Abstract
It is widely assumed that laissez-faire had its origins in the European context and that through colonization the countries of the East adopted the ideology. This might not be completely true for a distinctive brand of the same ideology had been prevalent in the Malay Archipelago long before the advent of western colonisation. In fact five trading zones, namely the Bay of Bengal, Straits of Malacca, the east coast of Malaya, the sea of Southern Vietnam, the Sulu Sea and the Java Sea, are known to have practiced a laissez-faire economy as far back as in the fifteenth century. This paper will trace the emergence of laissez faire ideas as embodied for example in free ports and trading zones prior to the arrival of western powers. It also shows how western powers used the existing free trade network to promote a colonial economy in the eighteenth and nineteenth centuries. Western powers in the late eighteenth and early nineteenth centuries were able to develop trade without territorial ambitions was due to the existence of a laissez-faire policy and the accommodative nature of the local rulers in this part of the world. The developments of Penang in the eighteenth century and Singapore in the nineteenth century are case studies to prove this argument.
Highlights
Laissez-Faire is a French word which means leave things be (Hill, 1980: 87)
The idea of free trade was further developed by Adam Smith in England with the founding of an institution known as School of Political Economy (Briggs & Jordan 1964: 188)
From the discussion one could see that the idea of laissez- faire as understood by Adam Smith has long been practiced in the East prior to the 15th century
Summary
Laissez-Faire is a French word which means leave things be (Hill, 1980: 87). It was said to have originated from the request of a group of French traders who wanted trade activities not to be curtailed by the government. The word Laissez - Faire came to be used widely in the second half of 19th century and early 20th century It was said the phrase “Laissez-Faire” was coined by the Physiocrat in France. When high tariffs were imposed on foreign products, traders started to discuss about the need to free traders from such restrictions This led to the origin of the term free trade which means free from protective tariffs and restriction. In the case of the Straits Settlements the government did not allow or interfere in trade activities except to provide efficient administration facilities and a stable currency In such a situation, individuals were free and different groups and communities specialised in fields in which they were efficient (Tate, 1979: 157). This matter is mentioned in the Straits Settlements Record. “... to the invariable practice to all Malay ports, have been in the habit of receiving antarantaran, or complimentary present from the Nakhoda’s of Junk and native vessels ...” (SSR (IOL) 10: 337-338)
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