A review of Merchant Kings: When Companies Ruled the World 1600-1900, by Stephen Bown

It was an era of war and conquest. The objective was to colonize new territories, and seek monopolies to build a massive financial empire. They called it the Age of Heroic Commerce, although the phrase was not at all indicative of the true atrocities taking place. Surprisingly, today’s world is not all that different, according to historian Stephen Bown’s latest publication, Merchant Kings: When Companies Ruled the World, 1600-1900.

Any reader the least bit familiar with the legacy of colonialism knows the term is all too imbued with irony: “heroic” really meant brutal, and “commerce” actually the subjugation and exploitation of indigenous lands. Bown's Merchant Kings paints the picture even darker, detailing the journey of six colonial players who would carve out the foundations of what we know today as modern enterprise. Accessible but careful not to dilute, Bown’s prose is sharp and potent, and refrains from the habit of stylistic emptiness that plagues too many history biographies. In tracing the past of these six businessmen, he draws out not so much contrasts as the eerie parallels to our present-day economy, where greed, corruption, and market monopolies are so poignantly shared by the likes of institutions like Enron and the U.S. banking crisis.

Commerce in the 1600s, however, was marked by Dutch merchants struggling in competition against one another for access to the Asian trade. On the other hand, uniting under one umbrella would bring the ultimate payoff: monopoly. The Netherlands, under pressure to overthrow competitors like the Portuguese and mitigate high costs of global trade and exploration, chartered the Dutch East India Company (VOC). The company would be granted full sovereignty—free from any control by the Netherlands, but funded by and able to act in the name of the government. It became the first joint stock company of its kind, forming a national conglomerate with unregulated freedom and ruthless ambition to defeat the competition Bown begins his series of profiles with Jan Pieterszoon Coen, the head of the VOC. With securing the world supply of spices in Indonesia, he dreamt not only of taking over all European trade, but dominating entire Asian markets. Unfortunately, for Indonesia’s natives, Coen’s activities meant the destruction of over thousands of lives, depopulation of prized islands, and bloody clashes resulting in torture and slavery.

Bown studies another Dutch merchant, Pieter Stuyvesant of the Dutch West India Company. Stuyvesant became the governor of New Amsterdam (later renamed New York), taking over for William Kieft after Kieft massacred thousands of natives during his bid to monopolize North American furs, leaving a trail of “rubbish, filth … dead animals or anything like it.” Stuyvesant was sent by the Dutch government to clean up the mess, and he ran a dictatorial regime that muffled citizen rights over corporate ambitions, favouring the financial benefit of distant shareholders and consumers. For Stuyvesant, citizens were a second-tier concern. His treatment of his workers strike a modern chord: note just our countless clothing companies, many of them outsourcing to sweatshops with histories of labour violations, driving the eternal push for the cheapest wages for the benefit of select profiteers.

Bown’s portrait of Robert Clive of the English East India Company is equally disheartening. Clive schemed to secure a crumbling India through corrupt bribes, violent wars, and the slaughter of more than 10,000 people. He was trialed by the English parliament for corruption. Aleksandr Baranov, of the Russian American Company, headed his company to the slaughter and exploitation in Alaska like his colonial neighbour, and also faced trial for his deeds.

But these hearings were unusual: rarely did merchants face any legal or moral enforcement. Clive and Baranov’s public disgrace come as a surprise, given their wealth and influence over a national climate thriving on their company profits. But Bown does not give any credit to the state powers imposing these consequences. Instead, these states appear as hypocrites, enjoying profits from Clive and Baranov only to point the finger at the greed which mirrors their own. In the 21st century, call to mind the latest revelations between corporate America and Capitol Hill, and this marriage between governments and corporations stands as a modern complement.

Canada, too, is guilty of the same sort of chaos. Most Canadians will know the Hudson’s Bay Company. It was spurred to success in the 1800s by George Simpson, who had capitalized on the ten million-strong beaver population to exceedingly high profits. But in the lawlessness of early North America, natives were pushed from their communities and their livelihoods threatened. With no regulation, Simpson was a tyrant left to his own devices. Resources were stripped, native cultures destroyed, and Simpson emerged at the dawn of Canada’s history as an unchallenged, charismatic autocrat until his death. The Hudson’s Bay Company is as relevant even today—albeit under the arm of the American NRDC Equity Partners—but Bown leaves out such modern concerns altogether. Whether the Company acknowledges its origins is left out in Merchant Kings; what we are shown is only its brutal history, with Bown hinting at the weakening reins of power left behind by Simpson’s death as the only precursor to its present establishment. Perhaps Simpson is Bown’s poorest vignette yet; omitting the modern voice places his readers in the dark as to whether Simpson’s retail chain, so prevalent in the fabric of Canadian consumerism, cares to redeem itself (or not) from its chaotic past.

Bown completes his series with Cecil John Rhodes of the British South Africa Company. Bown’s most enigmatic villain, Rhodes is the founder of what is now known as De Beers, having once held a monopoly of 90 per cent of the world’s diamond supply. He devised wars against African tribes, using deception and occupation to steal mining rights, land, and forcing natives into slavery after massacring thousands. A strong advocate of segregation, he was a genuine believer of “subject races,” thinking Anglo-Saxons were destined to greatness. Curiously enough, Rhodes strongly desired world peace, believing in a utopia of white supremacy with Great Britain as the mother country. He was educated at Oxford and established his legacy with the Rhodes Scholarship. But Rhodes’ political views began to change near the end of his life, writes Bown. Rhodes outlined that “no student shall be qualified or disqualified … on account of his race or religion” as one of the conditions for his scholarship. Since its establishment, the Rhodes Scholarship has funded more than 50 black academics.

With Rhodes, Bown dismisses readers from easy judgement. The challenge in understanding the merits of these six men are rooted in what he claims is our cultural veneer. We may view their actions as evil, but what they did was not illegal at the time; rather, these men had served their nations and shareholders, delivering prosperity and prominence to otherwise struggling governments. Without them, the structure of money-making and corporations today would not be what they are. Colonies provided soaring profits to crown nations, and accordingly, built and funded their peace and prosperity. To this extent, these corporations were only the means of changing markets. Their ideals weren’t solely theirs, but shared by the crown.

In similarity to our present economic woes, those states were too invested in fast-amassing capital. With colonial monopolies, jobs were plenty, profits quick, and countries prosperous. These companies subsequently employed hundreds of thousands of people, becoming simply “too big to fail.” And individuals involved in their operations held little accountability: too much was at stake, and everyone—including the heads of state—became dependent on their success. Any costly consequences stemming from corporate recklessness or wars were paid in full by taxpayers and shareholders.

If this sounds familiar, Bown’s book is a cautionary tale. Giant multinational conglomerates overshadowed economies with devastating consequences. Even centuries later, our states are far too conjoined in the commerce of corporate power, with U.S. multi-billion dollar bailouts fresh in our memories. In other words, learning these histories feels like “looking into a rear-view mirror.” If Bown’s portrayal of yesterday’s players as harbingers of today’s executives is right, perhaps we aren’t so different. Perhaps present economies have failed to learn from the past, and the tight, dysfunctional marriage between politics and business is the only honest thing around.

Merchant Kings: When Companies Ruled the World 1600-1900
By Stephen R. Bown
Hardcover: 314 pages, $34.95, 2009
Publisher: Douglas & McIntyre