Will They Stand the Test of Time?
If I ask you what the biggest, most powerful companies, many would say Amazon, Google, Apple, or maybe even Walmart considering it is number one in the Fortune 500. It is a wild thought to consider that these companies will likely either not exist as it is now 100 years in the future, or perhaps even sooner. I can say this rather confidently because no time in history has a company that has been that big, remained that big indefinitely. There have been businesses in history that have not only been wealthier than companies like Google, but more powerful, and influential, and have regardless disappeared entirely. The mega monopolies of the 20th century might be the first to come to mind like Standard Oil or Carnegie Steel, but their wealth was little compared to some of the trading companies in the 16th-19th centuries.
In 1720, The South Sea Company and the Mississipi Company would be worth 4 and 6 trillion dollars accounting for inflation respectfully but that is little compared the Dutch East India Company which was worth 7-8 trillion dollars at its height in 1637. To get a better perspective, Apple is currently worth a little less than 900 billion dollars. The Dutch East India Company was founded in 1602 in order to protect the Dutch Republic's trade in the Indian Ocean. The VOC (for convenience I will refer to it by its Dutch acronym from now on) was the first ever public company, meaning it was the first to ever be on the stock exchange. The VOC had a monopoly on much of the world's trade, acquiring exotic goods, establishing profitable colonies, and even waging wars (imagine if Google had its own army). The VOC was allotted a lot of freedom by the Dutch Republic, which allowed them to conquer and administer their own foreign lands with little to no interference. Hence, the VOC functioned more like its own country than a real company at its height. Most of its trade and land was concentrated in the East Indies or what is now Indonesia, its headquarters on the island of Java. The immense success of the company saw the small republic of the Netherlands become one of the most important economic powers in the 17th century and a prime example of a mercantilist nation. Amsterdam, the capital of the Dutch Republic became the world's leading commercial hub during this "Dutch Golden Age". The VOC was actually the only Europeans allowed to trade with Japan for over two and a half centuries. However, in 1799 the company practically went bankrupt and its assets and debts were absorbed by the Dutch government but its decline had been going on for quite a while at this point. How could such a powerful company decline into nothing when everything had been going so well?
It may sound crazy but one of the first things that set the downfall of the richest company in history in motion was tulips. "Tulip Mania" was the world's first ever speculative bubble, whereas the contract prices for tulip bulbs reached extremely high levels only to completely collapse in February of 1637. Some sources even saying that a single rare tulip bulb could sell for more than 10 times the annual salary of a skilled crafts worker. The crash was a result of huge over-speculation and it really hurt the Dutch economy and the VOC but it would just be the first of the many events and factors that would eventually lead to the fall of the company. Most important of these events was the Fourth Anglo-Dutch Wars which saw the VOC draw massive sums of loans to fight the British. After losing the war, the VOC had no money to repay that debt and had lost much of the means to actually make that money. As part of the peace deals, Britain was granted trading rights in Indonesia, effectively ending the VOC's monopoly there. Additionally, goods that had previously been exclusive to Indonesia like sugar became outsourced and grown in other nation's colonies like Brazil. Sugar and other crops were much cheaper to grow in the other places like Brazil due to a number of factors including a larger availability of land, a cheaper and more plentiful labor force (slaves), and a closer relative position to most of Europe. Corruption within the VOC became a massive problem in the 18th century and eventually, under the massive weight of debt and competition, the VOC was absorbed into the Dutch Republic.
Although businesses have dramatically changed since then, the principles remain the same. The VOC was crushed by competition in both goods and services. If a company that was as rich as the Dutch East India Company could go away forever, I do not see a reason why any of the companies that exist now could and likely will someday.
Sources;
http://fortune.com/fortune500/
https://www.fool.com/investing/general/2012/08/22/a-history-of-ridiculously-big-companies.aspx
https://www.britannica.com/topic/Dutch-East-India-Company
https://www.rijksmuseum.nl/en/rijksstudio/timeline-dutch-history/1602-trade-with-the-east-voc
https://en.wikipedia.org/wiki/Tulip_mania
https://en.wikipedia.org/wiki/Dutch_East_India_Company
In 1720, The South Sea Company and the Mississipi Company would be worth 4 and 6 trillion dollars accounting for inflation respectfully but that is little compared the Dutch East India Company which was worth 7-8 trillion dollars at its height in 1637. To get a better perspective, Apple is currently worth a little less than 900 billion dollars. The Dutch East India Company was founded in 1602 in order to protect the Dutch Republic's trade in the Indian Ocean. The VOC (for convenience I will refer to it by its Dutch acronym from now on) was the first ever public company, meaning it was the first to ever be on the stock exchange. The VOC had a monopoly on much of the world's trade, acquiring exotic goods, establishing profitable colonies, and even waging wars (imagine if Google had its own army). The VOC was allotted a lot of freedom by the Dutch Republic, which allowed them to conquer and administer their own foreign lands with little to no interference. Hence, the VOC functioned more like its own country than a real company at its height. Most of its trade and land was concentrated in the East Indies or what is now Indonesia, its headquarters on the island of Java. The immense success of the company saw the small republic of the Netherlands become one of the most important economic powers in the 17th century and a prime example of a mercantilist nation. Amsterdam, the capital of the Dutch Republic became the world's leading commercial hub during this "Dutch Golden Age". The VOC was actually the only Europeans allowed to trade with Japan for over two and a half centuries. However, in 1799 the company practically went bankrupt and its assets and debts were absorbed by the Dutch government but its decline had been going on for quite a while at this point. How could such a powerful company decline into nothing when everything had been going so well?
It may sound crazy but one of the first things that set the downfall of the richest company in history in motion was tulips. "Tulip Mania" was the world's first ever speculative bubble, whereas the contract prices for tulip bulbs reached extremely high levels only to completely collapse in February of 1637. Some sources even saying that a single rare tulip bulb could sell for more than 10 times the annual salary of a skilled crafts worker. The crash was a result of huge over-speculation and it really hurt the Dutch economy and the VOC but it would just be the first of the many events and factors that would eventually lead to the fall of the company. Most important of these events was the Fourth Anglo-Dutch Wars which saw the VOC draw massive sums of loans to fight the British. After losing the war, the VOC had no money to repay that debt and had lost much of the means to actually make that money. As part of the peace deals, Britain was granted trading rights in Indonesia, effectively ending the VOC's monopoly there. Additionally, goods that had previously been exclusive to Indonesia like sugar became outsourced and grown in other nation's colonies like Brazil. Sugar and other crops were much cheaper to grow in the other places like Brazil due to a number of factors including a larger availability of land, a cheaper and more plentiful labor force (slaves), and a closer relative position to most of Europe. Corruption within the VOC became a massive problem in the 18th century and eventually, under the massive weight of debt and competition, the VOC was absorbed into the Dutch Republic.
Although businesses have dramatically changed since then, the principles remain the same. The VOC was crushed by competition in both goods and services. If a company that was as rich as the Dutch East India Company could go away forever, I do not see a reason why any of the companies that exist now could and likely will someday.
Sources;
http://fortune.com/fortune500/
https://www.fool.com/investing/general/2012/08/22/a-history-of-ridiculously-big-companies.aspx
https://www.britannica.com/topic/Dutch-East-India-Company
https://www.rijksmuseum.nl/en/rijksstudio/timeline-dutch-history/1602-trade-with-the-east-voc
https://en.wikipedia.org/wiki/Tulip_mania
https://en.wikipedia.org/wiki/Dutch_East_India_Company
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