Path dependence in ports: The persistence of cooperative forms

Business History Review

Volumn 81, Issue 4, 2007, Pages 681-708

  Van Driel, Hugo ^a   Devos, Greta ^b  

^a ERASMUS UNIVERSITY   (Netherlands)

^b UNIVERSITY OF ANTWERP   (Belgium)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 41249090625     PISSN: 00076805     EISSN: None     Source Type: Journal    
DOI: 10.2307/25097420     Document Type: Review

References (70)

1. Veem, the singular form of vemen, originally meant a "cooperative" or a "partnership." It later came to mean both a warehouse company and the warehouse itself.
2. Some economists think path dependence implies that prevailing technologies, institutions, and other "solutions" are not efficient. However, their view does not affect the analytical value of the concept, so we will not explore it here. Two frequently cited articles highlighting the possible inefficiency of path-dependent outcomes are by Brian W. Arthur, "Competing Technologies, Increasing Returns, and Lock-in by Historical Events," Economic Journal 99 (1989): 116-31;
3. and Paul A. David, "Clio and the Economics of QWERTY," American Economic Review 75 (May 1985): 332-37.
4. Opposing this view, S. J. Liebowitz and Stephen E. Margolis argue that avoidable inefficiency or market failure through path dependence is extremely rare, in part because they are convinced that entrepreneurial action will act as a remedy. See S. J. Liebowitz and Stephen E. Margolis, "The Fable of the Keys," Journal of Law and Economics 23 (1990): 1-25;
5. and "Path Dependence, Lock-in and History," Journal of Law, Economics, and Organization 11 (1995): 205-26.
6. In a reply, Paul David emphasizes that the usefulness of path dependence as an approach does not depend on the issue of efficiency. See Paul A. David, "Path Dependence, Its Critics and the Quest for 'Historical Economics,'" in Evolution and Path Dependence in Economic Ideas: Past and Present, eds. Pierre Garrouste and Stavros Ioannides (Cheltenham, 2000), 15-39.
7. Consider, for instance, the following: "it is precisely in the phases of early 'seeding' and development of path dependent processes that the scope of discretionary (individual and collective) choices is higher, while later on, the weight of past history may well bind freedom to rather narrow boundaries." Andrea P. Bassanini and Giovanni Dosi, "When and How Chance and Human Will Can Twist the Arms of Clio: An Essay on Path Dependence in a World of Irreversibilities," in Path Dependence and Creation, eds. Raghu Garud and Peter Karnøe (Mahway, 2001), 63.
8. James Mahoney goes so far as to state that one can only speak of path dependence when the relation between initial conditions and the (initial) outcome is "unpredictable." See James Mahoney, "Path Dependence in Historical Sociology," Theory and Society 29 (2000): 507-48.
9. For a seminal paper that stresses the importance of what have been later called "imprinting forces" of society on a form during the time of its creation, see Arthur L. Stinchcombe, "Social Structure and Organizations," in Handbook of Organizations, ed. James G. March (Chicago, 1965), 142-93.
10. Similar views are contained in K. J. Arrow, The Limits of Organization (New York, 1974), 56;
11. and Dominique Foray, "The Dynamic Implications of Increasing Returns: Technological Change and Path Dependent Inefficiency," International Journal of Industrial Organization 15 (1997): 741.
12. Routines are critical to the creation of lock-in in organizational forms, because sources of lock-in that are normally mentioned in the path-dependence literature, such as externalities, interrelatedness of elements, and sunk costs, mainly apply to the study of technical standards and technological systems and geographic patterns that have been the focus of this literature. For a useful overview, see Foray, "Dynamic Implications." An explicit application of path dependence to organizational matters was written by Paul A. David, "Why Are Institutions the 'Carriers of History'? Path Dependence and the Evolution of Conventions, Organizations, and Institutions," Structural Change and Economic Dynamics 5 (1994): 205-30.
13. Christopher Marquis, in "The Pressure of the Past: Network Imprinting in Intercorporate Communities," Administrative Science Quarterly 48 (2003): 655-89, gives an overview of less explicit applications of path dependence in this field.
14. For routines, see Markus C. Becker, "Organizational Routines: A Review of the Literature," Industrial and Corporate Change 13 (2004): 643-77.
15. See Glenn R. Carroll and Michael T. Hannan, The Demography of Corporations and Industries (Princeton, 2000).
16. Mahoney, "Path Dependence." The example is taken from Jack A. Goldstone, "The Problem of the 'Early Modern' World," Journal of Economic and Social History of the Orient 41 (1998): 249-84.
17. Kathleen Thelen, "How Institutions Evolve: Insights from Comparative Historical Analysis," in Comparative Historical Analysis in the Social Sciences, eds. James Mahoney and Dietrich Rueschmeyer (Cambridge, 2003), 208-40;
18. and How Institutions Evolve: The Political Economy of Skills in Germany, Britain, the United States, and Japan (Cambridge, 2004).
19. In a similar vein, Jeffry Haydu seeks temporal continuities in recurring problems or dilemmas ("reiterated problem solving"): solutions chosen at a certain switch point shape subsequent ones. See Jeffry Haydu, "Making Use of the Past: Time Periods as Cases to Compare and as Sequences of Problem Solving," American Journal of Sociology 104 (1988): 339-71.
20. The empirical part of this article is based on Hugo van Driel, "De ontwikkeling van de vemen in Nederland 1600-1967," Management Report Series 194, Erasmus Universiteit Rotterdam, Faculteit Bedrijfskunde (Rotterdam, 1994) on the subject of the vemen;
21. and Greta Devos, Gustaaf Asaert, and Fernand Suykens, The "Naties" in the Port of Antwerp (Tielt, 2nd ed., 2004);
22. and Greta Devos, Katoen Natie 150 Years, Part 1: A Story of J-hooks, "Pirrewitjes," and Drayhorses (Tielt, 2002), regarding the naties. The primary sources for these studies were contemporary general city descriptions, government regulations, veem contracts (retrieved from both source publications and notarial archives), guild archives for the early modern period, and firm archives and address books for the nineteenth century.
23. Only a few natie contracts explicitly stating that the members shared income have been saved. However, it is plausible that many naties functioned as cooperatives. In the case of the vemen, there is no doubt that all of them were cooperatives. Still, only a small minority of the veem contracts that have been traced literally stipulate that all income was put in one purse. However, many of these contracts prescribe that sick or otherwise temporarily disabled members should receive their full share of the income, normally for no less than one year and six weeks. See M. G. de Boer, "Amsterdamsche veemcontracten," Economisch-Historisch Jaarboek 4 (1918): 122-83;
24. and J. G. van Dillen, Bronnen tot de geschiedenis van het bedrijfsleven en het gilde-wezen van Amsterdam, 3 vols. ('s-Gravenhage, 1929-74).
25. For recent overviews of the guilds in the Low Countries, see Craft Guilds in the Early Modern Low Countries, eds. Maarten Prak, Catharina Lis, Jan Lucassen, and Hugo Soly (Aldershot, 2006);
26. Jan Lucassen and Maarten Prak, "Guilds and Society in the Dutch Republic (Sixteenth-Eighteenth Centuries)," in Guilds, Economy, and Society, eds. S. R. Epstein et al. (Madrid, 1998), 63-77;
27. and Sandra Bos, Uyt liefde tot malcander. Onderlinge hulpverlening binnen de Noord-Nederlandse gilden in international perspectief (1570-1820) (Amsterdam, 1998), ch. 2.
28. See Clé Lesger, The Rise of the Amsterdam Market and Information Exchange: Merchants, Commercial Expansion, and Change in the Spatial Economy of the Low Countries, c. 1550-1630 (Aldershot, 2006).
29. Still there were some peat-porters' vemen by 1608. However, as far as we know, these cooperatives did not survive the old regime. Moreover, unlike the weigh-house porters' cooperatives, each peat-porters' veem was headed by an outside person, who was appointed and paid by the buyer or the captain of the peat ship involved (Bos, Uyt liefde, 113).
30. M. G. de Boer, Van waagdragersveem tot modern grootbedrijf (Groningen, 1917), 33.
31. Supervision of the weighing by the weigh-house porters was the main reason that they were officially appointed by the city and were sometimes referred to as "civil servants."
32. De Boer, Waagdragersveem, 27, 31.
33. The hourly wage seems rather high compared to the daily summer wage ranging from 90 cents to 1.5 guilders earned by Amsterdam masons and carpenters around 1650. See Hubert Nusteling, Welvaart en werkgelegenheid in Amsterdam, 1540-1860 (Amsterdam, 1985), 252.
34. For instance, Withoedenveem raised its buying-in sum incrementally from 800 guilders to 2,400 guilders between 1693 and 1785.
35. For an overview of Amsterdam's economy during this period, see Joost Jonker, Merchants, Bankers, Middlemen: The Amsterdam Money Market during the First Half of the Nineteenth Century (Amsterdam, 1996).
36. Karel Veraghtert, "From Inland Port to International Port, 1790-1914," in Antwerp: A Port for All Seasons, eds. F. Suykens et al. (Antwerp, 1986), 302. Ship tonnage is the best available measure for comparing the development of the nineteenth-century ports, since there are no consistent, complete, and reliable time series on the amounts of cargo actually handled.
37. See Jonker, Merchants, 67.
38. J. C. Westermann, Kamer van Koophandel en Fabrieken voor Amsterdam. Gedenkboek samengesteld ter gelegenheid van het 125 jarig bestaan. Eerste Deel. Het tijdvak 1811-1922 (Amsterdam, 1936); Bijlage 7 (data from the annual reports of the Amsterdam chamber of commerce).
39. Daniel Louis Uyttenboogaart, Het handelsgebruik betreffende ontvang-cedullen in Nederland (Amsterdam, 1905);
40. and H. H. van Dam, Zes lezingen over het veembedrijf (Rotterdam, 1930).
41. Borrowing money with goods as collateral in general and warehouse warrants in particular did not become important during the nineteenth century. See A. M. de Jong, Geschiedenis van de Nederlandsche Bank, vols. 1 and 2 (Haarlem, 1930, 1960);
42. other sources for obtaining short-term credit were widely available. See Jonker, Merchants.
43. For this and other information on Blaauwhoedenveem's conversion into a partnership firm, see Vopak Archives, Rotterdam (hereafter VAR), minutes of the meetings of members of Blaauwhoedenveem from 11 Dec. 1855 to 22 Dec. 1857.
44. Dutch National Archives (hereafter DNA), NHM Archives (hereafter NHMA), inventory number (inv. no.) 10287, personal files J. J. Rochussen 1851-58; and inv. no. 2046, confidential minutes of the meetings of the NHM managing directors in 1856 and 1857.
45. It is not clear when this happened. M. G. de Boer, Naamlooze Vennootschap Blaauwhoedenveem-Vriesseveem (n.p., 1918), 44, based on oral history, mentions that the NHM granted the warehousing of sugar, tin, and other goods to a consortium led by Vriesseveem in 1858. A document in the NHM archives listing the goods and vemen involved, dated Dec. 1858/Jan. 1859, mentions several combinations of vemen that were working at that time for the NHM, whereas Blaauwhoedenveem and others are described as newcomers in this field, that is, for warehousing and processing coffee; DNA, NHMA, inv. no. 2033, Naamlijsten der waagdragers in dienst der NHM.
46. One member voted against making Blaauwhoedenveem's celen negotiable, that is, against the changeover to a partnership firm; VAR, minutes of the meeting of members of Blaauwhoedenveem, 27 Oct. 1856.
47. A trend toward inheritance of veem membership within particular families had started at an earlier date. The Klyn family was represented in Blaauwhoedenveem throughout the nineteenth century. The members of one family did not carry much weight, however, for, at the time of its conversion into a partnership firm, Blaauwhoedenveem still had ten partners.
48. This and the following two paragraphs are, unless indicated otherwise, based on Theo van Tijn, Twintig jaren Amsterdam. De Maatschappelijke ontwikkeling van de hoofdstad, van de jaren '50 der vorige eeuw tot 1876 (Amsterdam, 1965);
49. and M. G. de Boer, De haven van Amsterdam en haar verbinding met de zee (Amsterdam, 1926).
50. These figures probably still overestimate Amsterdam port traffic, since some of the ships formally declared the cargo to the customs at Amsterdam but actually unloaded in Den Helder; see below, Theo van Tijn, "Het Noordhollands zeehavengebied, vóór en na de openstelling van het Noordzeekanaal," Tijdschrift voor Geschiedenis 69 (1966): 279, 289.
51. Calculated on the basis of Ministerie van Kolonien, Statistiek van Handel en Scheepvaart, 1864-1894.
52. Calculated on the basis of B. R. Mitchell, International Historical Statistics: Europe, 1750-1988 (Stockton, 1992), 699.
53. See L. P. D. op ten Noort, Exploitatie der Handelskade (Amsterdam, 1883); Amsterdam Municipal Archives, Particular Archives no. 550, inv. no. 46. Circulaire o.d.t. Project eener op te richten Naamloze Vennootschap genaamd de Handelskade, Amsterdam, May 1883 (circular letter to promote N.V. Handelskade, see below).
54. "Voordracht van B. & W. aan de Gemeenteraad van Amsterdam d.d. 21 mei 1883," in Gemeenteblad Amsterdam 1883, afd. 1, no. 473, 505-22,
55. and Kamer van Koophandel en Fabrieken voor Amsterdam, Verslag over den toestand van handel, scheepvaart en nijverheid te Amsterdam in 1883 (Annual report Amsterdam Chamber of Commerce in 1883), 9.
56. Like the Antwerp Compagnie des Docks-entrepôts et Magasins d'Anvers discussed below, the Rotterdamsche Handelsvereeniging was inspired by the example of foreign dock companies. In May 1879, when the building of the complex was not yet finished, RHV's director, Lodewijk Pincoffs, fled to the United States because he could no longer hide the fraud he had committed to save his other business ventures. The municipality bought the Feijenoord-complex in 1882 and decided that, in order to prevent a private monopoly in the port, it would never again allow a company to buy quay terrains.
57. On the history of Insulinde, see M. G. de Boer, Geschiedenis der Amsterdamsche Stoomvaart. Tweede deel, eerste stuk (Amsterdam, 1922), 34-42.
58. For this and the following discussion, see VAR, minutes of the meeting of the Blaauwhoedenveem partners between 22 Nov. 1883 and 29 Oct. 1885; and De Boer, Waagdragersveem, 54-57.
59. See Jacob Grooten, Eenige opmerkingen over de vennootschap onder firma in het Nederlands recht (Wormerveer, 1929), 53, 72-73.
60. Surprisingly, given the importance ascribed to this factor in the literature on changing legal forms of businesses during the nineteenth century, no mention was made of the fact that the Blaauwhoedenveem partners would no longer be fully liable for the company's debts. See, for instance, David A. Moss, When All Else Fails: Government as the Ultimate Risk Manager (Cambridge, Mass., 2002).
61. See Paul Marie Louis Frentrop, Corporate Governance, 1602-2002 (Amsterdam, 2002), 224.
62. As late as 1960, no less than 98 percent of all Dutch limited liability companies were "closed." See Keetie E. Sluyterman, Dutch Enterprise in the Twentieth Century (London, 2005), 154.
63. VAR, minutes of the meetings of the Blaauwhoedenveem partners on 29 Mar. 1889 and of the managing directors on 12 Nov. 1891.
64. Calculated on the basis of Kamer van Koophandel en Fabrieken te Rotterdam, Jaarverslagen 1886-1913 (Rotterdam Chamber of Commerce, annual reports) The volume of raw tropical goods was estimated by adding the arrivals of gums, wool, cotton, raw sugar, oilseeds, and other luxury foods and food preparations (which include coffee, cocoa, tea, spices, and tobacco). This underestimates the potential demand for the vemen's services, because beginning in 1904 they made use of cold stores, thereby extending their activities to the warehousing of (other) fruits, vegetables, and, in particular, meat.
65. VAR, file 33A, Blaauwhoedenveem, Jaarverslagen (annual reports) 1886-95 (handwritten), and Blaauwhoedenveem, Jaarverslagen 1902-1913.
66. Unlike the Dutch partnership firm, a VGN formally represented a separate legal entity - in practice, however, the partnership firm had a similar status in Dutch business.
67. Unlike the partnership firm, in the SM form, the natie partners could, if they so stipulated in their company's personal law, limit their liability for the firm's debt - again, as far as we know, this factor was not often considered by contemporaries.
68. This and the remainder of the paragraph are based on Greta Devos, "Moderniseringen in de haven van Antwerpen. De Compagnie des Docks-entrepôts et Magasins d'Anvers," in Een kompas met vele streken, ed. Griet Maréchal (Antwerp, 1994), 83-90.
69. Greta Devos and Ilja Van Damme, In de ban van Mercurius. Twee eeuwen Kamer van Koophandel Nijverheid van Antwerpen-Waasland 1802-2002 (Tielt, 2002), 86, 102, and 118;
70. and Greta Devos, "Land-Use Policy in the Port of Antwerp (1870-1940)," in Struggling for Leadership: Antwerp-Rotterdam Port Competition between 1870-2000, eds. Reginald Loyen, Erik Buyst, and Greta Devos (Heidelberg, 2003), 203-04.