Adam Smith and the Invisible Hand: Part I, Taiiwan

Friday October 17, by Jerome F. Keating Ph.D.

Taiwan has always had trade with the islands around it and with the Asian continent. However, it was when the "invisible hand" that Adam Smith speaks of in "The Wealth of Nations" took hold of many Europeans that it would drive them to enter Asian waters in search of many things including spices known for their taste, medicinal value and even preservative aspects. Like it or not, the invisible hand had a large role in putting Taiwan on the "radar screen" and maps of Europe and in so plotting Taiwan's future and often turbulent destiny.

In the 16th Century, Spain and Portugal, the then two major European maritime powers, explored Asian waters to gain access to the Spice Islands and to expand their trade routes. The Portuguese had rounded Africa's Cape of Storms (re-naming it the Cape of Good Hope) on their way to India in 1497; by 1557 they would also colonize Macau; from there it would be one of their ships on its way to Japan that would pass and name Taiwan as Ihla Formosa (beautiful island). Despite giving it a lasting name, the Portuguese would never settle on Taiwan.

Because of the Treaty of Tordesillas, the Spanish, however, had to find a different route than that of the Portuguese around Africa. And so they came to Asia from the opposite direction with Magellan rounding the tip of South America. He reached the Philippines in 1521. Spanish colonization of Manila would follow some fifty years later (1571). And in another 55 years the Spanish would colonize Taiwan (1626). They would be driven out in 1643 by a 17th Century competitor and follower of the invisible hand, the Dutch. The relative isolation that Taiwan once enjoyed would never be the same.