Friday, February 15, 2013

England and the Early U.S. in Asian Trade

Fichter, James R. So Great a Proffit: How the East Indies Trade Transformed Anglo-American Capitalism. Cambridge, MA: Harvard University Press, 2010.

This book is about Anglo-American capitalism in Asia. The story, says author James Ficther, illustrates "the deep links between the United States and the rest of the world from that country's inception (2-3).

For what it's worth, the part about "from that country's inception" is significant. The field of historical study that focuses on the U.S. and the rest of the world is growing rapidly. More to the point, it emphasizes not so much U.S. impact on the rest of the world, but rather the world's contributions and connections to U.S. history.

In this book, James Fichter notes that American international traders did quite well for themselves in the years that immediately followed the American Revolution. Their economic success helped to pave the way for the tremendous growth that the U.S. experienced during the nineteenth century. But how did it happen? A careful historian, Fichter argues that there were a number of global factors at work in the rise and success of early-U.S. international trade. According to the author, some of these factors were as follows:

1. A strong American resistance to state-sponsored monopolies. The English East India Company was the only corporation that could legally import Asian goods, like tea, to Great Britain and her colonies. This, says Ficther, was at the root of the Boston Tea Party in December 1773. It wasn't merely that British subjects in America resented taxes on tea. It was that they also rejected the monopoly that locked American merchants out of the import business. From the beginning, the United States held onto the economic theory that insists that open and fair trade is a good thing for everyone.

2. The French Wars, which lasted from about 1793-1815, were an incredible distraction and impediment to European trade. European navies required ships for military purposes. Hostile countries interfered in each other's international trade. All along, the U.S. was basically neutral. So its trading vessels could safely sail under the American flag and do business with anyone.

3. Asian sellers wanted to be paid by Western buyers in silver. But there wasn't much of that in the early United States. American business leaders remedied that problem by selling shares in a given trading voyage to sometimes twenty or more individual investors. Most of these investors could never have owned a ship or financed a voyage. But they could still get in on the huge profits that came from international trade. In essence, by pooling their silver, Americans were not only able to make a lot of money, they were also able to quickly become major players in the game of Western trade with the East.

4. In spite of all its pomp and pride, the English East India Company, a state monopoly, was incredibly inefficient. Ironically, by attempting to retain its authority and unique legal status, it defeated itself.

5. British colonization in Asia created a whole set of problems associated with ruling a place so far from home. The United States didn't have those problems because it didn't have colonies in Asia.

By 1815, the English East India Company was kaput. Also by that time, enough American international traders had accumulated enough capital that they were able to help other industries in the U.S. to grow. In short, the British came to adopt a superior approach to Asian trade. While that was happening, the United States became a major player in Asian trade. The foregoing is nothing like a complete review of this book. But it does present some of the highlights.

Now, what was best about this book? I'm no expert on this topic, but I can tell you my impressions. I think that the scope and depth of this book are impressive, to say the least. Ficther has spent a good bit of time in libraries and archives literally all over the world. Because of the extent of his painstaking research, he is able to tell a broad, complex story that takes into account a tremendous amount of wide-ranging information. This book represents quite an achievement, one that the reader will learn from and appreciate.

What wasn't so good about this book? While focusing on economics, Ficther tends to ignore the political dimension of his story. This shows up when one takes note of the featured actors. The author pays a lot of attention to people like American merchants, ship captains, and representatives of the East India Company. By contrast, we hear very little about significant politicians of the day. Perhaps the most glaring omission is Fichter's near silence about the labor of slaves in the Caribbean, an absolutely vital aspect of this episode in history. I am reluctant to fault a book along this line because it seems like faulting the author for not writing a different book. But I do think that more attention to the issues I have mentioned here would make this really fine book that much better.

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