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Authors: Murray N. Rothbard

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Not only were there no further expansion in the scope of international trade and no increase in the volume of commerce, but this trade was forced to take far different directions. The commercial centers of Italy—the northern cities—remained relatively free of restrictions of monopoly and the state apparatus, and Italian capitalists now sought a commerce free from control by the regulations and taxation of governments. The crucial problem of the capitalists was the loss of their overland trade route to northern France, brought about by the destruction of the great fairs of Champagne, by the taxation and controls of the French king. The Italian merchants therefore had to find an efficient route to Flanders, the source of European cloth. The only alternative for the carrying of large quantities of goods was the sea, and it was natural for Venice and Genoa to turn to the sea as the best means of transportation from the Mediterranean to Flanders. The first Atlantic convoys of ships to Flanders were sent from Venice and Genoa about 1314; they sailed through the Strait of Gibraltar and along the Atlantic coast of Europe to the English Channel port of Southampton, in England, then on to Bruges, in Flanders.

Bruges now became the great center of northern European commerce; it served as the northern depot of Italian trade, even as it had been the western terminus of North Sea and Baltic trade, a trade which now received a great impetus for growth. During the Middle Ages cities were founded along the coast of the Baltic Sea as the German people colonized eastward. These German cities engaged in trade along the North or German Sea, as well as the East or Baltic Sea. For the mutual defense of their trade they formed a confederation of cities called the Hanseatic League, From the Hanseatic western depots, Bruges and the Steelyard in London, the trade of the League extended through the German and Scandinavian countries to the Slavic countries of the eastern Baltic, terminating in the great northern Russian commercial center, the independent Republic of Great Novgorod. The trade of the Hansards, or Easterlings (from which the English measure of silver, the pound sterling, is derived), as the Hanseatic merchants were called, was largely in raw
materials and agricultural products. The foundation of Hanseatic commerce was its dominance of the Baltic trade in dried and salted fish, a necessary part of the European diet because of the scarcity of meat and the needs of religious observance. Search for the salt necessary for curing the fish had led the Hanseatic traders to Bordeaux on the Atlantic coast of France, the major source of salt. Bordeaux wine also accompanied the salt to northern Europe. The Bordeaux trade increased the importance of England in European commerce, as Bordeaux and the province of Gascony had been English possessions since the middle of the twelfth century. For the spices and manufactured goods that the Hansards carried to the Baltic from Bruges, they supplied the industrial centers of Western Europe with the dried and salted fish of the Baltic, the grain of Prussia and Poland, the timber of Scandinavia, and the furs, wax, and honey of the Russian forests. The closest to a luxury product for the Hansards was the important fur trade. Fur, because of its rarity and beauty, had become a symbol of social and political importance. The only form of fur sufficiently inexpensive to be available to the masses was hats processed from beaver—the most popular form of headwear. The Russian Republic of Great Novgorod built its greatness by controlling the fur trade with the Finnish peoples who inhabited the forests of northern Russia, and the Hanseatic League controlled the distribution of furs across Europe from Novgorod to the Steelyard in London.

Wool, the principal product of English agriculture, entered Hanseatic and Italian trade mainly through the cloth woven in Flanders. Poundage, the tariff on the export of wool and the import of cloth, was the principal tax imposed by the English government in the process of state formation. Poundage was permanently established by the fourteenth century, even though it was contrary to the provisions of Magna Carta. The newly burgeoning state apparatus was maintained by this tax on wool exports, and the rates increased as England’s financial crisis of the fourteenth and fifteenth centuries continued to intensify. This continuing crisis was brought about by the English government’s persistent interventions in overseas wars. To ensure collection of taxes on wool exports, the English government granted a monopoly of the export of wool to a group of merchants, drawn from the importing and exporting centers. In return for the monopoly profits gained from this privilege, the merchants would enforce and collect the tariffs and ensure their payment to the government. “The mayor, constables, and fellowship of the merchants of the staple of England” received the monopoly of wool export to the Continent in the mid-fourteenth century, after a succession of ill-starred attempts to grant the monopoly to smaller groups of merchants. It was the first lasting organization of English foreign trade monopoly.

The Merchants of the Staple proceeded to use their monopoly privilege in the time-honored manner of monopoly: by moving to jack up their selling prices and to lower their buying prices. Such procedure ensured their profit, but also eventually crippled the great English wool trade by
reducing the demand for wool and by discouraging the production of wool at home. But the free market also has a time-honored way of fighting back against restrictions: by evading them. Despite the restrictions, the free trade in wool persisted in the form of smuggling, which the government policy had forced upon the merchants. From the late Middle Ages through the eighteenth century, England was not so much a nation of seafarers and shopkeepers as a nation of smugglers.

Since Flanders was being carefully watched by the Merchants of the Staple, the Dutch Netherlands became the center of the free trade— the nontaxed trade in smuggled wool, and the Dutch ship captains became the leading carriers and traders in tax-free goods, shipped into and out of small harbors along the coasts of England. When the constitutional procedures of the common law were applied, there could be few convictions for smuggling by juries of ordinary people, who shared in the common interest as sufferers from taxes and monopoly, and hence in the common enthusiasm for smuggling. To circumvent the constitutional courts of common law, the prerogative High Court of Admiralty was established to absorb the jurisdictions of the maritime courts of the seaports, which had administered the traditional sea law and law merchant. A tariff on the importation of wines, called tunnage (the measure of a tun of wine), was imposed with the excuse that it would finance the policing of the seas. The creation of the offices of Lord High Admiral and the High Court of Admiralty increased the burdens on commerce, while their activities were used by the government to advance the claim of an English monopoly over the English Channel and other neighboring seas.

Thus, during the fourteenth and fifteenth centuries, in place of a universal economic system based on international trade, common commercial laws, and efficient economic relationships, unnatural economies were created on a foundation of violence and political power. The purposes were to supply a constantly increasing financial means of support for the civil and military apparatus of the state, and to grant special privileges for groups of merchants favored by, and sharing in control of, the state at the expense of the economy and the rest of the population. This mercantilist system, having its origins in the rise of sustained warfare and the development of the state apparatus, also introduced a permanent hostility between countries by its destruction of the universal European economy.

While Western Europe stagnated under the weight of the mercantilism imposed by the apparatuses of the emerging states, the regions of relative freedom—Italy and the areas of the Baltic producing raw material—continued to develop and progress economically. The Italian cities were preeminent not only by reason of their merchants, shippers, and bankers, but also for their advances in the arts and sciences of navigation—in technological inventions and the sciences of astronomy,
cartography, and geography. In the Middle Ages, the development of geography in Europe had centered in Sicily, where a Latin culture had been enriched by classical and Byzantine knowledge, directly by Greek and indirectly by Arab scholars. To classical geographical knowledge, summarized in Ptolemy’s second-century
Geography,
was added knowledge of Africa and India from Arab sources, and of East Asia from Italian travelers. A leading Italian traveler was Marco Polo, a late thirteenth-century Venetian merchant who had settled as an official in the Mongol capital of Peking, and had written the most important book on Asia of the late Middle Ages. This new geographic knowledge was incorporated into the scientific charts and maps developed by the cartographers of the northern Italian cities. The most advanced of which was a 1351 map of Laurentian Portolano of Florence. The Arab and Jewish scholarship in Spain led, in the latter half of the fourteenth century, to the development of the important Jewish school of geographers on the island of Majorca, which produced the most accurate medieval map, the Catalan Atlas of 1375. This atlas had a significant influence on future exploration both of Africa and of Asia. Ptolemy’s
Geography
had indicated a short circumference of the earth, making Asia three times nearer Europe than it actually was, and had depicted the African continent as short and connected directly to East Asia, making the Indian Ocean an inland sea, In 1410, however, Cardinal Pierre d’Ailly wrote
Imago Mundi;
he indicated that Africa was long and surrounded by water, thus making the Indian Ocean approachable by sea. These works were all to have a profound influence on the explorations seeking the routes to Asia around Africa and across the Atlantic.

But before the advanced geographical concepts could guide exploration, the necessary ship designs, navigational science, and experience of oceanic sailing needed to be developed. The northern Italian merchants had been forced to inaugurate the long Mediterranean-Atlantic oceanic route in the early fourteenth century, and thus had added oceanic experience to their overall stature as the great seamen of Europe. When, thereafter, the major Atlantic countries—England, France, Spain, and Portugal—decided to create governmental navies, they naturally turned to contract with Italian captains to develop, staff, and command these navies. The great northern Italian cities of Genoa, Venice, Pisa, and Florence were particularly abundant sources of those having experience with the sea. Thus, in 1317, Emanuel Pesagno of Genoa contracted to command the Portuguese navy as Lord High Admiral and to keep it supplied with twenty experienced Genoese navigators; these arrangements were continued as hereditary contracts with the Pesagno family for two centuries.

In addition to the role that Italian navigators and sailors, astronomers and instrument makers, geographers and map makers played in the maritime history of Atlantic Europe, Italians made important contributions
as ship designers and shipbuilders. The Hanseatic cogs, built in the Baltic, were efficient ships for carrying bulky cargoes in the Hanseatic trade. Italian ship designers maintained this efficiency, but revolutionized the ships’ maneuverability and speed; as a result, during the fifteenth century ships became available that could travel long distances at a suitable speed on rough oceans. They had large carrying capacities but needed only small crews, so that they could remain for a long while at sea without stopping regularly to take on provisions. However, as timber supplies in the Mediterranean became increasingly scarce, greater reliance was placed upon such ships built and even manned in the Atlantic European countries.

At the same time that the sailors of the Atlantic countries were gaining knowledge and experience from oceanic voyages, increasingly higher prices of spices in Western Europe encouraged the Atlantic countries to find the gold with which to pay for the spices, or to discover better alternative routes to the Oriental sources of these commodities. Routes were also sought that could bypass the Italian middlemen. Hence, when Portuguese explorers began to be sent southward along the African coast, their immediate and primary objective was to discover the sources of the gold of West Africa with which the North African Arabs were plentifully supplied.

From 1419 until his death in 1460, most of the exploration of the fifteenth century was organized by Prince Henry the Navigator, governor of the southern district of Portugal. Henry accomplished his exploration with the aid of a court functioning as a veritable maritime college, including Genoese captains, Venetian navigators, and Italian and Jewish geographers. The Madeira Islands were discovered definitely by 1420 by a Portuguese expedition, and one of the first officials sent there by Prince Henry was Bartholomew Perestrella, an Italian and future father-in-law of Christopher Columbus. Sugar cane from Sicily was introduced into Madeira and into the Canary Islands being settled by Spaniards, and these islands soon became an important source of sugar for Europe until the establishment of sugar culture in Brazil by the Portuguese in the sixteenth century. These “Western Islands” also became an important center of the cultivation of sweet wines.

During the following generation, numerous expeditions made slow progress down the coast of Western Sahara, while others discovered and settled the Azores in the North Atlantic. In 1441, a few Negro slaves were brought back to Portugal, thus beginning the extensive and barbarous slave trade. After tropical Africa, 1,500 miles from the Strait of Gibraltar, was reached in 1445, large numbers of slaves were purchased from the native chiefs of the coastal districts, and slave stations were constructed by the Portuguese along the West African coast. Although the Cape Verde Islands were discovered in 1445 by a Venetian, Captain Cadamosto, the world of Portuguese exploration largely turned to concentration upon commerce in
gold and local West African pepper, as well as to the slave trade for supplying the large feudal estates of southern Portugal, which had been granted by the Portuguese government after taking that region from the Moors.

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