The Business of Information: Brokers and Auctioneers in the Nineteenth-Century Anglo-Indian Trade

Michael Aldous

In the first half of the 19th century the scale and value of the Anglo-Indian trade grew significantly. By 1860 the Asian trade had expanded from 7 per cent to 25 over cent of total British exports. Yet, the firms conducting the trade faced significant challenges. Market co-ordination was difficult; information asymmetries were high, exacerbated by volatility in the production, supply and demand of key trading products such as indigo. The paper proposes that coordination between buyers and sellers was significantly improved by the growing number of brokers and auctioneers. Drawing on a new data-set of firms from Calcutta commercial registers, and data on indigo production and consumption, this paper shows that the increasing number of brokers closely correlates with a significant reduction in the volatility of supply and demand in the indigo trade. Due to their role as facilitators of the market these firms were uniquely placed to both gather and disseminate information on the market through regular circulars, improving the flow of market information and reducing information asymmetries between buyers and sellers.