148 THE WEALTH AND POVERTY OF NATIONSbut it continued to pay generous dividends, even borrowing the sums
required. A very bad sign. Was it making money? Our records are in
complete, and the methods of accounting make calculations difficult.
The profits and losses of governance, for example, are not included
with the commercial results, indeed are not available. Even Fernand
Braudel, who had at his disposal a large squad of research assistants,
had to give up: "... the very system of accountability prevents draw
ing up a general balance sheet and thus any exact calculation of real
profits."^17 Who is to say that even the directors, the Heeren XVII,
knew the real state of affairs? We assume that big business enterprises
are rational and that rationality entails awareness. The annals of busi
ness make it clear, though, that much decision making is guesswork
and improvisation. Otherwise, how do these enterprises manage to
dig themselves so deep a hole?^18
Toward the end of the century the hazards of politics made matters
much more difficult. Holland got caught up in war with England in
1781-84, and the VOC found it hard to move goods between the
Low Countries and the Indies. It had to ask for moratoria on its debt
while borrowing afresh. The state was now the company's only credi
tor (bankers knew better), and its fate was bound up with that of the
United Provinces. Then came the French Revolution, which boosted
radical politics in the Netherlands and set up a puppet Batavian Re
public (1795), much less sympathetic to the big business interests of
the old regime. When the renewal of war with Britain drove sales down
by almost two thirds, the outcome was inevitable. The Dutch state
took over the company—assets, debt, and empire.
This empire remained; indeed, the governments of a restored Hol
land ( 1814- ) worked well into the nineteenth century to round it out.
Costs of administration were covered by imposing delivery quotas on
selected plantation crops (coffee, tea, sugar), and by lucrative monop
olies of salt and opium. From 1870 on, the Dutch abandoned the
plantation "Culture System," partly owing to the conviction that a
free market would work better, pardy owing to a bad conscience about
forced labor. Two new, high-growth products eased the transition to
liberalism: the transplantation of Brazilian rubber in 1883, and the
discovery and exploitation of oil deposits in Borneo and Sumatra in the
late 1880s (foundation of Royal Dutch, 1890). But little time re
mained to redeem the errors of an earlier age before World War II al
lowed the Japanese to seize these Dutch possessions. The Japanese
occupation lasted only a few years, yet that was more than enough. The
change in regime fed aspirations for freedom. It taught the Indonesians