The dynamics of globalization in the early modern world: new evidence from the Dutch-Asiatic trade, c. 1600-18001 Please do not cite. Preliminary figures and a work in progress. Pim de Zwart
[email protected] Abstract This paper examines whether there is evidence of ‘hard globalization’ (i.e. price convergence) during the early modern period. New data on prices were assembled for the 16 most important products transported by the Dutch East India Company (VOC) between Europe and Asia in the seventeenth and eighteenth centuries. Of these commodities, the majority show price convergence, five show divergence and two products reveal no significant trend. While there was some scope for advances in transport, most of the explanation for price convergence (or the lack of it) was sought in the various commodity markets. Where commodities were traded between competitive markets, price convergence took place. In many of the purchasing markets, however, prices were not (only) determined by supply and demand, but were set by long-term contracts or influenced by the VOCs complete control over production and trade. This paper thus finds there are indications of global market integration in the early modern period. Mark-ups and trends were mostly determined by the extent to which the VOC controlled the purchasing markets in Asia. It is suggested that the consequences of this global trade, and its associated institutions, on various economies around the Indian Ocean should be further explored. 1. Introduction Between 1500 and 1800 intercontinental trade grew at 1.1 per cent annually.2 While this growth may not be remarkable by today’s standards, it was impressive compared with the development of world trade in the centuries before, as well as relative to the growth of other economic 1 I thank Gerrit Knaap and Judith Schooneveld-Oosterling for early access to Bookkeeper-General database, and Jan Luiten van Zanden for the data on VOC auctions in Amsterdam.