1. Introduction
1.1. Outline of the article
Between 1731 and 1813, the Swedish East India Company (SEIC) carried on trade between Asia and Europe. For several decades, it was one of the big chartered companies trading in Canton – the only Chinese port opened to Western countries. The company traded mainly in tea, but also in porcelain, silks, nankeens (Chinese cotton textiles), spices and many other goods. During the most extensive period of the Company’s operations, the company carried annually between 600 and 1200 tons of tea from Asia to Europe, accounting for about 15% the European tea imports from China. This was less than the English East India Company imported but about the same magnitude as the Dutch, Danish, and French annual tea imports. Considering the fact that Chinese tea, just behind Indian cotton, was the most important commodity in Euro-Asian trade, the Swedish Company was a major transnational trader. Yet the vast literature on the eighteenth-century chartered companies seldom pays attention to the Swedish venture. The literature on Swedish economic history furthermore often attributes little importance to the SEIC, as the company’s business strategy is believed to have had little impact upon the Swedish economy.

This paper aims to assess the role of SEIC from a new point of view. We will assess the role of the SEIC from the perspective of a value-added analysis of the trade flows between Canton, Sweden and the end-markets of the goods carried by SEIC. Such an analysis makes it possible to unveil the magnitude of the values generated in the value-chains of the Asian goods traded by the Company from Asia to Europe. This new perspective will also help us to assess the SEIC’s importance for the Swedish economy.

1.2. Previous research
The literature on Asian-European trade is to a large extent dominated by studies focusing upon the big English, Dutch and French companies (key works on the English East India Company include Bowen, Citation2006; Bowen, Lincoln, & Rigby, Citation2002; Chaudhuri, Citation1978; Erikson, Citation2014; Furber, Citation1948; Stern, Citation2009, Citation2011; for the Dutch East India Company see Clulow, Citation2014; Gaastra, Citation2003; Nierstrasz, Citation2015; Prakash, Citation1985; Steensgaard, Citation1973; Yong, Citation2007; for the French company see Haudrère, Citation1989; Le Bouëdec & Nicolas, Citation2008; for a comparative analysis, see Bruijn & Gaastra, Citation1993). Companies that were smaller, such as Danish, Swedish, Prussian or Ostend Companies, have received considerably less attention (standard works include Feldbæk, Citation1969; Koninckx, Citation1980; Parmentier, Citation1993; for more recent research see for example Asmussen, Citation2018; Dreijer, Citation2019; Hellman, Citation2019; Hodacs, Citation2016). Much of the standard literature on European chartered companies in Asia has focused upon the trade on India in particular, and especially on the competition between European companies in India (see for example Bowen, Citation1991; Bowen, Citation2006; Dalrymple, Citation2019; Stern, Citation2011). The research focus on India does not mean that the historians of Euro-Asian trade would underestimate the role of trade with China. In fact, the significance of the EIC’s trade with China has been acknowledged in the literature (see for example Berg et al., Citation2015; especially Hanser, Citation2019). The growth of the Canton trade had a transformative impact globally. First, there was the eighteenth-century transformation of consumption in Europe, not the least the transformation of Britain into a tea-drinking nation. Canton came to acquire a monopoly position in the Euro-Asian tea trade. All tea drunk in Western Europe in the eighteenth century originated in China. By the 1770s, the value of Britain’s imports of Chinese tea exceeded that of Indian cotton textiles (Price, Citation1998, p. 100). Second, there was the well-known role of Canton as a vehicle for India’s transformation after the British conquest of the sub-continent. After the conquest, Canton turned into the great destination of Indian goods – first cotton, then opium – as well as the destination of private Anglo-Indian remittances (Cuenca-Esteban, Citation2007; Hanser, Citation2019). As the trade in tea, silks, porcelain and cotton (nankeens) became the most dynamic part of Euro-Asian trade, Canton turned into a global trading hub (Van Dyke, Citation2005 and Citation2011).

Several European chartered companies took part in this transformation of the East Asian trade. The Danish Asiatic Company, reorganised in 1732, a year after the SEIC, is an illuminating point of comparison. Its role in Asia is well known and well understood (Asmussen, Citation2018; Feldbæk, Citation1969, Citation1991, Citation1997; Rasch & Sveistrup, Citation1948). The Danish trade with Asia had two legs, the Danish trading stations Tranquebar and Serampore (Frederiksnagore) in India, and Canton in China. Unsurprisingly, Danish-Indian trade was focused mainly on cotton textiles, while the Danes imported tea, porcelain, and silks from Canton. The total values of the Danish China trade by far exceeded the Danish India trade. In the four decades between 1732 and 1771, the Danish imports from China were three times bigger than the Danish trade with India. The difference diminished in the 1770s to 1790s due to the decline of China trade (Feldbæk, Citation1991, pp. 11–14). The Danish imports from China consisted mainly of tea, and much of it was re-exported from Copenhagen to the Netherlands, France, and Britain.

The history of the Swedish East India Company has received much attention in Swedish historiography, both in popular history literature and among professional historians. The popular history has often depicted the SEIC as the Swedish ‘adventure’ at sea (see for example Ahlander & Langert, Citation2009; Holmström, Citation2007; Lindqvist, Citation2002). The focus has been on the adventurous voyages, vessels, shipbuilding, dangers of life at sea, and meetings with exotic destinations and peoples in Africa and Asia. In this popular literature the business logic of the company, its extraordinary profitability, and its actual role in global trade is seldom discussed and often misunderstood.

There is also much scholarly research into the history of the Swedish East India Company. The general outlines of the company’s history are well-known from this research (Frängsmyr, Citation1990; Kjellberg, Citation1974; Koninckx, Citation1980; Söderpalm, Citation2003). The company was founded in Gothenburg in 1731 as a typical chartered company. The first charter stretched for fifteen years, from 1731 to 1746, and it provided the venture with monopoly rights on Swedish trade in Asia. The know-how and capital came to a great extent from the prohibited Ostend Company in the Austrian Netherlands. Many employees of the Swedish company were of Scottish and Flemish origin and made their early careers in the Ostend Asia trade. They therefore had know-how of the trade as well as useful contacts and networks in Asia and in Europe already at the time when they were recruited to work for the Swedish company. The British and Dutch perceived the Ostend Company as a dangerous competitor in Asia and the transfer of the Ostend venture to Sweden was seen as a hostile act in Amsterdam and London. This makes it understandable why, at its beginning, the SEIC’s venture was covered by much secrecy. After a conflict with the English East India Company in southern India, the so-called Porto Novo Affair of 1733 (Gill, Citation1958), the Swedish company focused almost exclusively on the trade in Canton. In Canton, the Chinese authorities treated all Europeans formally as equals and so the Swedes were treated in the same way as the Dutch and English East India companies.

The standard work on the history of the SEIC in the international scholarly literature is still Koninckx (Citation1980), an excellent work yet covering only the first two charters of the SEIC’s history (1732–1766). Several foreign accounts of the company’s business have relied upon Koninckx’s work without acknowledging this limitation in time, hence describing the SEIC as if these two charters make up the entirety of the company’s operations. This has in effect meant that only half of all SEIC voyages are included in these accounts (see for example Bruijn & Gaastra, Citation1993; de Vries, Citation2003, pp. 40–41). There were, in reality, 132 SEIC voyages, and the company continued to operate for several decades following the end of the second charter in 1766.

Most recent research into the history of the SEIC has provided an increasingly complex picture of the company’s business and its role in the Euro-Asian trade (Hodacs, Citation2016; Hodacs & Müller, Citation2015; Müller, Citation2003, Citation2011, Citation2016, Citation2018). It has stressed the role of illegal tea market in Great Britain as the main destination of the SEIC’s cargoes of tea. As the re-exports to Britain were smuggled there are no official data on the commodity flows, yet we have enough indirect evidence in correspondence (Müller, Citation2003), and even in newspapers, parliamentary papers and other records (Cole, Citation1958; Janes, Citation2016, Citation2020). Hanna Hodacs’ research (Citation2016), also pointed out the character of the SEIC as an important enterprise, and in many ways equal to other chartered companies, in organising trade between Europe and Asia, in silks and tea. Hodacs maintains the similarities, as well as differences, in strategies employed by the Danish and Swedish companies in Canton. Lisa Hellman in her research (Hellman, Citation2019) stressed how the Swedish company employees were well integrated in the European merchants’ society – the ‘foreign quarters’ – in Canton. Müller (Citation2011, Citation2016, and Citation2018) paid attention to the role the SEIC’s purchases in Canton in the 1760s and 1770s did play for flows of remittances between India, Canton and London. So-called ‘Indian remittances’, in form of credit money available in Canton, were used to purchase Swedish return cargoes. In such a way the Swedish company, together with other chartered companies, contributed to British exploitation of India after the Seven Years War (Cuenca-Esteban, Citation2007; Hanser, Citation2019). The Swedish company also used neutrality for commercial purposes. Until the outbreak of the Napoleonic Wars, Sweden did not participate in the Anglo-French wars, and in Canton, a neutral flag was a business advantage during such wars (e.g. in 1756–1763, 1776–1783, and in 1793–1800) (Müller, Citation2016, p. 243).

While the recent research on the SEIC placed the venture in the context of eighteenth-century globalisation, it has not specifically studied the company’s contribution to the Swedish economy. The standard literature in economic history certainly mentions the company, but provides no impression that it had any significant impact upon the Swedish economy, but at most some impact locally for the city of Gothenburg (see for example Lagerqvist, Citation2013, p. 56; Magnusson, Citation2016, pp. 254–256). There has, however, been no systematic study of the SEIC’s trade flows to and from Sweden in relation to economic historical data on GDP and trade flows. In their article on Sweden’s foreign trade in the eighteenth century Rodney Edvinsson and Christoffer Tarek Gad (Citation2018, p. 7) considered the SEIC’s trade but they only included imports for domestic consumption – which, as will be shown in the present article, only made up a minor part of SEIC’s total trade.

1.3. Aim of the current article
In this paper we argue that the SEIC’s trade was an important part of Sweden’s foreign trade if we not only focus on its imports, but also take into account the company’s main activity: the re-exportation of Asian goods to foreign markets in Europe. A combination of exports and re-exports in foreign trade was a quite typical feature of eighteenth-century mercantilist trade. The role of re-exports in Britain’s foreign trade, for example, is well known and considered as an important factor regarding trade flows, state revenues, access to credit, and Britain’s economic development in general (see especially Ormrod, Citation2003; O’Brien, Citation2005; Price, Citation1998). Adding re-exports to exports improved the balance of trade from a mercantilist point of view. The British re-exports consisted mainly of tobacco, sugar, cotton textiles, and coffee, and much of the goods – but far from all – were produced in British colonies. The direct production of such goods was thus potentially beneficial for the British Empire, as well as several British subjects benefiting from this trade, even though it took place outside of the United Kingdom, and hence outside the scope of British national accounts.

This is, indeed, different in comparison with the SEIC’s purchases in Canton, where the production of tea and silks clearly took place completely outside European sphere of influence. The value-added created in the trade of the Asian goods, however, was an activity that should be included in national accounting of the European nations, to the extent that European agents were the ones involved in the trade. Activities related to such trade created trade and credit networks, provided jobs in trade, shipping, shipbuilding and other industries, and created great profits that could be invested in the domestic economies.

To summarise, in spite of the vast international literature on the role of big chartered companies and eighteenth-century globalisation we lack an assessment of the economic role of the Swedish East India Company. Internationally, its role still is often misunderstood and diminished. In Sweden, the most recent research on the company has reevaluated its global role and placed it in the context European trade and consumption revolution, but the reappraisal has primarily been based on qualitative or limited quantitative evidence. The literature in the field of economic history has yet to reevaluate the importance of the company’s activities, in no small part perhaps because many scholars in the field still hold the (incorrect) belief that all primary sources relating to the company’s economic activities have been destroyed. In this article, we add a new dimension to the reappraisal, by employing a value-chain analysis on Sweden’s East India trade in order to assess the magnitude of this global trade flow in economic terms.

2. Materials and methods
2.1. Value-chain analysis
In recent years, there have been various attempts at studying the creation of value-added in historical transnational value-chains, for example in the transatlantic slave- and colonial goods trades (Combrink, Citation2017; Eltis & Engerman, Citation2000; Fatah-Black & Van Rossum, Citation2015; Rönnbäck Citation2014, Citation2018). A value chain, according to the leading theorists Raphael Kaplinsky and Mike Morris ‘describes the full range of activities which are required to bring a product or service from conception, through the different phases of production […] to final consumers’ (Kaplinsky & Morris, Citation2001, p. 4).

A key point of a value-chain analysis is that it enables studying in what links of this chain value is created, contributing to understanding how the value derived in the creation of a final product is distributed between different agents in the value-chain. This can be done by estimating the value-added at different stages of the value-chain. A value-chain analysis can be of different levels of detail, depending on how rich the available primary data is. In historical studies, a value-chain analysis is often forced to rely upon various proxies in combination with empirical data, as there might be variables for which information simply is lacking. A value-chain analysis can also be used to estimate the magnitude of economic activities in a comparative perspective. Estimating the amount of value-added throughout an economy is one way of measuring the historical Gross Domestic Product of the country (Broadberry, Campbell, Klein, Overton, & van Leeuwen, Citation2015, xxxiii). By estimating the value-added throughout a particular value-chain, we can thereby provide a quantitative estimate of how important that value-chain is compared to the total output of the whole country.

A simple method to do this is to calculate the value of the output at a link a the value-chain as the product of volume of goods handled and the price of the product at that link of the chain. The value-added is then calculated as the value of the output, minus the value of input of intermediate goods (from previous stages in the value-chain). When analysing transnational value-chains, we naturally have to take this transnational character into account, as the value-added of the whole value-chain might exceed the value-added of a single nation’s economy. In order to make a meaningful comparison, one would therefore need to compare only those links of a value-chain taking place ‘within’ a national economy, in abstract terms, to the GDP of that economy. Drawing such border between national and non-national economy in the eighteenth century is sometimes very difficult. This is the issue we have to consider, no matter if the analysis to British re-exports of the West Indian commodities, or the Swedish re-exports of Chinese tea. During the eighteenth century, trade was regulated in agreement with mercantilist thought of foreign trade, but at the same time – and because the early modern states lacked ability to implement their mercantilist policies – much trade was carried on in the grey zones between national, colonial and other borders (Müller, Citation2018, pp. 85–89; Shammas, Citation2000).

Our aim is thus to estimate the value-added involved in the Swedish participation in the value-chains of the Swedish East India trade during the eighteenth century. The value-chains for the commodities traded did, of course, not begin at the point when the Swedish company purchased the goods. The first legs of the value-chains would instead have been between production areas in China, for example Fujian tea-growing areas, or China’s inland porcelain capital Jingdezhen, and the point of sale to the European companies in Canton (Gerritsen & Riello, Citation2016; Yong, Citation2007). As our aim is to estimate the magnitude of the Swedish involvement in these value-chains, we take the point of purchase in Canton as our starting point (and hence first input of ‘intermediate goods’ in the value-chain), in order to analyse the value-added created at later links in the chain.

It is important to note from the outset that the study is not limited to studying the value-added of the Swedish East India Company alone, but of the value-added throughout the value-chain initiated by the SEIC, as long as Swedish agents were involved. We do thus try to estimate the value-added of Asian goods imported into Sweden, including the value-added that the Company directly was responsible for from purchase of goods in Asia to their sales in Sweden, but also the value-added at later links in the value-chain until the products reached the final consumers in Sweden or abroad. We furthermore try to estimate the value-added of re-exported Asian goods: both the links in the value-chain from purchase in Asia until the sale at auctions in Sweden, and the value-added in later stages of the value-chain for the share of the goods re-exported by Swedish agents. The SEIC was certainly directly responsible for a large part of the estimated value-added but, as we will show in this article, the Company’s trade also enabled a very substantial re-export trade conducted by other agents – most often agents in one or another way related to the company (Askenfelt, Citation2017; Hodacs & Müller, Citation2015; Janes, Citation2020; Söderpalm, Citation2003, pp. 88–105).Footnote1

2.2. Quantities and value of goods purchased by SEIC in Asia
There is no single data-source that would allow us to easily estimate the magnitude of the Swedish East India trade, as the account books of the SEIC largely were destroyed. Ever since Eli Heckscher’s days, economic historians have therefore despaired at the prospects of arriving at any estimates as to the company’s trade (Lagerqvist, Citation2013, p. 56). Such a conclusion is, however, premature. Primary sources are certainly often lacking, or – when they exist – are rather fragmentary. But several scholars have over the years come to realize that a number of primary sources related to the company actually have survived in various archives. By triangulating data between these different sources, it becomes possible to provide a quantitative estimate of the magnitude of the company’s activities. In order to estimate the volume and value of goods traded by the SEIC, we start by using data from primary and secondary sources on the goods purchased in Asia. Data has been gathered from different sources for different parts of the period under study.

For the period from 1733 to 1761, data has been gathered from previous research. Christian Koninckx (Citation1980, pp. 451–452) has assembled data on the amounts of tea purchased in Asia by the SEIC during the period 1739–1767. Data is missing for a few ships known to have gone to Asia on SEIC’s account. We have here assumed that the ships for which data is missing carried as much tea as the average carried on other ships the same year. One type of tea, Bohea, completely dominates the purchases, accounting for 84% of all known tea purchases by the Company during this period (see also Hodacs, Citation2016, p. 55, fig. 2.1). After tea, the silk textiles were the most valuable commodity and especially during the first two charters silks played an important role for SEIC’s trade. Silks were imported by the piece, a piece being between 14 and 15 m long and about 70 cm wide depending on the textile quality. Koninckx has assembled data for silk textiles traded by the SEIC (Koninckx, Citation1980, pp. 456–457). Hodacs has independently also created a dataset of SEIC’s silk trade, based on printed sale catalogues for the period 1733–1759 (Hodacs, Citation2016, pp. 193–194). Hodacs and Konincks provide very similar figures for the majority of available years.

For the period 1762–1786 the authors of this article have collected data on all company purchases in Asia from the primary sources on the Company balance accounts and purchase invoices stored at the Gothenburg University LibraryFootnote2 and Jean Abraham Grill’s collection (Godegårdsarkivet, Nordiska museet).Footnote3 The data for 1762–1786 complement Hodacs and Koninckx series, based on different sources, but as the data for the periods 1733–1761 and 1762–1786 differ in the ways they have been collected we have to be careful when comparing them. The purchase invoices report data on both the quantities and the values (accounted for in Chinese taels) of the purchases. They are dated either at the end, or at the beginning, of the year when the purchases of cargoes were completed and the vessels prepared to leave Canton for voyage home. Homebound voyage took on average about a half year. As the dating of the Company invoices is somewhat inconsistent (sometimes December, sometimes January), the Canton purchase data occasionally does not match auction data in Sweden from the corresponding year of sale. As we miss information for a few ships, we have in this article made a crude assumption that the ships for which data is missing carried as much goods as the average carried on other ships the same year. Some of the invoices for tea contain no data on the quantities purchased, but only information on the amounts of money spent for the purchase. We have then estimated a proxy for the quantities traded by using the price of tea in Canton, based on the research by Pim de Zwart (de Zwart, Citation2016). The resulting estimates are shown in Figure 1.

Figure 1. Quantities of tea purchased by the SEIC in Asia, 1738–1786 (kg). Sources: own elaborations based on Koninckx (Citation1980, pp. 451–452); Gothenburg University Library, Collection Ostindiska kompaniet: Fakturor på returladdningar från Kina med olika skepp 1768–1786; Godegårsarkivet, Nordiska museet, Digitala arkivet: Expeditioner, A28, 1762–1766.

Figure 1. Quantities of tea purchased by the SEIC in Asia, 1738–1786 (kg). Sources: own elaborations based on Koninckx (Citation1980, pp. 451–452); Gothenburg University Library, Collection Ostindiska kompaniet: Fakturor på returladdningar från Kina med olika skepp 1768–1786; Godegårsarkivet, Nordiska museet, Digitala arkivet: Expeditioner, A28, 1762–1766.
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The data enable us to estimate quantitatively the relative importance of the goods purchased by the SEIC in terms of their monetary value. As was noted above, the price of tea in Asia has been assembled by Pim de Zwart, and therefore enable us to calculate the value of the volumes of tea reported in previous research as purchased by the SEIC. We have then assumed that the SEIC purchase price of silk was roughly the same as that of the Danish East India Company, about 10 tael per piece.Footnote4 The price is consistent with the average prices in the purchase invoices and balance accounts of the period after 1762.Footnote5 There is no similar data on the purchase of other goods than tea or silk (e.g. porcelain, spices) prior to the data we have collected for the period 1762–1786, but from previous research it seems as if they were of quite marginal importance. We have here assumed that these goods in total amounted to ten per cent of the total purchase value in Asia (which also is roughly in line with the relative importance of these goods during the following period). The resulting estimates are shown in Figure 2.

Figure 2. SEIC’s purchases of Asian goods (per cent of total purchase value), 1739–1786. Sources: for the period from 1739 to 1761: own elaborations based on quantities of tea from Figure 1; prices of tea based on de Zwart, Citation2016; quantities of silk based on Koninckx, Citation1980, pp. 456–457; Hodacs, Citation2016, pp. 193–194; prices of silk assumed to be 10 tael per piece, as described in the text. For the period from 1762 to 1786, see footnotes 17 and 18.

Note: ’other’ goods have for lack of primary data been assumed to have amounted to 10% of total purchase value for the period 1739–1761. Years with missing values have been interpolated.

Figure 2. SEIC’s purchases of Asian goods (per cent of total purchase value), 1739–1786. Sources: for the period from 1739 to 1761: own elaborations based on quantities of tea from Figure 1; prices of tea based on de Zwart, Citation2016; quantities of silk based on Koninckx, Citation1980, pp. 456–457; Hodacs, Citation2016, pp. 193–194; prices of silk assumed to be 10 tael per piece, as described in the text. For the period from 1762 to 1786, see footnotes 17 and 18.Note: ’other’ goods have for lack of primary data been assumed to have amounted to 10% of total purchase value for the period 1739–1761. Years with missing values have been interpolated.
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We have then made use of official Swedish trade statistics concerning the East India trade, assembled by Joh. Fr. Nyström (Nyström, Citation1883, tables 1 & 4), for an estimate of how much of the Asian goods carried by the SEIC to Europe actually were imported and consumed in Sweden, and how much was re-exported to other markets in Europe. Nyström’s volume summarises known official and private data on the trade of the Swedish East India Company. Nyström’s data are most useful as regarding the values of Asian goods re-exported from Sweden, including data on an aggregate level (as well as disaggregated geographically by market for the re-exports). Nyström also included data on the value of Asian commodities officially imported into Sweden, by type of commodity. His data, however, has to be employed with caution and might sometimes require correction.

SEIC’s cargoes were normally sold on auctions in Gothenburg between July and October. Re-exports were loaded on smaller vessels and left Gothenburg, while goods for domestic consumption could be stored or transported by land to other parts of Sweden. It is difficult to evaluate the reliability of the official re-export data reported by Nyström. As the chartered English East India Company had a legal monopoly on the sale of Asian goods in Britain, re-exports to Britain were essentially illegal. That smuggling to Britain was a common practice is, however, well-known (Cole, Citation1958; Kent, Citation1973, pp. 112–129; Müller, Citation2003, Citation2018, pp. 133–153; Mackillop, Citation2015; Janes, Citation2016, Citation2020). We would therefore not necessarily trust the geographical disaggregation of the Swedish official statistics regarding re-exported Asian goods (Nyström, Citation1883), as re-exports that officially were reported to be destined for one market – say the Netherlands – very well might have been smuggled to the British market. As there were no regulations prohibiting re-exports from Sweden, and there were many legal markets for Swedish re-exports (Netherlands, France, Portugal, Hamburg, etc.), we on the other hand see little reason to believe that the total quantities reported to have been re-exported would suffer from any systematic bias. This data therefore allow us to calculate the share of Asian goods carried by the SEIC that was re-exported, for the period from 1756 until the early nineteenth century (with some gaps in the data-series). This is shown in Figure 3.

Figure 3. Share of goods carried by the SEIC re-exported to other markets in Europe, 1756–1812. Source: Nyström, Citation1883, tables 1 and 4.

Figure 3. Share of goods carried by the SEIC re-exported to other markets in Europe, 1756–1812. Source: Nyström, Citation1883, tables 1 and 4.
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From the late 1750s until the 1780s, around 95% of all goods carried by the SEIC to Europe were re-exported to Europe. The situation changed in the mid-1780s. In 1784, the British government enacted the so-called Commutation Act, which reduced the duties on tea from 119% to 12.5%, which in practice reduced the price of tea by half. The target of the Act was tea smuggling. The decline in Swedish re-exports in the 1780s and even more so in the 1790s indicates that much of the SEIC re-exports indeed had ended up as smuggled goods in Britain. During the last years of the SEIC’s existence the share of goods re-exported fluctuate substantially; by then, however, the values of the cargoes also declined rapidly.

As Nyström’s data in the main only is reported as aggregate value of the trade, we do unfortunately not know exactly how much of the individual commodities traded from China was consumed in Sweden, as the data for domestic consumption of the goods starts only in 1769 (Nyström, Citation1883, table 1). Previous research has established that the vast majority of the tea was re-exported. We have here assumed that, for the period from 1756 onwards, the share of tea re-exported is equivalent to the share re-exported of all Asian goods reported in Figure 3. For the period prior to 1756, we have assumed that 95 per cent of the tea carried to Europe by the SEIC was re-exported. This might be a slight overestimate, but will bias our value-added calculations downwards to err on the safe side (since the value-added will be lower for re-exported tea than for the imported, as will be discussed below). It is from qualitative sources on the other hand obvious that silks primarily were traded for domestic consumption in Sweden. In the private correspondence of the company’s directors (Hodacs, Citation2016, p. 116), there is evidence of a substantial domestic market for silks in Sweden and a lack of interest for silk abroad. The different markets for tea (re-exports) and silk textiles (domestic) seems to be confirmed by distinctions between bidders at Gothenburg auctions. There was thus a group of bidders who exclusively bought silk textiles, while others focused on trading in tea (Askenfelt, Citation2017, pp. 78–79). Fluctuations in silk imports depended partly on the market situation in Canton, partly on the state policy in Sweden. Some years there was a shortage of silk in Canton, and the Chinese authorities regulated sales to foreigners. There was also a close relationship between the SEIC silk imports and the regulations of the domestic market for silk in Sweden. For example, the decline in silks imports in 1746 and 1747 is undoubtedly related to the ban on sales of Chinese silks in 1745–1747. A total ban on domestic consumption of Chinese silks in Sweden was introduced in 1754 (Hodacs, Citation2016, p. 114). After that date, silk textiles ceased to be a major item in the SEIC trade.

2.3. Calculation of value-added
The quantities of goods traded, as estimated through the model presented above, and the value of these goods in Asia, are then used for a set of calculations of the value-added involved in the value chain, from the SEIC’s purchase in Asia to the final consumers in Sweden, or to the re-export end markets elsewhere in Europe. In order to calculate the value-added involved in the tea trade in particular, we have employed data from previous sources on the prices of the goods traded on various markets in Europe. Pim de Zwart has assembled data on the auction price of tea in the Netherlands (de Zwart, Citation2016). There are also auction prices of tea from Britain for sporadic years during the same period, assembled by Hoh-Cheung Mui and Lorna Mui (H.-C. Mui & Mui, Citation1984, appendix 2), and Swedish data for two years assembled by Linus Askenfelt (Askenfelt, Citation2017). There are furthermore consumer prices of tea from both Britain and the Netherlands: a long-term series of British data has been assembled by Gregory Clark (Clark, Citation2006), and a shorter series of data from the Netherlands has been assembled by Liu Yong (Yong, Citation2007, appendix 10). All prices have been converted into silver content-prices by the authors of this paper using the exchange ratios used by de Zwart and Clark, respectively, to enable comparison. The wholesale/auction prices are shown in Figure 4.

Figure 4. Prices of tea in Canton, Amsterdam, England and Sweden (wholesale/auction prices, grams silver per kg of tea), 1738–1800. Sources: de Zwart, Citation2016; H.-C. Mui & Mui, Citation1984, appendix 2; Askenfelt, Citation2017, p. 67

Figure 4. Prices of tea in Canton, Amsterdam, England and Sweden (wholesale/auction prices, grams silver per kg of tea), 1738–1800. Sources: de Zwart, Citation2016; H.-C. Mui & Mui, Citation1984, appendix 2; Askenfelt, Citation2017, p. 67
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As can be seen in the figure, the auction prices for tea are quite similar on the two biggest European tea markets – England and the Netherlands – and on both markets the price seem to exhibit a declining trend over time. In contrast, the final consumer prices of tea were, quite surprisingly, seemingly two to three times as high on the Dutch market as the price on the British market. Whether this is due to problems with the data assembled by previous scholars or is a reflection of really different equilibria on the two markets is beyond the scope of the present article. Clark’s English data at least fit well with more anecdotal data on English retail prices for tea reported by Stephen Twining (Twining, Citation1956, p. 45). There is, unfortunately, no data on retail prices of tea in Sweden but there is information on sale duties and excise on tea consumption. Nevertheless, it is difficult to assess its impact on the end-market prices of tea.Footnote6 We know that consumption of tea in Sweden was regulated in a similar way as that of coffee and chocolate in 1747, and there was an excise on tea (Knutsson, Citation2019, p. 276). There were, on the other hand, no bans on tea drinking comparable with the multiple bans of coffee consumption. The state was simply much less interested in tea drinking than in coffee drinking because, at least from the mid-century, there was so much less tea consumed in comparison with coffee. We have here made the conservative estimate that the consumer price of tea imported to and sold on the Swedish markets was equivalent to the consumer price on the British market, so as to not inflate our estimates of value-added of the imports unduly. The total value-added of the goods actually imported into Sweden would thus be the difference between this final consumer price, and the purchasing price in Asia. If consumer prices for tea were higher on the Swedish than on the British market, for example closer to the consumer prices Yong has reported from the Netherlands, we would thus be underestimating the value-added involved in the value chain substantially.

With the exception of silk, imports into Sweden were only a minor share of the goods carried to Europe by the SEIC. The vast majority of all goods carried were instead re-exported elsewhere in Europe, as was shown in Figure 3. The value-added of these re-exports must be calculated in two steps. First, we calculate the value-added of the links in the value-chain from purchase in Asia to the auctions in Sweden. There is auction data on tea available in the primary sources on the SEIC on the for the period 1733–1759,Footnote7 but as the Company sold the tea by the chest, without necessarily specifying how much tea the chests contained, the data is very hard to use for our purposes. As is shown in Figure 4, the crude estimates made by Askenfelt for two auctions (1748 and 1758) nonetheless suggest that the average price received on the auction in 1748 was very similar to the prices on Amsterdam auctions in the same year, and the price received in 1758 was somewhat higher than the price on the Amsterdam market that year. We have again made a conservative assumption that the prices of tea received at SEIC’s auctions were on par with the auction prices in the Netherlands. If the auction prices in Sweden were higher than in the Netherlands, as Askenfelt’s second data-point would suggest, we would thus underestimate the value-added created in the Swedish East India trade. As these goods would make up intermediate goods for the next step in the value-chain, this would however have no impact upon our estimates for the share of goods re-exported by Swedish agents (as a down-ward biased estimates of the value-added in this link of the value-chain would be met by a corresponding up-ward bias of the intermediate good in the following link in the value-chain). The bias would thus only be problematic for the share of goods re-exported by non-Swedish merchants.

The second step is to estimate the value-added involved in the value-chain from the sale at the auction, to when the goods were sold on the re-export markets. As has been noted above, official statistics suggest that these re-exports were destined for several markets in Europe, primarily Britain, the Dutch Republic and France (Nyström, Citation1883, p. 86). There is, however, much indirect evidence from Britain suggesting that the British market was a major destination. All such re-exported tea would have had to be sold illegally, since the English East India Company had a legal monopoly on the sale of Asian goods in Britain (Cole, Citation1958; Janes, Citation2016; L. H. Mui, Citation1975; H.-C. Mui & Mui, Citation1968). What prices the merchants re-exporting the goods were able to catch when selling their goods on the end market is therefore hard to determine. Anecdotal evidence from the inventory of the wife tea merchant Thomas Irvine (who also had been SEIC’s supercargo) in 1766 suggests that value that he estimated his tea to be worth was very high, almost four times as high as the auction prices in the Netherlands and Britain – and approximately two-thirds of the consumer price of tea in Britain.Footnote8 This also fits quite well with anecdotal evidence presented in previous research, for example Cole’s finding that smuggled tea sold for between half and two-thirds of the price of legally imported tea in Britain (Cole, Citation1958, p. 405), or Mui and Mui’s evidence on Gothenburg tea sold in Scotland in 1785 (H.-C. Mui & Mui, Citation1968, p. 64). Markets in Britain handled tea of many different qualities, and the SEIC adjusted successfully to the market differentiation. Bohea, the cheapest and most voluminous quality of tea, completely dominated SEIC’s trade over the period of 1733–1767 (Hodacs, Citation2016, p. 55, 189–192, Appendix 1). But demand for tea changed and in the 1770s and 1780s the company traded increasing quantities of the black tea quality Congo, in demand in Scotland and northern England. Many authors have pointed out the differences between Scotland and London tea markets. Scots were known for their taste for the more expensive Congo, originating in Gothenburg (Janes, Citation2016, pp. 230–232, Citation2020, pp. 192–193; Mackillop, Citation2015). SEIC’s teas, including the popular Congo, were known as the ‘Gotteburgh Teas’, the brand name established already in the 1750s. It seems as if the SEIC was crucial for creating the distinct Scottish taste for the more pricy Congo. In our analysis of the value added from the SEIC’s Asia trade, we have used established English tea price series (Clark, Citation2006; de Zwart, Citation2016; Yong, Citation2007) that do not differentiate between tea qualities as a benchmark. If, as previous scholarship thus suggests, the tea traded by the SEIC on average was of a higher quality, we might therefore underestimate the value-added involved in the business of re-exporting the Asian teas. We have here assumed that the wholesale price of such re-exported (smuggled) tea that Swedish merchants could capture when selling the tea on the re-export markets was the average of the final consumer prices (in Britain) and the London/Amsterdam auction prices. The value-added of this link in the value-chain would thus be the difference between this selling-price and the auction price described above. As we would want to compare our estimates to Swedish GDP-figures, we only want to include activities undertaken by Sweden-based agents (including too foreign-born, but naturalised Swedish merchants). Previous research has shown that the majority of the goods sold at the SEIC auctions were purchased by Swedish (or naturalised Swedish) merchants, who later re-exported the goods (Askenfelt, Citation2017, pp. 68–71; Hodacs & Müller, Citation2015; Müller, Citation2003).

For goods other than tea, we have in the model assumed a mark-up ratio in the price between the Asian and European markets equivalent to those found for silk and porcelain in the Dutch case by Pim de Zwart, in order to arrive at a proxy for the sale value of these goods (de Zwart, Citation2016). De Zwart’s data seems to refer to raw silk, whereas our data refers to silk cloth. Anecdotal evidence on mark-up ratios for silk cloth traded by the SEIC reported by Hanna Hodacs (Hodacs, Citation2016, p. 109) suggest a somewhat lower mark-up ratio at the stage of auctions in Gothenburg, but this does on the other hand not include any mark-up between the auctions and the final retail prices. We have therefore opted for using the Dutch data as a proxy for the mark-up ratio. We have then calculated the value-added in the trade in these goods as the difference between the sale values and the purchase values of these goods. As these goods only made up a minor fraction of all the goods traded by the SEIC for most of the period under study, they have a quite marginal impact upon the aggregate estimates.

The data has finally been compared to Swedish GDP estimates by Rodney Edvinsson (Edvinsson, Citation2013, Citation2014), both total Swedish GDP and the share of GDP made up of the sectors of transport and trade in particular. Edvinsson’s data has then been converted into silver content-values using data on the silver content of Swedish currencies from Wallroth (Citation1918). When comparing our data to these estimates, there is a risk that the transport sector’s share of Swedish GDP might be underestimated, as estimates of Swedish foreign trade often has focused on imports and exports (e.g. Edvinsson & Gad, Citation2018), excluding re-exports, but also as Swedish ships participated in international tramp shipping that do not show up in Swedish trade statistics (Müller, Citation2012, Citation2018, pp. 43–84).

3. Results
Figure 5 reports the resulting estimates of the value-added involved in the Swedish trade on East India for the period from 1739 to 1786. As described above, we have when necessary attempted to the best of our abilities to make conservative estimates, in order to not bias our estimates upwards. As can be seen in the figures, the total value-added involved in the trade was in the range of two to five per cent of total Swedish GDP during the period under study. The trade peaked during the 1740s, experienced a new temporary peak in the mid-1750s, as well as in the mid-1760s. All these peaks primarily seems attributable to particularly large amounts of goods purchased in Asia during these years, primarily of tea but during the first peak also of silk. Despite these peaks, the trade decreased in importance (relative to the Swedish economy) from the 1740s onwards. In the 1780s, the trade experienced a small, temporary increase again. This is largely attributable to rising prices of Asian goods in Europe (without any corresponding increase in Asia, as it seems), thus increasing the mark-up – and hence the value-added – between the Asian and European markets.

Figure 5. Value-added of Swedish East India trade relative to total Swedish GDP at various stages in the value-chains, 1739–1786. Sources: for estimates of value-added of the Swedish East India trade, see Figures 1–4. Swedish GDP figures based on Edvinsson (Citation2013, Citation2014).

Figure 5. Value-added of Swedish East India trade relative to total Swedish GDP at various stages in the value-chains, 1739–1786. Sources: for estimates of value-added of the Swedish East India trade, see Figures 1–4. Swedish GDP figures based on Edvinsson (Citation2013, Citation2014).
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Much of the value-added created in this process is directly attributable directly to SEIC’s trade alone, i.e. between the stage of purchasing the goods in Asia, and selling them at auctions in Gothenburg. As only a minor share of all the tea carried to Europe was imported into Sweden, comparatively little value-added can on the other hand be attributed to the part of the value-chain from the auctions to final consumption in Sweden. The largest contribution to the value-added created did, however, come from the re-exports of the tea carried to Europe.

4. Discussion
Several historians have in recent years come to re-evaluate the role that the Swedish East India Company played for the process of early globalisation during the eighteenth century. Economic historians have, however, not yet come to re-evaluate what role the company’s trade played for the development of the Swedish economy. The idea that the issue is impossible to research, since the company’s accounts are missing, still seems prevalent among scholars in the field of economic history.

Several scholars have, however, over the years unearthed a number of different sources relating to the company’s activities. These enable us to make some crude estimates of the magnitude of the company’s activities quantitatively. In this article, we have attempted to do so, using a value-chain approach. The data available from the primary sources are certainly far from perfect. It has several times been necessary to make more or less crude assumptions as to some of the aspects of the trade. One example of this is what price Swedish merchants might have received for goods (primarily tea) re-exported elsewhere in Europe – most importantly for goods smuggled to the British market. We have to the best of our ability then tried to make conservative assumptions, so as to not inflate our estimated figures unduly.

The results we arrive at suggest that the company’s activities was of a magnitude equivalent to around two to five per cent of the Swedish economy at the time. In comparison to total Swedish GDP, the value-added created in the Swedish East India trade is perhaps not overwhelming. This is hardly surprising, as the Swedish economy to a very large extent still was dominated by the agricultural sector. Compared to the value-added created by non-agricultural activities – and in particular from the trade- and transport-sectors – in the Swedish economy, the value-added created by the SEIC was in contrast without a doubt of a considerable magnitude: during the peak years potentially in the range of 60%–80% of the value-added estimated for the trade- and transport-sectors of the Swedish economy. The results must certainly be interpreted with some caution mainly for two reasons. The first reason is that the data available on the magnitude and value-added of the SEIC’s trade, and the re-export trade in particular, is imperfect, as has been discussed at length in this article. The second reason is that Swedish GDP figures in the trade/transport-sectors might be too low, missing much of the value-added created by the SEIC for the simple reason that re-exports often have been ignored in previous research, as noted above. This latter reason would thus merit the question whether the Swedish transport sector’s historical GDP-figures might be in need of revision. It is, at the very least, high time that the company’s role not just for the economy locally in Gothenburg – but also on in terms of the value-added even on an aggregate level as well as for globalising the Swedish economy – is recognised more broadly in the field of economic history.

Disclosure statement
No potential conflict of interest was reported by the author(s).

Notes
1 A useful approach to analyse organization of re-exports from Sweden is to study the public sales catalogues of the SEIC’s cargoes in Gothenburg. There is a large number of preserved sale catalogues for 1733–1759 reporting the names of bidders. See collection digitized by the Global History and Culture Centre, University of Warwick, https://warwick.ac.uk/fac/arts/history/ghcc/eac/databases/ [accessed 2020 January 7].

2 Gothenburg University Library, Collection Ostindiska kompaniet: Fakturor på returladdningar från Kina med olika skepp, 1768–1786, http://www2.ub.gu.se/samlingar/handskrift/ostindie/dokument/document.xml?id=61 [accessed 2020 January 5].

3 1762–1766, Godegårsarkivet, Nordiska museet, Digitala arkivet: Expeditioner, A28, http://ostindiska.nordiskamuseet.se/ [accessed 2020 January 5].

4 For details of qualities and length of pieces see Hodacs (Citation2016, p. 96). Dominant qualities being Poisee damask, taffeta, peeling, and Bed damask. We use here an average purchase prices of the Danish Asiatic Company assuming the Swedes bought their silk textiles at same price (Hodacs, Citation2016, p. 96).

5 Based on calculations from the SEIC purchase invoices for 1769–1774, the Canton price of silk was about 10–12 tael per piece.

6 The printed sale catalogues for 1733–1759, on the first page include information about different duties put on goods intended for domestic consumption. See for example sale catalogue of Götha Leyon of 1752 https://cdm21047.contentdm.oclc.org/digital/collection/swedish/id/2509.

7 The catalogues for 1733–1759, digitized in https://warwick.ac.uk/fac/arts/history/ghcc/eac/databases/ [accessed 2020 January 7].

8 Inventory of Margareta Irvine, 14 April, 1766, (widow of SEIC supercargo Thomas Irvine), Riksarkivet (Stockholm), Göta Hovrätt, Bouppteckningar, 1766, vol. 1. https://sok.riksarkivet.se/bildvisning/C0105477_00157#?c=&m=&s=&cv=156&xywh=-1508%2C-2%2C9165%2C5383 [accessed 2020 January 7].

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Appendix
In a robustness test of our estimates, we use the data discussed above on the official imports and re-exports of Asian goods assembled by Nyström (Citation1883). Data on the value of goods imported into Sweden is available from 1756 to 1812, with gaps in the series. Except for the quantities of tea imported, these statistics only report the values of the goods imported and re-exported. It is unclear exactly how these values were calculated. As both quantities and official aggregate values of tea are reported in the source from the 1760s onwards, it is possible to estimate the official Swedish valuation per pound of tea. These values shift quite substantially over time – starting in the 1760s at an unrealistically low valuation (even lower than the contemporary purchasing price of tea in Canton), but then rising drastically in the 1770s, and increasing drastically yet again in the 1790s. The official valuation of these goods is thus of uncertain reliability, similar to what previous scholars have argued in the case of the valuation in other Swedish trade statistics from this time (Häggqvist, Citation2015; Vallerö, Citation1969).

As the data in the official re-export statistics do not allow us to disaggregate between different types of Asian goods, we have here ignored the possibility that the value-added might differ between different types of goods. As the vast share of the re-exported goods during this period was made up of tea alone, as noted above, this ought not to introduce any major biases in the estimates.

We use this data to calculate a crude proxy of the volumes of Asian goods carried to Sweden by the SEIC (i.e. the total of goods imported and goods later re-exported) by using the price of tea on auctions in Europe as a basis for our calculation (see Figure 4). We here assume an official valuation of the tea twice as high that of the auction price in Amsterdam. This yields a proxy estimate of the volumes carried to Sweden by the SEIC quite similar to those estimated using the primary sources above, as can be seen in Figure A1, except for some years of extremely high (known) purchases in Asia.

Figure A1. Known purchases of tea, and estimated proxy purchases used in robustness test (kg tea). Sources: own elaborations based on Nyström, Citation1883, tables 1 and 4; price of tea from de Zwart, Citation2016.

Figure A1. Known purchases of tea, and estimated proxy purchases used in robustness test (kg tea). Sources: own elaborations based on Nyström, Citation1883, tables 1 and 4; price of tea from de Zwart, Citation2016.
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Using this data, we can then estimate the value-added of the East India trade in the same manner as described in the main text. The resulting estimates are reported in Figure A2. As can be seen, the robustness test shows a smoother development over time, to a large degree potentially as the particular peak purchases during the 1750s to 1770s shown in Figure A1 are not captured by the proxy series. The magnitudes of the estimates are, however, at least quite similar.

Figure A2. Value-added of Swedish East India trade relative to total Swedish GDP, 1756–1794, in main model and in robustness test (five-year moving average). Sources: see Figure 5 and Figure A1.

Figure A2. Value-added of Swedish East India trade relative to total Swedish GDP, 1756–1794, in main model and in robustness test (five-year moving average). Sources: see Figure 5 and Figure A1.
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