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For excellent reasons, Cornelis de Houtman has not gone down in the ranks of history’s legendary sailors. Nor was he destined to have a long career. The following year he found another backer and headed off once more to the East Indies, where, having once again raised the ire of the locals, he was killed in his cabin off Sumatra. But despite the black comedy and epic ineptitude of his first voyage, it was historic, because of two utterly unrelated outcomes. The lesser involved De Houtman’s brother, Frederick, who had been aboard. While in the Indies, he and the expedition’s navigator, Pieter Keyser, acting at the urging of Petrus Plancius, charted the stars visible from the Southern Hemisphere, becoming the first people to do so, and in the process identified the twelve southern constellations and gave them the names that apply to this day. (Frederick de Houtman would also take part in a later Dutch expedition, to Australia, where he would discover an island group that is still called the Houtman Abrolhos.)

  The other historic result of the first Dutch voyage to the East Indies had to do with the reaction of the nine merchants who funded it—and, for that matter, of all Amsterdammers, who, as appalled as they may have been by the loss of life, were instantly aroused by the enchantment and allure and sheer possibility that the trip suggested. For although the ships returned with their hulls mostly empty, the modest quantity of pepper they contained was enough for the merchants to recoup their investment. Beyond that, the thing had been done: De Houtman had sailed halfway around the world, defied the Portuguese, and established business relations—albeit marred by the odd spear through the neck and cannonade reprisal—with the exotic and economically intriguing kingdoms of Java and the Spice Islands. Anything, it seemed, was now possible.

  The inhabitants of Amsterdam—old guard and new arrivals, wealthy merchants and ready workers—reacted as one. Shipyards sang; the dark, twisting stench of pitch filled the air. Dirck van Os and his fellow backers doubled down their investments, dissolving their company, as was the practice on completion of a voyage, and launching a new one: outfitting new ships, raising new crews, this time with better leadership. As a Dutch historian of the nineteenth century put it in reference to this precise moment in the city’s life, “Getting rich became the ambition of the day.”

  The nine merchants were not alone in reacting feverishly to the return of De Houtman’s fleet—nor was Amsterdam. Businessmen in other seaport cities in Holland and Zeeland—Hoorn, Enkhuizen, Rotterdam, Middelburg, and Delft—cobbled together fleets of their own and flung them off southward, in the general direction of Asia. Seemingly no sooner had De Houtman’s ships sailed away from the East Indies than the people of the coastal kingdoms of Java, Sumatra, the Bandas, and other of the lush islands in the present-day Indonesian archipelago saw more Dutch ships arrive. The mayhem quotient lessened; deals were struck: for nutmeg, clove, mace, and pepper. Two years after De Houtman’s return, a second fleet sailed back into the IJ, Amsterdam’s waterfront, after a relatively brisk and trouble-free fifteen-month jaunt to the East Indies. Its backers stepped aboard and were led belowdecks by their exultant skippers. We can only imagine the stunned, reverential silence as they took in the sight of more than one million pounds of pepper, cloves, and nutmeg, packed with exquisite care into the hulls. The silence was broken by bells pealing from church steeples. As someone on the scene intoned, “So long as Holland has been Holland, such richly laden ships have never been seen.” Even after the staggering costs involved, the merchants turned a 400 percent profit.

  More sails bent toward the East Indies—within four years of De Houtman’s return, sixty-five Dutch ships had made the trek, essentially smothering the Portuguese presence—and more deals were struck, only the prices that Javanese merchants charged were now getting higher. And the sudden arrival of so much pepper in Europe sent prices on that end plummeting. It wasn’t long before the merchants from the various Dutch ports realized they were competing against one another. When the price of pepper at Javanese ports had doubled, the merchants, who until that point had viewed one another with distrust, decided that they would have to work together.

  They put the issue before the States General, the Dutch governing body in The Hague. It was an inevitable move, for this was now truly a political matter. The war against Spain and Portugal was ongoing, and the young Dutch government, based in The Hague, saw not only financial but military prospects in having the various merchant consortiums band together. In fact, as Johan van Oldenbarnevelt, the greatest Dutch statesman of the day, saw things, it was a matter less of prospects than of necessity. There was no certainty that the infant republic would survive; for it to do so, great, bold steps would have to be taken. What had begun with De Houtman’s voyage was now impelled by the Dutch shipping network in Europe. The very fact that men like Dirck van Os had taken over a large amount of European shipping traffic meant that that network had to be used in the service of the country. “Expand or die” might well have been the motto. And expansion of trade into Asia would further impel an expansion of the war. Which was to say, the new venture would need guns.

  As he tried to put together a consortium of companies that would trade in the East Indies, Oldenbarnevelt found resistance among the non-Amsterdam merchants, who feared that the city would dominate any joint venture. They had cause for concern. Copies of a new engraved plan of Amsterdam, commissioned by the city as a form of promotional literature, hit the streets in 1599 with the modest title “Amstelodamum, Urbs Hollandiae Primaria, Emporium Totius Europae Celeberrimum”: Amsterdam, First City of Holland, Celebrated Emporium to All Europe. Only two years after De Houtman’s return, the city was marketing itself with very un-Dutch braggadocio. Nearly half of the plan was taken up by the harbor, with hundreds of two- and three-masted ships at anchor or under sail, being serviced by fleets of lighters while others were being assembled in the vast shipyards. One area was helpfully labeled “ships to the West Indies” and another “ships from the East Indies or Java,” giving clear indication of the city’s global reach.

  Oldenbarnevelt employed all his political skills to bring the competing interests together. He got Amsterdam’s merchants to make a concession: instead of occupying half of the seats on the new company’s board of directors, Amsterdam would get eight out of seventeen. As a final push to win an agreement, Oldenbarnevelt brought in Maurice of Nassau, who as son of Willem of Orange, the assassinated father of the nation, had great prestige throughout the country, to give the venture his blessing.

  The result of months of negotiations was an entity that was unique in world history in several ways. It would be a private, forprofit venture, yet with governmental oversight and with not only the power but an obligation to wage war on behalf of the Dutch Republic. It would have the authority to build and maintain military forts and, from these, to impel foreign leaders and populations to trade with it. It would negotiate treaties with foreign governments. It would get support from the national government, especially military support, so that the leaders of its expeditions would be not only sailors and trade representatives but naval officers. It would also be a complex business operation, divided into six city chambers, each with its own fleet, largely under control of its city’s wealthy merchant investors. As historian Jonathan Israel observes, it was “a unique politico-commercial institution, and one that could be imitated nowhere else in the world, because the United Provinces were the world’s only federal republic in which a collectivity of town governments, committed to the advancement of trade, industry, and navigation, also wielded great military naval power.” In other words, the unique features that had developed in the Low Countries in the sixteenth century—leading to a society that was based not on the feudal system but on individuals who bought and sold property and banded together to promote their mutual interests—had given rise to the world’s first multinational corporation, the Verenigde Oost-Indische Compagnie, the United East India Company, which soon became universally known by the logo of its interlocked initials that would appear on ships in harbors around the w
orld: VOC.

  This is a book about Amsterdam, not the Dutch East India Company, but the two are so intensely woven together that it is worth laying out a few broad VOC facts. It’s by no means a stretch to say that the VOC remade the world. And to a large extent Amsterdam made the VOC. And in refashioning the world, the VOC in turn completely transformed Amsterdam.

  Like the oceans it mastered, the VOC had a scope that is hard to fathom. One could craft a defensible argument that no company in history has had such an impact on the world. Its surviving archives—in Cape Town, Colombo, Chennai, Jakarta, and The Hague—have been measured (by a consortium applying for a UNESCO grant to preserve them) in kilometers. In innumerable ways the VOC both expanded the world and brought its far-flung regions together. It introduced Europe to Asia and Africa, and vice versa (while its sister multinational, the West India Company, set New York City in motion and colonized Brazil and the Caribbean islands). It pioneered globalization and invented what might be the first modern bureaucracy. It advanced cartography and shipbuilding. It fostered disease, slavery, and exploitation on a scale never before imagined. It shuffled the global ecosystem—by design and by accident, with consequences we face still—by ferrying plants, animals, and insects across the planet. Over the course of its history the VOC sent more than a million Europeans to Asia, and hauled 2.5 million tons of Asian products back to Europe, four times more than its nearest competitor, the English East India Company. It took over kingdoms that did not bend to its wishes, making its officers island potentates; it slaughtered entire populations. The business of the VOC in Asia is typically described as buying spices for resale in Europe. In fact, it was vastly more complicated—and the company’s success came in large part from comprehending and exploiting that complication. For example, De Houtman was probably unaware that much of the pepper he was trying to purchase “from the source” was grown on other islands and that some of the Javanese he was attempting to bargain with were themselves middlemen. In addition to the Indonesians, Chinese and Indian transshippers had been working the tropical waters for centuries, helping to fuel two of the world’s great cuisines as well as providing ingredients for local medicine. The genius of the VOC was in threading itself through this highly evolved network. By the end of the golden age a century later, the Dutch were selling spices not only to Europe but to China, India, and even to the Spice Islanders.

  Along the way, the company developed many of the modern principles of business administration and management, as it figured out the intricacies of shipping copper and silver from Japan to China, selling those products there in exchange for silk and porcelain, then trading those in the East Indies for the spices that it then shipped to Europe. It made porcelain, coffee, tea, and dozens of other things literally household words in the West. It sold Indonesian sugar in Persia and Indian fabrics in Yemen. For two centuries it was the only outside entity permitted trade (or any other) access to the closed empire of Japan.

  By these means, the officers, merchants, and soldiers of the VOC engineered not just their own rise but the advent of modern economies in Europe and beyond. Whole populations of the world became for the first time dependent on the foreign sale of their goods thanks to the VOC’s muscular expansion of global trade. The company tutored goat herders in western Anatolia in upgrading their production of mohair yarn; as the yarn was transformed from a local to an export product, the region edged from peasant agriculture to become part of a global economy, and its people became proficient in new management techniques and mathematical concepts. People in India, China, West Africa, present-day Vietnam, Cambodia, Laos, Thailand, and Indonesia likewise shifted from being local cultivators to participants in global trade networks, in pepper, cinnamon, ivory, copper, silk, and many other products. The expansion of Dutch shipping affected Europe as well, as it brought Polish grain growers, Scandinavian processors of iron and tar, French grape producers, and Spanish salt refiners into a global network. All of this involved not just creating a transportation system but augmenting it by refining systems of insurance, storage, and processing. On the heels of the VOC’s success, Amsterdammers developed ancillary trades. They cultivated European markets for new products—coffee, tea, tobacco—with great care. All three of these were sold as wondrous medicinal cure-alls and marketed and advertised in often strikingly modern (if sometimes a bit coarse) fashion:

  Tea rejuvenates the very old

  Tea warms the piss of those who are cold

  went one catchy jingle.

  The common thread through this activity was that it was all geared to the individual. It was the beginning of consumerism, which, for better or worse, is surely a component of liberalism.

  The VOC was successful on a scale that few companies have achieved. It paid its investors healthy annual dividends over a period of nearly two centuries. Indeed, for all its achievements in shipping cargo and negotiating deals, in hauling crates of silks and spices and bending tropical kingdoms to its will, its greatest impact on the world—its most far-reaching impact on the development of liberalism—was in this, the realm of finance.

  Say you are a tourist in Amsterdam. You arrive the way most do: by train, at Central Station. Stepping out into the city, worn and dazed from your journey, you confront an unholy mess of trams and buses in the foreground and a smeary polychromatic chaos beyond. Walking forward, you cross a trafficky thoroughfare and come to a stop at one end of a fusty-looking rectangle of water, a canal of sorts, carrying toward the city center. The massive tourist barges that call this spot home sit quietly in their bays; a few are making seemingly impossible maneuvers as they get themselves into or out of their narrow slots. To your left, the gabled back ends of buildings along one side of the Damrak (as the canal is called) come right down to the water. Across the noisy stretch of traffic that runs along the water’s other edge is a matching lineup of brick buildings, the graciousness of whose gabled tops clashes forcefully with the kebab stands, marijuana dispensaries, beer palaces, casinos, sex arcades, Automat sausage vendors, and displays of dusty postcards and wooden-shoe key chain fobs that occupy their streetfront space. It is such a wearyingly ugly wreck of neon and litter and urban detritus that you turn away at once, in search of some other, less blasted and violated part of the city: in search of some history.

  But wait. What you have before you is a chance to engage in one of the most rewarding aspects of travel, which is also one of the most enjoyable things about reading (and writing) narrative history: the possibility of lifting the veil of the present and systematically willing a particular iteration of the past to reconstitute itself. With a little help, this powerfully unlovely view can be reenvisioned as the urban landscape that spawned one of the basic features of economic liberalism and one of the building blocks of the world we live in: the stock exchange.

  This little area was the beating heart of Amsterdam at the start of its golden age. Behind where you stand, in place of the crenellated Victorian-era towers of the train station, was the harbor itself, a thicket of wooden spikes and sailcloth, constantly alive with pumping, hauling, swabbing, jibing, trimming, augering, sawing, climbing, crawling, and cursing. (In the nineteenth century the city fought vigorously against the national government in The Hague, which, in the way of bureaucracies, had decreed that Amsterdam’s train station would be built here, cutting the city off from the waterfront to which it had always been wedded; the bureaucrats won, and Amsterdammers still sneer at Central Station as if its construction had personally offended them, never mind that it was built in 1889.) Thus, with the ships of the harbor coming right up to where they would have nudged your backside, the bridge you are standing on—the New Bridge—marked the gateway between the city’s two realms: water and land.

  One of the buildings along the left side of the canal had served as home to the Duke of Alba while he lorded over Amsterdam. Another, a generation later, was the wineshop of Marten Spil, where the nine Amsterdam merchants gathered to found the Company for Faraway Lands.
Then, on April 1, 1602, following the negotiations in The Hague at which those same nine men, plus eleven others, signed on as directors of the Amsterdam chamber of the East India Company, a curious assembly of people from all walks of life began streaming into another private home closer to Dam Square. Whether because he was felt by others to be elementally important to the success of the new venture or because he himself believed it would stand a chance only if he took personal charge of it, Dirck van Os turned his house, in the street called the Nes, into what you might care to think of as the birthplace of capitalism. Here, over the next five months, anyone wishing to purchase shares of stock in a new type of corporation would have to come. His street-level rooms must have been as bustling as a busy shop, for during that period 1,143 individuals signed up to buy shares in the Amsterdam chamber of the VOC, for a total of 3,679,915 guilders, which constituted 57 percent of the company’s stock.

  What made the Dutch East India Company different from all previous companies was its permanence. Where companies before had always formed around a particular venture and dissolved when the venture was complete, the VOC continued. (Technically, it was granted an initial charter for twenty-one years, but the charter was perennially renewed.) This was more than just a novelty: it meant that investors were buying not into a voyage but into the company itself. And it allowed for a far-reaching innovation, for Amsterdammers who signed the subscription book could read, on the first page, that they were entitled to sell their shares to someone else. They were further assured that if they did so the transfer would be rigorously monitored, and the subscription book stipulated the process for selling shares.

  Almost immediately after all shares were bought, so-called aftermarket trading began. The truly revolutionary innovation of Amsterdam’s stock market lay in the fact that it became the world’s first market in the sale of company shares: a secondary securities market. If a company’s shares of stock are frozen, its ownership is frozen and the business is a private affair. But if those shares, or derivatives based on them, can be resold, then you have a financial marketplace, which is a kind of living thing, constantly churning. It can then become a means of individual expression and power, allowing for anyone with a few extra coins to play a part in the great economic drama of society. It becomes a vehicle for economic liberalism. This was the collective insight of the society that launched capitalism in its modern guise.