Monopoly and Free Trade in Dutch-Asian Commercial Policy: Debate and Controversy within the VOC

Abstract

The Dutch East India Company (VOC) secured in March 1602, by charter from the States General of the Netherlands, a monopoly of eastern trade. Throughout its history of two centuries, it sought zealously to maintain and safeguard this monopoly against all interlopers and against any attempts at private trade by its own officers. With its establishment and expansion in the east the Company extended this concept of monopoly to embrace as much of Asian trade as it could master. It developed early the policy of acquiring a monopoly of certain key commodities of Asian trade by controlling the areas of production and hence the supply. It soon went further and declared a total monopoly of the entire seaborne trade of specific trading areas by virtue of conquest, enforced contracts and naval domination. Thus the close monopoly of the Europe/Asia trade and of large areas of their inter-Asian trade constituted a commercial system to which the Company's Directors and its officers in Asia became closely attached and it formed a major plank in its commercial policy in the two centuries of its existence. Through this period, its energies and exertions were largely directed to the acquisition and maintenance of this many-sided monopoly system. Monopolistic policies and practices in trading dominated the thinking and activities of the Company at all levels of operation. The VOC was held as the archetype of such a trading body.