INTERVIEW: Despina Vlami on ‘trading with the Ottomans’

INTERVIEW: Despina Vlami on ‘trading with the Ottomans’

William Armstrong -
INTERVIEW: Despina Vlami on ‘trading with the Ottomans’ The Levant Company may today be a little-known footnote of British and Ottoman history, but its centuries-long operations are an important marker of this early era of globalization, when diplomacy combined with war and high-stakes risk-taking at the sharp edge of economic expansion.

Founded in 1580, the Levant Company was made up of thousands of individual merchants pooling interests and sharing privileges. It represented England’s diplomatically in the Ottoman Empire for over two centuries, with the first English ambassadors to Constantinople also serving as the head of the company.  The company represented England’s economic and diplomatic authority in the Ottoman Empire until its eventual closure in 1825.

Despina Vlami’s “Trading with the Ottomans: The Levant Company in the Middle East” (reviewed in HDN here) explores the important but little-known history of the company.  Vlami, a senior researcher at the Academy of Athens, spoke to Hürriyet Daily News about her work.

The Levant Company was responsible for British diplomatic representation in the Ottoman Empire for over two centuries. Throughout the book you refer to this question of the tension between the diplomatic and commercial duties of the company. Could you describe this in a little more detail?

The Levant Company initially was known as the “Turkey Company.” It was a corporation of English merchants who under a royal charter granted by East India Company in 1581 enjoyed a trading monopoly with the Ottoman Empire. Initially the company was organized on a joint stock basis. But after 1605 it became a regulated corporation, with its members operating as individual firms so long as they complied with the companies rules. 

The company's representative to the Ottoman Empire was also given diplomatic authority as ambassador. The company organized offices or "factories" at strategic trading outposts in the East Mediterranean. Consuls, members of the company, were dispatched to defend the “capitulations” agreement signed between England and Ottoman Empire in 1580. The ambassador and consuls defended the property business interests and personal security of English subjects before the Ottoman authorities. 

Although the company was an association of merchants, it represented the English state to the Ottoman authorities. Its offices in the Levant operated both as diplomats and as company representatives advancing the business interests of its members. There were, however, occasions when the board of trade, the English government and parliament strongly and openly disapproved of specific company bylaws and resolutions.

One area in which this tension between the company's political, diplomatic and commercial impulses was obvious was the status of the English ambassador in Constantinople. The crown had had a direct role from the company's earliest days in the selection of the ambassador, but the ambassador was practically hired as a company employee, protecting its interests. Some ambassadors felt uncomfortable with this dual role.

Another tension was between the kind of trade protectionism that the Levant Company represented and free trade that was demanded by many merchants.

When the Levant Company was founded in the 16th century, entrusting England's trade over a vast area of great importance as the Ottoman Empire to a group of wealthy and socially well-connected merchants had practical and ideological motives. The company was seen as the only way to organize, finance and coordinate commercial enterprises in a vast and unknown space. The mercantilist economic ideology of the Elizabethan era advocated national economic self-sufficiency and supported a kind of economic nationalism. Of equal importance was the idea of organizing trade according to the principle of order and government: Foreign trade should be in the hands of knowledgeable, trained and experienced people, commodity prices should be kept high, and production should be controlled. All these standards could be attained effectively by chartered trade companies. This idea influenced economic policies throughout the 16th and 17th centuries. 

But the company's control of Levantine trade through restricted policies, exclusive rights and the imposition of high taxes and duties on British merchants drew reactions from the beginning. For liberals the Levant Company was a defective model of lingering mercantilist ideology: A monopoly set up to serve the interests of economic elites closely connected to the political establishment. So from the 18th century, under the pressure of severe criticism, the company reviewed its membership and regulations and promoted significant changes. The gradual opening of the company's trade to encompass Ottoman protégés and foreigners and to assist British trade during the French and Napoleonic Wars multiplied the opportunities for profitable business ventures outside the company's jurisdiction. The company reacted strongly against its members’ involvement in indirect trade, the engagement of foreign vessels and the evasion of duty payments. These methods showed the willingness of a large part of the British merchant community to operate freely, with the maximization of profit as their only aim - not political or diplomatic duties.

When peace was restored after the Napoleonic Wars in 1815, the new conditions of free trade further fueled the competition between the European merchants, making it impossible for company members to return to the old methods and techniques.

The book focuses on the final decades of the Levant Company. The company eventually dissolved in 1825, and you describe the process of its dissolution as almost inevitable given political, technological, and economic changes that had happened. Could you just go into a little more detail about how that happened?

In the 19th century all the contradictions in inconsistencies between the company's principles, strategy and practices were revealed. The Levant Company's founding principal to ensure exclusive treatment for its members by the Ottoman authorities - and at the same time ensure special conditions of trading against foreign communities and the native population - contrasted sharply with the notion of reciprocity and equality in foreign trade. This realization on the part of the British political establishment combined with consistent appeals from the section of British society calling for freedom of trade. Industrial growth and the rising power of the British state rendered the granting of monopolies and privileges to private institutions completely unnecessary.

In the last 30 years of its history the Levant Company underwent changes that dramatically influenced its identity and strategy. Its corporate identity weakened as the diversity of local market conditions turned each factory into a local cluster of individual interests. They operated more as autonomous institutions and less as an instrument of corporate strategy. The free tactics adopted by company members did not allow for a single company business network, but led to British traders engaging in many overlapping trading systems comprising members, non-members and foreigners. Monopoly regulations were gradually abandoned under pressure of war and foreigners - mostly Ottoman subjects of Greek, Jewish or Armenian background - were allowed into the company as partners. By the 1820s it was impossible to contain free trade or impede the involvement of Ottoman and other foreign merchants in British trade. This realization on behalf of the company ran parallel with a growing awareness that these types of organization had outlived their purpose. Soon the British government would opt for a free national trade policy. 

In 1819 the company attempted to demarcate its area of interest and develop a different business perspective by permanently lifting all restrictions on partnerships with foreigners. But this plan was overtaken by events. The implication of some of the Levant Company’s members in the Greek-Ottoman conflict [1821-1829], in ways that contravened Britain's official policy, gave the government another argument to reconsider the company's existence. It eventually said national relations should be governed by a national authority that would give more precise guidelines and have direct control. So around 100 years after the first liberal pamphlet had been published demanding the closure of the Levant Company, it finally closed down in 1825.

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