How to succeed or fail on a frontier

Friday, October 20th, 2006

Nick Szabo explains how to succeed or fail on a frontier:

In the early 15th century, two nations at opposite ends of the world — one vast and the other tiny, one an ancient and advanced civilization and the other recently emerged from a barbaric Dark Ages, one fielding large fleets with large ships, the other fielding small fleets with small ships — both set out on the sea. Told that one of these nations was destined to travel around Africa and conquer the main sea trade routes of the world by the early part of the 16th century, any rational observer would conclude that this prophecy must refer to the vast and ancient civilization with its giant fleets. That observer would have been wrong. But why?

The vast nation, the Chinese Empire, sent abroad vast naval flotillas — the Zheng He fleets. The main purpose of these fleets was not to develop trade, nor to protect trade, nor even to conquer. Instead, the main purpose was simply to display the glory of the Chinese Empire, which as everyone already knew was indeed the most glorious and powerful empire on the planet. A quite secondary purpose was to collect tribute, which came nowhere near the levels needed to fund the fleets.

These state fleets operated completely independently of the vibrant private Chinese merchant fleets that traded not only off China with Japan and Korea and the Philippines, but in Indonesia, Indochina, India, and as far as the east coast of Africa. Zheng He did not help to either protect, expand, or otherwise enable this trade. Instead Zheng He, a eunuch and master bureaucrat of the Emperor, sailed his vast fleet as far as Africa accomplishing little more than showing off the glory of the Emperor and collecting exotic animals for his amusement.

All it took was a political change for the bureaucracy to realize that these expeditions were far too expensive and ultimately pointless. But, as often occurs with politics, the Emperor overreacted and banned not only Zheng He’s “treasure fleets,” but also the productive trade of the Chinese merchants. The last “treasure fleet” returned in 1433 and China soon withdrew on itself.

Meanwhile, on the other side of the globe, a tiny nation of fishing villages and small-time crusaders set out on a different path. Assisted by navigators and investors from other parts of Europe, the Portuguese embarked on a pay-as-you go path of conquest and trade. They focused on conquering strategic points that allowed them to control, tax, protect, and enable trade. They enforced the property rights of their allied merchants and otherwise enabled the commercial institutions by which that trade could flourish.

What does this have to do with us?

When it comes to the “final frontier” of space, it seems to be so far the West that has stepped into China’s old shoes. What did Apollo return but glory and a handful of rocks? We proved that our socialists, if funded by taxing capitalists, could beat their socialists funded by socialists. Did such proof of bureaucratic glory really require 1% of our GDP over several years?

Apollo has been followed by several more white elephants that have much more to do with showing off the power and glory of federal bureaucrats than with military advantage or practical business.

Leave a Reply