Text of a talk I gave at the Globe and Mail/Ben McNally Books and Brunch Series

Some years ago I was doing research for a book on nitrates and explosives. Since one of the key ingredients of gunpowder is saltpetre, and one of the great historical sources for this valuable substance was in India, I was reading about the English East India Company, and about one of its greatest employees and eventual leaders, Robert Clive. I could hardly believe it when I came upon this quote:
“Consider the situation in which the victory of Plassey placed me,” Clive declared. “A great prince dependent on my pleasure; an opulent city lay at my mercy; its richest bankers bid against each other for my smiles; I walked through vaults which were thrown open to me alone, piled on either hand with gold and jewels. Mr. Chairman, at this moment I stand astonished at my own moderation.”
These comments were part of a larger speech Clive delivered in 1772, in his own defence, if you can believe it, at a parliamentary inquiry into his corruption and shady dealings. He had, after all, risen from upper middle class obscurity to become one of the richest people in all of Britain after only a handful of years in India.
I didn’t need the quote at the time, but of course I copied it and put it in a file of interesting things that I keep tucked into a corner of my desk.
Sometime later, while reading a book on the early spice trade, I came across another gem of a quote:
“Your honours should know by experience that trade in Asia must be driven and maintained under the protection and favour of Your Honours’ own weapons, and that the weapons must be paid for by the profits from the trade; so that we cannot carry on trade without war, nor war without trade.”
This quote was from Jan Pieterszoon Coen, written around 1614 in a letter to his Board of Directors in Amsterdam, explaining his violent actions and justifying the enormous military expenditures of the Dutch East India Company in what is now Indonesia.
This one went into the file as well.
Merchant Kings: When Companies Ruled the World is my fifth historical book. My other books were about travelling naturalists in the 19th century, the quest for the cure for scurvy in the Royal Navy, the history of explosives and nitrates and the two most significant people who contributed to the science of dynamite, as well as a biography of Captain George Vancouver. I read widely on many topics while writing these books, particularly on historical themes, and I’ve always been intrigued by little known or unusual or peculiar people and events, or patterns that have been overlooked in standard historical narratives.
For me, one idea generates the next idea. For Merchant Kings, while I was working on those other books I kept coming across references to the East India Company, or some other company or monopoly, owning or conquering this or that part of the world, and I began to see a pattern of certain mighty companies, monopolies actually, governing large parts of the world during a period roughly spanning the centuries between 1600-1900. This is a key distinction from the modern era: these companies were governing. This is to say that they were not merely engaged in commercial operations, monopolistic operations at that, and they were not just influencing the government - they actually were the government – unelected, unaccountable except to shareholders in distant foreign lands, and having no actual interest or experience in governing people. Certainly a lot had been written about these companies and individuals, but oddly all in isolation – what I mean is that they have never to my knowledge been considered together as a group - a group with similar beginnings and with similar structures and objectives. Which struck me as very odd – first the notion that corporations were at one time actual governments, with people falling into one of three groups: customers, competitors or employees, and then that for some reason they hadn’t been considered together as an era in word history. I like to think of the era as a sort of evolutionary dead-end of capitalism – an idea that had its day and was shown by experience to be faulty or flawed or inherently unprofitable and perhaps even immoral. I’ll get back to that a little later.
When I started to look into the subject more and started doing reading on early global trade and corporations, the structure for the book fell into place and I settled on six intriguing and powerful individuals who were instrumental in shaping the world we now live in. Here are a couple of other quotes from the merchant kings, to give an idea of the sort of unusual and brash individuals they were:
In 1647, Pieter Stuyvesant the autocratic, narrow-minded, governor of the Dutch West India Company’s quasi colonial-corporate outpost of New Amsterdam on Manhattan, announced to the people under his control:
“We derive our authority from God and the West India Company, not from the pleasure of a few ignorant subjects.” The so-called “subjects” were the people who lived there and who were agitating for some form of responsible government free from the Company’s control.
He resisted these calls for decades, even as the colony and town grew in population and importance. Stuyvesant ultimately placed his Company’s interests ahead of those of his country, resulting in the loss of the entire territory to a foreign power. When British war ships anchored off Manhattan in 1664 during the third Anglo-Dutch war and offered the people of New Netherland civil government free from the dictates of the Dutch West India Company if they surrendered, the entire militia laid down their arms without firing a shot, and the British renamed it New York.
Haughty, impatient, and self-important, George Simpson was the financial and structural genius who steered the Hudson’s Bay Company to its greatest financial success and greatest territorial dominion in the early 19th century. The Little Emperor, as he was known, was the unaccountable (except to company directors in London) dictator over a good chunk of North America responsible for shipping to London hundreds of thousands of beaver furs a year. He was chauffeured about his vast fur domain perched in the back of a giant canoe exhorting his exhausted voyageurs to paddle harder so he could set speed records – claiming all the credit for himself, naturally. Soon after he died in 1860, most of his domain passed from the Company’s power and became part of the country of Canada.
Oddly, for such a mighty personage, he had a peculiar interest in the minutiae of his employees lives, in an effort to cut costs. He wrote: “I consider it quite unnecessary to indent for Sauces & Pickles on public account . . . I never use fish sauce in the country, and never saw anyone use it or pickles either. From the quantity of Mustard indented for, one would suppose it is now issued as an article of trade with the Indians!”
Cecil Rhodes was a British-born South African mining magnate, politician, businessman and racist promoter of British colonialism. He was the founder of the diamond company De Beers and other business interests in south and central Africa. In 1889 he secured British government support for the creation of the British South Africa Company to operate in Rhodesia, a territory he created and named after himself. The Company was a monopoly trading enterprise with the right to raise its own private army, regulate banking, and manage and govern land while theoretically respecting the rights of native Africans.
Here is Rhodes musing on one of his favourite topics, the expansion of the British Empire by use of the companies he controlled. “To think of these stars that you see overhead,” he said, “these vast worlds which we can never reach. I would annex other planets if I could; I often think about that. It makes me sad to see them so clear and yet so far.”
With a collection of these sort of quotes I knew that a book on these individuals would be interesting just based on their personalities alone. The fascinating stories of a group of middle-class adventurers who transcended class boundaries to achieve tremendous power over global events, as well as ignominious shame. But I also found that by looking at them we could have an interesting window into the history of world trade and the story of major commodities that were once astronomically valuable but fell prey to the fickle nature of consumer demand and are now niche products – think of nutmeg and cloves, the furs of wild animals, saltpetre, silk and exotic fabric dyes – items that once commanded their weight in gold, yet we hardly have a use for now.
The six Merchant Kings were extremely influential in the creation of our world as we know it: the history of Canada, India, Indonesia, Southern Africa, Russia and the United States were shaped by their Merchant King. Furthermore, the astronomical wealth that their companies generated for their host nations indirectly fuelled cultural and political changes and the Industrial Revolution.
The Age of the Merchant Kings was an age when business and political interests commingled – when corporations were used as the vehicle for achieving political goals rather than purely commercial ones. The idea seemed brilliant at the time – to tap private capital to achieve foreign policy objectives, rather than fund these objectives through national taxes. But all the great monopolies that extended their operations to include political power were eventually faced with the reality that governing people responsibly was not an inherently profitable field of enterprise.
In order to make profits, the merchant kings had to govern immorally and irresponsibly, acting at the same time as law makers, judges and police.
In pursuit of their objectives the Merchant Kings occasionally committed what can only be termed by our modern standards as horrifying atrocities against their competitors and their customers. They depopulated entire regions and realigned centuries-old commercial patterns to provide themselves and their companies with maximum profit, and to pursue the political objectives of their host nations. Thousands of people died as a direct result of their actions.
The Merchant Kings as individuals had unlimited capacity for the growth of their egos, without laws and customs to tether their ambition or their tactics. There were no maps or telephones or computers – no global news network. They commanded the most powerful military forces wherever they went – they all had private armies. Because the sailing time from Europe to reach the arena of their operations could be over a year in each direction, they controlled all knowledge of their activities. They were multinationals in an era before international law, with no forum for even raising the question of legality or morality.
The reviews of my book so far have tended to emphasize just how brutal and corrupt these Merchant Kings were. But I’d like to pose the question, Just how bad were they? It raises interesting philosophical and moral questions.
For example, the ever present difficulty of judging historical figures by contemporary standards. Should we overlook their moral failings because they effected revolutionary changes in the course of world history? Many of the Merchant Kings were celebrated as heroes during their lifetimes precisely because of their victories over foreign peoples and the wealth that they generated for their societies, but they are viewed much less favourably today. In fact we hardly study them at all – which is going too far the opposite direction. When we think of the British in India, we think of the British government, not a private company – whose company troops a young Robert Clive led to victory over the armies of numerous Indian kingdoms, and then ruled for decades before an actual government took over.
In many ways, the book is a series of psychological case studies of what happens to competitive individuals in a game without rules or conventions. The Merchant Kings were ultra competitive people given an opportunity to excel in situations without any rules, and occasionally descended into immoral or ruthless behaviour to achieve their objectives. There was no one to tell them when to stop.
Fortunately, in western societies at least, what the Merchant Kings did is not actually possible in the same way today - we have greater separation of commerce and the state, and an appreciation for the importance of human rights (not necessarily the case in the 3rd world, China always comes to mind as a nation where commerce and government blend). But imagine our world, just for a moment, without any of these regulations. The exact same things could happen today, by a different crop of merchant kings, if not for the system of checks and balances we have to limit the behaviour of people incapable of limiting themselves – a global media, however sketchy and imperfect, laws restricting pollution and the environment, laws relating to the rights of workers and so forth.
The merchant kings were incredibly important historical figures. Our world is the way it is, in part because of the actions of these merchant kings and their companies. We cannot fully understand the current state of our world – the type of societies and cultures we live in and some of the conflicts between peoples around the world, without appreciating the actions of these merchant kings. They changed the world order so profoundly that it is impossible to imagine what our world would be like without them. There is nothing to be gained from dismissing them as evil or immoral - we have to be able to learn from what happened in the past, not just pass judgment on it.
In closing, I’d like to share the final thoughts from my Epilogue:
“Heroes or scoundrels; patriots or thieves; sagacious administrators or greedy plunderers –these are often flip-sides of the same coin. Squint your eyes or shed light to shift the shadows and one can become the other. Contemplating the Merchant Kings of those earlier times is like looking in a rear view mirror: remove the cultural veneer and the same sort of people, mixing business and politics, are making our world even today.”