The first shares anyone could buy were in a spice company.
In 1602 the Dutch East India Company invited the public to invest, and its shares were soon traded in Amsterdam. It is widely regarded as the first company to offer shares to the general public, and Amsterdam's trading grew into the first modern stock exchange.
Long-distance voyages to Asia for spices were hugely profitable but risky: ships sank, were captured or simply never returned. Earlier Dutch ventures pooled money for a single voyage and paid out when it ended. In 1602 the Dutch government merged rival companies into the Vereenigde Oostindische Compagnie, or VOC, and gave it a monopoly on Dutch trade in Asia.
Crucially, the VOC raised capital from the public, and that capital was committed for the long term rather than one voyage. Anyone, from merchants to servants, could subscribe. Because investors could not simply withdraw their money, they needed a way to get out, so they sold their shares to others. Trading in VOC shares on the streets and bridges of Amsterdam grew into what is widely regarded as the first modern stock exchange.
Many features of today's markets appeared remarkably quickly: forward contracts, short selling and even early examples of shareholder activism, as investors complained about the company's secrecy and dividends.
The VOC was also an instrument of empire. It had the power to wage war, sign treaties and establish colonies, and its pursuit of profit involved violence, forced labour and slavery, including the conquest of the Banda Islands to control the nutmeg trade. The invention of public shares is a pivotal moment in financial history, and a reminder that the history of capital is tied up with the history of power.
Source: Wikipedia — Dutch East India Company · Text summarised from Wikipedia (CC BY-SA 4.0)
