James R. Fichter. So Great a Proffit: How the East Indies Trade Transformed Anglo-American Capitalism. Cambridge: Harvard University Press, 2010. 384 pp. $35.00 (cloth), ISBN 978-0-674-05057-0.
Reviewed by Tirthankar Roy (London School of Economics)
Published on H-Asia (November, 2010)
Commissioned by Sumit Guha
The American Era in Early Modern Globalization
The name Ramdulal Dey figures prominently in descriptions of the business world of Calcutta in the late eighteenth and early nineteenth century. Dey was a Bengali merchant, philanthropist, and social leader, and benefactor to the greatest educational institution of early colonial Calcutta, the Hindu College. Dey's was a rags-to-riches story. Having lost all during the Maratha raids in western Bengal in the 1740s, his parents lived in poverty in Calcutta. Dey showed entrepreneurial talent, and much courage, at a young age. Bengali children still read the story of how, returning home alone through forested roads with a large amount of money on his person, he fooled a band of robbers into thinking that he was a tramp of unsound mind. An offbeat character with no inherited reputation or contacts to protect, Dey partnered with the American traders rather than the European companies or English private merchants. Dey's meteoric rise in the 1790s owed to his status as the principal agent of the American trading ships in Calcutta. The Americans in their turn benefited from dealing with an individual who was, unusually for the time, free of conflicts of interest. The Philadelphia merchants honored him by naming a ship Ramdulal.
The rise of American maritime enterprise was as dramatic as that of its most reliable partner in Bengal. Within thirty years of independence, and effectively within a few years at the turn of the nineteenth century, American re-export trade in Asian goods increased to become as large as that carried by the Europeans combined, accompanied with rapid strides in shipping, ship-building, and commercial finance. This success and its far-reaching effects on American capitalism are the subjects of James R. Fichter's book. An impressively researched narrative, the book documents the early beginning and the rise into prominence of American traders in Asian waters, and the pattern of economic and political connections that the process gave rise to. It begins with the Revolution and ends with the 1813 charter act. The book is not the first scholarly work available on American trade in that period. Some of the quantitative data employed in the book are taken from older published works. A few useful essays on North American trade were printed in a 2000 collection edited by John McCusker and Kenneth Morgan (The Early Modern Atlantic Economy). But Fichter's is the first book-length work that places the trade in the context of Asia, and the political transition of the late eighteenth century.
The narrative project is carried out with skill, sophistication, and in interesting detail. American trading missions began in earnest in the 1780s, amidst patriotic fervor. Proposals to form chartered corporations in the European style were considered and rejected, and the trade remained in the hands of private individuals, mainly consortia of Philadelphia merchants. Ideological resistance apart, the coastline would have presented impossible challenges to any regulatory law. The trade, however, was small in scale, and the traders had difficulty finding goods for export. The demand for ginseng and furs in Asia eased that problem somewhat, but access to silver was still critical. Trading missions, therefore, needed to maintain links with sources of supply of these goods, with entrepôts such as the Cape of Good Hope, and with the South American ports. The Pacific and the Atlantic routes to Asia were equally favored, which gave American shipping an advantage.
The decisive break in this pattern of expansion came in the 1790s, when the Americans found themselves in possession of the only neutral fleet in both the Atlantic and the Indian oceans. War in Europe spilled over into the colonial territories, as it had done on many previous occasions. On this occasion, however, the principal rival of the English and the French in commercial matters, the Dutch, had been drawn into the conflict. The Dutch East India Company (VOC) was suspended during the years of the Batavian Republic, leaving much of Europe directly or indirectly dependent on American shipping for supplies of consumer goods such as tea, coffee, sugar, and cloth. In this enterprise, American merchants like Israel Thorndike proved well situated on account of two prior attributes, an established position in Caribbean and Atlantic trade that had remained relatively untouched by the war, and the nonspecialized character of American imports of Asian goods.
The larger aim of the book is to contribute to three themes: the effects of the trade boom on the American globalization, on the domestic economy, and on British politics. The book shows that the pattern of globalization was of manifold significance. At the most obvious level, it enabled Americans to entrench themselves in Asian ports. Also, the trade allowed them to feed Asian goods to the American consumer market, aiding a consumer revolution, and perhaps an "industrious" revolution, in North America. It further allowed the traders to resource some goods already part of the American consumer basket, such as coffee and sugar, from Asia. In respect of organization, the trade created a chain of agents and intermediaries, or "correspondence partners" in Europe, in the ports where Americans re-exported Asian goods. These partners, who were usually British expatriates, arranged to deposit the sale proceeds into London bank accounts of the merchant firms. At the American end, the trade seemed to make possible a unique form of cooperative enterprise between small and large capitalists, who came together to contribute towards individual expeditions. Class differences were present, but participation widened too.
Valuable as this analysis is, it leaves two critical dimensions of the American globalization insufficiently developed. In a recent paper M. A. Irigoin has discussed "the increasingly dominant role of North Americans as intermediaries of the world's silver trade after the 1780s." North American ascendance depended on Spanish American silver, and on existing patterns of intra-empire fiscal transfers and silver circulation. This link is not altogether ignored, but it remains shadowy in the book. Equally shadowy is the commercial system represented by the Asian traders who supplied the American ships. The book describes the principal ports and the advent of American merchants in these locations, but the description does not delve into the question of how the choice of partners made by the Bengali and the Hong merchants, and the credit and contractual systems that they depended on, contributed to the rise of North American fortunes. Men like Ramdulal Dey, who made the American dream in Asia attainable, remain almost invisible in the narrative presented here.
On the other two larger themes, domestic economy and British politics, the book has some useful propositions to offer. in 1810, the urban population in the United States barely exceeded 3 percent. In such an agrarian society, trade seemed to create prosperity and economic growth only within a small segment of the population. The author somewhat labors this point. That the measurable gains in the shape of income were limited is plausible, but presumably the welfare effects of imported consumer goods were spread wider. It is argued here that the American trade contributed to ending the East India Company monopoly of India trade, and to Britain's journey from mercantilism to market liberalism. The connection between the trade and the hardening of the stand against monopoly is indirect and tenuous, consisting mainly of the point that the Americans showed the key political figures in Britain "that it was possible to trade to the east without a monopoly" (p. 234). Discussions of the rivalry between London merchants and those located in the emerging commercial-industrial centers like Liverpool that in the end brought the more than a hundred-year-old battle to a close, revisit an issue already well known to historians.
The grand narrative outlined in the introduction is that American commercial success between 1790 and 1810 was due mainly to superior business acumen, commitment to free enterprise, belief in liberalism, risk-loving entrepreneurial spirit, aversion to monopoly, and in consequence of all this, the possession of a leaner and more formidable trade machine than what the merchant companies of western Europe could command. In turn, these qualities not only established American traders in Asia, but also helped end the Company monopoly of India trade, and transformed American capitalism. Gratifying as the message is, and the strong endorsements printed on the jacket testify to its appeal, it is likely to leave some global historians dissatisfied. The message lives uneasily with the fact that the Americans could achieve this thanks to the accidental circumstances created by warfare in Europe and in India. Conceivably, any noncombatant merchant fleet stood to gain during the Napoleonic Wars. It neglects the fact that the Company in India had other goals to pursue than trade. It does not explain why monopoly continued in China for twenty more years. And perhaps most serious, it implies that indigenous agency was marginal to American success.
That being said, the book makes a very important contribution by successfully integrating American history with global history during the eighteenth century transition from commerce to empire.
. M. A. Irigoin, "The End of a Silver Era: The Consequences of the Breakdown of the Spanish Peso Standard in China and the United States, 1780s-1850s," Journal of World History 20, no. 2 (2009): 207-244.
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Tirthankar Roy. Review of Fichter, James R., So Great a Proffit: How the East Indies Trade Transformed Anglo-American Capitalism.
H-Asia, H-Net Reviews.
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