The economic and political environment

The contribution of the European East India Companies to the evolution of modern world trade was in many ways unique. Operating through a formal bureaucratic structure, the chartered companies of the seventeenth and eighteenth century helped to integrate the scattered and self-contained economic regions of pre-industrial trade into a well-defined pattern. Production and consumption, both in Europe and Asia, undoubtedly increased as a result of this process. It might even have led to hitherto unutilised resources being brought into fresh use. Historically, the Conquistadors and the Iberian methods of overseas expansion had created in the southern part of the American continent a formidable economic, commercial, and political empire which continued to exert a profound influence on Europe until the latter half of the eighteenth century. Indirectly, the Spanish model was of significance even to the maritime nations of Asia, for the Dutch and English East India Companies, following in the paths of the Conquistadors, created in another continent a phenomenon not known in the history of world trade since perhaps Roman times. This was what later came to be known as economic imperialism. It was a system in which the use of political power and armed force was inseparable, both doctrinally and in terms of every-day practice, from the more normal forms of commercial activities. Important as these larger forces were, working against the general background of contemporaneous economic and political environment, there was yet a third force whose significance was of no lesser magnitude.