1493_ Uncovering the New World Columbus Created - Charles C. Mann [92]
In the textbooks, government appears mainly as an outside factor that imposes tariffs, quotas, levies, and so on, influencing the outcome of private trade, often reducing the net economic benefit. But the state does this because trade has two roles: one highlighted in economics textbooks, where private markets allow both sides to gain economically, and one that rarely appears in those textbooks, in which trade is a tool of statecraft, the goal is political power, and both sides usually do not win. In this second role, the net economic benefit of trade is much less important than the political benefit to each side, and the government interventions that exasperate economists can be useful, even vital tools to achieve national preeminence.7
The greatest expansions of world trade have tended to occur when both roles are aligned and commercial ambitions can be enforced, as Findlay and O’Rourke put it, “with the barrel of a Maxim gun, the edge of a scimitar, or the ferocity of nomadic horsemen.” Today violence is less common, if only because powerful weapons are so cheap that all sides have them, and states tend to make do with tools like subsidies to industry, exchange-rate manipulation, and export and import regulations. But still today trade expands when government sees it as a way to project and increase power—witness the recent history of Japan and China.
At the same time, the two roles often conflict, and the conflict leads, as in Manila, to a considerable amount of profoundly fractured cerebration. For Spain, Manila was both a trading post and a projection of Spanish power in the Pacific. Its traders wanted to generate as much profit as possible by importing as much silk as possible; its political rulers, by contrast, wanted to seize Asian lands, convert Asians to Christianity, thwart Dutch and Portuguese ambitions—and have as much of the silver as possible come to Spain, because the state needed it to pay for wars in Europe. Considered purely as a trading entrepôt, Manila should house as few Spaniards as possible—they were expensive to send over and kept dying of disease—and let Chinese people do all the work. To serve best as an imperial outpost, though, the Spaniards needed to ensure that all vital civic functions were in loyal Spanish hands, and minimize the number and influence of the Chinese. Every step to satisfy one imperative worked against the other.
Like the Spanish court, the Ming court struggled to reconcile the divergent roles of trade. On the one hand, silver from the silk trade became a source of imperial wealth and power. American silver helped pay for huge military projects, including much of the Great Wall of China, which the Ming were revamping and extending. And it fueled an explosion of commerce within China, which led to an economic boom. On the other hand, the money that enabled business to grow also set off inflation, which had its worst impact on the poor. And silver was ever a political threat to the dynasty, because it controlled neither the trade nor the source. Alarmingly, the emperors could not restrict the flow of silver into Fujian, even if they wanted to, because of rampant smuggling. In the eyes of the court, the Fujianese merchants were people of dubious loyalty who had created in the Parián an important Chinese city that was outside imperial supervision. They were becoming wealthy and powerful in a way that was hard for the court to control. Little wonder Beijing kept a wary eye on Yuegang!
There is little evidence, though, that Beijing anticipated the worst consequences. As in Europe, so much silver flooded