1. “Specific Information and the English Chartered Companies, 1650-1750” (with Ann M. Carlos, University of Colorado, Boulder), forthcoming in Information Flows, 1600-2000, edited by Jari Ojala.

During the early modern period, much of England’s long-distance trade was carried out under the aegis of the great chartered companies: the East India, Royal African, and Hudson’s Bay companies. These early corporate forms were hierarchical with head offices in London and salaried agents stationed in overseas settlements. We begin with a description of the business of each of these companies to provide a context in which to understand the information asymmetries that saturated the relationships between company directors and their overseas agents. Using a Jensen and Meckling framework, we identify how decision rights were allocated in each firm and the steps each firm took to assess and improve the quality of received information. Finally we identify and evaluate the organizational consequences of this information environment.

2. “Contract Enforcement in the English East India Company” [In Journal of Economic History. 65(2): 1-27. 2005.]

Long-distance trade depends crucially on the enforcement of long-distance contracts, those in which principals are significantly removed from agents. The problem of contract enforcement in the English East India Company, the largest of the English chartered companies, is explored through an analysis of the information environment, the formal employment contract, and the broader relational contract. The mechanisms that upheld the contract included private trade, dismissals, seniority-based promotion, and insider hiring. An exogenous factor, mortality, affected contract enforcement by lowering job duration. The use of legal suits against misbehaving employees had an unclear impact on enforcement. Private trade is identified as the most important of these mechanisms. Its official prohibition by the Dutch East India Company is also examined.

3. “Job Design and the Benefits of Private Trade” [with Pablo Casas-Arce, Oxford University, Department of Economics Discussion Paper Series #204, September 2004 ]

We reconsider the job design theory of Holmstrom and Milgrom (1991) to include career concerns considerations. When reputations are considered, discretion may play a more integral part of the incentive scheme. It can be a useful instrument to enhance incentives and prevent the adverse selection of low ability agents. We then show that these synergies are useful in explaining the employment of U.S. faculty members and the employment of agents in the English East India Company, an historically important firm.

4. “The Reproving of Karl Polanyi” [with Deirdre McCloskey, University of Illinois at Chicago, Departments of Economics, History, and English.] In Critical Review. 13 (3-4): 285-314. 2001.

Karl Polanyi’s The Great Transformation has had enormous influence since its publication in 1944. In form, this influence has been salutary: Polanyi targets one of the main weaknesses of modern economics. But in substance, Polanyi’s influence has been baneful. Mirroring the methodological blindness he criticizes, Polanyi insists on the all-or-nothing existence/nonexistence of laissez faire – and on its all-or-nothing goodness/badness.

5. “ Polanyi and the History of Capitalism: Rejoinder to Blyth” with D.N. McCloskey. Critical Review. 16(1).

Mark Blyth's rebuttal to our constructive critique of Polanyi "blithely" takes for granted the accuracy of Polanyi's now-outdated historiography of capitalism—by means of a loose, overly expansive definition of capitalism that question-beggingly equates it with modernity. Blyth emphasizes the need to view markets as "socially embedded," with which we agree—but he appears not to take account of the individual self-interest that is thus embedded. Similarly, he asserts a priori the role of ideas in history, in parallel to the economists he condemns (unfairly) for reading ideas out of history a priori. All of this poorly serves the cause of extracting Polanyi's welcome emphasis on social embeddedness and on the empirical from the ideological and methodological certitudes and errors in which The Great Transformation placed them.

6. “Market Power in Pre-colonial Bengal” [In progress.]

One of the more trenchant criticisms of the English East India Company was the claim that its monopoly power enabled it to buy Indian products at below market prices. This paper explores the extent to which the Company exerted monopsony power in its main Bengali markets: raw silk, saltpeter, and textiles. The paper is based on rich data sets of price and quantities for all major commodities purchased by the Company from 1660 to 1760. Using a straightforward supply and demand model, my empirical analysis suggests that the firm did not bulk large in the local markets. It was a small demander of Bengal’s products where small is defined as the ability to set prices. The emerging portrait of a small English presence in large, competitive markets bears directly upon several historical literatures.

7. “The Economic Origins of British India” [In progress.]

The view of the English East India Company as preeminently a commercial rather than a colonizing organization has influenced two distinct literatures: imperial and business history. Students of the Raj emphasize the profit-making character of the Company to suggest that empire was an unplanned consequence of the Company’s engagement in eighteenth century India. Business historians, by contrast, celebrate the Company’s focused commercial organization as a precursor to the modern multinational firm. Paradoxically the two literatures suggest that John Company was both absent-minded and single-minded. This project attempts to resolve the paradox by integrating imperial and business history via the economic theory of contracts. I investigate how the incentive structure within the firm affected the firm-state relationship within Bengal. Building on earlier work by Tollison et al. and the metaphor of contained conflict used by Subrahmanyam, I explore the extent to which the Company’s takeover of the Nizamat of Bengal correlated to the structure of incentives between Company servant and director.

8. “Own, Rent, or Rent-Seek? Vertical Integration in Historical Chartered Monopolies” [In progress.]

The own versus rent problem is explored in the context of three historical trading firms, the Hudson's Bay Company, the Royal African Company, and the East India Company. Both owned and hired ships were used to transport commodities owned by these early multinational enterprises. Historical accounts indicate that hired vessels were used on more competitive routes and that the corporate managers were often partial owners of the hired ships. Given the level output market power, the shipping executives could pursue an integration policy consistent with their private incentives. Such activities, known as influence activities, explain the decline in the use of hired ships over time. As a result of influence activities, the extent of vertical integration varied with the cost and benefits facing individuals within the firms.

“Resources for Teaching the History of the Firm” invited essay for EH.Teach. available on-line at http://eh.net/pipermail/eh.teach/2006-September/001312.html.

“Trade Policy, 1800-1947” Encyclopedia of India. Edited by Stanley Wolpert. In press.

The Business of Empire, The East India Company and Imperial Britain, 1756-1833 by H.V. Bowen, Eh. Net, forthcoming.

Bullion for Goods, European and Indian Merchants in the Indian Ocean Trade, 1500- 1800 by Om Prakash, Indian Economic and Social History Review, forthcoming .