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8 Piracy and the Shadow Economy in the South China Sea, 1780–1810 Robert J. Antony In China, when pirates extorted money and goods from victims, they euphemistically referred to their actions as “levying duties on personal wealth” (xishu caibo).1 Although they acted outside the law and the normal, licit trading system, pirates considered their activities a justifiable collection of tribute on private property. They attacked shipping not to destroy trade, but rather to gain a more equitable share in it. Theirs was a plunder-based political economy. Pirates and their complex of accomplices actually created an important shadow economy that operated alongside the regular economy and commercial system. Numerous black markets sprang up to deal specifically in stolen goods and to supply pirates with food, weapons, and other necessities. Pirates also needed safe harbors where they could careen and repair their vessels, and friendly ports where they could gather information and relax. Those who aided pirates became their partners in crime. By extending their operations on land, pirates entrenched themselves in local villages and made contacts with a wide cross-section of society. They built up a large underground network that included not only gangsters, smugglers, and Triads, but also fishermen, farmers, merchants, soldiers, gentry, and officials.Piracy, in fact, played an integral and pervasive role in the political economy of the South China Sea in the early modern period. In recent years, a growing number of scholars have taken an interest in the shadow or informal economy, emphasizing its importance to the overall economy. Theypointoutthattofullyunderstandanyeconomicsystemweneedtogobeyondthe formal regulated and recorded economy to also examine the informal, unregulated, and illegal (or quasi-legal) one. Shadow economies develop organically, and provide job opportunities and incomes for millions of people around the world today. They include not only criminal activities such as smuggling, drug dealing, gambling, and prostitution, but also, illicit activities such as street hawking and the underreporting of income in legitimate businesses. These studies have discovered that in many contemporary societies, the shadow economy, although difficult to quantify, actually occupies a significant place in the “real economy.” One economist, for example, 100 Robert J. Antony estimated that in recent years the informal economy in Taiwan may be as large as fifty percent of the country’s GNP.2 Often too, with the predominantly illegitimate nature of the shadow economy, it has become closely tied to organized crime while its success depends on violence.3 Most studies have examined contemporary shadow economies without paying much attention to its predecessors in China. This chapter examines piracy in the light of what it can tell us about the socio-economic conditions and power structures of early modern China’s maritime society. In particular, I seek to engage with the literature on piracy as an economic menace and to argue, instead, that it also had important positive economic consequences. This does not deny the negative impact of piracy on legitimate trade, but rather, explores a fresh, alternative approach to a well-traveled subject.4 The main focus of this chapter centers upon the shadow economy that piracy had fostered around the South China Sea, and in particular, along the Guangdong coast, in the early modern era. Piracy in Context In the South China Sea, the years from 1780 to 1810 proved a time of paradoxes. Tremendous population growth stimulated a commercial revolution that, in turn, created fabulous wealth that, unfortunately, was distributed unevenly. For some, this was a time of great opportunity, but, for others, of great distress. By the late eighteenth century, as unemployment, vagabondage, and poverty mounted, so did social unrest. A series of uprisings and rebellions stretched from Vietnam to southern and central China — the Tay Son Rebellion in Vietnam (1771–1802); the Lin Shuangwen Rebellion in Taiwan (1787–88); the Miao Uprising in Sichuan, Hubei, and Guizhou (1795); the White Lotus Rebellion in central China (1795– 1804); and the Triad Uprising in Guangdong (1802–03). Banditry, armed feuds, and ethnic unrest were likewise on the rise. Throughout this whole period, South China also experienced an unusually large number of natural disasters — floods, typhoons, locusts, droughts, and earthquakes — that caused famines and added further to disorder and dislocation.5 Indeed, during these troubled years, the whole region suffered. Piracy comprised yet another social disorder to plague the South China Sea during this period. After a century of relative calm (as discussed in the previous chapter), in the 1780s, large-scale piracy reappeared in the region...

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