THE IMPACTS OF CORPORATE GLOBALIZATION: HOW THE DUTCH EAST INDIA COMPANY CHANGED THE WORLD
Reading time: 14 minutes
The ‘Age of Discovery’, a period of European overseas exploration from the 15th to 17th century and considered by some to be the beginnings of globalization, is synonymous with the expansion of global capitalism and the explosion of maritime trade. At the start of the 17th century, the popularity of maritime trade was evident in the creation of global trading companies that attempted to monopolize trade routes and expand to the newly ‘discovered’ areas of the world. One of these companies – the Dutch East India Company – facilitated a global corporate expansion that impacted and fundamentally transformed the local societies they operated in. Four case studies; Batavia, Dutch Formosa, Mauritius and the Dutch Cape Colony – show how the VOC’s global corporate expansion impacted these areas through characteristics of globalisation – namely migration, exchange of flora and fauna, mixing of cultures and language and the linking of economies – that ultimately fundamentally changed their societies. By extrapolating these examples to other parts of the world influenced by the Dutch, it is clear that the VOC did facilitate corporate globalisation and that the effects of this process can still be witnessed today.
By Madison Moulton
The making of corporate globalisation
The travels of European explorers like Christopher Columbus and Vasco da Gama at the end of the 15th century ushered in an age of unprecedented expansion of global trade, known as the ‘Age of Discovery’. This Age was first dominated by the Iberian powers, Spain and Portugal, until the 17th century when the idea of a “free sea” was popularised by Dutch jurist Hugo Grotius. At the same time, extensive improvements in shipping vessels allowed for longer trips with greater cargo. New private trading companies were created to take full advantage of these developments, often operating as “states within states” supported by the governments of their countries. The rivalries and competition between various European powers were played out over the oceans as these chartered companies fought for the monopoly on commodities and trade routes. Some examples of chartered companies included the Muscovy Company, the East India Company, the Dutch East India Company (VOC), the Hudson’s Bay Company and the Royal African Company. There were similarities in structure between these companies and they facilitated the spread of European capitalism across the globe, replacing previous traditions of China or the Islamic World. These companies traded on every continent, with the East India Company and the VOC being the largest in reach and volume of business.
Although the East India Company was the first to adopt the company model, just two years later the Dutch followed suit in 1602, creating the VOC. The VOC managed to expand quickly, becoming one of the largest European trading companies. To manage this expansion the company created a managerial structure and consolidated company processes, aiming to ensure continuity and uniformity through all missions. Maintaining control of trade routes and territories was achieved by the company’s own military, a new feature to private companies, that made the VOC a virtually unstoppable force. Using the military force, the VOC took control of major trading areas; a project suggested and facilitated by Jan Pieterszoon Coen after being appointed governor-general. Coen’s project began with Fort Jaccatra (renamed Batavia) that became the overseas operational hub in 1619. Their increasing success allowed the VOC to add new trading points by colonising areas, establishing control and using the territories to grow commodities and find labour. After Batavia, the VOC expanded and built trading points at Dutch Formosa (now Taiwan) in 1624, Dutch Mauritius in 1638, and the Cape of Good Hope in 1652.
These processes of expansion were the beginnings of the VOC’s contribution to corporate globalisation. Although the definitions of globalisation are contested, and the existence of the phenomenon itself has been questioned, there is some consensus among scholars that globalisation has economic aspects, either “through market expansion or the selling of goods and services”. By this definition the VOC was the epitome of corporate globalisation, attempting to reach many continents and secure trade in all corners of the globe. The VOC is largely characterised by economic or corporate globalisation, but their pursuit of profits also ensured the company not only ‘traded’ commodities, but also language, culture, political beliefs, flora and fauna, and even people through mass migrations. The case studies of Batavia, Dutch Formosa, Dutch Mauritius and the Dutch Cape Colony show how the VOC’s expansion was characteristic of corporate globalisation through the prevalence of the hallmarks of globalisation; migration, homogenization or hybridization of culture, exchange of flora and fauna and the linking of economies.
The impacts of corporate globalisation
Batavia
On the 30th of May 1619 the VOC, led by Coen, captured the town of Jaccatra and renamed it Batavia. The Latin “Bata-via” is the name of an old Dutch tribe that carries connotations of the origins of Dutch identity, evoking the idea of a new beginning for the Dutch in Asia. The members of the VOC settled here and set out to make Batavia the capital of VOC operations in Asia. A major part of this process was finding labour and populating the city which led to mass migration, as well as cultural and linguistic hybridization, that characterises their corporate globalisation.
The newly established operational hub needed enough workers to populate it, and migration from different parts of Asia fulfilled that role. While Jaccatra was previously a central trading port and had an already diverse population, the immigration to Batavia after 1619 facilitated by the VOC – both forced and voluntary – made the diversity greater. In 1673, a population survey showed that only 7% of the population was of Dutch descent, the rest being 10% Chinese, 11% Javanese, 18% Indian and almost half (48%) slaves of many origins. This migration completely changed the demographics of the town, having an influence on culture and language.
An entirely new culture, Betawi (from the Dutch-given name Batavia), was developed in the 18th century and officially recognised in 1930 as an amalgamation of the various cultures that came together under the VOC; an example of cultural hybridization[1]. The Betawi language is the most widely spoken indigenous language in Indonesia and has influences from various other languages including Dutch[2]. Modern day Jakarta remains diverse, reflecting the VOC’s influence, evidenced by the many different population groups with the largest proportion (Javanese) only reaching 35%[3].
Batavia exemplifies the typical forces of globalisation – migration, the hybridization of culture (to the point where it became an entirely new, officially recognised culture) and the hybridization of language – all in the name of the corporate expansion of the VOC. These factors remained influential long after the VOC left the country, influencing the structure and demographics of modern-day Indonesia. This same model was followed in subsequent years in the various areas that the VOC expanded to.
Dutch Formosa
The Portuguese first took an interest in the island now known as Taiwan from 1557 and called it ‘Ilha Formosa’ or ‘The Beautiful Island’, never settling there but rather at Macao near China, to begin trade with the Chinese. In 1622, the VOC decided that they also wanted to facilitate trade with the Chinese, and they settled in the territory of Formosa in 1624. As in Batavia, labour was important, but this time voluntary Chinese migration was encouraged to maintain a good relationship with the Chinese for trade. The VOC also linked the economy of Dutch Formosa with the rest of the world, particularly China, and the various territories the company held on different continents.
In need of a labour force, the VOC encouraged members of the inland Chinese province of Fukien to immigrate to Formosa to work. In only 25 years, the Chinese population of Formosa had become 15% of the total population. The native Austronesians were subjugated in favour of maintaining good relations with the Chinese, so much so that in modern Taiwan they only make up 2% of the population, with the rest largely Han Chinese. This can be considered the largest “Chinese Diaspora” which completely transformed Taiwan from an independent area to a part of China. The example of Dutch Formosa is, therefore, an early indicator of the cultural homogenization that accompanies globalisation, as the native cultures were suppressed in favour of accommodating the Chinese. Another aspect of this cultural homogenization is the prevalence of endangered languages in Taiwan due to the dominance of Mandarin; Mandarin is the main spoken language and 5 of the traditional languages are in danger of dying out.
In terms of the economy, the VOC’s settlement brought Formosa into the global economy as “producers of local commodities for export and as consumers of imported merchandise”. Through this process, their entire economy was transformed to be capital and resource focused and this spread throughout the whole region. Chinese immigration and the importance of trade in this area permanently linked Taiwan and mainland China economically, and later politically and culturally. The VOC left Formosa in 1662, but their influence has remained significant nearly 400 years later.
Mauritius
The employees of the VOC were the first to inhabit the island of Mauritius, establishing a settlement in 1638. The purpose of settling in Mauritius was to prevent either the French or English from controlling it and to use it as a stop on the route to Asia. The VOC settlers left in 1653 but returned in 1664, for a second period of occupation, to make the most out of the resources the island had to offer; the most abundant of which was ebony trees. The migration of members of the VOC made permanent and destructive changes to the environment and introduced new flora and fauna to the island that damaged indigenous ecological populations.
The most prominent characteristic of the first Dutch occupation of Mauritius was “an extreme form of exploitative development”. With no previous inhabitants on the island, there were abundant natural resources that the VOC completely exploited. One of the most well-known consequences of the environmental destruction was the extinction of the dodo bird within 30 years of the VOC’s arrival at Mauritius. A VOC crew member drew the first depiction of the dodo and described it as “good food”, foreshadowing their later demise (Figure 1). Secondly, on the VOC’s arrival, the island had forests of ebony trees that had been reduced by 10-15% once they left, changing the ecology of the area permanently. The migration of VOC members and their slaves to the island left Mauritius poorer “not only ecologically but also economically” and is considered the “most destructive human intervention in the environment per unit of time”
Figure 1 – “Dodo (VOC Gelderland, 1602)”, 1602, by Joris Joostensz Laerle
Another environmental change was the exchange of flora and fauna from several continents the VOC was stationed in, to Mauritius. The most common introduction was crops, such as rice, wheat, coconut, and sugar. The latter, from Batavia, would come to be the most important introduction to the island. In modern Mauritius, sugar cane fields are a common landscape (covering 90% of cultivated land) and placed third on the list of exports for 2018. The Dutch introduction of sugar to Mauritius would lead to it becoming known as the “sugar island”. The VOC also brought deer, rabbits and cattle, as well as rats and monkeys that traveled on the ships, that became new predators to plant and animal life. The introduction of these invasive species destroyed indigenous fauna and flora and the deforestation by the VOC crew allowed these invasive species to dominate over the indigenous ones.
The VOC’s legacy is still evident across Mauritius, including in its given name; but the most notable effect of their corporate globalisation is on the environment. The Dutch left a completely different island without dodo birds, very few ebony trees, new crops and animals that altered the ecology and decimated some of the native plants, and a small population of ex-slaves. Facing problems with resources and natural disasters, the VOC left in 1710 in favour of their settlement at the Cape of Africa.
Dutch Cape Colony
The history of European settlement in South Africa begins with the VOC in 1652. A group of VOC crew members, led by Jan Van Riebeeck, arrived in the Cape to set up a trading post as a halfway point between Europe and the main overseas operational hub at Batavia. They decided to colonise the area, beginning an extensive legacy that would come to inform the modern South African state “in political and constitutional terms”. The migration of ‘free burghers’, as well as the subsequent migration of slaves, changed the region and later the entire country through the diversity of peoples, cultures and language.
The Cape was one of the most important territories of the VOC, both in function as a stopping point to Asia and in strategy to keep other companies from taking control and achieving a monopoly on the trade route. To ensure the successful maintenance of the colony, the VOC sent foreigners to settle in the area and gave them land. It can be argued that the settlement of the Dutch was one of the most significant points in modern South African history as, similar to the Betawi in Indonesia, cultural hybridization was evident in the creation of the Afrikaaners who became significant in the political and social history of the country. Homogenization of culture, or specifically religion, is also evident as the religion introduced by the Dutch and extended by the British, Christianity, is followed by 80% of the population.
Involuntary migration was also prominent here, as it was in Batavia, with about 60 000 slaves from Indonesia, India and parts of Africa being sent to the Cape from 1652 to 1807. These slaves were often political prisoners from their countries of origin, sent to the Cape as punishment for opposing Dutch occupation. This migration brought several new cultural influences to the region and created what is now known as ‘Cape Malay’ culture. The mixture of the Dutch with the slaves at the Cape resulted in the creation of the Afrikaans language, and these two groups often shared cultural traditions and practices. The Cape became a cultural ‘melting pot’ as a result of the forced and voluntary migration under the VOC that still contributes to South Africa’s diversity today.
The VOC in a global context
These case studies show the extensive and diverse legacies of corporate globalisation under the VOC. The most common factor is migration that changed the demographics of these areas and spread different people to different parts of the world. This further impacted culture, religion, language and connected distant areas through the movement of people. Secondly, the VOC often changed the trajectory of economies by changing agriculture or industry and tied these countries to the global capitalist system permanently. Through this process, environments were also altered and Dutch influence in infrastructure was entrenched.
These patterns can extend to other colonies of the Dutch VOC and even those of the Dutch West India Company that spread Dutch influence to the western half of the world. On the North American continent, the Dutch established New Netherland that would become the largest metropolitan area in the world, also known as the financial capital of the world, New York. In South America the Dutch had a brief occupation of Brazil, known as New Holland, that permanently changed environment, impacting the sugar industry, and consolidated the unity of the other inhabitants as one nation against the Dutch. They reached, but never colonised, the continent of Australia and named it New Holland. The impacts of their corporate globalisation even extended to the Dutch Republic as they became a leading economic power through ownership of overseas territories, making advances in several industries and encouraging immigration to the Republic. The 17th century was deemed the “Dutch Golden Age” as a result of the advancements made in the economy, science and the military, much of which is owed to the success of the VOC.
Figure 2 – “Dutch trade routes”, 2018, by Menán van Heerden
The Dutch companies’ reach across almost all continents shows the trajectories of their “market expansion [and] the selling of goods and services” (Figure 2). Because of their expansion, parts of the Dutch legacy exist all over the world and play a role in their 21st century reality, whether it be in demographics, the environment, the economy or the society. Through this corporate globalisation, the VOC linked these areas permanently to each other and ultimately, the rest of the world.
Conclusion
While discussions on corporate globalisation and its impacts often revolve around whether it is positive or negative, it is important to first look at the extent of its legacy and how it has impacted different societies. Focusing on the VOC, it is evident that their global corporate expansion formed part of the corporate globalisation said to have started with these 17th-century trading companies. The characteristics of this corporate globalisation – migration, exchange of flora and fauna, mixing of cultures and language and the linking of economies – impacted each of the VOC’s territories in diverse ways. Population demographics changed drastically, new cultures and languages were developed, environments were permanently altered, agricultural crops were spread across continents and economies became intertwined with global capitalism. These impacts have lasted long after the closing of the company in 1799 and although in some areas the Dutch government continued colonisation, it was with the VOC that these processes and legacies began.
This article was originally published on the website of one of History Guild’s writers, Madison Moulton.
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The text of this article was republished with the kind permission of the author, Madison Moulton.
