarmament. We cannot hear the Bandanese proposal directly through this sentence. We can hear the company’s condition for accepting it.

Then come the vessels. The Schiedam carried spices toward Jacatra for onward shipment. The Dragon carried captive Bandanese. The Postpaert accompanied the transport to help guard them. The letter records forty-five orangkayas taken back off the Dragon and detained, invoking their alleged deception and hostile intentions. These assertions are part of the captors’ account. They do not establish the guilt of the people held. The page moves between merchandise, transport and prisoners: the business has to decide what and whom its vessels will carry.

The shortage of men gives this movement a further, uglier coherence. Earlier in the same letter, the authors described a proposed garrison that included captured Javanese. Sailors, prisoners and boys would gather nutmeg and mace to help defray its expense. The people displaced by conquest and the labor needed to sustain its gains were being considered within one calculation. Martine van Ittersum’s study follows the wider outcome: killing and flight were followed by a colonial plantation order sustained through imported enslaved labor. The history of continuing finance has reached people who never bought a claim upon it and could not sell one to escape it.

Their position is not an enlarged version of the shareholder’s complaint. The frustrated subscriber could have a claim against the company and a market in which to sell it. The person whose home or movement was subjected to the company’s orders had not thereby become one of its participants. A commercial history confined to those who supplied finance would leave the most severe exercise of company power outside its account, as though violence were an unfortunate condition surrounding the undertaking rather than one of the means by which it tried to secure its trade.

There were treaties as well as assaults. That does not restore an uncomplicated consent. Martine van Ittersum shows both companies assembling competing claims from agreements, possession, conquest and freedom of trade. Bandanese leaders pursued their own alliances; English rivals were themselves claimants to protection and sovereignty. The dispute cannot be reduced to a modern charter confronting a society without law. It concerned which obligations would be recognized, which parties could interpret them and what force would follow an interpretation. Legal argument did not make the companies harmless. It helped determine the terms in which they asserted the right to act.

Making land and labor available to an undertaking changes more than the undertaking’s inventory. It changes what other people may continue doing with their lives. In Banda, a company sought to secure the supply of spices by destroying alternatives open to their producers. The company’s pursuit of supply now involved removing people from the islands and putting others to work there under compulsion.¹⁰

The power to continue

What, then, do the floors reveal? They draw attention away from the quantity of wealth alone toward the positions from which it can be employed. But if we place the whole VOC on the top floor, we can no longer see the subscriber asking the directors for an account, the directors seeking support from public authorities, or officials overseas demanding resources from the directors. The company was powerful without each person within it being powerful in the same way. It could also be constrained by its commitments while imposing far harsher constraints on others.

An account of corporate organization can explain why resources were pooled, why management became specialized and why capital had to remain available beyond a single expedition. That explanation does not need a separate species of enterprise called capitalism proper. Braudel’s distinction earns its place when it keeps a further question open inside the explanation: who can use the continuing organization to determine the conditions under which others must deal with it? The answer is not given by totaling their contributions. The original subscriber, the director and the public authority stood in different relations to the same capital. People beyond those relations could nevertheless be subjected to its use.

There is no need to call every payment to such an enterprise an economic rent. Transport and coordination can deserve payment; financing can absorb risk; useful activity can yield a return. Nor is the exercise of exclusion proof that the resulting return was secure. But an undertaking need not be exceptionally profitable to exercise an objectionable power. The coercion in the letter does not become less real because the directors are short of money. Indeed, their need to sustain the undertaking can furnish a reason for seeking more command over its surroundings.

The capacity to maintain an undertaking has become entangled with the authority to prolong commitments, restrict alternatives and decide what counts as a sufficient reason to continue. Those powers are neither contained in the physical resource nor earned in their entirety by having helped to make it useful.

The next change begins when people design around an abundance they expect to last. What they build will need continuing provision, and someone will have to decide how that provision is maintained. The authority to keep an undertaking going can become the authority to decide what others must give up so that it may go on.

Source notes

Footnotes

1. Nationaal Archief, VOC archive 1.04.02, inv. 7064, subscription register, displayed scan 36 on ‘Aandelen VOC (1602)’. The displayed transcription records Grietgen Dirkx’s sixty-guilder subscription and cross. The text makes no claim about her motive, later payment, influence or return. The open-subscription and oversubscription terms come from the charter, not this entry. ↩

2. Charter of 20 March 1602, Nationaal Archief, 1.04.02, inv. 1, founding record; Peter Reynders, trans., Rupert Gerritsen, ed., A Translation of the Charter of the Dutch East India Company, 2011 revised edition (Australia on the Map Division, Australasian Hydrographic Society), pp. 1–5. The invitation, chamber provisions, ten-year accounts and departure appear at pp. 1–3; named directors, later nominations and oath at pp. 3–5. Inspected an openly displayed reproduction of that edition. The formulation about withdrawal follows the charter; the later scheduled liquidation is described by the historians cited below. These are not interchangeable descriptions of the company’s twenty-one-year public term. ↩

3. Reynders–Gerritsen translation, pp. 5–7. The exclusive route grant governs voyages from the United Provinces and preserves certain earlier permissions during a transition. Agreements, forts, officers, oaths and reporting belong to the charter; actual conquest and the recognition of claims in Asia require separate evidence. The chapter does not attribute a general coinage grant to this document. ↩

4. Oscar Gelderblom, Abe de Jong and Joost Jonker, ‘The Formative Years of the Modern Corporation: The Dutch East India Company VOC, 1602–1623’, Journal of Economic History 73(4) (2013), 1050–1076, especially 1053–1064, DOI. Inspected the published journal text in a public reproduction, not the differently paginated working paper. July 1612 permission appears at p. 1064. The authors reconstruct finances from incomplete accounts and shipping data; no estimated financial total is treated here as a complete observed ledger. The following discussion of what continuity and withdrawal allow is the chapter’s economic interpretation. ↩

5. Gelderblom, de Jong and Jonker, pp. 1051, 1053–1054, on transferable stakes and the corporation’s developing features. Giovanni Arrighi, The Long Twentieth Century (Verso, 1994), introduction, pp. 4–7, distinguishes liquidity from wealth committed to particular productive combinations. The application to different parties within a continuing company is this chapter’s argument; his larger cycle interpretation is not offered as a prediction about computation or a claim that every investor can sell advantageously. ↩

6. Gelderblom, de Jong and Jonker, pp. 1070–1072: shareholder campaign, renewal and the account committee; managerial liability was not simply created by the renewed charter. The text distinguishes the promise of accounts from control and original provisions from subsequent practice. No motive is attributed to an individual subscriber. The company’s continuing legal authority and an investor’s capacity to trade a share do different work. ↩

7. Fernand Braudel, The Wheels of Commerce, vol. II of Civilization and Capitalism, 15th–18th Century, trans. Sian Reynolds. Inspected Book Club Associates edition (London, 1983), by arrangement with William Collins; English translation copyright 1982. See pp. 374–380 on the hierarchy and work of commerce, 433–446 on flexibility, firms, companies and state power, and 447 on existing Asian commerce. Braudel already recognizes conflicts within the relationship between state and capital. The chapter tests the simplified three-floor rendering, rather than attributing that simplification to every part of his history. ↩

8. Martine Julia van Ittersum, ‘Debating Natural Law in the Banda Islands: A Case Study in Anglo–Dutch Imperial Competition in the East Indies, 1609–1621’, History of European Ideas 42(4) (2016), 459–501, DOI. Inspected the publisher’s online-first text, internally paginated 1–43, University of Dundee copy: pp. 2, 24–26 and 32–34. Those locators refer to that version, not to the final issue’s pagination. They govern the account of established commerce, local choices, competing titles and the plantation outcome. No casualty total is supplied. ↩

9. Coen and Sonck to the directors, 6 May 1621, Nationaal Archief, VOC 1.04.02, inv. 1073; H. T. Colenbrander, ed., Jan Pietersz. Coen: Bescheiden omtrent zijn bedrijf in Indië, I (The Hague: Martinus Nijhoff, 1919), pp. 625–639. Digitized volume. The postscript reproduced by the archival teaching page is at 638–639; the labor and garrison proposal is at 637. The printed pages were checked against the scan. The chapter paraphrases the authors’ reports and proposals; allegations against captives remain allegations. The teaching page’s gloss interpreting approximately 1,200 people as deaths is not followed: the printed passage concerns captives obtained and separately mentions others killed. Its modernization also changes the subject of the reported counterattack. Neither gloss governs the narrative. The letter is not evidence for every event or eventual outcome of the conquest. ↩

10. Karl Polanyi, The Great Transformation (Rinehart, 1944), ch. VI, especially pp. 71–73 in the inspected transcription. The interpretation in the narrative draws on Polanyi’s account of commercial organization reaching into the lives of its human and natural subjects. Coerced colonial labor cannot simply be folded into his account of a self-regulating labor market; the application does not equate slavery with a formally free labor market. It does not supply the historical evidence for Banda. The larger account of commodity fictions and the self-regulating market is not rehearsed here. ↩