Free Trade

Mutiny and Bounty

Rogue Traders Spark Global Markets

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In the late 17th and early-to-mid 18th centuries, the East India Company oversaw one of the most important waves of globalization in world history, linking Northern Europe and East Asia more closely than they had ever been tied before. A paper in the July American Journal of Sociology argues that this "dense, fully integrated, global trade network" was an unintended by-product of employee malfeasance. As captains systematically disobeyed official policy and used their employer's ships to carry out deals of their own, they independently explored exotic regions, made contacts, built networks, and established "complex trade structures well beyond those envisioned" by the royally chartered monopoly's directorate.

The paper, by the sociologists Emily Erikson of the University of Massachusetts at Amherst and Peter Bearman of Columbia University, draws on data "compiled from ships' logs, journals, factory correspondence, ledgers, and reports that provide unusually precise information on each of the 4,572 voyages undertaken" by the company's traders. One interesting conclusion: "Imperfect control over captains and ships led to long-term gains for the English company." The East India Company's Dutch rival, the VOC, opted for closer control over its agents, establishing a centralized network headquartered on Java. The long-term result: The English raced ahead while the Dutch stagnated.