[4] Cities and Production for the World, 1490–1640
Southeast Asia’s “Age of Commerce”
Southeast Asia played its most central role in world history as a crucible for the birth of modernity and the unification of world markets. During the long sixteenth century, roughly 1480–1630, it owed this centrality less to its people, then a much smaller proportion of the world’s population than its 10% today, than to its maritime location and its spices. This was a critical period of commercialization and global encounters for many parts of the world, but exceptionally so for Southeast Asia, indeed its preeminent “age of commerce.” China’s direct “discovery” of Southeast Asia in the Zheng He period after 1400, Europe’s from 1509, and Japan’s from the 1580s, brought these powerful economies together with one another and the Muslim traders of the Indian Ocean in the ports of Southeast Asia. They were there in part to buy the pepper, spices, and aromatics of Southeast Asia, to which they had become addicted in the preceding centuries. But they also used Southeast Asia’s ports to exchange the goods of one another. In particular China, having converted to a silver-based cash economy during the Song and Yuan periods, had an insatiable demand for further silver throughout the Ming Dynasty (1368–1644). It met this in large part by buying American silver in Manila, Japanese in Hoi An, Cambodia, and Ayutthaya, and European (often also from American mines) in Banten, Batavia, and Melaka. European and Indian demand for Chinese silks and ceramics was met in the same ports, while the cottons of India were in enormous demand in all ports to its east.
World silver production increased ninefold in the sixteenth century, from about 42 metric tons per annum in 1493–1520 to 380 tons throughout the peak period 1581–1620. Thereafter there was a steady decline to the 1670s, and the inflow of silver into the world economy did not regain the boom levels of around 1600 until the 1720s. The main contribution to this world boom came from the Americas, but more important for eastern Asia was the increase in output of Japanese silver mines, which developed the much more efficient mercury extraction technique at almost the same time as those of Peru. Until 1600 Europe was exporting silver and gold to pay for spices and other Asian goods, though most of this went first to ports in India and the Arabian Sea. By contrast the small amounts brought from Mexico by the Manila galleon before 1600, and those exported by Japan, all went to Southeast Asian ports initially, albeit ultimately to China. All these sources peaked in the 1620s, when the Japanese were exporting as much as 130 tons a year by some estimates, the Manila galleon bringing in about 23 tons, while the Dutch and English were now shipping at least 20 tons a year directly to Southeast Asian ports. All this fueled an enormous expansion of commerce and urban life in the peak of this age of commerce between 1580 and 1630, after which the decline was dramatic (Chapter 7).
Part of the reason for Southeast Asia’s centrality in these exchanges was its geography; part was the peculiar trade situation of China. Although it was the world’s largest economy Ming China severely restricted private economic exchanges beyond its borders. In the early Ming period tribute missions from the “barbarian” states to its south were the only officially sanctioned means of exchanging goods. The frequency of these tribute missions declined sharply after 1430 (Table 3.1), as the empire shifted focus to its northern defenses, moved the capital to Beijing, and passed through its own mid-century monetary crisis. Private traders based in Southeast Asia and Ryukyu filled part of the gap in that difficult period, operating under conditions of uncertainty moderated by bribery. From about 1470, as gold and silver began to flow back into the world system, Southeast Asia-based traders became the chief beneficiaries of the better conditions in the China trade. But during the sixteenth century they were edged out by China-based shippers.
In 1567 a new Ming Emperor, Muzong, finally accepted the inevitability of maritime trade and began a system of officially licensing it. This greatly increased the security of Chinese shippers, who had unique advantages in negotiating bureaucratic hurdles in Canton and the Fujian ports. Japanese, Southeast Asian, Muslim, and European shippers therefore contented themselves with buying from the Chinese in Southeast Asian ports. Chinese shipments to the south rapidly increased in frequency as the junk captains sought to bring home not just the exotic spices and aromatics of the region but the growing supply of silver now available. Fifty ships a year were licensed in 1567, and by 1597 this had grown to 118. Although the licensing system gradually broke down thereafter, there were estimates of several hundred Chinese junks in the trade in the 1610s.
Manila was the most attractive port for this expanding Chinese shipping because of its silver supplies, attracting nearly half the Chinese vessels in many years. From around 1600, when Nguyen Hoang made his southern Viet state of Cochin-China effectively independent, its port of Hoi An became another important destination for the silver traders, with Ayutthaya and Cambodia the next most important Mainland ports for the Chinese. Further south, south Sumatra and west Java were the main Chinese sources of pepper, with Dutch Batavia soon after its 1619 foundation usurping the role played for a century by Javanese Banten. The Chinese records, however, show a variety of small ports, beyond those permitted to play the old tribute trade game, now acknowledged officially as destinations for the seventeenth-century ships. In the Peninsula, Patani, Pahang, Melaka, and Johor were mentioned; in Sumatra, Jambi and Palembang; in Borneo, Brunei, Sulu, and Banjarmasin.
Japan’s great opening to world trade began around 1580, as its ships carried silver and metalware southward to exchange with Chinese and Southeast Asians. The Tokugawa shogunate also adopted a system of annual licenses to sail to different Southeast Asian ports, and that data reveals a similar hierarchy, with Hoi An in the lead followed by Manila. Siam and Cambodia were less convenient for this Japan-China exchange, but did offer a great supply of deerhide, for which Japan developed an insatiable demand in the seventeenth century as the inner lining for gloves and armor. The ports of Dai Viet became steadily more important for Japan during the seventeenth century, as an alternative to inaccessible China as supplier of silk.
A still greater variety of ports serving the international trade were mentioned by the European chroniclers, beginning with Tomé Pires around 1515, including those serving the Indian Ocean rather than the South China Sea. Pires described four trading negeri on the coast of Pegu (modern Burma), seven on the Peninsula, a dozen in Sumatra, eight in Java, and a host more in the eastern islands. In the peak period a century later a few ports, such as Aceh, Banten, Batavia (from 1619), Pegu (until 1598), and Ayutthata (Siam), became dominant. These nodal points of the global trade routes became the centers of economic and social innovation discussed below. They not only exposed a significant proportion of newly urbanized Southeast Asians directly to global products and ideas, but indirectly brought a larger number of rural producers and consumers into contact with the world market.
Crops for the World Market
Until the fifteenth century the overwhelming majority of Southeast Asian exports derived from foraging in the seas or forests. Chinese imports of Southeast Asian exotic luxury items had expanded tenfold during the southern Song boom, but in items such as elephant tusks, rhinoceros horns, pearls, aromatic woods, and incense. Such expansion entailed the development of settled ports and markets, where the goods of forest and sea were exchanged for manufactured items from China, but not yet of cash crops.
Even cloves and nutmeg, traded from Maluku around the world as medicines throughout the Common Era, had for centuries been plucked from trees growing wild in the islands. Only in the fifteenth century, according to the first Portuguese account (Pires 1515/1944, 219), did production gradually shift from wild to cultivated trees, “in the same way that wild plums become cultivated plums and wild olives become cultivated olives.” The other products shipped to China, India, and the Muslim World were largely aromatic woods (sappanwood, gharu, sandalwood, cinnamon), and gums and resins (camphor, benzoin, frankincense, dammar) collected from trees in the forest, or the product of forest-dwelling fauna (lac, rhinoceros horn, ivory, bird of paradise, birds-nest). The same foraging process had delivered a variety of products of the sea, notably pearls and tortoiseshell.
The change to a totally different scale of commercial agriculture appears to have begun around 1400. The last years of the fourteenth century provide the first evidence of regular and substantial shipments of clove and nutmeg into Europe’s Mediterranean ports – at about 30 tons of clove and 10 of nutmeg each year. Pepper, which was not among the exports of northern Sumatra in the 1350s, had begun its spectacular career there by the 1420s. Though numerous factors contributed to a global increase in trade at this time, the most important single development for Southeast Asia was the unprecedentedly active southern policy of the first and third Ming emperors in China (Chapter 3). Their fleets brought back such large amounts of pepper that the demand attracted from India to Sumatra the cultivation for the first time of round or black pepper, Piper nigrum (as opposed to the long pepper already grown), much closer to the China market along the established trade route.
Between 1400 and 1650 the expansion in pepper and Malukan spice exported from the region was spectacular, as competition from all quarters drove prices higher. Europe alone was importing about 200 tons of cloves and nearly 100 tons of nutmeg in the early 1600s. European pepper imports grew threefold in the same period, and whereas all had come from India in 1400, most came from Southeast Asia by 1620. All three of these items became organized plantation crops covering a large amount of land – cloves first in northern Maluku and later Ambon; nutmeg in the Banda Archipelago; pepper in Sumatra, west Java and the Malayan Peninsula. In addition, cane sugar became an important cash crop in the southern Viet kingdom, Siam, Cambodia, and Java in the seventeenth century, as did benzoin in northern Sumatra, Laos, and Cambodia. Cotton production for local use was very widespread, but export was already extensive by 1600 to the areas too wet or infertile to grow their own.
As Table 4.1 shows for the two exports easiest to quantify, production of pepper and cloves expanded rapidly after 1560 to meet the growing demand from Europe. The influx of silver and the competition among buyers drove prices up spectacularly, until the Dutch Company (VOC) succeeded in establishing a partial monopoly of cloves and nutmeg in the 1620s and a total one by the 1650s. The arrival of Dutch and English competitors in the early 1600s drove prices in free-market entrepôts like Banten and Makassar to all-time highs of around 160 Spanish dollars per ton for pepper and 1,000 for cloves in the 1640s (Bulbeck et al. 1998, Table 2.15). The cumulative effect of the increased exports of these and other Southeast Asian products was not only to divert large populations to specialized cash-cropping, but to encourage the growth of trading cities, of a commercial culture, and of profound changes in values.
Table 4.1 Estimated growth of two key Southeast Asian long-distance exports.
| Cloves exports: tons | Value | Pepper exports: tons | Value | |||
| To Europe | Total | $000 | To Europe | Total | $000 | |
| 1500–09 | 30 | 170 | 5.9 | 50 | 950 | 47 |
| 1530–39 | 50 | 200 | 20 | 300 | 1300 | 78 |
| 1560–69 | 70 | 230 | 115 | 1300 | 2700 | 189 |
| 1590–99 | 140 | 250 | 150 | 1400 | 3400 | 340 |
| 1620–29 | 330 | 450 | 360 | 1500 | 3800 | 551 |
| 1640–49 | 205 | 308 | 308 | 2100 | 3800 | 602 |
Southeast Asian economies had never been static and subsistence-oriented, but only at this time can we begin to quantify the extent of their dependence on the world market. The total value of Southeast Asian long-distance exports at the peak of the trade boom in 1630 was around 8.6 million Spanish dollars, representing nearly half a Spanish dollar per head of population. This magnitude enriched the trading centers and increased the scale of internal exchanges, carrying foodstuffs, cloth, ceramics, and metal goods from port to port, upstream to downstream.
If we exclude rice, traded over shorter distances within Southeast Asia, pepper was the largest export crop both by quantity and by land area of its cultivation. Pepper-growing was established by 1500 along the north coast of Sumatra, though smaller amounts were produced in west Java, and in Kedah, Patani, and Pahang on the Peninsula. By 1600 the original gardens were exhausted, and the main source was along the west coast of central Sumatra, and in Lampung (southern Sumatra) and west Java. In the subsequent half-century Sumatran pepper-growing was taken further inland by Minangkabau growers who now exported their crops through Palembang and Jambi. The older pepper fields on the west coast were finished by 1700, though new frontiers opened further south around (British) Bengkulu, in the Banjarese area of south Borneo, around Nakhon Sithammarat (Ligor) in the Peninsula, and in the southern Viet kingdom of Cochin-China.
The primary reason for this constant shifting of the areas of production was the exhaustion of the soil on which pepper was grown. Sumatrans sought primary forest to open a new pepper garden, as near as possible to some port. The forest would be cut down and burned, and a crop of dry rice grown in the first year. Stakes of chingkareen (dadap duri) were planted to provide living support and shade for the pepper vines, which produced their best yield between their seventh and tenth year. A new patch of forest would therefore be cut down after the tenth year to replace the deteriorating old one. Pepper would never be replanted on the old garden, which no longer had enough nutrients to sustain cultivation. It was left either to regenerate slowly as secondary forest, or very frequently to turn into grassland (alang-alang, Imperata cylindrica) – still a feature of Aceh and Lampung.
In the seventeenth century the Peninsula and western Archipelago became the dominant source of the world’s pepper. Total exports increased to a peak of 6,500 tons in the 1670s, by which time about a tenth of the then population of Sumatra, the Peninsula, and Borneo must have been economically dependent on this single export crop. The key figure in this expansion was usually the aristocratic entrepreneur, who either controlled labor directly or was able to use his or her capital to acquire it. Some were already established trader-officials in a port-capital; others became rajas of a pioneer negeri devoted to pepper production. Such entrepreneurs would send cultivators into the selected forest areas with tools and a supply of rice. At least initially, these producers were less than free, bonded to a powerful entrepreneur either by their debt or by their purchase or seizure as slaves.
One of the consequences of cash-cropping for the international market, particularly in pepper, was to shift population from established rice-growing areas in the uplands to coastal areas more accessible to the ports. These forested areas had been neglected by rice-cultivators for good reason – frequent flooding, constant rainfall, and great dangers from malaria and water-borne diseases. In much of the central Southeast Asian area of no dry season (Sumatra, the Peninsula, and Borneo) it was pioneer pepper-growers, joined in the nineteenth century by gambier-growers, who gave their lives to tame the hostile forest for agriculture. As an Aceh poet observed, “The Lord has created the desolate rantau (frontier); there man goes wrong … You know how it is in the rantau, it is misery everywhere. When you are ill, there is no end to your laments … If you are in luck you will return; if not you will die in the rantau” (Drewes, 1980, 10–11).
Sugar, which became Southeast Asia’s greatest export crop in the nineteenth century, began its career there in the seventeenth. Previously, palm sugar and honey had been the staple sweeteners of the region, but around 1600 the cultivation and refining of cane sugar was brought southward by Teochius from southern China. Japan, too cold itself for cane cultivation, was the great market for Southeast Asian sugar. Teochiu immigrants began growing and refining the cane in the Quang-nam area of Cochin-China, and Japanese shippers took it home from Hoi An. In the same period, Chinese began cultivation in the low hills above the flood-plains of Siam and Cambodia respectively, and in Banten in west Java. When the Dutch Company established its headquarters in Batavia in 1619 it soon took an interest in the Chinese sugar industry established in nearby Banten. Chinese growers and millers were encouraged to move to the outskirts of Batavia, where about 23 small mills were operating in the 1640s. Further expansion occurred to the east of Semarang on Java’s north coast, where there were 36 mills operating in 1686. Production levels were highest in the 1640s and 1650s, when more than a thousand tons were shipped to Europe in the best years, in addition to the 400–500 tons regularly sent to Japan and Persia.
A large proportion of the world’s tin is concentrated in the chain of hills that runs down through the whole Peninsula to the islands of Bangka and Belitung in the south. By the tenth century the Peninsula was supplying most of Asia’s tin needs, and a series of Arab travelers extolled the importance of the west coast tin mines they located in Kalah. The trade boom of 1580–1640 witnessed a great increase in mining of this tin to supply the busy markets of India, China, Siam, and Java. Up until the seventeenth century the ports of the western coast of the Peninsula – Junkceylon (Phuket), Kedah, Perak, and Selangor – supplied India and the Arabs, while Nakhon Sithammarat, Patani, and Pahang on the eastern coast supplied China.
Local inhabitants of the Peninsula may have been mining for hundreds of years as a subsidiary to agriculture and foraging. Mining sites were located and supervised by a shaman who could mediate with the spirit of the tin. Men dug the ore and earth out of flooded pits, while women separated the tin ore with their fingers. The “casting” was a primitive form of smelting by mixing burning charcoal with the tin ore until the metal ran out into the mold. These slabs of about 20 kg weight were then floated down the rivers to port, where the port-ruler usually took the largest share of the profits of selling it.
By 1500 the negeri of Melaka had risen to control most of the tin of what is today Kedah, Perak, and Selangor in the western Peninsula, and sold it to Indian merchants to take back to their markets. The amounts coming onto the market appear to have been less than 100 tons a year around 1500, up to 300 tons in 1600, and over 1,000 tons in a peak year such as 1638. The Portuguese occupants of Melaka (1511–1641) had to contest the supply of tin with Muslim traders, and they lost badly after their great Muslim enemy, Aceh, conquered the Perak and Kedah fields in 1575. The Dutch, who in turn conquered Melaka in 1641, hoped to use the port to monopolize the supply of tin, and they were in a much stronger position to do so. The largest amount they ever succeeded in acquiring was 380 tons in 1650, however, and the effect of their heavy-handed system of fixed prices and quotas appears only to have been to drive the tin industry of the Peninsula into decline in the second half of the century. It began its modern rise a century later, largely at Chinese hands (Chapter 9).
Ships and Traders
The annual alternation of wind patterns made the different sectors of the sailing routes (described in Chapter 2) relatively dependable for a few months of each year and almost impossible at others. From December to March the monsoon winds blow reliably southward from the Asian landmass; from April to August they blow northward, or northeast in the Indian Ocean (Map 1.1). The entrepôts that arose at different junctions of the routes were therefore essential not just for provisioning but to await a favorable wind for the return voyage. Most Southeast Asian maritime cities, and all those which served the long-term trade with India and China, had hectic periods when merchants from both China and India were in port, which reminded Europeans of the trade fairs of their continent. The ports around the Straits of Malacca and Sunda, or serving the trans-Peninsula portages, were particularly prone to this pattern, with huge temporary populations of traders arriving with one monsoon and leaving with another. Melaka, which cornered a large share of the trans-Asian exchange trade in the period 1450–1511, was aptly described by its Portuguese conquerors as:
a city made for merchandise, fitter than any other in the world; the end of monsoons and the beginning of others … The trade and commerce between the different nations for a thousand leagues on every hand must come to Melaka(Pires 1515/1944, 286).
The variety of shippers visiting Southeast Asian ports was reflected in the variety of ships, considerably more diverse than those in the Mediterranean or Atlantic. Technological borrowing was a constant process. Ships were built in Southeast Asian harbors to the specifications of Javanese, Chinese, Gujarati, or Arab masters. Southeast Asian vessel types had been derived from an iron-scarce environment. Instead of using nails, shipbuilders constructed a hull by joining planks together very tightly with wooden dowels, adding the strengthening frame only afterward. The smaller vessels all had an outrigger for stability, and the depictions on the ninth-century Borobudur temple in Java reveal that even large ocean-going ships at that time used them. Southeast Asian ships had a quarter rudder on either side of the stern, lateen sails, and a system of internal rooms or divisions (petak) between the ribs of the ship’s frame. Descendants of vessels of this type, typically of less than 50 tons, still carry the freight of the islands as they have for more than a millennium.
By contrast, the river-based shipping tradition of China had used a flatter bottom, planks nailed onto a series of bulkheads which took the place of a frame, and split-bamboo sails mounted on two or three masts. The vessels of the western Indian Ocean resembled Southeast Asian ships in their lateen sails, and in being built up from a keel by attaching one plank to another, but the system of attaching was not wooden dowels but coconut-fibre ropes. These vessels proved no match for European ships in naval warfare, and Gujarati and other Indian shipping began to emulate the Iberian galleons from the sixteenth century.
The period between about 1290 and 1500 saw the evolution of a hybrid Sino-Southeast Asian style in shipbuilding as in many other spheres. The thousands of Chinese sailors, soldiers, and traders who made their home in Southeast Asia following the interventions of Kublai Khan in the 1290s and the Yung-lo Emperor in the early 1400s, helped to create the new port-cities of Southeast Asia, and also their shipping techniques. The large ships known to Europeans and Arabs as junks were hybrids, using the keels, quarter-rudders, and lateen sails of the Austronesian tradition, but with the large size (80–700 tons), several masts, and multiple hulls of the Chinese tradition.
The term junk occurs from the fourteenth century in foreign accounts, though the Javanese term jong from which it derives is older. One Old Javanese poem refers to a new type of jong copied from the Chinese at the time of the Mongol invasion of Java. Although the disappearance of these large Southeast Asian junks around 1600 shifted the meaning of the term in English to a specifically Chinese ship, there is no doubt that it was the Southeast Asian variant (with part-Chinese ancestry) which dominated the seas and most impressed Europeans when they first arrived in the region. Figure 4.1 illustrates the Javanese and Chinese junks observed in 1596, as the former was becoming scarcer.
Figure 4.1 Vessels of the Java coast, as sketched by the first Dutch expedition, 1596. Clockwise from left: Javanese junk, small Javanese trading vessel, Chinese junk, local fishing boat.
Source: De eerste schipvaart der Nederlanders naar Oost-Indië onder Cornelis de Houtman 1595–1597, Vol. I, eds. G.P. Rouffaer and J.W. Ijzerman. The Hague: Nijhoff for Linschoten-Vereniging, 1915.
Cities as Centers of Innovation
The rapid trade expansion gave rise to substantial cosmopolitan cities at the nodal points where monsoons met. Until the fourteenth century food supplies were probably the main constraint on the growth of such cities. The irrigated upland areas that produced a ready rice surplus were far from the key straits and portages where entrepôts were located. In turn, the Champa coast, the Peninsula, eastern Sumatra, and west Java were strategically placed as shipping hubs, but lacked rice-growing areas. The success of Thai migrants in the fourteenth century in taming the malarial swamps of the lower Chao Phraya River and developing highly productive rice strains which grew as fast as the river flooded, was one important key to providing a source of rice for maritime cities. Javanese cultivated the lower Brantas delta to provision Gresik and Surabaya and to export to Maluku. Cities such as fifteenth-century Melaka, sixteenth-century Patani, Johor, and Pahang, or seventeenth-century Batavia, Banten, and Aceh could not have survived without these new sources of exportable rice.
Throughout Eurasia cities grew in response to the silver influx and resulting trade boom of the long sixteenth century. Edo (Tokyo) and Beijing were among the biggest with around a million inhabitants. In the mid-seventeenth century it seems likely that Ayutthaya (the Siamese capital) had more than 150,000 inhabitants, and Aceh, Makassar, and Banten each close to 100,000. The largest cities were those at the centers of populous gunpowder empires that had used trade wealth and the new firearms to attract or coerce a dependent population to its temporarily glittering capital. At their respective peaks, Thang-long (Hanoi) around 1460, Pegu (the Burmese capital) around 1570, and Mataram (Java) around 1640 may have reached 200,000. Each of these very large cities was able to tap an adjacent rice-surplus area. In all, there were about a million urban dwellers (in a dozen cities over 30,000) in Southeast Asia at its commercial peak around 1630 (Map 4.1). This relatively advanced urbanism, contrasting with its later peasantization, was at its most evident in the Peninsula, at least 20% urban through its many entrepôts and sparse agricultural land.
Map 4.1 Urban populations at their sixteenth- to seventeenth-century peak.
Cities Below the Winds combined elements of both the chessboard regularity of many Eurasian imperial civilizations and the huddled confusion of many Islamic and European commercial hubs. In the Buddhist cities of the Bama (particularly), Khmer, and Tai the state seemed better able to cast its ordered imprint on the city. Pegu, Ava, and Chiang Mai, like Angkor before them, were all walled cities with a palace at the center, many temples, and a grid of streets within, while foreigners and the busy life of the market were typically outside the walls. In Archipelago and Viet cities the walled area was essentially only the royal palace or citadel – even if larger city walls were later built as defenses against Europeans. Muslim cities such as Banten, Demak, and Aceh built the market into the central planned area, comprising a large central square, the palace to its south, mosque to its west (the direction of Mecca), and market to its north. Beyond this, however, the pattern was determined by rapid commercial accretion rather than royal plan. Aceh, Makassar, and Banten, as well as Ayutthaya, grew fastest at times of low state authority, and the cities became agglomerations of rich men’s extensive and often fortified compounds surrounded by the urban poor. Sixteenth-century Aceh was reportedly dominated by rich merchant-aristocrats with large, fortified houses. In Banten, the Dutch described the interior of these fortified compounds, each containing a small open space, a prayer-hall, a nearby well for washing, storerooms, shops, and guardrooms where slaves lived to ensure protection of the buildings at night.
To European, Chinese, or Arab eyes, even the walled cities of Siam and Burma seemed astonishingly green. The unwalled ones, like Aceh and Makassar (Figure 6.1), appeared to them as an agglomeration of villages within a forest, so dominant were the coconut and fruit trees, and so absent any constraints imposed by walls. The only treeless and congested quarters of these cities were the Chinese or European quarters, which often became pestilential with time – as eighteenth-century Batavia notoriously was. Before the nineteenth-century advent of piped water it seems likely that Southeast Asian cities shared the universal pattern of higher death than birth rates, though they were better protected than European counterparts from urban epidemics by their high rainfall, frequent bathing, and open wooden houses. The greatest danger was seen to be fire, since almost all buildings were light and wooden.
With the exception of some briefly inflated conquest capitals, these cities were by no means the parasites of the oriental despotism image. The majority of their imported supplies were paid for from the benefits of trade, not tribute. In addition, the great centers of population and wealth naturally became the centers also of craft production, where ceramics and metalware were fashioned for the court elite but also for the surrounding hinterland. The initial process was often involuntary, as craftsmen were brought to the capital by conquerors to serve their ostentatious purposes. Iskandar Muda (1607–36), the most powerful of Aceh’s rulers, reputedly had three hundred goldsmiths at his palace in addition to other craftsmen. Such power did not always outlast the ruler, but permanent specialized craft districts did develop in the larger cities, where gold, iron, copper, and clay were manufactured to meet the needs of a diverse urban population. An extreme case was Nagara, the capital of the Banjar kingdom on Borneo’s Barito River before its sixteenth-century conversion to Islam. When the capital moved downriver to the trade center of Banjarmasin, the craftsmen appear to have stayed in Nagara, which became the prime metalworking center of Borneo over the following two centuries. In Java also the centers of sixteenth- and seventeenth-century kingdoms remained as specialist centers of metalworking thereafter – Kota Gede (Yogyakarta), Surakarta, Tuban, Sidayu, and Gresik. Goldworking reached levels of skill matched in few other crafts except boat-building. One seventeenth-century French missionary to Cochin-China related how, 24 days after presenting a Parisian chiming clock with a silver face to the king, the royal goldsmith produced a replica indistinguishable from the original, and which kept equally good time.
In the larger cities there were whole quarters dedicated to particular crafts. Particularly famous for this pattern was the Tongking (Dai Viet) capital of Thang-long, divided administratively into 36 quarters, most of which bore the name of the particular craft practiced in it. Even the city over the water in Brunei had two quarters for ironworkers and one each for kris (dagger) makers, bronzeworkers, and oil processors. As the Burmese capital moved from Ava to Amerapura to Mandalay the specialist craft villages which sustained urban life remained in place at different points along the river. Most large cities had quarters for ironworkers, bronzeworkers, gold- and silversmiths, shipwrights, furniture-makers, arms manufacturers, potters, weavers, and arak distillers. In Thang-long there were also paper-makers and silkworkers.
The Makassar chronicles are unusually informative about the rapid progress of that city in developing different skills, under the influence of the rapid influx of foreign traders and new technologies during the commercial boom. Under King Tunipalangga (1548–66), bricks, gunpowder, and large cannons were first manufactured. Under Tunijallo’ (1566–90), kris makers and chronicle-writers made their appearance; under the regent and chancellor Matoaya of Tallo’ (1593–1636), irrigation works were first undertaken, a gold and lead coinage minted, and muskets and war galleys first made, as well as other innovations in shipbuilding including the use of nails. From foreign sources we know that this technological innovation went further under the chancellor Pattinggalloang (1639–54), discussed in Chapter 6.
Nevertheless, the system of labor organization in most Southeast Asian cities limited the extent to which innovation could be rewarded and encouraged. Manual labor was associated with servitude and inferior status even when it involved skilled craftsmanship. The booming cities of the long sixteenth century offered abundant opportunity for upward mobility, the object of which was to escape such manual labor as craftsmanship, or acquire one’s own slave to perform it. War captives usually performed the roughest forms of construction labor, but craftsmen too were typically bonded to some powerful figure. As late as 1822, Crawfurd (1828/1967, 322) complained that in the Siamese capital “every mechanic of skill is immediately seized upon, and becomes the retainer of the king, or of some courtier, or other man in authority.” The only labor market was that of Chinese immigrants to cities where they were numerous, or that of slaves hired out at rates much higher than a free market would have allowed. A Persian visitor to Aceh and Siam noted “it is their custom to rent slaves. They pay the slave a sum of money, which he gives to his master, and then they use the slave that day for whatever work they wish” (Ibrahim 1688/1972, 177–8).
Trade, Guns, and New State Forms
The age of commerce brought with it substantial benefits for a new kind of maritime state: the revenues from trade; improved military technologies; foreign minorities willing to act as mercenaries; and new ideas of statecraft and religion which could be used to legitimate absolutism. There were two stages to this state-forming. Around 1400 it was Chinese intervention that provided enormous advantages to a distinct type of port-state that played the Chinese tribute game. In the second stage, the sustained trade boom of the long sixteenth century introduced more lethal firearms and a competitive world-contest that was both ideological and economic. In this environment some trade-based negeri became expansive gunpowder states with enough state centralization to lay the basis of some of the region’s modern ethnic identities.
In the first, city-state, phase, Ayutthaya, Melaka, Pasai, Brunei, Manila, and the Javanese ports of Gresik and Demak were the great winners from the unprecedented Ming Dynasty interest in southern barbarian tributaries in the period 1368–1424. Melaka and Brunei gained special privileges by sending their kings to Nanjing for investiture, while Ayutthaya sealed its dominance in the Tai world by becoming the one port in the Gulf of Thailand to be recognized by China. As well as channeling the trade of Southeast Asia to China, these ports benefitted from the defection of thousands of Chinese mariners – both anti-Ming Cantonese and Muslims who did not wish to return after the change of dynasty, and direct defectors from the massive fleets of Zheng He. The Javanese ports appear to have become a base for Chinese of both sorts, many of them Muslims long associated with the Arab-descended maritime communities of Quanzhou. Palembang and Patani, on the other hand, became the havens for thousands of anti-Ming Cantonese, and never achieved Ming recognition as properly respectful barbarian kingdoms.
With the exception of Ayutthaya, which conquered Angkor in 1432 and set about dominating the longer-established northern Tai polities, these all remained essentially port-states in the fifteenth century, with little purchase over the interior. The Bay of Bengal ports of Pegu – Bassein, Syriam, Martaban, and Ye – owed little directly to the Chinese but showed a similar pattern of maritime prosperity with relative autonomy in the fifteenth century. Under the benign Mon Buddhist rule of Queen Shinsawbu (1453–72), and the monk she selected to succeed her as King Dammazeidi (1472–92), Pegu became a very successful center of both trade and Theravada Buddhism, little interested in territorial expansion. In a different category was Dai Viet, which the expansionist Ming had occupied for two decades (1407–28). Once Le Loi mobilized the country to expel the Chinese, his new Le Dynasty provided the Tongking (Red River delta) area with Southeast Asia’s most bureaucratic and regulated state on the Confucian model. Although the fifteenth was Viet Nam’s great century of ceramic export, this was the only Southeast Asian state of the period that flourished for reasons other than its cultivation of seaborne trade (see Chapter 9).
The second stage may be equated with the sixteenth century, when maritime commerce accelerated and new military techniques became central to the rise of what might be termed gunpowder empires. These had similarities with those that arose all over Eurasia in the period, but were more brittle, personalized, and short-lived than their better-known Moghul, Safavid, Ottoman, or Hapsburg contemporaries. Various kinds of cannons had begun to influence Southeast Asian warfare from around 1400, introduced chiefly from China but also from Islamic sources in the Middle East. In particular, the countries bordering China needed to acquire Chinese gunpowder technology to fight the expanding Chinese state, and did so through defectors and smugglers. The Ming minister of war complained in 1444 that Chinese firearms had been smuggled into all the northern polities of Southeast Asia, making them more resistant to absorption. Dai Viet and the northern Tai state of Lan Na were particular beneficiaries of Chinese-style gun technology.
The Portuguese arrival in 1509, and their spectacular conquest of Melaka two years later, nevertheless began a more fundamental military revolution in Southeast Asia as elsewhere. Although the Portuguese conquerors reported that they found a great store of firearms in Melaka, as well as skilled gun founders, these appear not to have been effectively used in defending the city. At least the Malay chronicle of Melaka’s loss, written a century after the event, preferred to remember the defenders as dumbfounded at the effectiveness of the Portuguese artillery onslaught. “The people of Melaka were more and more astonished to see the effect of this artillery; they said ‘What is this weapon called that is round, and yet so sharp that it kills?’” (Sejarah Melayu 1612/1938, 182). Whereas the Chinese technology was stagnating, Portugal was an active participant in the competitive military revolution just beginning to transform Europe, and Portuguese gunners were immediately identified as the preferred mercenaries. The most successful Southeast Asian gunpowder empires of the long sixteenth century – Pegu, Ayutthaya, Aceh, Banten, and Mataram – were able to exploit the possibilities of unprecedented trade wealth, new military technology including Portuguese or Muslim mercenaries, and imported ideologies of statecraft.
Mainland Buddhist rulers were the chief beneficiaries of Portuguese mercenaries, because the most ambitious Islamic states were on the other side of Portuguese-Muslim polarization. The Bama ruler of Toungoo, Tabinshweihti (r.1531–50), was the quickest to adopt the new firearms, using Muslim as well as Portuguese mercenaries to conquer Pegu and its wealthy ports on the Bay of Bengal. He was criticized in the Burmese chronicles for being excessively close to his dissolute Portuguese mercenaries, whereas his successor Bayinnaung extended the new technology throughout his army. From a prosperous and cosmopolitan base at Pegu he conquered the whole Irrawaddy basin for the first time, and established Bama hegemony over the trade-oriented Mon of the south as well as the Shan muangs in the north. He also conquered his strongest Tai rivals – Chiang Mai and in 1569 even Ayutthaya, which had undergone its own military revolution with the help of Portuguese mercenaries.
In the Archipelago, Muslim adventurers and mercenaries played a similar role as disseminators of the new technology. Although most of these were carried to Southeast Asia by the usual factor of trade, the Ottomans provided a unique moment of great-power intervention into the Indian Ocean on the Muslim side. Aceh was the chief initiator and beneficiary of an alliance with Turkey that marked the summit of Ottoman global ambitions (Chapter 5). Turkish gunsmiths and artillerymen made an important contribution to Aceh’s sixteenth-century rise, but Turks were also noticed among Islamic forces in the conflicts of Java, along with Gujaratis and Malabaris from India, and Muslim Chams and Filipinos. Aceh, Johor, Banten, Patani, and Makassar all possessed giant cannon deemed impractical in Europe, but prized, personalized with names, and given supernatural powers in the internal literature. Several of these gunpowder empires at their peak possessed hundreds of cannon large and small.
In Java, the autonomous, polyglot, predominately Muslim ports of the north coast gradually got the better of the Hindu-Buddhist interior in the fifteenth century, and the last capital of the Majapahit Dynasty, at Kediri, probably fell to Muslim forces in the 1520s. The center of gravity remained on the coast throughout the sixteenth century, though Demak was not able to centralize power as effectively as Pegu did in Burma. Other north-coast city-states such as Gresik, Surabaya, and Tuban continued to enjoy a virtual autonomy that was undoubtedly advantageous to their commerce. Only in the early seventeenth century, as the coastal negeri were weakened by Europeans taking over the most lucrative branches of commerce, did Mataram use the demographic weight of the rice-growing interior to create a brief moment of centralized power in Java – the work of Sultan Agung (r.1613–45).
Other potent Archipelago states of the sixteenth century were creations of that period’s trade boom and adoption of firearms. After the Portuguese conquest of Melaka in 1511 the Muslim trade sought other centers, preferably strong enough to withstand Portuguese bullying. The new sultanates of Aceh, Johor, Pahang, Patani, and Banten were the result, each centered in an important entrepôt but also commanding a particular river system or pepper-growing littoral. Further east, Makassar began to unite the populous southwest peninsula of Sulawesi in the same period. It became Muslim only in 1605, attracted Malay and Portuguese traders needing protection against Dutch monopoly, and produced a rice surplus for the Maluku spice trade.
On the Mainland, both Cochin-China and Arakan can be considered analogous maritime states, arising in a commercially advantageous location on the strength of trade wealth and firearms. Arakan had only a century of successful autonomy (c.1540–1640), using the trade of its port-capital, Mrauk-U, and the skills of Portuguese mercenaries to hold off the ambitions of both Bengal and Burma. Cochin-China, known to its inhabitants as “the inner region” (Dang Trong), was established on the southern frontier of Viet settlement by Nguyen Hoang around 1600. While proclaiming loyalty to the powerless Le Dynasty in Hanoi, he refused to accept the claims of the Trinh Dynasty that had seized effective control of Tongking in 1592. For almost two centuries (c.1600–1777) the Nguyen Dynasty governed a rival southern Vietnamese state, borrowing from its negeri-like Cham predecessors on this crossroads both a commercial orientation and a pluralist style of mediating between upland producers of export produce and the outside world.
In virtually all the states of Southeast Asia in this period except Tongking and the landlocked northern Tai polities, trade provided the principal source of royal revenues. The Melaka sultanate has been calculated to have drawn the equivalent of two tons of silver a year from its customhouse around 1500, which must have constituted at least 90% of state revenue. In general port duties amounted to 5–7% of the value of imports, though compulsory gifts to powerful officials could distort this pattern in disorderly ports. Rulers and key merchant-aristocrats made most of their income through selling their own export items like pepper, tin, jewels, and sappanwood, often insisting on a monopoly of the supplies coming from their own domains. Speaking particularly of Siam, one French observer correctly observed that “These kings are all merchants, and are only wealthy to the extent that they engage in commerce” (Le Blanc 1692 II, 219).
This commercial interest distinguished Southeast Asian rulers from most of their counterparts on the Eurasian mainland. Although royal chronicles were designed to show the supernatural origin and legitimacy of a dynasty, they acknowledged that a mark of the successful ruler was a port full of foreign ships. But this closeness to commerce did not necessarily create conditions favorable for commerce to flourish. There was always tension between royal greed and mercantile interests, between the palace and the marketplace. Because states rose and fell so quickly, this dynamic period provides a fascinating laboratory of the birth pangs of capitalism.
On the positive side there was progress in a number of places toward royal absolutism and rule of law, central requirements for the growth of capitalism in the Europe of the same period. Both in Siam under Naresuan (1590–1605) and Aceh under Iskandar Muda (1607–36) the king radically centralized authority at the expense of the nobility, who were killed, expropriated, or intimidated into royal service. The new prominence of foreigners, Christian, Muslim, and Chinese, enabled ambitious rulers to rely on mercenary troops and quasi-monopolist buyers of export produce to reach over the heads of their own over-mighty subjects. To some extent this process did give rise to royal officials dependent on the king rather than on local revenues (particularly in Dai Viet from the fifteenth, and Burma and Siam from the seventeenth centuries), and to courts which enforced increasingly codified laws (particularly in Burma, Siam, and Aceh).
This progress was not accompanied by political theories or institutions that guaranteed the property of subjects against their kings. The very newness of absolute power encouraged its abuse. The new religions, Islam, Theravada Buddhism, and Spanish Catholicism, were used by the ambitious to override local pluralisms rather than to build the rights of subjects into the system. The more analytical of the European observers identified the rapaciousness of rulers as the chief reason that Southeast Asians of the seventeenth century did not accumulate capital except in forms that could be readily hidden, like gold and jewelry, or in manpower that could protect them against their rivals. “This is the reason they get as few immovables as they can, and that they always endeavour to conceal their movables from the knowledge of their king” (La Loubère 1691/1969, 52).
The most successful states commercially, if not always militarily, were those that incorporated, by accident or design, an element of oligarchy into their theoretically absolute kingship. The most dynamic, if disorderly, period of Banten’s commercial growth came when the kings were children over most of the period 1580–1620. Several port-kingdoms in the Archipelago institutionalized a dualistic symbiosis between an upstream and a downstream ruler. Other dualities were built into contractual form – between Malay king and Bugis “junior king” in Riau-Johor, between the front palace and the main palace in Siam, and most successfully between Goa and Tallo’ dynasties in Makassar. The preference shown for queens, despite Islamic strictures against them, in Aceh (1641–99), Patani (1584–c.1690), and a number of other Archipelago port-states, can be seen in a similar light. Female rule proved congenial to peaceful commerce, but as queens succeeded each other there was a tendency for their power to diminish to the point they could no longer act as effective referees between the mercantile oligarchs, so that the system declined into disorder.
One of the major commercial functions of the state was to regulate the market and issue standardized currency that could be used in it. Southeast Asian rulers provided for markets, both at the center of the capital and at the harborside, and at best regulated its affairs through commercial courts, market officials, and a systematic leasing of booths to sellers. But as commerce grew, these markets expanded in scale rather than sophistication, remaining preeminently the sites where prices were established through a process of bargaining. The minting of coins by rulers must be one index of the increasing monetization of the societies in question, but it shows a curiously discontinuous pattern. Arakan, the Mon and Pyu kingdoms of Burma, and the Dvaravati kingdom of the Chao Phraya basin had all minted their own silver coinages from around the fifth century, but these disappeared from Burma and Siam in the ninth century and from Arakan in the eleventh. The charter polities of Angkor, Pagan, and Champa (ninth to fourteenth centuries) issued no true coinages, using instead as measures of value rice, cloth, Chinese coins, or, for large transactions, gold and silver by weight. In Java, Brunei, and other Archipelago states there were coins of gold and silver between the ninth and twelfth centuries, but in the thirteenth these disappear, their place taken by a large influx of base Chinese coins.
One of the features of Southeast Asia’s age of commerce was the great influx of Chinese copper cash, with a square hole in the middle to facilitate compiling strings of 600–1,000 coins. They became the base coinage of Java around 1300, perhaps as a result of the Mongol naval expedition of the 1290s, and of some parts of the Philippines soon after. In the fifteenth century they became still more widespread, probably as a result of the intense Chinese interaction associated with the early Ming interventions. Kingdoms such as Dai Viet, Champa, Melaka, Pasai, and Brunei became so dependent on the coins during the Ming visitations that they began minting their own when the ships stopped coming around 1430. Despite widespread local production, Southeast Asia could never get enough of these cash. The local manufacture initially used the more abundant tin, but this proved uncompetitive once China, around 1590, began producing for the Southeast Asian market low-grade cash made primarily of lead rather than copper. English and Dutch companies began supplying lead to manufacturers in the islands and copper to Dai Viet in the 1630s, and the tonnage of metal imported provides some measure of the base money supply. By calculating that the small lead coins deteriorated to nothing within about five years, while the Vietnamese copper ones lasted somewhat longer, one must assume that over a billion cash must have been in circulation in Southeast Asia at this time (Reid 1993, 98–9).
For higher values, gold coinage re-entered the Archipelago with Islam. North Sumatran kingdoms continuously minted a small gold mas of 0.6 grams in the ruler’s name, from Pasai around 1300 through to Aceh around 1700. Similar coins were issued in the seventeenth century by Johor, Kedah, Banten, Makassar, and Patani. Cambodia produced both a silver and a gold coin from the sixteenth century. Silver was historically more favored, and more available, in the Mainland. Arakan reintroduced a silver coinage at least by the 1530s. In the Tai and Burmese states, large transactions continued to be by weight of silver, but Ayutthaya (Siam) by the sixteenth century had produced a standard kidney-shaped lump of silver weighing 14.6 grams, the long-lasting baht, which functioned as a currency even though not marked with the ruler’s name.
These attempts at managing the money supply through domestic coinages must be understood against the background of the massive influx of silver to the region after 1570. Increasingly this was in the form of the Spanish real, which quickly became the international currency of the whole region. The gold coinages issued by the port states of the Archipelago fought an unequal battle in the marketplace, despite periodic draconian attempts to enforce their use. Because of the popularity and abundance of silver, and the large quantities of it brought in by foreign buyers, no ruler in the Archipelago could maintain effective control over the money supply. By 1620 the international currency was the real, and local gold coinages were chiefly used for internal taxes and fines that touched the ruler directly.
Asian Commercial Organization
As the major point of interaction of Indian, Arab, Chinese, and European commercial methods, Southeast Asia represents an important laboratory in the development of financial techniques. Each commercial network or diaspora in the region operated by its own rules of trust. Each of them also contributed elements to the distinctively Southeast Asian commercial system that evolved during the fifteenth and sixteenth centuries, particularly in the Malay idiom.
Before the great commercial revolution of the Early Modern period brought about the incorporation of a host of foreign terms and concepts into Southeast Asian trade, there was already a long tradition of commerce, exchange, and borrowing at interest. Thus the dictionaries compiled in the early 1600s for the Visayan language include a range of indigenous terms for such things as a business partner (bakas), a business partnership (samahan), buy on credit (gamit), and for a variety of types of exchange. Vernacular concepts of interest were well established through the metaphor of the flower (bunga in Malay, dok in Thai) produced by a tree. The profit of a transaction was expressed in the Austronesian languages of the Archipelago by the ancient term laba.
In the sixteenth and seventeenth centuries, the preeminent financial managers were Gujarati Muslims, inheriting some of the capital accumulation methods of the Hindu sharafs (described in Chapter 3) with the universal aspirations of Islamic commercial law. A Florentine merchant with the Portuguese in Melaka conceded that the Gujaratis there were “astute and clever merchants, as good as us in all business matters; their cargo ledgers with their lists of bales taken and discharged are all in perfection” (cited Reid 1993, 113). European merchants in Islamic ports found it difficult to cope with the complexity of currencies, weights, and prices unless they employed a Gujarati broker who could work the system. Many Indian terms, like capital (modal), were adopted into Southeast Asian languages at this time, as the methods of these Indian commercial specialists were followed by a broader group of urban merchants. Arab commercial terms came into Malay usage through Islamic law, which was partially adopted into Malay law codes to govern such matters as bankruptcy (muflis) and the Islamic disapproval of usury (riba).
Chinese commercial practice was influential in the system of weights used throughout Southeast Asia. The maritime practice on board Sino-Southeast Asian shipping was largely shared by the Chinese vessels from Fujian, though the interactions between Chinese, Tamil, and Southeast Asian practice in the period were so constant that we should assume hybridity rather than single origins. Aboard the seagoing junks in this region, whether Chinese, Malay, or Javanese in ownership, the hold was divided into a series of partitions, and traveling merchants, captain, and crew all had a stake in one or more of these partitions. The term adopted in the Malay maritime code for these traveling merchants (kiwi) may be of Fujian (Kheh-ui in Amoy dialect) or Tamil (kevi) origin, or perhaps from some more complex set of interactions.
The peak of Southeast Asian commercial activity in its age of commerce was also a period of exceptional cosmopolitanism. It is easy to be misled by the prominence of foreign merchants at every major port to imagine that Southeast Asia lacked a commercial group of its own. The reality is that in this period foreign merchants were constantly being incorporated into local society through the medium of marriage and adoption of local language and dress norms. It remained an advantage to be foreign and mobile, because jealous kings were less likely to try to cut down a powerful merchant if he was seen as outside the system. The Malay word for commerce, dagang, indeed had a prior meaning as foreign. But among the most important “foreign” commercial minorities in every port by 1600 were Southeast Asians operating outside their own area – Javanese, Malays, Bandanese, Chams, Mons (from Pegu, southern Burma), and “Luzons” (from Manila and Brunei). All these terms referred to peoples of cosmopolitan origins, with a strong Chinese element in those labeled Javanese and Luzons; Javanese, Chinese, and Indian in those labeled Malays; Javanese and Malay in those labeled Bandanese, and so forth.
As sites of interaction of these diverse commercial traditions, Southeast Asia’s ports gave rise in this period to their own hybrid commercial minorities and commercial methods, adopting the most serviceable of the foreign techniques. In addition to features of the junk itself, Javanese and Malay navigators incorporated the Chinese compass and chart-making into their navigational methods, which in coastal waters were heavily dependent on recognition of tides, winds, and land features.
The crucial evidence for Southeast Asian commercial and maritime methods comes from complementary Malay and Portuguese sources. Two Malay law codes were probably first drawn up for the Melaka sultanate in the late fifteenth century, and are known to us from later texts such as the Undang-undang Melaka (Melaka Laws; Liaw 1976) and the Undang-undang Laut (Maritime Code). The first generation of Portuguese also described the local Indian financial systems and Javanese, Malay, and Mon navigation on which they relied for their own voyages. These sources show the nakhoda on Southeast Asian vessels acted as both captain and supercargo. The Undang-undang Laut was drawn up by five leading nakhoda of Melaka, reportedly in consultation with all the others, and endorsed by the sultan of the day with the words, “you nakhoda are like kings in your respective junks.” On shipboard the nakhoda held powers of life and death, and his authority was supported by officers expected to enforce his will – a master, several deck officers (tukang), helmsmen, and boatswains (jurubatu) to look after the anchor and leadline. In the typical large junk of around 200 tons there would be 50–100 crew members, some of whom would be slaves but others active traders. The pilot was in a class alone as the malim, a term also used for a learned Muslim teacher. He was the possessor of arcane knowledge both technical and mystical, and thereby responsible for the survival of all.
The nakhoda was supreme in commercial matters, with the right to buy and sell onshore first, at the most favorable prices. He acted also as diplomat, carrying letters and news between the courts and ports of the region. Besides his own goods he would be entrusted with the cargo of several stay-at-home merchants at a rate of return agreed beforehand. For Melaka ships sailing to Java, the conventional return on such commenda transactions was 40%, to Pegu or Siam 50%. More common, however, was the system whereby the stay-at-home merchant rented one or more of the divisions (petak) into which the cargo was divided, either for a fixed charge or for a percentage of the cargo’s value – 20% on some Archipelago routes. The merchant then sent his own men to manage the cargo and trade it. In each of these cases the investor would lose everything if the ship were wrecked.
The traveling merchants, probably including those working for a stay-at-home investor, were known as kiwi. Their spokesman (maula kiwi) had to be consulted by the nakhoda on matters affecting the commercial outcome of the voyage, especially if cargo had to be jettisoned. A typical ship would have as many kiwi as crew, each sleeping with his goods, and perhaps his wife, in one or more cargo partitions. While an allowance of rice was provided for the slave crew, the officers and freemen were given no salary but an entitlement to trade. In this respect, as in most other shipboard arrangements, the Melaka-based ships were very similar to the ocean-going ships of the south China coast, but quite unlike those of India. Although there are unfortunately no surviving examples of commercial contracts from the sixteenth century, we know that Malay, Javanese, Mon, and Vietnamese merchants recorded their obligations in writing. As the first Dutch expedition noted of Banten:
The rich merchants usually remain at home, and when a ship is about to sail they give to those travelling with it a sum of money on [the promise of] a double return, more or less, when the voyage is complete, of which they make an obligation, and if the voyage is successfully completed then the investor is paid, following the contract. … These writings, like all others, are written on leaves of a tree [palm-leaves](Lodewycksz 1598/1915, 120).
It was not ignorance of financial techniques that restrained the development of capitalist structures in Southeast Asia, but a lack of security of capital. In comparison with cities that took a faster capitalist track (in parts of Europe, Japan, and China), Southeast Asian merchants were apt to suffer from the commercial orientation of their rulers. Rulers took a very active interest in commerce as the source of their power. Paradoxically, the much greater reliance on landed wealth on the part of feudal aristocracies in Europe and Japan provided more breathing space for mercantile enclaves than was the case in Southeast Asia. None of the cities of the region solved the problems of insecurity, though on the whole merchants fared better in the somewhat chaotic periods between strong rulers.
The most powerful rulers of the age of commerce were those who succeeded in drawing the maximum wealth of the port into their own hands, both by trading on monopolistic or advantageous terms, and by outright confiscation of the goods of potential rivals. The rapid rise of many states on the back of commerce and gunpowder tended to erode traditional legal conventions and aristocratic privileges, making it possible for kings to rise to high but brittle pinnacles of personal power, usually giving rise to a reaction after their death. Sultan Iskandar Muda of Aceh (r.1607–36), one of the most successful tyrants of this type,
makes great gains from confiscating the property of those whom he has executed every day. Most often these are the great lords who have incurred his displeasure. … I noted two reasons which cost the lives of various orangkaya [merchant-aristocrats]. One was the good reputation which they had among the people; the other was their wealth(Beaulieu 1622/1996, 215–16).
The consequences of this insecurity were a shortage of capital, its concentration in the hands of those who could protect it, and consequently high interest rates. European observers in all the trading cities of the region complained at how difficult it was to find merchants who had significant supplies of goods on hand. Foreign merchants whose capital was protected by their mobility had to advance funds on one voyage and return later for the goods. Chinese traders were more adept at establishing networks that could collect goods from a large range of small providers. The European companies, however, with their large overheads, were driven to deal with the rulers, and thereby to accentuate the absolutist tendencies already evident in the period.
Interest rates in seventeenth-century Southeast Asia were far above those in Amsterdam, the world’s leading capital market, and even above the leading Indian cities such as Surat. The minimum rates quoted were at 2% a month (24% p.a.), but these were only available to rulers, the European Companies, the largest foreign merchants, or one’s own close kin – in other words, either those who could be trusted to repay, or those whose power enabled them to dictate terms. These rates were cited at enough cities around the region to suggest that this was an optimum standard sought by these large borrowers in dealing with each other. Elsewhere in the mobile, insecure world of commerce borrowing rates could rise as high as 200–400% a year.
In short, Southeast Asian societies in this period were relatively heavily exposed to commerce, in relation to other times and places, but failed to develop an institutional base for capital accumulation in private hands. The chief inhibition to such accumulation was insecurity, caused by the lack of political or legal safeguards. The political problems were made more difficult by the presence of a monopolistic Dutch Company in the seventeenth century, but the Company itself is not an adequate explanation for the failure to develop durable capitalist institutions.