Portuguese Resilience in Global War: Military Motivation and Institutional Adaptation in the Sixteenth- and Seventeenth-Century Cape Route

Abstract

Between 1500 and 1600, intercontinental trade might have grown at an annual compound rate of 1.2 per cent.¹ While some enterprises pursued trade through peaceful intercourse, the expansion of global trade was also attained through conflict, violence and recourse to arms, particularly in Euro-Asian trade. Artillery on board merchant vessels was clear evidence that trade and plunder occurred together. Not only was commercial exchange compatible with violence and conflict, but trade ties also prompted far-reaching innovation and adaptation to ensure that commercial ventures remained lucrative. The economic implications of risk of attack or confrontations with opponents led Frederic C. Lane to examine the economic spin-offs of war in protection rents, while Douglass C. North surveyed the consequences of the state’s supply of defence to merchant fleets in his pioneering article on factors for productivity growth in merchant shipping.² This chapter examines the dynamic between trade and war by explaining how the military competition between Portugal under Habsburg rule (1580–1640) and the Netherlands provoked institutional innovation affecting the financing of commercial voyages to Asia, such that the Portuguese Carreira da Índia continued to be profitable even when confronted with determined rivals and falling pepper prices in European markets.