Economic efficiency and management of costs and expenses in the 18th century: The example of the Compagnie Perpétuelle des Indes (1719-1769).

Summary In the 18th century, the Compagnie des Indes was the emblematic figure of a trade that opened up to the new markets of America and the Far East, using large amounts of capital and motivated men whose undeniable successes could not, despite everything, prevent its ruin. How to explain and understand such a failure? A question that leads in a subsidiary way to that of its management: how efficiently did the East India Company manage its costs and expenses? Efficiency is understood here as the result of a rational use of the means that were put at its disposal in order to achieve a priority objective: the constitution of profits. The examination of the type of cost and expense management followed by the management highlights an organization and a governance framework marked by the permanent influence of the King's representatives. This was counterbalanced to some extent by the presence of competent administrators from the commercial and financial sectors, and the creation of a system of cost and expense management and control that was remarkably well developed for its time. The whole system was put at the service of a policy of rationalization and optimization of costs and expenses on a large scale. From the construction of the ships and their use to the management of an arsenal and a staff composed of both sailors and craftsmen, the Company constantly sought, and was certainly successful, in improving the economic performance of its resources. However, from the beginning of the second half of the 18th century, its management model came under strong criticism. First, from those who, like Dupleix, and because of their long practice of the system, had perceived its inadequacies. Then from those who, like Gournay, considered on a theoretical level that the granting of a commercial monopoly to a company could only be unfavourable. Each of these two protagonists proposed his own solution: while Dupleix pleaded for a sovereignist model of management, Gournay demanded a complete liberalization of trade. The failure of these new management models was, in the end, added to the failure of the Compagnie itself. It is in a critical analysis of these different management approaches that a new understanding of the causes of the Company's downfall opens up to the researcher. This analysis reveals the importance of the exceptional expenses that the Company had to assume, but it also underlines the difficulties it encountered in the management of its material and human resources, whose economic efficiency it was unable to promote sufficiently.