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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 476.00+2.4%Jan 27 4:00 PM EST
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To: Maurice Winn who wrote (51257)6/13/2009 2:57:40 PM
From: Elroy Jetson1 Recommendation  Read Replies (2) of 219819
 
Transportation costs and greed greatly influenced the trade between the UK and China from the 1700s forward. Stiglitz greatly misrepresents the situation when he says, the "West had little of value to sell to China other than drugs." That particular statement is more pejorative hyperbole than economics.

The UK could have traded other items, but opium was far more lucrative from a number of aspects. Primarily it could be sourced locally in their eastern colonies. This permitted a particularly efficient three-port trade route.

Ships could take UK manufactured goods to the East India Company, then opium and a few other high profit margin items on to China, returning to the UK with tea, silk, and porcelain. Manufactured goods from the UK made their way from India to other eastern ports through local trade with India, but most industrial goods remain in India.

Economist Charles Kindleberger, who carefully analyzed the resulting capital flows, found that the UK had effectively exported a vast amount of their capital to India during this period prior to Indian independence. It appeared in India in the form of trains, sewers, roads, buildings and communications systems.

This loss of capital was largely the cause of the greatly reduced prosperity in England after WW-II. This loss was far greater than all of the bombing damage and debts built up from the war with Germany. Capital sharing led to poverty.
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