Tactics of the VOC

The tactics that the VOC used to keep on the top of their business varied during the 17th and 18th Centuries. Their size permitted them to simply undercut their smaller competition, buy paying more for spices in the East and selling it for less. This means of competing with what we would now call “the little guy” tend to cut into profits. Instead of lowering their prices, the VOC preferred to simply sink independent and small traders. The VOC’s private navy was also used to clean out pirates, which indirectly benefitted the small business ventures, as well as do battle with rival national monopolies, most notably the English (and later British) East India Company.

The VOC was a quasi-nation in its own rights. The monopoly granted by the Staaten-General allowed the VOC to sign its own treaties. The VOC signed exclusive trading treaties with states such as Kandy and Sultanates across the East Indies. In other cases, such as western Ceylon and Java, the VOC simply marched in and conquered their sources of spices and trading partners. Many of the independent states soon found themselves dependent upon the VOC. With the Company lending credit and minting coin, all of which the VOC forced its trading partners to accept. Back home, the VOC bankrolled many members of the Second Chamber of the Staaten-General, and flat out bribed those in the First Chamber. With this, and national interest, the VOC insured its exclusive trade monopoly was renewed time and again.

Their biggest threat came from other national monopolies. To battle these, the VOC and its navy took control over entire trading lanes. In the Indian Ocean, the Dutch discovered that sailing eastward across the Indian Ocean from around Forty Degrees allowed them to bypass the mercies of the seasonal monsoon patterns; flowing southwest during one part of the year and northeast during another. By taking control of the best route and currents directly across the Indian Ocean, along with the Cape of Good Hope, the VOC was able to trade year round. Those who either did not know about the currents, or were banned from them, had to wait months in India until the monsoon winds shifted and allowed for a return trip to India.