Chapter 1: The Dutch East India Company: An Early Modern Optical Illusion

The Dutch East India Company (Vereenigde Oostindische Compagnie— VOC), a pioneer of many modern management principles, is often described in terms of “rise and fall.” After having achieved worldwide dominance in the 17th century, the company fell victim to shifting consumer tastes, intensifying competition, and uncontrollable agents in the 18th century. However, the historical literature also tends to qualify the company’s directors as truly professional. This raises the question of why substantive attempts to counter the VOC’s decline were never made. A survey of the company’s three important domains of activity—the Asian branch, the metropolitan upper echelons, and shipping between Europe and Asia—yields a view of the VOC as an organization where trade-offs and dilemmas were consciously addressed. Nonetheless, as the VOC struggled to reconcile long-term goals with short-term exigencies, managerial action was often ambivalent or inconsistent. Although this mode of decision making was not sufficient to prevent the company’s eventual downfall, it should not be mistaken for rigid inactivity. The VOC is in effect an optical illusion: “Rational” economic coordination at the dawn of modern capitalism was not so much a function of an autonomous economic logic, as commonly believed, as it was of pragmatism and social construction.