The first thing we might note when looking at the system of the VOC as a state, is the financial structure that lay beneath it. In the previous chapter, we have already quoted Howard, who describes how for the European state, wealth was a means to an end. This end was the upkeep of armies, which grew increasingly large and costly in the course of the seventeenth century. In order to be able to play the vicious game of European politics, the entire state apparatus of the various European powers was bent on keeping these huge armies fed and moving, innovating the tax system and developing new financial institution in order to be able to do so. Around the turn of the 17th century, we might say that the states of Europe had truly turned into war machines, pumping virtually all of their resources into the upkeep of their armies.[1] Thus, wealth led to power. For the VOC, however, one might say that it was exactly the other way around: the aim was wealth (through trade), and power was increasingly the means to achieve this.

As noted above, the VOC apparently started off as an enterprise with very limited military ambitions, but the escalating situation with the Portuguese soon changed this. A strategy of confrontation and pushing out was substituted for one of evasion and coexistence: the VOC fleets actively looked for Portuguese fleets on their way to the Indies in order to attack them, the Company tried to oust the Portuguese from various regions, and drew up exclusive contracts with the various local rulers in order to exclude the Portuguese from the trade. This latter practice was very successful and very soon developed into something of a market strategy: as early as 1609, the directors declared the attainment of a complete monopoly in fine spices from the Moluccas to be one of the Company's goals.

This shift in the market strategy only increased in the following years, and can be said to have reached new heights when Jan Pieterszoon Coen became Governor-General in 1619. Coen is the person traditionally credited with transforming the Company into a warmongering trade empire. In his letters to the Netherlands, he indefatigably insisted on the need for more troops, ships and cannon for the VOC to hold its own in Asia. In the field, apart from establishing the long-sought rendezvous by conquering Jakarta on the prince of Bantam, he made his contribution to the attainment of the spice monopoly by violently enforcing the observation of the various contracts between the Moluccas' local rulers and the Company. In order to get a foothold in the China trade, he attacked Macao, the Portuguese gateway to China, and when that failed, contented himself with blockading it periodically. All in all, violence, in the form of militarily driving out competitors, blockading their harbors, as well as using violence to force monopolies and favourable trading conditions upon local rulers, very soon became accepted instruments to influence the market and enhance profit for the VOC.[2]

As profit was ultimately the Company's yardstick, force had to remain profitable. Particularly the directors in patria were not planning to invest all of the revenue into weapons and soldiers. When they had no choice but to do so, as in the first years of the Company's existence, they immediately ran into trouble, witness the revolt of the Company's stockholders in 1623. In his article on the cost of warfare, Femme Gaastra follows the way in which the directors would have reasoned, by wondering whether the VOC's military expenditures were a sensible investment. His estimates of the military expenditure in comparison to the total 'debit' side of the VOC balance sheet, show that for the European side of the Company, military spending came down to about one fifth of total spending, and for the Asian, about one third.[3] This stands in stark contrast to the percentages reaching up to 90% that European states spent on their military in early modern times.[4] "Victory, whatever the cost," seemingly the attitude of many European heads of state in these days, was a phrase which would have been cause for either hilarity or nightmares with the directors of the VOC.

List footnotes

Parker, The Military Revolution, 61-74.
Niels Steensgaard, 'The Dutch East India Company as an institutional innovation' in: Maurice Aymar ed., Dutch capitalism and world capitalism (Cambridge 1977), 235-258.
Femme Gaastra, 'Sware continuerende lasten en groten ommeslagh: kosten van de oorlogvoering van de voc' in: Oorlog en diplomatie, 81-104.
Parker, Military Revolution, 62.