The Philippines and the dawn of globalization



MOST economists and scholars of globalization think that free trade emerged during the Industrial Revolution and the heyday of Western empire building, a period roughly from 1870 to 1914. During this time, Europe’s colonies in Asia and Africa supplied raw materials to European manufacturers and were markets for European goods. Free trade zones, or the unhampered movement of goods, capital, ideas and people, were essential to a globalized economy. Arturo Giráldez, a professor of Spanish and global economic history at the University of the Pacific begs to differ. Over the course of his long career, he has told a far different story. For him, the birth of globalization occurred in a radically different place and time. In his latest book, The Age of Trade: The Manila Galleons and the dawn of the global economy, published in 2015, Giráldez begins the story of globalization several centuries earlier and puts the Philippines at center stage.

From about the late 15th century, every major European power nursed a grandiose but simple ambition: to secure all-important sea routes to the spices, silks and other riches of the East. Ownership of the Moluccas, better known as the Spice Islands, and control of the trade in cinnamon, cloves, nutmeg and pepper, that is, the spice trade, then the most lucrative trade in the world, centrally figured in dreams of an empire in the Pacific and motivated extraordinary voyages, from Christopher Columbus (1451-1506) to Vasco da Gama (1469-1524).

Arguably, the Dutch came closest to realizing this dream. Soon after their arrival in the Indonesian archipelago around 1600, the Dutch wrested control of the Moluccas from the Portuguese. A couple of years later, the Dutch East Indies Company, the Vereenigde Oost-indische Compagnie, better known as the VOC, was formed. The VOC turned the port city of Jayakerta on western Java, into the capital city of Batavia and its main Asian headquarters, established trading arrangements with the Japanese on the artificial island of Deshima, in the port of Nagasaki in Japan, and through ruthless ‘total war’ campaigns, enforced a trade monopoly on nutmeg, cloves and mace on the Spice Islands, in addition to securing much of the trade in pepper and cinnamon. At their zenith, VOC territories and trading posts stretched between the Cape of Good Hope and Japan and annually imported to the Netherlands six million pounds of black pepper.

Manila Galleon being attacked by British ship.

As the Dutch ascended, Spain, in comparison, suffered her share of setbacks: she had lost her crucial claim to the Moluccas and the spice trade to Portugal in 1529. But she was far from being outdone. Spain had gained a foothold in the Pacific by colonizing the Philippine archipelago and, thanks to the ingenuity of the circumnavigator and Augustinian friar Andrés de Urdaneta (1498-1568), had discovered a fast and efficient return route across the Pacific to Mexico, a critical factor to the commercial success of the Spanish expedition to the East Indies.

With his colleagues Dennis O. Flynn and James Sobredo, Giráldez builds the case for a history of globalization that begins in the Pacific. Urdaneta marks the crucial turning point. The Augustinian had sailed northeasterly from Cebu and, climbing between 37 and 39 degrees, his ship caught the prevailing westerlies across the Pacific, skirted the California coast, and reached Acapulco with a total journey time of four months. With this route secured, Spain established the trans-Pacific galleon trade with the first of the ‘Manila galleons’ sailing for Acapulco in 1572, and the last in 1815. Departing from the colonial capital city of Manila, galleon ships annually set forth westwards to Acapulco in Mexico bringing Chinese silks, spices and other treasures from the East to return loaded with silver from Spanish America.

While costly to maintain by an overstretched royal treasury, the galleon trade at its peak was capable of financially bolstering the Spanish empire, and its economic success continued well after the initial spectacular commercial boom of the late 16th and early 17th centuries. The galleons were the richest ships in the world and through trans-Pacific trade, Spain came to dominate commerce in both silk and spices.

The Manila-Acapulco voyages also enabled important botanical exchanges. Coconuts from the Philippines taken aboard Manila galleons were responsible for the introduction and spread of modern coconut populations in Mexico and southwards to Peru. The return route introduced many New World plants to Southeast Asia: cereals and beans, maize, sweet potato, fruiting trees, peppers, peanuts and pineapple, medicinals and textile plants. Vanilla reached the Philippines possibly from Guatemala or El Salvador.

Manila became a contact point for the meeting of peoples, ideas, and goods. Within 50 years of its founding, the city was transformed into the colony’s preeminent political, religious, multiracial, trading hub, and one of the wealthiest and greatest entrepôts in Asia. Over three months in the year, from between March to June, Manila’s inhabitants and merchants engaged in feverish commercial activity. The trade required little effort and minimum business acumen, while the profits that could be reaped could make an entrepreneur fabulously rich.

But it was a high-risk affair and financial losses could also be steep. The months-long two-way crossing was exceedingly perilous. Reliant only on wind and rowing power, the galleon traversed the roughest seas, storms, and treacherous currents. When a ship was wrecked or attacked and looted, investors were left ruined and communities were reduced to destitution and starvation. Even then, globalization had its dark side.

The demand and supply commerce, and the route taken to facilitate it, Giráldez argues, were far-reaching. Two world regions came into contact with one another for the first time through the direct exchange of goods and the histories of four continents—Europe, the Americas, Asia, and Africa, were influenced by free trade and a globalized economy that began in the Philippines.


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