The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor

by David S. Landes

  Religious commitment entailed a serious commercial disadvantage: it introduced an element of irreconcilability into what might have been an easier, more profitable encounter. For the Portuguese, the Muslims were infidels and enemies of the true faith. No brutality was too much. All Muslim shipping was fair game; all Muslim kingdoms were defined as foes. On his second voyage of 1502, Vasco da Gama capped a victory over a Muslim flotilla before Calicut by cutting off the ears, noses, and hands of some eight hundred “Moors” and sending them ashore to the local ruler with the facetious suggestion that he make curry of them. And one of his captains, his maternal uncle Vincente Sodre (whose name deserves to be remembered ad opprobrium), flogged the chief Muslim merchant at Cannanore (Malabar coast) until he fainted, then stuffed his mouth with excrement and covered it with a slab of pork to make sure he ate the filth.1

  Such actions led to war with the many lands bordering the Indian Ocean: East Africa, Arabia and Persia, much of India, the greater part of the Indonesian archipelago. In the words of a sixteenth-century essay on the Excellency and Honourableness of a Military Life in India: “Nor is this to be wondered at, since we are the sworn foes of all unbelievers, so it is hardly surprising if they pay us back in the same coin…. We cannot live in these regions without weapons in our hands, nor trade with the natives except in the same manner, standing always upon our guard.”2

  Did ever newcomers try harder to make trouble for themselves?

  Even so, Portuguese political strategy necessarily diverged sharply from the opportunistic Spanish conquests. For one thing, the locals were far more numerous, and their familiarity with metal and war made them serious adversaries. For another, they were not vulnerable to Portuguese-imported diseases. On the contrary, the Portuguese had cause to fear local contagion and parasites. As a result, they had to limit their craving so as not to dissipate their forces. The Portuguese looked for choice places of strategic import, key points controlling key passages—Malindi and Mombasa on the African coast (jump-off points for voyages to India), Ormuz at the mouth of the Persian Gulf, Malacca (between Sumatra and Malaysia, on the strait connecting the Indian Ocean and Gulf of Ceylon to the South China Sea and the Spice Islands), Macao near the mouth of the Pearl River (entry to southeast China). They wanted Aden (access to the Red Sea), but could never take it. The most important base of all was Goa, pearl of the Malabar coast—entrepôt for pepper, port of entry for Arabian horses into South India (the climate made it impracticable to breed horses locally), defended by sea and, on the landward side, by a channel stocked with crocodiles.

  In the end, the native rulers of these regions learned to live and do business with these Portuguese enclaves, as they had with other outsiders since time immemorial. When they did attack Europeans, they were thwarted as often as not by their own local enemies. The Portuguese played the balance of power to a fare-thee-well, and it saved them more than once.

  But more serious adversaries were on their way. Everything changed once the Dutch and English entered the arena. In 1605, the Dutch took Amboina and drove the Portuguese from other bases in the Moluccas (Spice Islands). In 1622, the Portuguese lost Ormuz to the Persians, who were decisively assisted by English ships and gunners. In 1638, the Dutch took Elmina, that first Portuguese fort on the Guinea coast, symbol of their pioneer voyages and market for African gold and slaves. In 1641, it was Malacca’s turn, again to the Dutch; in 1665-67, Macassar’s. In the course of all this, the Dutch simply threw the Portuguese out of the Spice Islands, the original point of the exercise. Portugal’s day had come and gone, but pride thrives on reverses, and they clung to what they could. Thus they held Goa until 1961 (long after it had lost wealth and commercial importance), when a far stronger Indian government marched in and took it over, without provocation or pretext. No self-respecting independent country could live with such a colonial boil on its flank.

  TRADE ROUTES IN THE EASTERN SEAS

  This regional (country) trade flourished well before the Europeans arrived in the sixteenth century.

  Portugal’s primary commercial objective in the East was to obtain pepper and other spices and ship these directly to Europe, bypassing the intermediaries that encumbered the traditional traffic across Asia and into the Mediterranean.* This the Portuguese did by purchase or seizure, compensating by force for the obstacles that Muslim merchants put in their way. In the early decades, these measures garnered a large share of the trade. At the peak, some 40 percent of the pepper imported into Europe was going around the Cape of Good Hope, and the Venetians were hurting. But with time, the older trade routes reasserted themselves. The direct Portuguese share fell back to about 20 percent, still important but no longer dominant. In 1570, the Portuguese crown gave up its monopoly of the trade between Lisbon and the east (Goa). The king ceased to be a merchant and instead sold concessions, frequently to foreign traders. In 1586, the German merchant house of Welser leased the exclusive rights to purchase pepper in the Indies. The sale marked ebbtide. The Portuguese were selling an empty hand.3

  (These figures of market share are grossly approximate. We have no aggregate data.4 But we do know that Venice, drawing on overland shipments to the Levant, once again found itself Europe’s key pepper emporium in the latter part of the sixteenth century. When the news came of the first successful Dutch voyages to the East Indies [Cornells Houtman, 1595], Venice, as well as Portugal, could see the imminent, “utter overthrow” of the older trade.5 By 1625, the Venetian customs classified spices as “western commodities”: they now came from the Atlantic rather than the Near East.)

  To make up for the shrinking spice trade, the Portuguese got into intra-Asian exchange. This had flourished well before the Europeans came: Gujrati, Javanese, and Chinese merchants trading pepper and spices for Indian and Chinese textiles and Chinese porcelain; Arab merchants walking and shipping slaves from Africa throughout the Muslim world; ships from everywhere moving teak, sandalwood, and other fine woods; ivory and rhinoceros horn, valued as an aphrodisiac; also rare and not-so-rare animals, including monkeys, tigers, and above all horses and elephants, for use in war and ceremony; and everyone bringing precious metals to balance accounts (silver from the New World to India and China, gold from East Africa and Japan). Much of this Asian trade was spontaneous and improvisational—a kind of Brownian movement. One went where the cargoes were, bouncing from port to port. This is the way of what later came to be known as tramp steamers; these were tramp sailing ships.6

  Along with this went a shift out of trade into what the economist would call rent-seeking activities. In particular, the Portuguese sought to use their power to batten on the trade of others. They became the robber barons of the Indian Ocean. All merchant vessels were required to purchase a Portuguese trading license. Those that did not were liable to seizure. The shift to racketeering and local trade made possible important economies: many fewer ships went out from Europe to Asia. In their stead, the Portuguese used Indian-built vessels. Hardwood was readily available, and Indian carpenters quickly learned to work to European specifications—and for much lower wages. Crews also went native. Sometimes, except for fifteen or twenty European (or Eurasian) soldiers, gunners, and officers, the entire ship’s complement would be Asians or African slaves. Given the size of the Indian Ocean, one might have thought the need for patrol ships endless, to ensure obedience to Portuguese controls. Here the topography helped: the narrow trade routes and passages made for easy surveillance. Besides, one did not have to be everywhere; a few exemplary boardings and seizures made the point.

  The trouble is, two and more can play the game. The European newcomers fought harder and sailed better. Accounts of early Dutch and English voyages to the area (early seventeenth century) are full of waiting and skulking, of traps and perfidy, of attacks and captures. One side’s knave was another’s hero. James Lancaster, a bold and skillful English captain, could not get enough by trade on his second voyage to the Indies (1601)? No problem. When Lancaster returned to England two ye
ars later, his ships laden with booty, King James knighted him for his efforts. The surface of the Indian Ocean mimicked the waters below, full of predators feeding on one another. All of this amounted to legalized piracy, legitimized for the Dutch and English by a state of war with Spain, which war extended to Portugal once the two Iberian kingdoms were joined in 1580 by common rule. So profitable was this game that even after the two Iberian kingdoms separated in 1640, the Dutch and English were loath to return to peace. What could be better than

  The good old rule, the simple plan,

  That they should take who have the power,

  And they should keep who can?7

  The land powers of the Indies watched this intra-European contest and kept clear. They preferred to take their share of monopolistic trade or even to use the foreigner as an ally in their own wars. Besides, the Asians were largely indifferent to maritime power and naval prowess—“Wars by sea,” said Bahadur Shah, ruler of Gujarat and neighbor of the Portuguese, “are merchants’ affairs and of no concern to the prestige of kings.” That was not far from the Chinese attitude. Another bad mistake.

  Meanwhile Portuguese power shriveled: one historian speaks of “the inherently brittle superstructure of their maritime dominance.”8 And, he might have added, the sandy infrastructure. Soon, only the great memories remained, enshrined in the poetry of Luis da Camoëns (The Lusiads), who sang of invisible tracks through “oceans none had sailed before.”9 All pride. As the English governor of Bombay observed in 1737: “The Crown of Portugal hath long maintained the possession of its territories in India at a certain annual expense, not inconsiderable; purely as it seems from a point of Honour and Religion.”10

  The Spice of Life

  People of our day may wonder why pepper and other condiments were worth so much to Europeans of long ago. The reason lay in the problem of food preservation in a world of marginal subsistence. Food supply in the form of cereals barely sufficed, and it was not possible to devote large quantities of grain to animals during long winters, excepting of course breeding stock, draft animals, and horses. Hence the traditional autumnal slaughter. To keep this meat around the calendar, through hot and cold, in a world without artificial refrigeration, it was smoked, corned, spiced, and otherwise preserved; when cooked, the meat was heavily seasoned, the better to hide the taste and odor of spoilage. Hence the paradox that the cuisine of warmer countries is typically “hotter” than that of colder lands—there is more to hide.

  Condiments brought a further dividend. The people of that day could not know this, but the stronger spices worked to kill or weaken the bacteria and viruses that promoted and fed on decay. Tabasco and other hot sauces, for instance, will render infected oysters safer for human consumption; at least they kill microorganisms in the test tube. Spices, then, were not merely a luxury in medieval Europe but also a necessity, as their market value testified.

  “Os Cafres da Europav”—The “Kaffirs of Europe”11

  To understand the rise and fall of empires, one must always look as much at the forces and circumstances of the home country as at conditions in the field. When the Portuguese conquered the South Atlantic, they were in the van of navigational technique. A readiness to learn from foreign savants, many of them Jewish, had brought knowledge that translated directly into application; and when, in 1492, the Spanish decided to compel their Jews to profess Christianity or leave, many found refuge in Portugal, then more relaxed in its anti-Jewish sentiments. But in 1497, pressure from the Roman Church and Spain led the Portuguese crown to abandon this tolerance. Some seventy thousand Jews were forced into a bogus but nevertheless sacramentally valid baptism. In 1506, Lisbon saw its first pogrom, which left two thousand “converted” Jews dead. (Spain had been doing as much for two hundred years.) From then on, the intellectual and scientific life of Portugal descended into an abyss of bigotry, fanaticism, and purity of blood.*

  The descent was gradual. The Portuguese Inquisition was installed only in the 1540s and burned its first heretic in 1543; but it did not become grimly unrelenting until the 1580s, after the union of the Portuguese and Spanish crowns in the person of Philip II. In the meantime, the crypto-Jews, including Abraham Zacut and other astronomers, found life in Portugal dangerous enough to leave in droves. They took with them money, commercial know-how, connections, knowledge, and—even more serious—those immeasurable qualities of curiosity and dissent that are the leaven of thought.

  That was a loss, but in matters of intolerance, the persecutor’s greatest loss is self-inflicted. It is this process of self-diminution that gives persecution its durability, that makes it, not the event of the moment, or of the reign, but of lifetimes and centuries. By 1513, Portugal wanted for astronomers; by the 1520s, scientific leadership had gone. The country tried to create a new Christian astronomical and mathematical tradition but failed, not least because good astronomers found themselves suspected of Judaism.12 (Compare the suspicious response to doctors in Inquisition Spain.)

  As in Spain, the Portuguese did their best to close themselves off from foreign and heretical influences. Education was controlled by the Church, which maintained a medieval curriculum focused on grammar, rhetoric, and scholastic argument. Featured were exhibitionism and hair-splitting (some 247 rhymed, learn-by-heart rules on the syntax of Latin nouns). The only science at the higher level was to be found in the one faculty of medicine at Coimbra. Even there, few instructors were ready to abandon Galen for Harvey or teach the yet more dangerous ideas of Copernicus, Galileo, and Newton, all banned by the Jesuits as late as 1746.13

  Meanwhile no more Portuguese students went to study abroad, and the import of books was strenuously controlled by inspectors sent by the Holy Office to meet incoming ships and visit bookshops and libraries. An index of prohibited works was first prepared in 1547; successive expansions culminated in the huge list of 1624—the better to save Portuguese souls.

  Within the kingdom and overseas, a triple censorial barrier begrudged imprimaturs and discouraged originality. Such printing presses as were allowed (in Goa, none in Brazil) were in the hands of clerics, generally Jesuits, who limited their publications to dictionaries and religious matter.* From Brazil and Angola, even these safe materials had to be sent to Portugal for prior censorship.

  Small wonder that the life of science and speculation decayed. A privileged few were eventually exempted from controls—thus the noble and clerical members of the royal historical academy (founded 1720), amateurs all, who were permitted to import otherwise forbidden books, but found it easier to write fawning eulogies of the royal family.

  To be sure, it was impossible to isolate a country caught up in the concert of Europe and the course for empire. Portugal diplomats and agents abroad came back with the message that the rest of the world was moving on while Portugal stood still. These estrangeirados—their pejorative nickname—attracted deep suspicion, for they were tainted. Their dismissal was implicit in Portuguese pride. Most unfortunate. They saw what few Portuguese could or would see: that the pursuit of Christian uniformity was stupid; that the Holy Office of the Inquisition was a national disaster; that the Church was swallowing the wealth of the country; that the government’s failure to promote agriculture and industry had reduced Portugal to the role of “the best and most profitable colony of England.”14 (British classical economists would put it differently. Portugal was Ricardo’s chosen example of the gains from trade and pursuit of comparative advantage.)

  Portuguese intellectual shortcomings soon became a byword: thus Diogo do Couto, referring in 1603 to “the meanness and lack of curiosity of this our Portuguese nation” and Francis Parry, the English envoy at Lisbon in 1670, observing that “the people are so little curious that no man knows more than what is merely necessary for him” and the eighteenth-century English visitor Mary Brearley who remarked that “the bulk of the people were disinclined to independence of thought and, in all but a few instances, too much averse from intellectual activity to question what they
had learned.”15

  Through this self-imposed closure, the Portuguese lost competence even in those areas they had once dominated. “From being leaders in the van of navigational theory and practice, [they] dropped to being stragglers in the rear.”16 By the end of the seventeenth century, several of the pilots in the carreira da India (the Indian trade) were foreigners. Gone the days of top-secret navigational charts; the Dutch had better ones. And when the chief engineer persuaded King John (João) V (reigned 1706-50) to renew the teaching of mathematics, military engineering, and astronomy, the instruments required came from abroad.

  By 1600, even more by 1700, Portugal had become a backward, weak country. The crypto-Jewish scientists, mathematicians, and physicians of yesteryear were fled; no dissenters appeared to take their place. In 1736, Dom Luis da Cunha deplored the absence of a Reformist (Calvinist) community in Portugal. He noted that the Huguenot challenge had kept the French Catholic clergy from sinking to the “sordid” level of their Portuguese brethren.17 Very provocative words, but right on the mark: if the gains from trade in commodities are substantial, they are small compared to trade in ideas.

  10

  For Love of Gain

  …We Amsterdammers journey…

  Wherever profit leads us, to every sea and shore,

  For love of gain the wide world’s harbors we explore.

  —JOOST VON DEN VONDEL1

  As countries go, Holland is small—almost as small as Portugal, and hardly big enough to play the grand imperialist. In 1500, the Dutch numbered about 1 million; 150 years later, twice that. Small, but potent: in the seventeenth century, half the people lived in cities, a higher percentage than anywhere else in Europe. And active: an observer of 1627 noted that Dutch roads and waterways were crowded, “that there are not so many carriages (and heaven knows there are) in Rome than there are wagons here, filled with travelers, while the canals, which crisscross the country in all directions, are covered by innumerable boats.”2 Even more impressive were the ports large and small, hives of shipping. By the 1560s the province of Holland alone possessed some one thousand eight hundred seagoing ships—six times those floated by Venice at the height of its prosperity a century earlier. About five hundred of these were attached to Amsterdam, but in fact the whole seaboard was a pincushion of masts: over five hundred busses for the herring trade alone, sited for the most part in small ports long forgotten—Hoorn, Enkhuizen, Medemblik.3