Tobacco and the Democratization of Wealth

The history of tobacco has not always been without dire consequence. The pros and cons always seem to be battling when tobacco is concerned. Although today we have demonized the evil herb to the point of absurdity, a far cry from its actual benefits. The near simultaneous discovery of tobacco in both Brazil and Hispaniola gave birth to what was to become a global phenomenon of commercial liberalization.

 The Discovery of the New World and Tobacco

The first taste of tobacco, either by smoke or powder, permitted the common man a path to create wealth. Gold and silver mines were exclusive property of the upper class and royalty whereas tobacco permitted entrepreneurship and trade to be absconded by the bourgeoisie or merchant class. Initially the Nicotiana Rustica tobacco plant from Brazil was adopted by the Portuguese while the Nicotiana Tabacum from Hispaniola provides the Spanish with an equivalent product. Tobacco proceeded to spread like wildfire across the globe.

 Dutch East Indian Company explorers the world.

The Dutch have always led Europe in the art of trade. Merchants and entrepreneurs have generated enormous wealth by balancing between investment and risk. A low-risk and profitable market was developed in the early 17th century using tobacco as a new world commodity. Unlike precious metals, tobacco was a crop that could generate limitless profits. Amsterdam was, at this time, the hub of commerce for most of Europe as the Dutch possessed a vast merchant fleet willing to place risk at a premium. This led to the founding of Vereenigde Oostindische Compagnie (Dutch East India Company).

 17th Century Dutch Entrepreneurs

The Dutch also saw opportunity not only with the tobacco leaf but with the plant itself. The districts of Utrecht and Gerlderland started to produce their own tobacco crops using new world seeds. The resulting product becomes an agricultural phenomenon that permits farmers to participate in wealth creation via the market. These new local tobaccos could be blended with American imports to create new blends for a growing market and helping to stabilize the market when imports were rarer. This phenomenon is then spread around the world permitting ambitious farmers to profit unlike ever before. This rising tide of wealth helped to raise all boats.

17th century tobacco farming.

It is arguably true that the tobacco trade was also responsible for the suffering of a large swath of humanity. The profits of unpaid labor in the new world permitted the advancement of, at first a privileged class, then taken over by the merchant class and eventually by the common man or woman. This very controversial plant has been at the root of the democratization of wealth whether we like it or not. Something to ponder next time you take a pinch. S’nuff said. See you in the funny pages!

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