Bridges to the east : European merchants and business practices in India and China

Abstract

The aim of this contribution is to examine to what extent the operations European merchant houses in Asia during the colonial period were based on, or influenced by, cultural features. Rather than proposing an antithesis between a rational and modern European and an archaic, mystical Asian culture, as it has been brought forward in several studies, the following analysis adopts a different approach. It focuses on the role of a shared mercantile culture for facilitating economic transactions between European and Asian merchants. This type of mercantile culture acted as a basis for establishing mutual understanding and for building up relations of trust. It enabled European merchants to embed their transactions in the foreign Asian environment and can be interpreted as an informal institution, including conventions, norms of behaviour and self-imposed codes of conduct, which helped to minimise transaction costs. It played a crucial role in world trade since formal institutions – contracts or laws –were often lacking or insufficient.