Splendid Exchange, A
Page 49
42. The underlying theoretical flaw in the mercantilist argument is simple: if a country has a strongly positive balance of trade, its stock of specie will swell, causing an overall rise in prices (as indeed was the case in seventeenth-century Holland), thus making its exports more expensive. This would then reduce or eliminate the favorable trade balance. The opposite effect would occur in nations with a negative trade balance: specie would dry up, lowering prices, thus making their exports more attractive.
43. Quoted in Douglas Irwin, Against the Tide (Princeton: Princeton University Press, 1996), 48.
44. Charles Davenant, Essay on the East-India-Trade (London: Printed for author, 1696), 22, 26, 32.
45. Henry Martyn, Considerations on the East India Trade (London: Printed for J. Roberts, 1701), 10, photographic reproduction in J. R. McCullouch, Early English Tracts on Commerce (Cambridge: Cambridge University Press, 1970). There is some doubt as to the authorship of this tract. The frontispiece lists no author, but most scholars consider Martyn the author—see P. J. Thomas, Mercantilism and the East India Trade (London: Frank Cass, 1963), 171–173.
46. Ibid., 37.
47. Ibid., 32–33. Even more remarkably, Martyn clearly described the magic of the division of labor seventy-five years before Adam Smith. He noted that while a cloth- or watchmaker might be able to perform every step in the manufacturing process, it was better for each to specialize in the task he performs best: “The Spinner, the Fuller, the Dyer or Clothworker, must needs be more skilful and expeditious at his proper business, which shall be his whole and constant imployment, than any Man can be at the same work, whose skill shall be pulsed and confounded with variety of other businesses,” 43.
48. George L. Cherry, “The Development of the English Free-Trade Movement in Parliament, 1689–1702,” Journal of Modern History 25, no. 2 (June 1953): 103–119.
49. Ibid., 110.
50. K. N. Chaudhuri, The Trading World of Asia and the English East India Company (Cambridge: Cambridge University Press, 1978), 294–295.
51. Quoted in Thomas, 136.
52. Beverly Lemire, Fashion’s Favourite (Oxford: Oxford University Press, 1991), 32.
53. Ibid., 145–146.
54. Ibid., 34–42, 160.
55. T. K. Derry and Trevor I. Williams, A Short History of Technology (New York: Dover, 1993) 105–107, 558–561.
56. E. J. Hobsbawm, “The Machine Breakers,” Past and Present 1 (February 1952): 57–70.
57. Lemire, 54.
58. McKendrick et al., 34–99.
59. Hobhouse, 148–154.
60. C. R. Harler, The Culture and Marketing of Tea, 2nd ed. (London: Oxford University Press, 1958), 109, 225.
61. Chaudhuri, The Trading World of Asia and the East India Company, 386.
62. James Walvin, Fruits of Empire (New York: New York University Press, 1997), 16–19.
63. N. McKendrick, “Josiah Wedgwood: An Eighteenth-Century Entrepreneur in Salesmanship and Marketing Techniques,” Economic History Review 12, no. 3 (1960): 412–426.
64. Jonas Hanway, quoted in Walvin, 22.
65. Philip Curtin, The Rise and Fall of the Plantation Complex, 83.
66. Richard S. Dunn, Sugar and Slaves (Chapel Hill: University of North Carolina Press, 1972), 7–21, 61, 64–65.
67. Richard Ligon, A True & Exact History of the Island of Barbadoes (London: Peter Parker, 1673), 20–21.
68. Quoted in David Eltis, The Rise of African Slavery in the Americas (Cambridge: Cambridge University Press, 2000), 201.
69. Ibid., 127, 201–202.
70. Ligon, 96.
71. Hugh Thomas, The Slave Trade (New York: Simon and Schuster, 1999), 201–207.
72. Dunn, 112–116.
73. Ibid., 73.
74. Calculated from Eltis, 50, table 2-2.
75. Philip Curtin, The Atlantic Slave Trade (Madison: University of Wisconsin Press, 1969), 69, 81.
76. Paul Bairoch, Economics and World History (Chicago: University of Chicago Press, 1993), 146.
77. Curtin, The Rise and Fall of the Plantation Complex, 39–40.
78. David Brion Davis, Inhuman Bondage (Oxford: Oxford University Press, 2006), 90–91.
79. Eltis, The Rise of African Slavery in the Americas, from 176, table 7-3.
80. Quoted in Davis, Inhuman Bondage, 92.
81. Professor Curtin produced the first scientific census with the publication of his landmark The Atlantic Slave Trade in 1967. His basic conclusions were largely confirmed and refined by Professor Eltis; see The Rise of African Slavery in the Americas; “The Volume and Structure of the Transatlantic Slave Trade: A Reassessment,” William And Mary Quarterly, 58, no. 1 (January 2001): 17–46, and David Eltis and David Richardson, “Prices of African Slaves Newly Arrived in the Americas, 1673–1865: New Evidence on Long-Run Trends and Regional Differentials,” in David Eltis, ed., Slavery in the Development of the Americas (Cambridge: Cambridge University Press, 2004), 181–211.
82. Curtin, The Atlantic Slave Trade, from 268, table 77. For a more recent, and perhaps more accurate, quantitative assessment of the transatlantic slave flow, see Eltis, “The Volume and Structure of the Transatlantic Slave Trade: A Reassessment,” 17–46.
83. Davis, Inhuman Bondage, 80.
84. Ibid., 11–12, 40–41.
85. Michael Tadman, “The Demographic Cost of Sugar: Debates on Slave Societies and Natural Increase in the Americas,” American Historical Review, 105, no. 5 (December 2000): 1556.
86. Ibid., 1554–1555, 1561.
87. Ibid., 1536.
Chapter 11
1. Quoted in Greenberg, 45.
2. Ibid., 78–79.
3. Jehangir R. P. Mody, Jamsetjee Jeejeebhoy (Bombay: R.M.D.C. Press, 1959), 2–14, 21–28.
4. Hsin-pao Chan, Commissioner Lin and the Opium War (New York, Norton, 1964), 121–122.
5. Briefly summarized, the Canton System revolved around nine rules: (1) No foreign war vessels in the Pearl River. (2) No weapons in the factories. (3) Foreign merchants allowed at Canton only during the trading season (September–March). (4) All Chinese boat crews in employ of foreigners to be licensed. (5) Number of servants of foreigners subject to strict limits. (6) Only very limited visits by foreigners to Canton city proper allowed. (7) No smuggling by or credit to foreigners permitted. (8) Foreign ships allowed no farther upriver than Whampoa; all goods to be carried the final thirteen miles to Canton in small local boats. (9) All transactions to be conducted through the government-sanctioned hong monopoly. See Maurice Collis, Foreign Mud (New York: New Directions, 2002), 15.
6. In 1772, four years before the publication of Wealth of Nations, Smith had been considered for membership in a commission of the EIC to travel to the Bengal to investigate malfeasance there, but because of parliamentary opposition, it was never sent. See William J. Barber, British Economic Thought and India 1600–1858 (Oxford: Clarendon, 1975), 88–89.
7. Plassey was just one facet of the Seven Years’ War, which yielded a particularly rich bounty for England: not only the Bengal, but also Canada and much of the Lesser Antilles.
8. Quoted in J. R. Ward, “The Industrial Revolution and British Imperialism, 1750–1850,” Economic History Review 47, no. 1 (February 1994): 47.
9. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Chicago: University of Chicago Press, 1976), I: 82.
10. Ibid., II:33; Barber, 97.
11. Anthony Webster, “The Political Economy of Trade Liberalization: The East India Company Charter Act of 1813,” The Economic History Review 43, no. 3 (August 1990): 404–419.
12. Jack Beeching, The Chinese Opium Wars (New York: Harcourt Brace Jovanovich, 1975), 51.
13. W. Travis Hanes III, The Opium Wars (Naperville IL: Sourcebooks, 2002), 13–19.
14. Hsin-pao, 9–10.
15. Greenberg, 86.
16. Ibid., 5.
17. Hsin-pao, 4.
18. Greenberg, 6, 8.
19. Carl Trocki, Opium
, Empire, and the Global Political Economy (London: Routledge, 1999), 6, 14–21.
20. Hsin-pao, 16–17.
21. Trocki, 34.
22. Paul Johnson, The Birth of the Modern (New York: HarperCollins, 1991), 761–774; Hsin-pao, 95–96.
23. Greenberg, 110.
24. Robert Blake, Jardine Matheson (London: Weidenfeld & Nicholson, 1999), 44–45. The one exception to the EIC’s abstention from direct opium sales occurred in 1782, when because of the Spanish War, no trade goods or silver had arrived to pay for tea exports, and the governor-general of Bengal, Warren Hastings, authorized the shipment of two opium vessels. See Greenberg, 108.
25. W. Somerset Maugham, On a Chinese Screen (New York: George H. Doran, 1922), 60–61.
26. R. K. Newman, “Opium Smoking in Late Imperial China: A Reconsideration,” Modern Asian Studies 24, no. 4 (October 1995): 784.
27. Hsin-pao, 85–91.
28. Astor’s wealth derived not just from the fur trade, but also from tea and sandalwood. In the early nineteenth century one of his trans-Pacific ships loaded some firewood in the Sandwich Islands. On arrival at Canton, the captain was astonished to be offered $500 per ton for it. Astor managed to keep this profitable secret over the two decades it took to denude the islands of sandalwood trees before moving on to Manhattan real estate. See Anonymous, “China and the Foreign Devils,” Bulletin of the Business Historical Society” 3, no. 6 (November 1929): 15.
29. Greenberg., 22–28.
30. Chinese trade figures are quoted in the main medium of exchange, Spanish dollars. A Spanish dollar (an eight-real piece) was equivalent to one U.S. silver dollar, at an exchange rate of approximately five dollars to one pound sterling.
31. Ibid., 96–97.
32. Greenberg, 36–41, 136–139.
33. Blake, 46.
34. Trocki, 103.
35. Basil Lubbock, The Opium Clippers (Glasgow: Brown, Son, and Ferguson, 1933), 72–77.
36. A bark has three masts: a stern fore-and-aft rigging, with one square-rigged mast amidships and another in the bow. The original Prince de Neufchatel had been a brigantine, which has only two masts, the fore-and aft in the stern and square-rigged in the bow. There are other permutations of square- and fore-and-aft-rigged masts, among which are the barkentine, brig, and schooner, to name but a few. All these configurations could be tightened and mounted on a sleek, narrow hull to produce a “clipper.”
37. The Red Rover’s triumphant first voyage followed many years of trial and error. In 1826 Clifton had married the daughter of François Vrignon, a successful Calcuttan shipwright; the result was a disastrous attempt to use a combination of a steam tug and clipper to reach China. At about the same time, a small private yacht designed along clipper lines, the Falcon, made an unsuccessful winter run from Singapore to China. The first vessel to successfully complete a full leg against the monsoons was probably the Baltimore-style schooner Dhaulle in 1827. However, it was much smaller and slower than the Red Rover, and only made one journey. See Lubbock, 62–78; Blake, 54.
38. Because of their short life span, there exists today only one example of an “extreme clipper,” the renowned Cutty Sark, which was on display at Greenwich until it was damaged by fire in 2007.
39. Trocki, 106.
40. Anonymous eighteenth-century journalist, quoted in “Behind the Mask,” Economist, March 18, 2004.
41. Greenberg, 13.
42. Ibid., 112–113, 142.
43. Hsin-pao, 51–61.
44. Ibid., 62.
45. Ibid., 189–203; see also Hanes, 66–83. Even within the firm, there were doubts; in 1849, Donald Matheson resigned his position in the firm cofounded by his uncle in protest against the trade. See Trocki, 163; and Peter Ward Fay, “The Opening of China,” in Maggie Keswick, ed., The Thistle and the Jade (London: Octopus, 1982), 66–67.
46. Edward Le Fevour, Western Enterprise in Late Ching China (Cambridge, MA: Harvard University Press, 1968), 13.
47. Trocki, 110–115.
48. Quoted in Karl Marx, Capital (New York: International, 1967), 1:432. This passage is supposedly from a letter written by the governor-general in 1834, but Marx probably manufactured it. An examination of Bentinck’s letters for 1834 and the years surrounding it does not yield a primary quotation. These two dramatic and eloquent sentences, while consistent with Marx’s occasionally emotive prose, are quite inconsistent with Bentinck’s uniformly dry and undistinguished output. See C. H. Philips, ed., The Correspondence of Lord William Cavendish Bentinck, Governor-General of India, 1828–1835, 2 (Oxford: Oxford University Press, 1977); and Morris D. Morris, “Trends and Tendencies in Indian Economic History,” in Indian Economy in the Nineteenth Century: A Symposium (Delhi: Hindustan, 1969): 165.
49. Jawaharlal Nehru, The Discovery of India (Calcutta: Signet, 1956): 316.
50. Colin Simmons, “‘De-industrialization,’ Industrialization, and the Indian Economy, c. 1850–1947,” Modern Asian Studies 19, no. 3 (April 1985): 600.
51. B. R. Tomlinson, “The Economy of Modern India,” The New Cambridge History of India, vol. 3, 3. (Cambridge: Cambridge University Press, 1993): 102.
52. Morris D. Morris, “Towards a Reinterpretation of Nineteenth-Century Indian Economic History,” Journal of Economic History 23, no. 4 (December 1963): 613.
53. See, for example, Morris; Tomlinson; and Tirthankar Roy, “Economic History and Modern India: Redefining the Link,” Journal of Economic Perspectives 16, no. 3 (Summer 2002): 109–130.
54. Paul Bairoch, “European Trade Policy, 1815–1914,” in Peter Mathias and Sidney Pollard, eds., The Cambridge Economic History of Europe (Cambridge: Cambridge University Press, 1989), VIII:109.
55. Jeffrey Williamson, working paper, “De-Industrialization and Underdevelopment: A Comparative Assessment around the Periphery 1750–1939” (December 2004): 15, accessed at http://www.economics.harvard.edu/faculty/jwilliam/papers/DeIndEHW1204.pdf, December 22, 2006.
56. Recent economic research shows a fairly strong relationship between length of European rule and subsequent economic progress; the longer the period of colonial governance, the higher a nation’s modern GDP. See, for example, James Freyer and Bruce Sacerdote, “Colonialism and Modern Income—Islands as Natural Experiments,” Working Paper (October 2006), accessed at http://www.dartmouth.edu/~jfeyrer/islands.pdf, December 22, 2006.
57. Computed from Donald Grove Barnes, A History of the English Corn Laws (New York: Augustus M. Kelley, 1961): 295–296.
58. Interpolated from Maddison, The World Economy, 95.
59. Ibid., 299–300; and S. Fairlie, “The Corn Laws Reconsidered,” Economic History Review 18, no. 3 (1965): 563.
60. Barnes, 72–73. This is not very different from the refusal of twenty-first-century Americans to drive fuel-efficient vehicles.
61. Ibid., 5–89.
62. David Weatherall, David Ricardo, A Biography (The Hague: Martinus Nijhoff, 1976), 1–3.
63. Ibid., 38–39; see also 69–71 for Waterloo loan.
64. David Ricardo, Principles of Political Economy and Taxation (London: Dutton, 1911), 77–93; quotation, 77.
65. In fact, John Stuart Mill described the principle much more clearly in his similarly titled Principles of Political Economy, published a generation later; and earlier writers of the seventeenth and eighteenth centuries, including Smith, Robert Torrens, and Henry Martyn, had described the concept in general terms. Nonetheless, economic historians generally award Ricardo pride of place for his groundbreaking mathematical description of free trade’s win-win nature. See Irwin, 89–93.
66. Barnes 133–135, 177–179. The foreign minister’s antipathy to the working class would later be immortalized by Shelley after the Peterloo massacre of 1819: “I met murder upon the way; He had a mask like Castlereagh.” (“The Masque of Anarchy.” Note to American readers: this rhymes.)
67. Weatherall, 101–106, 135–137.
68. For more than a century, there has been a lively debate among economic
historians as to whether the corn laws did indeed serve to keep grain prices high, and if their repeal caused prices to fall. The consensus seems to be “yes” to both questions. For a comprehensive treatment of the subject, see Fairlie, 562–575.
69. Joyce Marlow, The Peterloo Massacre (London: Panther, 1969), 53–54.
70. The bill of 1828 imposed a 34-shilling duty when the price was below fifty-two shillings, which decreased gradually to just one shilling when the price reached seventy-two shillings. See Barnes, 200–201.
71. Wendy Hinde, Richard Cobden (New Haven, CT: Yale University Press, 1987), 1–2.
72. Richard Cobden, England, Ireland, and America (Philadelphia: Institute for the Study of Human Issues, 1980), 94.
73. Ibid., 29. This is a point that is almost always overlooked by proponents of protection: imposing high import tariffs and erecting trade barriers raises the prices of imported production materials, making domestically produced manufactures more expensive, and thus less competitive abroad.
74. Norman McCord, The Anti-Corn Law League (London: George Allen and Unwin, 1958), 34–36.
75. Johnson, 167.
76. Hinde, 50–52; quote, 51.
77. Ibid., 52.
78. Barnes, 254.
79. Henry Donaldson Jordan, “The Political Methods of the Anti-Corn Law League,” Political Science Quarterly 42, no. 1 (March 1927): 66.
80. G. Kitson Clark, “The Repeal of the Corn Laws and the Politics of the Forties,” The Economic History Review 4, no. 1 (1951): 5.
81. Jordan, 69–73. If one estimates the return on property at 6 percent per year, then this computes to a cost per vote of approximately £33 (the £2 per year freehold divided by 0.06), well within the league’s budget in a tightly contested “pocket borough,” where a dozen votes could easily decide a seat in the Commons.
82. Fay, 105.
83. Quoted in Hinde, 147.
84. The modern reader will find an obvious similarity between the pious concern of the English landowning aristocracy for working conditions in England’s mills and that of the modern American labor movement for the treatment of workers in the developing world. Many on both sides of the Corn Law controversy thought, incorrectly as it turned out, that the League’s factory owners would benefit from cheaper bread, which would enable them to pay workers less and thus exact greater profits. (Cobden, right as usual, realized that cheaper bread meant a higher standard of living for workers, not higher profits for mill owners.) A popular ditty went: