Banda Islands, 1621.

Jan Pieterszoon Coen stands in a town

square.

>> [music]

>> Around him,

44 severed heads. Villages burned.

People were hunted into the mountains,

all for spice.

Great [music] work, team. Send the

dividend report to Amsterdam.

Nutmeg production is now fully

optimized. [music]

This is the story of the VOC, the

company that basically invented

shareholder capitalism by committing

genocide for profit.

It's the 1500s. [music]

Europe had discovered something

shocking. Food could taste good. For

centuries, European [music] cuisine had

been a creative exercise in how much

salt can we legally apply before God

intervenes?

>> [music]

>> Then Crusaders came back from the Middle

East like, "Hey guys, guys, hear me out.

What if food had flavor?"

And suddenly the aristocracy lost their

minds. Pepper, cloves, nutmeg. Spices

weren't just ingredients, they were

exotic, precious [music] luxury items,

the ultimate 16th century status symbol.

But there was a problem.

Venice and the Ottoman Empire controlled

the Silk Road. They were the middle men,

and they knew it.

You want nutmeg? [music]

That'll be one kidney and your

firstborn. And when prices [music] get

that stupid, people start getting

creative.

Europe basically said, [music]

"Okay, new plan. We don't need the Silk

Road if we can just go around it."

So they started hunting for an alternate

route to Asia,

and eventually Portugal found [music]

one. A sea route around Africa.

They were sailing directly to Asia,

loading up their ships with spices, and

coming back absurdly rich.

For decades, [music] the Dutch were

perfectly happy to just buy from them.

Problem solved. Except in 1580, Spain

Portugal.

And Spain absolutely hated the Dutch

because they were in the middle of the

80 Years War.

So, Spain looked at the Dutch and said,

"No more spices for the Dutch rebels."

And just like that, Amsterdam was

spiceless and mildly furious.

They had two choices, give up or lock

in.

Enter

>> [music]

>> Cornelis de Houtman.

In 1595, he stood before a group of

Dutch investors [music] and convinced

them that he could find the Spice

Islands.

Small issue.

de Houtman was not that guy.

>> [music]

>> His maps were basically scribbles. His

crew had never seen a palm tree.

Within weeks, the voyage became a

floating nightmare. Scurvy turned their

gums into jelly. Men went blind. Their

teeth literally vibrated out of their

skulls.

After months of suffering, they finally

[music] reached Java, modern-day

Indonesia, and immediately ruined

everything.

Welcome, travelers. Please sit. [music]

Have tea and tell me of your homeland.

Spices. Now. Friend and family discount.

Bulk order. Sorry?

We just [music] met?

de Houtman was so incredibly rude that

he ended up in a Javanese prison [music]

for general unpleasantness.

By the time the ships limped back to

Amsterdam, only 87 of the [music]

original 249 sailors were still alive.

The cargo barely paid for the costs,

but they didn't care about the profits

yet. They looked at the [music] map and

smiled because the route was real.

Suddenly, [music] every merchant in

Amsterdam wanted a piece of the action.

Within 5 [music] years, 65 ships from

several Dutch companies were racing to

Indonesia.

They were outbidding each other, driving

prices up in Asia, and crashing them in

Europe.

It was free market chaos.

The Dutch government watched this and

said, "Enough." [music]

In March 1602, they forced every rival

company into one single [music] entity,

the VOC.

But, this wasn't just a company. The

government gave the VOC powers to build

forts,

mint money, declare war, and execute

people, all in the name of trade. To

fund this monster, they invented IPO,

initial public offering.

For the first time in history, anyone

could buy a piece of the company.

Widows, bakers, even servants poured

their life savings into the company.

The stock market was born,

and shareholders wanted one thing,

return on investment, big ones.

And their strategy to get those returns,

>> [music]

>> market monopoly. Oops, I meant simplify

the market experience and optimize

customer choice to one. [music]

One choice.

And in a minute, you'll see exactly what

they meant

in the bloodiest way possible.

Imagine a world where the most valuable

real estate on Earth isn't Manhattan or

London, it's 10 tiny volcanic islands in

the middle of the ocean, the Banda

Islands, present-day Maluku province,

Indonesia.

Why? Because these islands were the only

place on the planet where nutmeg grew.

In the 1600s, nutmeg was a miracle

[music] drug. People believed it could

cure the bubonic plague. It couldn't. It

mostly just made your breath smell

slightly better while you died of the

Black Death.

But, because of that myth, a pound of

nutmeg was worth more than a pound of

gold.

For centuries, the Bandanese people were

the ultimate free agents. They sold to

the Chinese, the Arabs, the English,

whoever had the most cash.

Then the VOC showed up with a contract

that basically said, "Look, it's simple.

We buy all your nutmeg at a 90%

discount. We build a massive stone

fortress in your backyard [music] and in

exchange, we don't shoot you.

Deal?

Your discount sounds like robbery and

your fortress sounds like a prison.

The English pay double [music] and they

don't have whatever those hats are.

You're really [music] hurting my

year-end bonus here.

Fine.

Let's discuss [music] terms over there.

In that quiet grove, away from the sun.

See? Diplomacy works. It did not work.

The grove was an ambush. All it took was

one sudden move and Verhoven and his men

quickly became history.

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Back to the video.

Enter Jan Pieterszoon Coen, the new

Governor-General.

If the VOC was a startup, Coen was a CEO

who fires the entire staff through a

Slack message. He had no interest in

negotiation and he wanted a

[clears throat] monopoly.

Full stop.

They murdered my boss and we are wasting

money on diplomacy.

If the locals won't give us a monopoly,

[music] we'll just remove the locals.

Isn't that bad optics?

Do you want 600% margins or a hug?

The board chose the margins.

In 1621, Coen arrived in Banda with

1,600 soldiers, 250 Japanese

mercenaries,

>> [music]

>> and zero chill. It was an execution.

They burned villages, hunted people into

the mountains, and destroyed food

supplies.

Anyone suspected of resistance was

executed.

On the island of Lontor, Coen had 44

village elders beheaded in front of

their families and displayed publicly as

a warning.

The numbers are staggering.

Before Coen arrived, there were 14,000

Bandanese. When he left, there were

barely 1,000. [music]

The islands were empty.

Uh, problem solved by blood.

Sir, [music] minor issue.

We killed almost everyone who knows how

to grow the nutmeg. The trees are

[music] dying.

Fine. Import slaves from Java, bring in

convicts, repopulated ourselves, and

just [music] like that, the Banda

Islands became a giant open-air prison

plantation. The land was divided into

parcels. Dutch colonists got the plots.

Enslaved labor kept the spice flowing.

With the competition dead, literally,

the VOC was free to set their own

prices. They bought 10 lb of nutmeg in

Banda for less than a penny and sold it

in Europe for over £2.

Back in Amsterdam, the shareholders

never asked questions. They just saw the

dividends increase and the stock price

went up. But while the Dutch were busy

counting their blood money, someone was

watching from the sidelines taking very

detailed notes.

A new threat was about to enter the

chat.

By the 1630s, the VOC had officially

stopped being a trading company and

started being a floating empire with a

logo.

From their fortress headquarters in

Batavia, modern-day Jakarta, they

controlled nutmeg, cloves, cinnamon,

[music]

and more importantly, the choke points.

They didn't need to own all of Asia.

They just needed to own the doors. And

every ship that wanted to trade had to

knock.

That'll be a fee.

But the real money engine?

Introducing the intra-Asian trade loop.

See, most Europeans showed up to Asia

like this.

Hello. Yes, I brought silver and gold.

Please give spices.

Look at those dumb Europeans. Why use

your own gold when you can use everyone

else's?

Here's the play.

Buy a commodity cheaply in one Asian

market, flip it for a massive markup

where it was scarce,

and use those local profits to fund the

high-value exports, [music] spices, tea,

and silk that Europeans craved.

By the time [music] the ships headed

back to Amsterdam, the cargo was

basically free.

Repeat that for decades and

congratulations. You were the richest

company in human history.

>> [music]

>> At its peak, the VOC had 150 merchant

ships, 40 warships, 50,000 employees,

10,000 private soldiers, and a dividend

payment of 40% on the original

investment.

>> [music]

>> Shareholders were ecstatic. The baker in

Amsterdam, your uncle, your grandma,

everyone was getting rich.

Except the system was rotting. The

company was run by the Heeren XVII.

Translation, the 17 gentlemen.

Did they audit?

No. Did they show the books?

Also, no.

Instead, once a year, they basically

sent a letter that said,

"Everything is fantastic. Here is an

enormous dividend. Please stop asking

questions."

Meanwhile, 10,000 miles away,

employees realized something very

important. Nobody was watching.

Technically, private trading was banned.

But, I'd say it was more of a

um

suggestion.

Some voyages even left port packed with

employees' personal cargo, while the

company's official goods were, let's

say, emotionally present.

The VOC did try to crack down. They

wrote rules. They yelled. [music]

They threatened. They even fired a few

people as examples.

And it still didn't [music] work. So,

the company pivoted to the next best

anti-corruption strategy.

If we can't stop you, we'll tax you.

Geez. By the way, sir, we're losing

money on every voyage due to shrinkage.

Also, we're fighting five wars at once.

Should we maybe stop paying dividends?

Stop the dividends? [music]

The public would riot. Just borrow more

money to pay the old investors.

And while they were busy being dumb and

corrupt, the rest of the world caught

up.

The English East India Company stopped

obsessing over spices and focused on

Indian textiles and tea, the iPhone

[music] of the 18th century.

They were leaner, meaner, and didn't

have a corruption budget.

Then came the final insult, the great

nutmeg heist.

In [music] the 1770s, French smugglers

finally managed to steal live nutmeg

seedlings [music] from the Dutch.

Suddenly, nutmeg started popping up in

Mauritius.

The global monopoly was dead.

Prices tanked. [screaming]

The VOC was now a giant [music]

slow-moving target.

In 1780, the British Navy finally

decided to put [music] them out of their

misery. They blockaded Dutch ports and

hunted VOC ships like they were in a

shooting gallery. But by 1799, the VOC

was 134.8 [music] million guilders in

debt. Game over. That's roughly $6

billion today.

On New Year's Eve, the world's first

[music] mega corporation was dissolved.

But if you think the end of the company

meant the end [music] of the suffering

in Indonesia,

think again.

The Dutch government took over the VOC's

assets and [music] instead of reforming

the brutal system, they doubled down.

In 1830, they introduced the cultivation

system.

It was a fancy name for state-sponsored

extortion.

The rule: 20% of all village land must

[music] grow cash crops.

Farmers were forced to stop growing rice

to feed their families so they could

grow sugar for Dutch tea sets.

The government set the prices [music] so

low.

The result?

Massive famines. Hundreds of thousands

of people starved to death in fields

surrounded by high-value crops [music]

they weren't allowed to touch.

This system brought the Netherlands back

from the brink of bankruptcy, accounting

for 50% of the Dutch state revenue

[music] at its peak.

On the flip side, the VOC's story got

sanitized in the Netherlands. Children

learned about the exploration,

prosperity, maritime dominance. It was

the golden age. But the slavery, the

genocides, hidden in footnotes, [music]

if mentioned at all.

It wasn't until the 21st century that

the Netherlands started seriously

confronting what the VOC actually was,

the first corporate empire and one of

history's most efficient machines for

turning human suffering into dividends.

As John Peterson Cohen once said,

"We cannot make trade without war,

[music]

nor war without trade."