Chapter 15: Global Commerce

The European sail to India in late fifteenth century was not an accident. It was a deliberate and systematic process by the Portuguese to explore a sea route to the East. They knew about the rich trade network between East Africa coat and China and wanted to find a way to exploit it. During the fifteenth century, Europe was going through a general recovery following the disaster of the Black Death in the early fourteenth century. The population was growing; the cities were expanding and a more capitalist economy was being developed. Moreover, for centuries, Eastern goods used to come through the Middle East. The Italian commercial city of Venice monopolized the European trade of Eastern goods. Finally, few products of Europe were attractive in Eastern markets, so they were required to pay with cash-silver or gold- which resulted in persistent trade deficit.

The arena of the Indian Ocean commerce was vast, in geographic context and in the diversity of those who participated in it. East Africans, Arabs, Persians, Indians, Malays, Chinese and others traded freely in that area. Portuguese could have chosen to participate freely and compete in that market, but because the European goods were not competitive, they chose to dominate the area using forces to benefit from the region. The Portuguese used their forces to establish fortified bases at several key locations within the Indian Ocean with the objective of controlling the commerce. The Portuguese king grandly titled himself “ Lord of the Conquest, Navigation, and Commerce of Ethiopia, Arabia, Persia, and India”.

However, Portuguese failed in their mission to control the commerce in the Indian Ocean. They were outnumbered by Asian traders, many Portuguese traders escaped the control of their government and settled and learned local languages and sometimes converted to Islam. By 1600, their post trade empire was in steep decline.

Further, Spain was the first to challenge Portugal’s position. In an effort to catch up, they establish themselves on what became the Philippine Islands. Some conditions encouraged the Spanish colonial rule on the Philippine Islands: the proximity to China and the Spice Islands, small and military weak societies, the absence of competing claims. Accompanying Spanish rule was a major missionary effort, which turned the Filipino society into the major outpost of Christianity in Asia. The Spanish rule made a major transformation to the original Filipino society. 

English and Dutch entered the Indian Ocean commerce in the early seventeenth century and they became a far more important power than the Portuguese and Spanish. They organized their Indian Ocean ventures through private trading companies which were able to raise money and share risks among a substantial number of investors. These British and Dutch companies were granted trading monopolies and the right to launch wars from their respective governments.

The Dutch acted to control not only the shipping but also the production of spice like cloves, cinnamon and others. They sized islands and sometimes killed and enslaved its population to control the production in these islands. Their methods were bloody which enabled them to gain so much profit. The British acted differently, they secured their trading with base with the permission of the local authorities with substantial payments of bribes to gain admission to the Indian markets.