One of the most popular questions that scholars have asked themselves is: “What determines economic policy?”.
Some academics have answered to the question developing the idea that politics and economics are strongly related and they influence each other. In some cases, the way economy is managed depends strongly on power politics, which is a way of doing politics based on the use of military and economic tools aimed at increasing the power of one country on a domestic and international level.
For its pursue, in the economic field, the control of trade is one of the most important and effective instruments. In history, it is possible to find several cases of power politics, one of the most relevant is the example of China during the Ming dynasty in the fifteenth century with the use of pro-authority trade policies and the promotion of the tributary system. Furthermore, another great example is the Ottoman empire which used trade and the control of its routes for increasing power in Europe. This essay is going to talk about the way trade policies were shaped in these super-powers of the fifteenth century and the effects they produced inside and outside the two empires.
In the fifteenth century, it is possible to notice the emergence of two types of foreign trade policies in China: pro-authority and pro-efficiency policies. These two policies have completely different purposes. The former aims to increase the authority of the emperor through trade, the latter has the ambition of promoting the efficiency of the economy. For this reason, certain rulers have the dilemma of which policy to follow because they fear that pro-efficiency policies could weaken their power and threaten their dominance (North, 1984) The early Ming government pursued strong pro-authority policies which are considered the most conservative trade policies in Chinese history(K. Chan,2008). The tributary system has become the vital heart of the economic policy of this period.
Since the Shang dynasty, China started developing a tributary trade system. It had the function of facilitating the international trade and of preserving the Chinese imperial world order. Representatives of the vassal states usually visited the imperial court periodically for bringing gifts to the emperor. His majesty, in exchange, used to give to the visitor gifts much larger than the one receive from the visitor. With these precious and extremely valuable objects, it was common to “buy” the loyalty of the vassal state (K. Chan, 2008). The most loyal partners, the one who used to visit the emperor frequently, had facilitation and benefits for trade. On the other hand, the states which visited the emperor rarely were subjected to trade restrictions.
With his pro-authority policies, the emperor forbade private foreign trade to states that were not part of the system. Since China was a hegemonic power in the area, the ruler acquired an enormous political power. In this way, as Kenneth S. Chan says: “The Ming government only imposed a restrictive trade policy and monopolise trade and to maximise her authority over those other states which benefitted from China trade”.
However, in the mid-Ming period the structural weaknesses of this system have started to emerge with the spread of illegal contraband trade, especially in the maritime areas. Then, in the late Ming period, the dynasty was weakened by the emergence of many threats. It favoured pro-efficiency policies that reflected the high demand of resources for managing and keeping under control the situation and solving the issues of the period.
Analysing the two types of policies, it is possible to notice how both aim to increase or to stabilise the imperial power. In the fifteenth century, pro-authority policies guaranteed to China the hegemony in the region. Later, in the sixteenth and seventeenth century, pro-efficiency policies were focused in promoting trade in order to use revenues for financing the expenses for the protection and the strengthening of the imperial power.
However, trade with Europe continued also in the period of the pro-authority policies. In fact, in the Old Continent there was a large appreciation for Chinese products and China had a strongly desire of silver. The high appetite of bullions emerges after a disastrous monetary policy started by the Yuan dynasty in 1350. The government adopted a currency reform which introduced paper money (W. Atwell,1988). This decision has resulted extremely unsuccessful since it was not possible to convert the notes into gold, silver, cloth and, for this reason, they declined in value. The paper currency has been promoted also by the Ming dynasty especially in the early period. Moreover, they unsuccessfully also tried to ban the use of copper and metals for commercial transactions. Soon China entered in a new monetary age, based on the use of silver. During the fifteenth century because of the government policies that wanted to foster the spread of the imperial notes, mining has been dramatically limited. For this reason, because of the lack of silver in China, merchants started to import from elsewhere and in a short time it became the medium of exchange in trade with Europe. This phenomenon caused the famous “the flight of bullions to the East” (Atwell, 2002). This flow of silver to China has caused in the West a period of “famine of bullions” in which it was extremely hard to find them and it has provoked great difficulties in Eurasia. As William S. Atwell writes:” The once-prosperous Byzantine Empire was on the verge of economic and political collapse and gold and silver coins were becoming increasingly difficult to find in parts of Northern India and Java”. The lack of silver and other factors, such as the weather, caused the dramatic “Great depression” of the mid-fifteenth century (W. Atwell, 2002). Many scholars agree that Chinese economic problems could have represented a threat for Eurasia because until the sixteenth and seventeenth century the country was the only economic engine in the global economy. However, the advent of innovative mining technologies in Europe and the decision of increase mining in China brought to a new diffusion of silver worldwide, in this way, the world economy had a brilliant recovery. Trade gave an important contribution for the economic recovery. It has also helped to solve problems of monetary shortages that became extremely acute in parts of Yunnan, Guizhou, Sichuan, Jiangxi, Huguang, Shaanxi and Shanxi and could have caused uprising, riots and weakened the power of the emperor (W. Atwell, 2002)
Trade was essential for increasing the imperial power in the region for the Ottomans too, in fact it has contributed to pursue their aim of territorial expansion. Unfortunately, trade with Europe has been extremely limited by the action of the European leader of that time, for example the pope Gregory XI strongly promoted the ban of the export of arms and cereals to the Ottoman empire (S. Ayduz, 2006).
However, the Ottomans had a special relationship with Genoa and Venice. The two Italian maritime powers were the two most important Ottoman partners in Europe, in fact as dr. S. Ayduz notes, this trade was simply too profitable for traders to be discouraged by rulers. Some merchants, even though they were violating the Pope’s will and were risking to be excommunicated, they continued to supply to the expanding empire huge amounts of steel and arms. In fact, even If the Ottoman major aim was the territorial expansion, they also wanted to create trade agreements with other states in order to use the revenues for pursuing the conquering. In the fifteenth century there have been several conflicts with Genoa and Venice for the conquest of several territories that were vital for the Oriental trade.
The words of Bartolomeo de Giano that he wrote in a letter to the Venetian authorities are extremely important. In fact, he denounced that this trade would have damaged the two Italian states since they were supplying strategic materials to an empire who had a strong desire of territorial expansion and hostile feelings towards Christians.
Furthermore, when the Ottomans finally conquered the Aegean sea, the Bosphorus and the Black sea they finally could control territories in the the Eastern part of the Mediterranean as well as the trade roots connected to the Far East. Through the conquest of some of the maritime territories of the two Italian city-states they could learn new seafaring and technological skills by local artisans that allowed them to create their fleet (K.Fleet, 1999). As J. Burbank and F. Cooper note, overland trade routes from Asia passed through the Black Sea, where Venetians, Genoese and others brought the products to the Mediterranean, after that Greek merchants used to travel around the Mediterranean to sell the products. Instead, for the Indian Ocean trade Arab, Armenian and Jewish traders used to bring products to the Persian Gulf, Red Sea, Egypt and then to the Mediterranean. During the fifteenth and the early sixteens centuries, the Ottomans conquered most of the areas that are involved in both the routes. Having the control of the Oriental routes allowed the Ottomans to ask for duties to the trading groups in order to carry and their products within the empire. The control of trade guaranteed to the Ottomans huge revenues and forced Europeans to discover new routes but also allowed them to use trade as a tool for limiting the influence and the power of their neighbours.
Looking at the Ming and Ottoman empires it is possible to see the importance trade had in strengthening their power. China has used it in two different ways during the time and both of them are great examples of power politics. In the early fifteenth century, with pro-authority policies, the fact that trade was allowed just to the countries which were members of the tributary system allowed China to increase its power in the region and to have extremely loyal partners.
The idea that trade has been used as an instrument has been supported by several scholars because the aim of the country was to have more influence in the area and not having more benefits from trade, otherwise the wouldn’t have missed the chance to trade with more states and have more revenues. In fact, they pursued this policy in a period of political stability and wealth. Later, with the weakening of the imperial power and the emergence of various external threats, they started pursuing a pro-efficiency policies. They are used in order to have more revenues to face problems and threats and to protect and strengthen the imperial power.
By contrast, for the Ottomans, in the early period trade has been essential for increasing the imperial power in the area. In fact, through the trade with Venice and Genoa and other states, they had the material they needed for the territorial conquest. Later, the Ottoman Empire reached a great extension which included key areas essential for the Oriental trade. When it happened, they used their trade policy for limiting the power of the other European states. In fact, this trade policy caused the decline of Venice and Genoa and forced the other states to start the explorations the in Atlantic Ocean. This one is a great example of power politics too.
In a nutshell, trade has been essential in the making and the keeping of numerous states and empires, such as China and the Ottoman Empire. It is often used as a tool that helps to increase and to protect the power of a state among the others and for securing internal stability, becoming part of power politics.