European expansion

A commercial world economy

In a sense, the European discovery of the Americas was something of a distraction. After all, it was to East Asia that the Europeans wanted to go. From this perspective the year 1498 is more important than the year 1492. It was in 1498 that the Portuguese sea captain Vasco da Gama rounded the Cape of Good Hope, on the southernmost tip of Africa, and started making his way up Africa’s eastern coast. Here the Europeans met traders from Oman, Yemen, and Gujarat; in fact, if the Europeans only had arrived half a century earlier, they would have met Chinese traders here too. Benefiting from the monsoon winds, da Gama arrived in Kerala in southern India in May 1498, and from here Portuguese ships soon started exploring other ports around the Indian Ocean. This is how the Europeans came into contact with the “spice islands,” the vast archipelago in today’s Malaysia and Indonesia where assorted exotic spices were grown. The Europeans soon developed a taste for nutmeg, cloves, cardamom, black pepper and mace — which all helped to bring flavor to the notoriously bland European diet. Before long European ships had continued into the Pacific Ocean too, traveling northward to China and Japan. The Portuguese established trading depots in Goa in India, 1510; Malacca in Malaysia, 1511; and in Macao in China, 1557. These were not colonies, only ports where they could trade with the locals, store goods and repair their ships.

The Portuguese were soon followed by the Spanish. In 1565, conquistadors from Mexico sailed to the Philippines where they established a colony known as the “Spanish East Indies,” with Manila as its capital. The Spanish visited Taiwan too, and southern China. The Spanish economy at the time was actually quite underdeveloped, yet their discovery of silver in the Americas allowed them to ignore this fact. The silver also provided a way around a problem that always had plagued European trading relations with the East: there was so much they wanted to buy from the Asians, but next to nothing that the Asians wanted to buy from them. Once silver started flowing from the Americas, however, the Europeans could suddenly buy anything they wanted. This infusion of cash caused a boom in international trade, bringing great wealth both to China and India. Before long the Spanish did not even bother to send the silver to Europe first but sent it instead directly across the Pacific Ocean, straight to their Asian creditors.

More than the Spanish, however, it was the Dutch who came to copy the Portuguese. The Dutch also became their greatest rivals as international merchants. The Dutch lived in a republic, and officially they had no imperial ambitions, but they were very keen on trade. It was in Holland, in 1602, that the first truly multinational company — the Vereenigde Oostindische Compagnie, the Dutch East India Company — was established. The VOC, as it was known, expanded the markets for the products which the Portuguese had discovered, and connected all parts of the world into one global marketplace. Similar trading companies were soon established all over Europe.

The European states benefited greatly from the trade with the East. The seventeenth century was a time when European rulers increasingly came to call themselves “sovereign,” meaning that they had pretensions to exercise supreme authority within the territory which they took to be theirs. In order to give credence to this rather extravagant claim, the kings needed resources, and this is what the trade with East Asia supplied. For one thing, each trading company was given a monopoly on trade with a particular part of the world. Or rather, these monopolies were sold by the kings and thus a good source of revenue for them. Soon the kings could also borrow money from the trading companies. Making fabulous profits, they had surplus cash which they needed to invest. The kings of France were notorious for defaulting on these loans, but the kings of England were less extravagant. This is how the Bank of England and similar financial institutions came to be established. Eventually, the City of London became the leading center of international finance.

The development of these global trading networks had a profound impact on the world economy, and it was to have political implications too — involving European countries in colonization and empire-building. Yet in Asia, Europe’s position was nothing like their position in the Americas. The Dutch established a colony, Batavia, in Indonesia, and the Spanish occupied the Philippines, but there was no way for the Europeans to successfully make war on the powerful kingdoms of the East. China, India, Japan, Siam, the Mughal Empire, Persia, and the Ottomans were far too rich and powerful, their armies too strong, and the Europeans were far too few in numbers. Portuguese traders had established a powerful grip on commerce in the Indian Ocean, ending the tradition of free competition and free trade, but this was not something that worried the rulers of Asia. The Europeans, much as in the Middle Ages, continued to be awestruck by the wonders of the East, and the eastern empires were greatly admired for their wealth and power.

The Seven Years’ War, 1756-1763, is the world war few people have heard about. It was fought in Europe — between Britain and France and their respective allies — but the war spread to other continents too. The conflict was particularly fierce in North America where both Britain and France had established communities of settlers and had strong commercial interests. The Seven Years’ War was fiercely fought in India too where the settlers were fewer in numbers, but the commercial interests at least as strong. In both cases, the conflicts concluded with victories for Britain. One long-term consequence of the wars in Europe was that the settlers came to make themselves more independent of their home governments. In fact, relations between the settlers and the European motherlands had always been complicated. The Spanish government had, for example, tried to keep some order in the empire and sought to stop the conquistadors from mistreating the natives. Yet the conquistadors were scornful of such policies, and they resented Madrid’s meddling in what they regarded as their own affairs. When Spain itself was occupied during the Napoleonic Wars, 1808-1814, the settlers saw an opportunity to assert themselves. One after another, they declared their independence: Colombia in 1810, Venezuela in 1811, Argentina in 1816, Peru in 1821, Bolivia in 1825, and so on.

Something similar happened in the case of North America. In the southern parts of that continent, the British had established large plantations where they grew tobacco, sugar, and cotton for export. In the eighteenth century, these products proved extraordinarily successful. Suddenly people everywhere around the world started smoking, eating sweets and dressing in cotton fabrics. To make up for the shortfall in cheap labor, the settlers in North America too began importing African slaves. When slavery eventually was abolished in 1865, there were close to 4 million slaves in the United States. Today some 13 percent of the US population — around 40 million people — identify themselves as “African-American.” In British North America, there were three quite distinct groups of settlers — the plantation owners in the South, the Puritan settlers in New England, and the people who lived in fledgling cities like New York and Boston. The lifestyle, outlook, and values of these three groups were really quite different, yet they, much as the settlers in South America, shared a resentment of any outside interference. They insisted that London had no right to tax them as long as they were not represented in the British parliament. Moreover, they wanted to continue their expansion westward, a project which London regarded as too adventurous. Thirteen settler colonies in North America declared their independence from Britain in 1776.

This is how European imperialism by the 1820s largely had come to seem a thing of the past. People in Britain looked back wistfully on the days when they had had an empire. There was still Canada to be sure, but this territory was mainly a concern for merchants involved in the fur trade; there was India too, but India was ruled by the East India Company and not a British colony. Other European countries had even less of an empire. As a result of the Seven Years’ War, the French had lost most of their commercial outposts; the Portuguese had lost Brazil, even though they retained their trading posts in Africa and Asia; there were Dutch settlers in South Africa, but the Dutch presence in the rest of the world was motivated by commercial imperatives, not by imperialism.

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De Vereenigde Oostindische Compagnie

Carl von Linné names the world