The social networks of cosmopolitan fraudsters: The Prussian bengal company as a transnational corporation

This chapter combines approaches from economic and business history with social network analysis to evaluate the challenges faced by a genuinely ‘transnational’ or ‘cosmopolitan’ business trading between Europe and the Indian Ocean world in the eighteenth century. By employing Peter F. Drucker’s differentiation between a ‘multinational’ and a ‘transnational’ enterprise, it evaluates the levels of national preference in the private trading operations of a multinational group of merchants sent by the Prussian East India Company to Bengal in the 1750s. Its findings demonstrate not only the lack of cosmopolitanism of these European traders but also the increased levels of principal-agent problems and moral hazard incurred by transnational enterprises which operated across several national and imperial frameworks. Although headquartered in Emden, Prussia’s eighteenth-century North Sea Port located on the German-Dutch border, and chartered by Frederick II of Prussia, the 1750s Prussian Companies trading to China and Bengal were genuinely transnational enterprises. Their capital, directors, sailing and commercial staff were drawn from Britain, Ireland, the Netherlands, Flanders, Sweden, France, and the German states. This cosmopolitan make-up posed a distinct set of challenges in terms of governance and firm organization. The focus of this chapter is on a single voyage, that of the ship Henry Prince of Prussia sent out in 1754 by the newly founded Royal Prussian Commercial Company Trading to Bengal. The captain was a Flemming and the three supercargoes in charge of the expedition were Scottish, French, and Flemish respectively. Instead of accomplishing their mission as instructed, the four took over the ship and the company’s funds to finance their own trade along the Coromandel Coast and Bengal in India before their ship sunk in the Ganges mouth a good one and a half years later. The subsequent legal case produced minute evidence that permits us to trace their Indian trading contacts and commercial social network as they developed over time, which in turn gives an insight both into how limited the ‘cosmopolitanism’ of these individual traders actually was and at the same time how even this limited cosmopolitanism posed an insurmountable challenge for a transnational enterprise operating across different legal and political frameworks.