In the sixteenth century, the international commercial panorama started evolving. Technology, shipping, warfare, and violence are the causes that historians use to explain the predominance that Europe gained over the other continents beginning in the seventeenth century. With this book, Ron Harris aims at enriching the historiographic debate by analyzing the role that the organizational revolution had in enhancing the European domination of the Eurasian trade. This book focuses on the organization of companies operating in international trade and their development during the early modern period. Harris adopts a comparative perspective, analyzing the trading companies’ organization in China, India, the Middle East, and Western Europe, all united by their interest in the Greater Indian Ocean.
The book faces debates that have characterized the fields of commercial, legal, and economic history in recent decades, such as the centuries-long European dominance in global trade and the role of business organization for economic growth. In particular, looking at the organization of the EIC and the VOC, the author analyzes the circumstances of the birth of joint-stock companies with large-scale operations governed by impersonal cooperation that made it possible to raise large amounts of capital from many investors.
Harris develops his argument by underlining the differences in the identities and business strategies of those who conducted commercial activities in the late Middle Ages and early modern period to introduce the changes that took place after the arrival of Europeans in Asia. The medieval commercial world, characterized by small enterprises (such as family businesses, partnerships, or ethnic networks), paved the road for creating the English and Dutch joint-stock business corporations. The author claims that the evolution of the commercial and manufacturing sectors toward corporate organizational forms is typical of the European context. Indeed, this new business form wasn't adopted in other continents for about three hundred years: its novelty and innovation allowed the Europeans to penetrate inter-Asian trade and dominate global connections.
The book analyzes the origin of several business typologies and their migration trajectories, intending to highlight the specificity of the joint-stock business. The novelty is, according to Harris, linked to the ability of the business corporations to guarantee the investors a certain degree of participation in the decision-making process, access to information, and simple methods of entry and exit (buying and selling of shares) from the company.
The book is organized into four parts. Part 1 analyzes the literature regarding the Eurasian trade, delving then into the features of long-distance trade and its challenges. In this part, the author also introduces the institutional and organizational theories and addresses the institutional evolution that supports business growth. Parts 2 and 3 deal with the issues and strengths of premodern organizational business forms (family firms, commercial networks, and state-owned ventures and enterprises), showing how these experiences provided the building blocks for the business corporation. These organizational blocks could be more or less used across the Eurasian commercial areas. The analysis of the experiences that led to its creation confirms and explains the slow migration of the joint-stock business corporation outside Europe. The peculiar European context and its institutional and social evolutions proved to be essential for the functioning of the new business organization. In part 4, the change that has taken place since the seventeenth century is analyzed with an accentuated focus on English and Dutch areas. Harris aims to understand why the change took place in the seventeenth century and why the new corporate form did not take root outside Western Europe for three centuries.
Harris's book has several strengths. First, the research questions are clearly articulated and act as a guideline for the structure of the book. Second, the analysis of the similarities and differences in the business organization among the various geographic contexts is an interesting and new approach to the change in the global commercial equilibrium that took place since the seventeenth century. Lastly, the analysis of the organizational forms of companies is helpful to understand better the turning point for economic development that the birth of the joint-stock business corporation represents. Joint-stock companies, indeed, provided the most suitable business form for the capitalist and imperialist development of the colonial commercial, financial, and manufacturing sectors.
The bibliography used by the author is rich, even though too strongly imbalanced toward literature in English. The limited use of studies published in national languages carries the risk of limiting the understanding of the local societal, political, and economic nuances that greatly impacted business organizational development. This linguistic limitation is particularly of concern considering that some historiographic traditions (e.g., Spanish, French, or Italian) still favor publishing in the original language.
