Free Trade

Like most economists, I am a supporter of free trade. By “free trade” I mean voluntary contracts, with a minimum of transactions costs. Here’s a description of some trade which I wouldn’t describe as “free.”

The rise of commercial conflict along the Chinese coast may also be linked to the disastrous arrival of the Portuguese on the Indian Ocean. Seeking to take over the extensive maritime trading networks that Muslims and Chinese operated before they arrived, the Portuguese plundered or sank almost every trading vessel they encountered between 1500 and 1520 in order to force their competitors out of the market. When the Portuguese captured the major regional trading center of Malacca in 1511, they butchered the large community of Chinese merchants living there.

That is also from Timothy Brook’s Confusions of Pleasure. He also describes the natural effect of some trade bans. The end results of prohibitionist policies seem almost inevitable, and are one of the easiest things to predict:

The bans against foreign commerce were counterproductive and further intensified the violence associated with the trade. Chinese and foreign merchants continued to gather in considerable numbers in the lees of offshore islands to trade out of sight of piracy-suppression officials. As trade increased, so did suppression, culminating in the so-called wokuo, or “Japanese pirate”, raids of the famine-troubled decades of the 1540s and 1550s, when bands of Chinese sailors working with Japanese and other foreigners raided where they could not trade. The tension between trade and closure would not be resolved until the reopening of trade in the 1560s.

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