146 THE WEALTH AND POVERTY OF NATIONSflorins a month, could take home a fortune of 10 million florins; a ju
nior merchant was ready to pay 3,500 florins to the Appointments
Board for a post that paid 40 a month but yielded 40,000. In the end,
the company began to tax its officers on their presumed gains, which
only encouraged them to attend more assiduously to their own busi
ness. Small wonder that after the VOC's demise, its logo came to be
read as Vergaan onder Corruptie (Perished by corruption).^11
Even so, the company made money. It paid dividends that averaged
18 percent per year from the time of its founding. Most of the VOC's
earnings came from its monopolies of agricultural products: spices
from the Spice Islands to begin with; then rice from Java, because one
could not allow these specialized islands to waste spice land on food;
then coffee and sugar, which the company introduced into Java. (Cof
fee came originally from the Mocha area in the Arabian peninsula, but
the Dutch did so well acclimating it in Java that they gave us a new
generic term for the beverage.) The other profits came from purchases
in the open market: porcelain, silks, and tea in China; silks and cotton
in India; and so on. But here the company had to compete with other
buyers, including its own agents. No wonder the directors preferred
monopolies.
Yet in the long run the monopolies were precarious. To maintain
them against native and outsiders required the use of force so expen
sive that only a sovereign with taxing power could hope to pay the
bill.^12 Inevitably, the VOC was led to substitute its own governance for
that of native princes. The VOC thereby incurred the kind of non
business expenses that are open-ended and unpredictable; that do not
show up in the books because they are so easily spread about; that
grow insensibly until too late. (Compare the budgetary deficits that af
flict modern nation-states.)
This governance, moreover, led the company to impose a command
economy. In J.S. Furnivall's words, "the archipelago became one vast
estate, literally, a plantation."^13 This strategy may have enhanced on oc
casion the direct revenues of the company, but only at the expense of
native cultivators and tax revenues; so that in the long run the VOC
earned less than it could have in a free market.^14
In the long run: in the absence of force (and force has its own costs),
people will not allow themselves to be done to. At some level they
would rather sit on their hands or resort to "crime."
Take cloves. The clove tree, which grows to some forty feet at ma
turity, was found only on Amboina (Ambon) and a few lesser islands.
The Dutch, seeking monopoly, moved people from the other clove is-