A Strange Voyage

**PJ Vogt** (0:25)
Welcome to Search Engine, I'm PJ Vogt. This month, SpaceX, Elon Musk's rocket ship company, which also owns Starlink, his satellite internet company, and x.com and XAI, went public.

**SPEAKER_3** (0:43)
History made on Wall Street today, SpaceX going public, the biggest IPO ever launched.

**SPEAKER_4** (0:49)
SpaceX stock blasted off in its debut, soaring more than 19% on the NASDAQ. At the closing bell, SpaceX is now worth over $2 trillion, turning SpaceX employees into millionaires and its CEO into a trillionaire.

**PJ Vogt** (1:05)
The largest initial public offering in all of human history. The company raised over $85 billion.
And it's been driven in an unprecedented way by retail investors.

**SPEAKER_5** (1:16)
I just bought 50 shares of SpaceX at $172 per share.
And I'm never selling. Let's see what happens, baby.

**PJ Vogt** (1:29)
According to the New York Times, in the week after SpaceX first began selling to the public, retail investors have purchased a net of $370 million worth of stock. More, the Times said, than the net retail buying of Nvidia, Microsoft, Alphabet, Meta and Amazon combined over the same period.

**SPEAKER_6** (1:46)
Today, SpaceX briefly became the fourth largest company in the world by market cap, surpassing Amazon and Microsoft.

**PJ Vogt** (1:54)
How do you begin to think about something like this? That the social forces that pushed Gamestop, a store that sells physical copies of video games, up the leaderboards, that those same forces are now aimed at something much larger.
At Elon Musk's promise that the future of AI sits with him, with him using rocket ships to launch data centers into orbit. What's actually going to happen?
When the future confounds me, as it usually does, I look at the present. When the present confounds me, as it usually does, I look at the past. This week, we are doing an extreme version of that. We're going to go all the way back. We're going to go back to the creation of the stock market, an accidental invention over 400 years ago. We're going to understand how and why that happened, how a tool for funding sea voyages has evolved into something somewhat different today. And by the time we're done, the present will make a little more sense to you, the future will make a little more sense to you, and the Netherlands will make a little more sense to you. Strap in, buckle up, this week at Search Engine, we're time traveling.

**Lodewijk Petram** (3:02)
My name is Lodewijk Petram. I'm a historian and economist from the Netherlands.

**PJ Vogt** (3:07)
And why did you decide that you wanted to study the history of the stock market?

**Lodewijk Petram** (3:12)
Oh, that's interesting. So I was a student of economics here in Amsterdam, and then I taught my thesis supervisor. This is many years ago, of course. I was also a student of history, early modern history, and he said, well, yeah, are you aware of the special situation that you're in the Netherlands? That there's so much financial history in the Netherlands, in Amsterdam.
So I'm currently right in the center of Amsterdam. And when I look out the window here, I see what is called East India House in Amsterdam, which is the original headquarters of a company that was founded in the early 17th century, the Dutch East India Company, which from modern eyes was a really terrible company. I mean, it did so many hideous things in Asia. But back then, some more than 400 years ago, people in Amsterdam, they were really about making money, trading stuff from place A to place B, out competing the English, the Spanish, the Portuguese. People were still exploring the world. And as they were exploring the world, they were also trying to control the world.

**PJ Vogt** (4:17)
The Dutch at the time in a cutthroat competition used all these powers, fighting to win the spice race. Not space, spice. Spices, like nutmeg, for instance, just extremely valuable back then. Historian Giles Milton, in his book about this era, Nathaniel's Nutmeg, writes about how if you could get a ship to the Banda Islands, you could buy 10 pounds of nutmeg for less than an English penny. If you could get that ship back to Europe, you could sell the spice at a markup of something like 60,000%, assuming your ship didn't wreck, assuming all your men didn't die.
The risk of a failed voyage was that it could ruin the person who funded it.
Lodewijk explained to me that businesses until the 1600s were pretty much all funded, either by one single person or a single person plus their family. That's how things had been, but because shipping was so expensive and risky, this had begun to change. In some Italian city states, people were founding these shipping companies. You'd raise money from a lot of people, not just your family, to fund a boat voyage. And this is working, but there's this funny inefficiency in the way they organize these companies, a limitation that people at the time cannot see.