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Globalization and the Colonial Origins of the Great Divergence

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Globalization and the Colonial Origins of the Great Divergence Globalization and the Colonial Origins of the Great Divergence Pim de Zwart Cover image: Abraham Storck, The Island ‘Onrust’ near Batavia (1699). Cover design: Rick de Zwart, meneerdezwart.nl Printing: Ridderprint BV, www.ridderprint.nl 2 Globalization and the Colonial Origins of the Great Divergence Intercontinental Trade and Living Standards in the Dutch East India Company’s Commercial Empire, c. 1600-1800 Globalisering en de Koloniale Oorsprong van de Great Divergence : Intercontinentale Handel en Levensstandaarden in het Handelsimperium van de Verenigde Oost- Indische Compagnie, ca. 1600-1800 (met een samenvatting in het Nederlands) Proefschrift ter verkrijging van de graad van doctor aan de Universiteit Utrecht op gezag van de rector magnificus, prof. dr. G.J. van der Zwaan, ingevolge het besluit van het college voor promoties in het openbaar te verdedigen op vrijdag 17 april 2015 des middags te 2.30 uur door Pim de Zwart geboren op 30 augustus 1986 te Amstelveen 3 Promotoren: Prof. dr. J.L. van Zanden Prof. dr. A.F. Heerma van Voss Copromotor: Dr. E.J.V. van Nederveen Meerkerk Dit proefschrift werd mede mogelijk gemaakt door financiële steun van Fonds 21. 4 Acknowledgements ‘It is astonishing what foolish things one can temporarily believe if one thinks too long alone’ - John Maynard Keynes I could not have written this thesis without the advice, criticism and support of my colleagues, friends and family. Obviously, I am solely responsible if any foolish things have still found their way into this thesis. First and foremost, I am indebted to Jan Luiten van Zanden. Despite his busy schedule, his door was always open and he patiently answered all my questions (some were undoubtedly very foolish). Our meetings were a lot of fun (it is clear that we share a similar sense of humour) as well as useful. When I was worried about problems with my work, Jan Luiten remained very relaxed and casually pointed out possible solutions. I cannot think of a better supervisor. Lex Heerma van Voss looked at my work from a different point of view and his sharp observations helped me to make essential improvements. In addition, Lex encouraged me to pursue my own agenda and not to succumb to critique too easily. Elise van Nederveen Meerkerk joined this ‘team’ a little bit later, but immediately proved to be a very valuable addition. Elise meticulously read all my work and provided it with extensive and much appreciated feedback. I have benefitted enormously from their guidance and support over these past few years. Next to the help of my supervisors, I was lucky enough to take advantage of two academic ‘homes’: the research department of the International Institute of Social History in Amsterdam and the economic and social history group at Utrecht University. Next to the fact that the IISH provides researchers with the unparalleled luxury of borrowing an unlimited number of books for an indefinite amount of time, it was great to discuss the social and economic history of India, Indonesia and Sri Lanka with Ulbe Bosma, Karin Hofmeester, Jan Kok, and Jan Lucassen. I enjoyed the lunches with, among others, Aad, Angele, Angelie, Aukje, Co, Jacqueline, Jacques, Henk, Kees, Leo, Marcel, Marco, Matthias, Richard, and Rombert. I thank Richard 5 Zijdeman especially for his help with GIS and the Allen-Unger data, and Henk Looijesteijn for giving me a new (old) book every once in a while. In Utrecht, the research group on economic and social history provided another inspiring and fun academic environment. I enjoyed the seminar series, group outings and lunches. My gratitude goes in particular to Ewout Frankema, Oscar Gelderblom and Maarten Prak, who were also my teachers during my BA and MA and who can thus be partially blamed for putting me on this path. I thank Bas van Leeuwen for his collaboration in teaching the course on Global Economic History and the work on the ILO/OECD data. Thanks to Sandra de Pleijt for our joint adventures with vector autoregressions and Toda-Yamamoto Granger-causality tests and to Dan Curtis for proofreading some of my papers. It was great to share the experience of doing a PhD (as well as celebrate Sinterklaas, and go on conference trips) with the substantial group of fellow (in some cases: former) economic and social history PhD students: Auke, Benjamin, Bram, Dan, Daniëlle, Felix, Kati, Lotte, Michail, Miguel, Mikolaj, Ruben, Sandra, Sarah and Selin. This brings me to two special fellow PhD students: my paranimfen Sarah Carmichael and Daniëlle Teeuwen. It was great going through the PhD trajectory with you; I will certainly remember our awkward networking attempts at conferences and going to a meeting seemingly hosted by the jury of Dragon’s Den. I am happy that we could share PhD-worries and celebrate PhD-successes together. In addition to the colleagues in Amsterdam and Utrecht, the wider Dutch- Belgian community for social and economic history, gathered in the N.W. Posthumus Institute, provided a good environment for the exchange of thoughts. Through this network, I received useful feedback from, among others, Catia Antunes, Christiaan van Bochove, Alberto Feenstra, Marjolein ‘t Hart and Herman de Jong. I thank Gerrit Knaap for early access to the Bookkeeper-General database. Furthermore, I have benefitted from the advice of some of the (more well-known) international colleagues who have inspired much of the research in this dissertation: Robert Allen, James Robinson, Jan de Vries, and Jeffrey Williamson. Thanks to Johan Fourie for the conversations about the economic history of the Cape Colony (as well as about many other things). My appreciation goes to Sven Beckert and Charlie Mayer for allowing me to work at Harvard University during the Spring semester of 2014, and to Florian, Julia, Julio, Leander, Maral, Melissa, and Norberto for making it a nice and useful experience. At least as important, certainly for the quality of my life in the past few years, have been my friends and family, who always supported my academic endeavours, but, more significantly, showed me that there are more important things in life than developments in trade and living standards in the eighteenth century. I cannot name everyone here, but for those who know me and who are reading this: you can be confident that I have enjoyed your company and (possibly) your friendship over these 6 years (unless I have told you otherwise). Playing futsal with the guys from VSC/Faja Lobi has always been a lot of fun (as well as instructive: losing 10-2 or thereabouts against a team consisting of players twice our age on a Friday night in Culemborg has certainly taught me/us how to cope with disappointment). At the same time, almost nothing beats celebrating a victory at the ‘Bar Tropical’ of Sporthal Hoograven. One of the candidates (for beating Bar Tropical) is the annually organized weekend with the group of friends formed in the history bachelor. I hope that these weekends will continue to be organized in the coming decades. Over the past years, I have bored some of my friends with stories about academic (and non-academic) life more than others. Therefore, I have to name in particular Adriejan, Eline, Jos, Katelijn and Tim: thanks for your wisdom, friendship and love. Last but not least, I would like to thank my family: Rick, Sylvia, and Charlie, Maria and Wim: I have felt unconditionally loved and supported during this project, and throughout my life. I could not have wished for a warmer home and a better environment for writing this book. Utrecht, March 2015 7 Table of Contents Chapter 1: Introduction ......................................................................................... 13 1.1. Trade and growth ........................................................................................ 13 1.1.1. Globalization ......................................................................................... 14 1.1.2. The Great Divergence ........................................................................... 16 1.1.3. Colonialism and development ................................................................ 18 1.2. Linking the debates: the Dutch East India Company ..................................... 21 1.3. Sources and data .......................................................................................... 25 1.4. The Case Studies ......................................................................................... 26 1.4.1. Data availability ..................................................................................... 26 1.4.2. Bengal ................................................................................................... 29 1.4.3. Java and Ceylon ..................................................................................... 31 1.4.4. The Cape Colony .................................................................................. 35 1.4.5. Colony types ......................................................................................... 37 1.5. Outline ........................................................................................................ 38 Chapter 2: The Dutch East India Company and pre-modern globalization .............. 41 2.1. Introduction ................................................................................................ 41 2.2. Definitions and methodology ....................................................................... 44 2.3. Sources........................................................................................................ 47 2.4.
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