What We Can Learn From The Founders Of Hong Kong

Tyler Durden's picture

Submitted by Simon Black of Sovereign Man blog,

As you may know, I’m an avid reader. I devour especially historical accounts of any kind, because I consider lessons of history to be invaluable. As the Latin proverb says: Historia magistra vitae est—history is life’s teacher.

One of my all-time favorite books is a novel by James Clavell, Tai-pan. It’s the second book in his series of six novels known as The Asian Saga—a fictional account of historical facts.

Tai-Pan tells the story of Western, and especially British, traders at the time of the Opium Wars with China. The story starts right after the British have defeated the Chinese Empire in the First Opium War and claimed a barren island in the Pearl River delta as a British possession—Hong Kong.

Tai-Pan is actually a Cantonese term that literally means “big shot”, and was reserved strictly for top foreign businessmen and traders operating in the Chinese realm.

In the story, right after the ceremonial claim of Hong Kong, the eponymous Tai-Pan, a Scottish merchant Dirk Struan, who dominates the trade in tea, silk, and opium, receives letters and dispatches from his son Culum who has just arrived to the Orient from Scotland:

“Finally he broke the seal on his banker’s letter. He read it and exploded with rage.


“What is it?” Culum asked, frightened.


“Just an old pain. Nothing. It’s nothing.” Struan pretended to read the next dispatch while raging inwardly over the contents of the letter. Good sweet Christ!


“We regret to inform you that, inadvertently and momentarily, credit was overextended and there was a run on the bank, started by malicious rivals. Therefore we can no longer keep our doors open. The board of directors has advised we can pay sixpence on the pound. I have the honor to be, sir, your most obedient servant…”


And we hold close to a million sterling of their paper. Twenty-five thousand sterling for a million, and our debts close to a million pounds. We’re bankrupt.


Great God, I warned Robb not to put all the money in one bank. Na with all the speculating that was going on in England, na when a bank could issue paper in any amount that it liked.”

Chillingly familiar, right?

A million pounds was an ENORMOUS amount of money in the 1840s. And here the biggest merchant in the Orient fell into the same trap as many people do today. He failed to recognize the risks and diversify accordingly.

He was obviously aware of the threats, but didn’t act when he had the time and opportunity to do so.

The world is not that different today.

Just last week we talked about how HSBC in the UK is restricting its customers’ access to their own money. As revolting as it seems, this is what banks with capital shortfalls and liquidity crunches do.

Another thing from Europe which has gone completely unnoticed was a hearing in the European Parliament on banking, during which the new German board member of the European Central Bank, Sabine Lautenschlaeger said that it should be possible to wind down failing eurozone banks over a weekend “before markets open in Japan on Monday.”

The threats and warning signs are there for everyone to see even today.

The question is, will you have the foresight to act and mitigate your risks beforehand, or will you end up regretting your inaction, just like the Tai-Pan?

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IridiumRebel's picture

Ahh...the sweet Brits and East India company; drug dealers who addicted a country and stole their wealth for generations to come. Drugs are so good at rendering unsuspecting folks inept to brazen theft. Now America has taken the place as world power. Stay groggy, folks....

wintermute's picture

Ahh.. The irony, the US today is descended from what was effectively the "West India" company. Just compare the Stars and Stripes with the East India company flag.


Landotfree's picture

Tai-Pan thinks he is going to be okay because he spreads his so called wealth to multiple banks?


Tai-Pan is going to be liquidated pretty fast once that process starts if that is what he really thinks.   

Tanks and bombs don't care how your so called wealth is spread out once the liquidation starts.   

About as stupid as Peter Schiff, "Crash Proof", yet everything he suggested crashed along with everything else.   The idiots don't see the Forest for the Trees.

philipat's picture

"Debt money" and its pushers, aka Bankers, is just as insidious as opium and should also be made illegal.

old naughty's picture

Big Dick (um, sorry, Dirk) as depicted in "Tai Pan" is not part of the elite.

"Tai Pan Dick" = Big Dick, a Hongkonger slang.

And when it comes to il-legal, check out the BNA (British North America Act), they're still very much "behind the curtain".

In the Dominion of Canada, not even fuddle-duddle Pierre could make significant in-road after "Bill of Rights" repatriation.

Union Jack is still flying high...Who coined the word commonwealth, duh !!!

IridiumRebel's picture

Absolutely correct. The Colonials would write back to Merry ol England about infrastructure, schooling and religious desires and the response was, "STFU AND GROW CROPS". Y'all came for gold, but tobacco and cotton will do. The Chinese got Maize, peanuts and sweet potatoes...not that they cared in between drooling and more opium hits.

Skateboarder's picture

East India company... until bam! Nationalized. You're a colony now, bitch. Afghanistan looks worse because we skipped the formalities this time.

Boris Alatovkrap's picture

Drug for 21 Century is iDevice, is iDistraction for iCitizenry. Is access gateway for important information such as is like "Is Speers and Federline reunite or is hair razor redux?", "what hooker shoe is Kim Kardashian wear with slut dress?", "Who is next Amerika Idol?" and "Ducks Die Nasty". If global economy is collapse, maybe Amerika citizenry is sleep through, no?

Skateboarder's picture

If global economy is collapse, supplies chain is stop, and iDevice is no longer produce for to be consume by loyal iCitizen. :(

"What do you mean run out of vodka?"

Rainman's picture

Greed, envy , sloth ....humans never change

0b1knob's picture

Obama meets with his master.   I guess we will know what orders he received soon.



steve2241's picture

altikriti?  Where have I heard that name before?  Oh!  Sadaam Hussein al-Tikriti.  (Signifies someone from the town of Tikrit, Iraq.)

akak's picture

I wonder how they teach the glorious history of the Opium Wars in British state schools?

(Probably about the same way that they teach the glorious history of World War II and the "Greater East Asian Co-Prosperity Sphere" in Japanese state schools.  Or, for that matter, probably in about the same way that they teach the invasion and annexation of Tibet in Chinese state schools.)

Winston Churchill's picture

Or like the opening of the West in America, maybe.

Funny how those rose tinted spectacles only work on other

countries history.

Let he is without sin cast the first ... seems aposite.

tip e. canoe's picture

Be innocent of the knowledge, dearest chuck,
Till thou applaud the deed.

Panem et Circus's picture

Thank Ol Hickory for that whole Manifest Destiny crap... That will probably offend a few ZH folks, but it's true.

logicalman's picture

About as well as the US education system teaches about indiginous people and slavery.

The British school system was (can't comment about the present) about as interesting as watching the tar drip experiment.

History was no exception and was pretty much indistinguishable from propaganda.

I went throught the Grammar School system (just listen to The Wall) and loathed history.

I am now a big reader of things historical because I can follow a thread, fill in gaps for myself and see the patterns.



Winston Churchill's picture

I went to an  English Public school.

They didn't gloss over the details at all.

Scratch an Englishman ,and find a pirate seemed to be the meme.

Mind you a lot of my contemparies then became pirates in business.

Clowns on Acid's picture

Yeh I heard about that... "Dress British... Act Yiddish".

Panem et Circus's picture

You clearly don't have young children. The US schools ONLY teach about instances where minorities were oppressed. They don't ever, ever, talk about the good things we have done.

Balanced Integer's picture

At least two people seem to think that the US has been run by Emperor Palpatine since 1789.

logicalman's picture

What the fuck did the Arabs do for the world?

Not much really, only a decent mathematical system, medicine and the beginnings of observational astronomy.

DLux's picture

They shared the Hindu developments in mathematics with the west, but they did not develop the original system. Same with astronomy.

They did travel the world and pickup on the developments of other ancient people (much like the Brits). 

NoDebt's picture

I'm going to let you in on a little secret, Simon: THERE IS ONLY ONE BANK TODAY.  If I learned anything from 08-09 it's that when one of the big ones, no, not even a big one, just a medium one goes down, it takes the rest of them with it.  Derivatives have seen to that.

They're a bunch of out-of-shape 300 lb. mountain climbers all tethered together going up the side of Mt. Everest.  One slips, he's dragging the rest down with him.

Dr Benway's picture

LOL. Simon goes to James Clavell for fine literature and historic insight.

Urban Redneck's picture

If one wants to learn, shouldn't the goal be to find history that ISN'T a fiction?

Winston Churchill's picture

A lot of Tai Pan wasn't fictional.

Can't remember the true name of the  trading house anymore.I think

it was Jardine Matherson , but the names were changed to protect

the author from lawsuits and/or triad killing.

InanimateCarbonRod's picture

Yep. It was Jardine Matheson.  Sir William Keswick.

Saul Sage's picture

Just finished 3/6 books last year:
noble house = tiapan/dirk straun
brock & sons = morgan brock, the other big english trade house
cooper tillman = the americans

Clavell wrote a fine set of books without the same old story feeling you get from authors like clive cussler or a tom clancy.., Jack Ryan as lead character in every book? come on, at least change the dude's name!

Terminus C's picture

there is no such thing as fictionless history.  the goal is to reduce fiction, but because it history is a story told by people, there is always a ficticious element (the less the better, but always prevelant.

Urban Redneck's picture

Herodotus & Plutarch.
We used to care.
On a long enough timeline...
apparently it stops being a mattering thing.

Seychelles's picture

One is always kept guessing.  History is similar to gossip; as it spreads from person to person or book to book and is modified to varying degrees at each step, there comes a time when the information content by chance can in part be mostly true.

OC Sure's picture

Dirk Straun navigated 40 lacs of silver down the river.

Ian Dunross orchestrated the modern exchanges flawlessly.

'twas a Noble House indeed.

(...the house these daze are tainted with ignoblilty.)

PGR88's picture

Want to really learn about what made Hong Kong successful??

Read about Sir John Cowperthwaite.  He was a British Civil Servant and a post-war HK Financial Secretary.


akak's picture

Admit it, you just made that name up.

logicalman's picture

There's plenty of Postlethwaites around, why not a few 'Cowperthwaite's?

kaiserhoff's picture

Brit names are often stranger than fiction.  Kraut names too.

There are neighboring towns in England called Nasty and Ugly.  Supposedly, the editor of the local paper waited for years before announcing "Ugly woman to marry Nasty man."

akak's picture

Well, I have been to Bliss, to Paradise, to Nirvana, to Climax, AND to Hell --- all in one US state!

logicalman's picture

There were two pubs near Sheffield - The North Pole and The Moon.

It wasn't uncommon to go to the North Pole and the Moon in a single night!



Apostate2's picture

Correct and glad you pointed this out to the historically challenged.

Harbanger's picture

He introduced Hong Kong to free market economics which made them incredibly succesful.  Hong Kong has a very capitilistic system with low taxes and high economic freedom.  The exact opposite of where the socialized west is going.  That's why you'll never hear his name mentioned.

MoneyPowerWomen's picture

thanks PGR, great tip, interesting history

TideFighter's picture

If you want collegiant-level history classes, you must now attend a military academy. None of the top 29 liberal arts colleges require ANY history-sad fact. 

HardAssets's picture

Yeah right, . . . . they teach all the 'dirt' to young cadets and midshipmen.

Funny they never mentioned USMC Maj General Smedley Butler to me when I was a midshipman even though he won two congressional medals of honor.

Maybe his book "War Is a Racket' had something to do with it and his statements that he never had an original thought till after he left the military. Or maybe it was his opinion that he had been nothing but hired muscle for the 'banker boys' all over the globe.

pupdog1's picture

War is a racket can be found online and downloaded for free.

It's only about 25 pages.

It is an absolutely must-read.

logicalman's picture

If you are looking for a 'must watch' movie with a similar message, All Quiet on the Western Front (1930 version) is worth your time.


teslaberry's picture

funny i thought the main lesson of hong kong was that all political power comes from gunboat diplomacy, or, saving that, world war 2 demonstrates it comes from  massive conquest. 


bank runs? this is the lesson of hong kong. no...........

Apostate2's picture

No. the 'lesson of Hong Kong' is don't give up all your silver to buy dope. You may lose real estate.

Bitchin Bear's picture

What great books!  Tai Pan is by far my favorite.  I usually re-read it every couple of years.  Hubby can't understand why one would read a book again.   What can I say?  It's just rich... as are Noble House and Shogun.  King Rat is a great change of pace.  Makes me want to drag out the storage boxes and dust them off!

RaceToTheBottom's picture

Don't worry about them losing money from corrupt banks, the Scots can squeeze more out of a coin than anyone.  With them, it is genetic...