ABSTRACT
According to N. Steensgaard, a basic shift occurred in Asian trade in the early seventeenth century that he sees as nothing less than a “trade revolution,” and it was achieved by the Companies. The trade conducted by peddlers over the caravan routes from India to the Middle East and from there to Europe was redirected by the Companies around the Cape. This was—again according to Steensgaard—on the one hand effected by the use of monopolist practices that allowed the Companies to manipulate the price of products and thus oust their small competitors from the market. But the Asian merchants dealing with the Companies benefited as well: the Companies were able to reduce unpredictable fluctuations of the market. This was an innovation in the running of commerce: the Companies behaved, to use J. Schumpeter’s term, like “creative monopolists.”
