Thursday, July 27, 2006

History Can Be Cool, Too

This is fascinating: according to a new study out of Columbia University, it was the unsanctioned trading done by sea captains working for the East India Company that was responsible for the establishment of the first global market (which led to the success of the East India Co.).

The researchers analyzed data from 4,572 voyages undertaken by the East India Company between 1601 and 1833, totaling over 28,000 port-to-port journeys. In a paper in this month’s American Journal of Sociology, they describe how many rogue captains ignored orders to trade in established markets and then return directly to England, choosing instead to explore new locations and trade between local Asian ports for their own personal profit. Although they were breaking the law by appropriating supplies and ship crews for this private trading, in doing so they ultimately benefited the East India Company by building a larger market and gaining a unique knowledge of local market fluctuations.

A great point is also made about the nature of markets:

Because a market is a decentralized structure, it must consist of many individuals who can act in their own interest. “We sort of take the process for granted at this point,” says Erikson. “We live in a capitalist society, we think markets are good, we believe in individual freedom. But back then, people didn’t believe individual initiative was a good thing, especially in the context of a monopoly organization.”

[Via H&R]


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