Asian trade and European expansion in the age of mercantilism

The present conflict between rich and poor nations which must be resolved in the future has its origins in the age of mercantilism when keen competition for the gains from international trade stimulated European expansion. The commercial revolution of that time was followed by the financial and industrial revolutions which transformed the economy of the North. Asian trade played a pivotal role in the commercial revolution and gave rise to many innovations in Europe.

Asia did not benefit from that trade. The flow of the precious metals with which the Europeans paid for Asian commodities did not lead to the rise of capitalism in Asia but only to an increasing monetization which facilitated the collection of land revenue. The great land-based powers of Asia which depended on this revenue welcomed this development, but they were politically unstable and could not resist foreign intrusion which spread from small bridgeheads on the maritime periphery until it assumed a major role in the control of the respective countries. A parasitical symbiosis between these foreign commercial systems and the agrarian states of Asia emerged in the course of time.

Modern theories of international trade which are based on the assumption of universal economic growth and mutual benefit do not account for this type of development. Therefore an attempt has been made in this book to trace the trend of European expansion in this context of unequal trade. The Venetian model of guarded trade, the Portuguese system of maritime protection rent, the Dutch combination of monopoly control and free trade, the British success in linking a flourshing re-export business with an expanding home market, and finally British-French rivalry for global hegemony have been outlined and contrasted with the history of the major Asian states of this period. As the first volume of the new series "Perspectives in History" this book provides a synthesis of a great deal of specialized research work and raises issues for further discussions and enquiries.