Was the East India Dutch Company Ever Worth $7 Trillion in Today’s Dollars?

Spoiler alert: No.

After Apple made history by becoming the first publicly traded company to be worth more than $1 Trillions in the US stock market, several news sources reported that, adjusting for inflation, the East India Dutch company was worth, at one point in the late 1600s or early 1700s, more than $7 Trillions. Here, for example, is a Time.com article putting its adjusted value at $8 Trillion.

There were only about 600 million people in the world at that point (source) mostly living off subsistence agriculture, and that would be more than $10,000 of today’s dollar per person! Maddison estimates the the world’s GDP at that time was about $90 Billion in 1990 dollars (source) or about $180 Billion in 2018 dollars (source for 1990-2018 adjustment) and the GDP of the Netherland at that time was about $4 Billion in 1990 dollars (source) or about $8 Billion in 2018 dollars. Could a company really be worth a thousand time the GDP of its country and 40 times the world’s GDP? Maddison’s estimates are controversial, but even Bairoch’s higher estimates put the combined GDP of North America, Europe, Russia and Japan at about $300 Billion in 2018 dollars (source).

So how much would the 1700s value of the Dutch East Indian Company be worth in 2018 dollars, and where did the crazy $7 Trillion come from? The answer to the first question is about $1 Billion, and the answer to the second question is not clear, but most likely someone named Alex Planes came up with that number with some creative methodology, and then the factoid made it to more and more prestigious publications, each one citing the previous occurrence, and this includes publications with high standards for fact-checking like the Atlantic.

Trying to answer the second question shows how completely broken fact-checking is whenever numbers are involved.

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