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Jul 29, 2006 12:14 pm

Smugglers All

Americans should take pride that John Hancock, a signer of the Declaration and Independence and financier of the revolution, was a smuggler par excellence but now it appears that his British counterparts were playing both sides of the street.

In an article for the American Journal of Sociology, Emily Erikson and Peter Bearman assert that the East India Company, the nemesis of Hancock and other Americans, was a hornet’s nest of smuggling. Smuggling not only helped the company’s bottom line but gave an early boost to global trade.

Here is the description of the article from the Scientific American website:

In the 17th and 18th centuries, the East India Company established a monopolistic trade network on the high seas, gaining immense wealth and influence at home in England. Their ships sailed from Europe with silver and bullion, returning months or years later with exotic goods from Asia and Africa. Along the way, enterprising ships' captains engaged in private trading of their own, abusing company resources for personal gain. Now, researchers at Columbia University have shown that it was this illicit trading, rather than officially sanctioned activity, that was directly responsible for the creation of the first global market and the success of the East India Company.

The researchers analyzed data from 4,572 voyages undertaken by the East India Company between 1601 and 1833, totaling over 28,000 port-to-port journeys. In a paper in this month's American Journal of Sociology, they describe how many rogue captains ignored orders to trade in established markets and then return directly to England, choosing instead to explore new locations and trade between local Asian ports for their own personal profit. Although they were breaking the law by appropriating supplies and ship crews for this private trading, in doing so they ultimately benefited the East India Company by building a larger market and gaining a unique knowledge of local market fluctuations...."They were engaging in criminal activity but that was actually necessary to build up what was the first instance of the global market," says Erikson.

Hat tip to Jesse Walker.

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More Comments:

Craig J. Bolton - 7/30/2006

Sort of reminds one of, ah, the "war on drugs," doesn't it?

Sudha Shenoy - 7/29/2006

I'm responding to the summary in Scientific American. It has long been known to historians that 'private' British merchants (i.e., those who were _not_ Company employees) _hired_ East India Company ships for the 'country' trade, i.e., intra-Asian trade. Because of the monsoons, Company ships had to remain in Indian waters for at least a couple of months to catch the North-east monsoon to sail back across the Arabian Sea. These 'East Indiamen' were the largest ships in the merchant fleet & trading voyages were very expensive. Thus 'private' merchants & Company employees trading on their own account, neatly helped the Company defray part of the huge costs of its long voyages. Substantial quantities of textiles were exported from Calcutta to SE Asia & spices brought back from the East Indies. The Dutch East India Company also participated in the 'country trade'. Dutch ships also carried the goods of Indian merchants. From around the beginning of the Christian era, Tamil merchants had also traded with SE Asia from the Coromandel coast. What happened in the 18th century was simply a massive increase in the volume of trade, but now from Bengal.