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A gilded view of global trade misses its dark sides
By Wan Lixin |
March 7, 2009, Saturday
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Print Edition
Print Edition
WILLIAM Bernstein's "A Splendid Exchange: How Trade Shaped the World" is an encomium of global trade.
It does mentioned such byproducts as the Black Death and smallpox, but on the whole the book's recurring theme is that world trade is most nations' primary source of prosperity.
The book is ambitious in its reach, spanning all major historical periods and all continents.
In its 400 pages of tribute to global trade, the bloodier aspects of global trade seem to be less well investigated.
While Adam Smith did say, "Man has an intrinsic 'propensity to truck, barter and exchange one thing for another'," that does not mean this human impulse needs encouragement in all its many manifestations.
China's recent history clearly demonstrates the close relationship between war and trade.
Yantie Lun ("On Salt and Iron'') is the minutiae of an intense court debate during China's Western Han Dynasty (206 BC-24 AD) on the state monopoly of salt, iron and wines.
A well-argued point in the exchange is that "the emperors should not value or hoard rare, exotic but useless products, so that the general masses would concentrate on agriculture, which is the root of all.''
Ever since Emperor Wu (156-87 BC) of the Western Han Dynasty espoused Confucianism as the orthodox state ideology, nearly all ensuing dynasties had pursued a policy of promoting agriculture while discouraging businesses.
A self-sufficient civilization like China's naturally showed little inclination to engage in commerce with the outside world, with the Chinese people living in contentment for thousands of years.
Before 19th century, major Western powers purchased tea and luxuries like silk from China, and paid in gold and silver.
As trade and profit-seeking Western businessmen were held in contempt, the commerce was subject to serious limitations. The foreigners in China were not allowed to carry arms, bring along their wives, learn the Chinese language or read Chinese books.
By the late 18th century, the British East India Company had come to dominate the China trade.
Industrialized Britain badly need overseas markets for its products.
After suffering repeated setbacks in forcing open the China market through diplomatic channels, the British came upon an ideal product: opium.
This product grown in colonial India had the magic power of at once creating steadily increasing demand and generating huge profits, siphoning gold and silver out of China.
China's attempt to crack down the trade of vice led to the two opium wars, failures, and a series of humiliating treaties.
In his preface to an English translation of Plutarch's "The Age of Alexander," G. T. Griffith said that for Greeks war held for centuries "all the fascination which 'the economy' now holds for some few of us."
China's humiliating suffering at the hands of brutal and greedy Western powers suggests that war and trade are mutually enhancing.
Bernstein's unqualified endorsement of trade totally ignores the blood, slavery, coolies, slums and genocide that have been the part and parcel of global trade.
Given the author's limitations, it is not surprising that he states, "The great national trade organizations, particularly the English and Dutch East India companies, spearheaded Europe's commercial dominance and made world trade the nearly exclusive province of large corporate entities."
We have already comprehended the greatness of the English East India Company in its opium trade.
His assertion that "free trade immensely benefits many people around the globe" also sounds empty today when some Western politicians find protectionism more to their taste.
Ironically, these politicians may be right.
Bernstein asserts that today your fate depends on whether your product can be made more cheaply somewhere else.
But making a product "cheaply" can be deceptive - we fail to take into account the huge environmental impact of flooding the earth with cheap consumer products, the pollution, and the energy costs.
Local solution may be the only sensible solution.
It does mentioned such byproducts as the Black Death and smallpox, but on the whole the book's recurring theme is that world trade is most nations' primary source of prosperity.
The book is ambitious in its reach, spanning all major historical periods and all continents.
In its 400 pages of tribute to global trade, the bloodier aspects of global trade seem to be less well investigated.
While Adam Smith did say, "Man has an intrinsic 'propensity to truck, barter and exchange one thing for another'," that does not mean this human impulse needs encouragement in all its many manifestations.
China's recent history clearly demonstrates the close relationship between war and trade.
Yantie Lun ("On Salt and Iron'') is the minutiae of an intense court debate during China's Western Han Dynasty (206 BC-24 AD) on the state monopoly of salt, iron and wines.
A well-argued point in the exchange is that "the emperors should not value or hoard rare, exotic but useless products, so that the general masses would concentrate on agriculture, which is the root of all.''
Ever since Emperor Wu (156-87 BC) of the Western Han Dynasty espoused Confucianism as the orthodox state ideology, nearly all ensuing dynasties had pursued a policy of promoting agriculture while discouraging businesses.
A self-sufficient civilization like China's naturally showed little inclination to engage in commerce with the outside world, with the Chinese people living in contentment for thousands of years.
Before 19th century, major Western powers purchased tea and luxuries like silk from China, and paid in gold and silver.
As trade and profit-seeking Western businessmen were held in contempt, the commerce was subject to serious limitations. The foreigners in China were not allowed to carry arms, bring along their wives, learn the Chinese language or read Chinese books.
By the late 18th century, the British East India Company had come to dominate the China trade.
Industrialized Britain badly need overseas markets for its products.
After suffering repeated setbacks in forcing open the China market through diplomatic channels, the British came upon an ideal product: opium.
This product grown in colonial India had the magic power of at once creating steadily increasing demand and generating huge profits, siphoning gold and silver out of China.
China's attempt to crack down the trade of vice led to the two opium wars, failures, and a series of humiliating treaties.
In his preface to an English translation of Plutarch's "The Age of Alexander," G. T. Griffith said that for Greeks war held for centuries "all the fascination which 'the economy' now holds for some few of us."
China's humiliating suffering at the hands of brutal and greedy Western powers suggests that war and trade are mutually enhancing.
Bernstein's unqualified endorsement of trade totally ignores the blood, slavery, coolies, slums and genocide that have been the part and parcel of global trade.
Given the author's limitations, it is not surprising that he states, "The great national trade organizations, particularly the English and Dutch East India companies, spearheaded Europe's commercial dominance and made world trade the nearly exclusive province of large corporate entities."
We have already comprehended the greatness of the English East India Company in its opium trade.
His assertion that "free trade immensely benefits many people around the globe" also sounds empty today when some Western politicians find protectionism more to their taste.
Ironically, these politicians may be right.
Bernstein asserts that today your fate depends on whether your product can be made more cheaply somewhere else.
But making a product "cheaply" can be deceptive - we fail to take into account the huge environmental impact of flooding the earth with cheap consumer products, the pollution, and the energy costs.
Local solution may be the only sensible solution.
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