The World of Horo (Medieval Economy, Historical Setting etc.)

[TinyRedLeaf]

A new suggestion:

Medieval Economy by Horo Wolf. Tips, references and more.

;) I am not good to make an initial post, anyone help me. :)

The following has been adapted from Wikipedia. I'll add other stuff as I go along. Please feel free to contribute. :)

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Everything I know about Economics, I learnt from Horo!

Mercantilism
Mercantilism is an economic theory which suggests that the prosperity of a nation depends upon its supply of capital, and that the global volume of trade is "unchangeable." Economic assets, or capital, are represented by bullion (gold, silver, and trade value) held by the state, which is best increased through a positive balance of trade with other nations (exports minus imports).

Mercantilism suggests that the ruling government should advance these goals by playing a protectionist role in the economy, by encouraging exports and discouraging imports, especially through the use of tariffs. The economic policy based upon these ideas is often called the mercantile system.

Historical context
Mercantilism was established during the early modern period (starting in the 16th to the 18th century, which roughly corresponded to the emergence of the nation-state). This led to some of the first instances of significant government intervention and control over market economies, and it was during this period that much of the modern capitalist system was established.

Mercantilism as a whole cannot be considered a unified theory of economics. There were no mercantilist writers presenting an overarching scheme for the ideal economy, as Adam Smith would later do for classical (laissez-faire) economics. Rather, each mercantilist writer tended to focus on a single area of the economy. Only later did non-mercantilist scholars integrate these "diverse" ideas into what they called “mercantilism”.

Mercantilism developed at a time when the European economy was in transition. Isolated feudal estates were being replaced by centralised nation-states as the focus of power. Technological changes in shipping and the growth of urban centers led to a rapid increase in international trade.

Today, mercantilism has seen a resurgence in economic theories that focus on the trade surplus and deficit as determinants of monetary value (ie, trade protectionism), but mercantilism as a whole is rejected by many economists.

“Zero-sum game”
To a certain extent, mercantilist doctrine itself made a general theory of economics impossible. Mercantilists viewed the economic system as a zero-sum game, in which any gain by one party required a loss by another. Thus, any system of policies that benefited one group would by definition harm the other, and there was no possibility of economics being used to maximise the common good.

Internationally, mercantilism encouraged the many European wars of the period, and fuelled European imperialism, as the European powers fought over "available" markets.

Bullionism
Early mercantilist writers embraced bullionism, the belief that quantities of gold and silver were the measure of a nation's wealth. Later mercantilists developed a somewhat more sophisticated view.

In an era before paper money, an increase for bullion was one of the few ways to increase the money supply. Simply put, the more gold or silver a country possesses, the richer it is relative to its rivals. Mercantilist trade was thus another way of affecting the balance of power between great powers — early European nation-states attempted to enrich themselves while beggaring their neighbours.

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The World of Horo
(or rather, possible real-world inspirations for the WoH)

The Italian Renaissance
The Italian Renaissance began the opening phase of the Renaissance, a period of great cultural change and achievement in Europe that spanned the period from the end of the 14th century to about 1600, marking the transition between Medieval and Early Modern Europe.

Although the origins of a movement can be traced to the earlier part of the 14th century, many aspects of Italian culture and society remained largely Medieval. The Renaissance did not come into full swing until the late 1500s.

The Italian Renaissance began in Tuscany, centered in the cities of Florence and Siena. It later had a significant impact in Venice, where the remains of ancient Greek literature were brought together, leading to the “rebirth” of classical Greek culture.

The Northern Renaissance
Before 1450 the Italian Renaissance had almost no influence outside Italy. After 1500 Renaissance spread around Europe, but Late Gothic influences remained present until the arrival of Baroque.

The Northern Renaissance was distinct from the Italian Renaissance in its centralisation of political power. While Italy was dominated by independent city-states, countries in central and western Europe began emerging as nation-states.

Western Europe was more uniformly under the embrace of feudalism than Northern Italy. This economic system had dominated western Europe for a thousand years, but was on the decline at the beginning of the Renaissance.

The reasons for this decline include the post-plague environment (the bubonic plague, ie, Black Death), the increasing use of money rather than land as a medium of exchange, the growing number of serfs living as freemen, the formation of nation-states, the increasing uselessness of feudal armies in the face of new military technology (such as gunpowder), and a general increase in agricultural productivity due to improving farming technology and methods.

Renaissance’s impact on the Church
Finally, the Renaissance in Western Europe coincided with a weakening of the Roman Catholic Church. The slow demise of feudalism also weakened a long-established policy in which church officials kept the population of the manor under control in return for tribute. (Hmm...debatable, Wiki probably needs a citation here.)

Consequently, the early 15th century saw the rise of many secular institutions and beliefs. Forms of artistic expression which a century ago would have been banned by the Church were now tolerated or even encouraged. Ultimately, the printing press spurred mass production of the Bible, contributing to the Protestant Reformation.

The Age of Discovery
One of the most important technological developments of the Renaissance was the invention of the caravel, the first truly oceangoing ship. This combination of European and Arab ship building technologies for the first time made extensive trade and travel over the Atlantic feasible.

This period of exploration and expansion has become known as the Age of Discovery. North Atlantic states such as Spain, Portugal, France and England began to conduct extensive trade with Africa, Asia and the Americas. This marked the beginning of colonisation activities as the competing European powers sought to monopolise potential markets and lucrative sources of bullion.

[Kang Seung Jae]

Good work.


It seems I'll have to get out my history of trade papers....

[TinyRedLeaf]

At this point, I’m not sure whether this background information would be relevant to Horoconomics. But I'm starting to have ideas about what the antagonists in Spice and Wolf are up to. It's a conspiracy! (Isn't that always the case?)

Ah well, the below information can also turn out to be completely irrelevant, but hey, a little bit of knowledge can't hurt that much. ;)

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The birth of a dynasty
During the 1400s, Florence was the centre of the Renaissance. By no accident, it was also, at the time, the centre of an industry that has marked the West no less: banking. And at the centre of that sat the Medici family. This one family supplied four popes and two queens of France, and ran Florence, with a couple of interruptions, for almost 400 years. Its power emanated originally from the family bank. [2]

Set up in 1397 by Giovanni di Bicci de Medici, who had managed a bank in Rome before moving to Florence, the Medici bank lasted until 1494, when it collapsed, a victim of depression, internal strife and French aggression.

How it worked
The Medici were not great innovators in their methods. But they used the techniques newly developed in Italy, or still being so, to their fullest advantage: things like double-entry book-keeping, bills of exchange and book transfers.

The bank, like any modern one, held deposits and made loans, dealt in bills of exchange, changed money and conducted business abroad. Each of its branches was a partnership, under (until 1455) a central holding company. This seems to have been a Medici innovation.

Banking and trade went together. Italian merchants might, for example, lend to English sheep farmers or wool merchants, in return for lower prices. This was also one way for banks to circumvent the Church’s ban on the charging of interest. Another was to use foreign currency: the bank could lend, or accept a bill of exchange, in one currency and collect its debt in another, building a hidden rate of interest into the exchange rate.

The Pope’s banker
The bank grew rapidly. At its widest, it had nine branches outside Florence. It also had many correspondent banks. And it used this network to great effect for what became its biggest client: the Vatican, to which it brought the tithes and taxes due to Rome from other branches of the Church commercial in Europe.

So successful was the bank that under Cosimo de Medici, who ruled it with an iron rod, the Medici were for a long while put in charge of papal finances. Until 1434, more than half of the bank’s revenues came from its Rome “branch” (which followed the pope around on his travels). Its connections with Rome and the Vatican’s reliance on it gave the bank immense clout both with other customers and with the Church itself.

The Godfathers
The Medici didn't start out as the most powerful family in Italy. Other families were just as rich, and just as ambitious. But no one knew more about getting ahead — and staying ahead — than the Medici. [3]

They clawed their way to the top, sometimes through bribery, corruption and violence. Those who stood in their way could end up humiliated — or dead. And the Medici exploited a network of “friends of friends” — hangers on who would do anything to stay close to the family.

Patron of the arts
By 1434, Cosimo de Medici had consolidated power for himself and his family in Florence, all the while maintaining the appearance of democratic government. Cosimo clung to his position as a private citizen, but it was clear to all that he ruled the city of Florence from behind the scenes. [1]

Though Cosimo maintained his power through the actions of a manipulative schemer, other aspects of his life were nothing if not admirable. He generously supported the arts, commissioning the building of great cathedrals, and commissioning the best artists of the age to decorate them. He demonstrated great support for education, establishing the Platonic Academy for the study of ancient works. It is estimated that before his death in 1464, Cosimo spent approximately 600,000 gold florins supporting architecture, scholarly learning, and other arts. When one considers that the unprecedented fortune left to Cosimo by his father totaled only 180,000 florins, this amount is clearly extraordinary.

Of course, it is possible to question the motives behind such displays of philanthropy. As wealthy and influential citizens, the Medici probably had no choice but to participate in public life. In many Italian societies there is nothing more humiliating than to receive a brutta figura — a loss of face in society. [3] The fear of public humiliation informs every choice, every argument, every decision in 15th century Italy.

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References
[1] Florence and the Medici (1397-1495) ( http://www.sparknotes.com/history/european/renaissance1/section2.rhtml)

[2] Those Medici ( http://www.economist.com/diversions/millennium/displayStory.cfm?Story_ID=347333)

[3] Medici: Godfathers of the Renaissance (http://www.pbs.org/empires/medici/medici/ruthless.html)

[TinyRedLeaf]

By the way, 95% of what I've contributed so far has been lifted directly from source, so I can't claim credit for what's been written. However, the choice of quotations and the arrangement of points are my own, and so are most of the subheaders. Merely exercising an editor's perogative, as it were. Any faults in these respects are entirely my own.

[Vexx]

hey, its not like you don't provide the references and footnotes :)

Sadly, you've done such a slambang job at this point all I can do is watch the series and then provide a "compare and contrast" to see how well the author (and production team) did their homework. :)

[MakubeX2]

Spicy Wolf did not look at things at such a level as stated above. It's Medieval Setting is more akin to World Of Warcraft than real life sans the Supernatural Elements except for Horo (and her kinds).

What we are shown is more down to earth and relevant to real life everyday workings of Corporate Politics like Currency Speculations (demonstarted in the anime), Under The Table Dealings, Blackmailing, Dog-Eat-Dog, Bankruptcy, Contract Breaching (Novel Vol.2), Coporate Esponiage, Pyramid and High Risk Schemes, Absolute Profiting (Novel Vol.3)

I think everyone gets the idea. The Novel does act like an entry level Textbook to the basics of Economics Politics.

[Vexx]

But delivered in a far more appealing way than any econ 101 book I've seen :)

[Rhyel]

Thanks TynyRedLeaf, Amazing job. :D

[TinyRedLeaf]

What we are shown is more down to earth and relevant to real life everyday workings of Corporate Politics like Currency Speculations, Under The Table Dealings, Blackmailing, Dog-Eat-Dog, Bankruptcy, Contract Breaching, Coporate Esponiage, Pyramid and High Risk Schemes, Absolute Profiting.

"You have to remember two things about the market. One is that they are made up of very sharp and sophisticated people — these are the greatest brains in the world. And the second thing you have to remember, is that the financial markets — to use the common phrase — 'are driven by sentiment'." — George Parr, investment banker

SJ_qK4g6ntM

Financial markets ("currency speculations, under the table dealings, bankcruptcy, high risk schemes, etc") haven't really changed that much since the Middle Ages. ;)

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Back on topic. Since I haven't read the novels and mangas, I wouldn't know what aspects of economy that the novelist covered. But I get the feeling that he must have done some research of his own and drawn inspiration from real historical events and personalities — like most good writers do. So, in this sense, I don't feel that the background I've provided is far off-course. In fact, I can point out to instances in the anime which may be referring to similar real-world economic trends.

That said, I don't mind helping fans of Spice and Wolf understand economic/financial terms they are curious about. So, if there's anything from the novels that puzzle you, why not bring them up? I'll see what references I can find.

Next up, probably something about the history of money, or about the implications of currency speculation. :D

[Vexx]

Much of what has been portrayed so far in the series fits neatly into early Medici period ... Mid/northern Italy (including the trading motifs, the descriptions of how coinage represented the "market battlefield", the architecture of the cities they visit).
The Church elements seem cranked back from the period... or perhaps we've just not seen much of their part in the play yet. The Church went through more than a few periods of fragmentary dominon when the pope selection got out of whack. The village and their festival seem a bit "behind in time" for the period - though its not impossible that a remnant festival of that sort had escaped the cultural cleansing of the church power brokers.

If they make it up into Germanic territories (I'm kind of assuming Horo's homeland is Scandinavian latitudes) - it'll be interesting to see if the peoples and places reflect that.

Bah, there's simply not enough episodes to cover the sorts of adventures they could have.

[MakubeX2]

So, in this sense, I don't feel that the background I've provided is far off-course. In fact, I can point out to instances in the anime which may be referring to similar real-world economic trends.

I'm not saying that you are wrong to provide relevant real life historical reference. But Lawrence and Horo didn't get into anything major in the novels such as those that you have pointed in your examples. But some of your examples such as Bullionism does appear in the source material as people might see very soon in the anime, so you are not too far off.

However, the impression the novel has given me is that Hasekura does is take examples of Economical Politics in real life, change it's elements (currency, goods,etc) to something Medieval and insert it into the scenarior.

[Vexx]

Well, a good author will always fill the "out of sight" background of his world with stuff that makes sense so that what's "on stage" for the story makes sense. LOTR is an excellent example of this. Tolkien invented languages, histories, cultures, etc that were never seen in the main LOTR story or only brief snippets... just enough you knew the story tapestry went way beyond the immediate story.

What Red Leaf is doing is documenting what appear to be the historical elements from which the author drew to create his world. There's nothing to say that the author didn't just cherry-pick what he needed. But Horo and Lawrence's world seem all the more realistic because of what isn't explicitly stated but still there.

Hasekura didn't have to change anything --- the things described in episode 3 are exactly the kind of trading and currency world that existed in the early Middle Ages right down to the coin metal percentage revisions. There's little or nothing *new* about such things in the modern world.

[TinyRedLeaf]

Lawrence:
“There are several hundred different currencies, and the silver and gold content is constantly changing. To begin with, the face value of the currency is higher than the silver or gold it’s made of. You can’t use it if it’s not credible.” —Spice and Wolf, Episode 3, “Wolf and Business Sense”


The value of money
The first thing to understand is that “money” does not actually possess any intrinsic value. The “value” of a currency depends on its trade value, ie, how much goods can you buy with it? The more goods you can buy with it, the more “valuable” the currency.

Initially, the value of goods was expressed in terms of other goods, ie, barter trade, where you exchange an item for another item you deem of equal value. However, barter trade has an obvious limitation — different countries, different cultures would value the same item differently. This encouraged early human societies to look for an item that could serve as a common benchmark of “value”. [1]

In different economies, everything from teeth to feathers to pretty stones served this purpose, but soon metals —in particular gold and silver— established themselves as an accepted means of payment as well as a reliable storage of value. The attractiveness of gold (or silver), from an aesthetic point of view, and its resistance to corrosion are two properties which led to its use for monetary transactions for thousands of years. [2]

In other words, everyone (well, Europeans at least) loved items that go *bling bling*. So, it was relatively easy for everyone to accept gold or silver as the common item to represent “trade value” — hence metal currency was born.

Typically, the more silver you have, the more goods you can buy. You usually measure the amount of silver you have by weight. Hence, 5 ounces of silver is obviously worth more than 1 ounce of silver. By the same token, a coin which contains a higher “weight” of silver is worth more than one with less silver in it.

Legal tender
This is where things get very tricky. I can’t find references to explain the following in layman terms, so I’ll have to wing it.

The “face” value (nominal value) of a currency is different from its “real” value (in our context, the value of silver). To understand the difference, you first need to understand the concept of “legal tender”. [3]

Legal tender is what happens when an authority (typically a government that operates a mint) forces you —by law— to accept payment for a debt that is measured in the currency that it produces. In effect, that means that the government is exercising its legal authority to declare an arbitrary value for its currency. It could mint a coin and stamp a number “25” on it, and voila, that coin would be legally worth 25 units of debt.

So, how much silver is “25” worth? Whatever amount of silver that government uses to make that coin. One government might choose to use 5 ounces of silver to make a “25” coin. Another government might be a little bit more stingy and decide to use 2 ounces to make “25”.

Keeping face
Why the discrepancy? One obvious reason is that each country owns different amounts of silver. If you only have a small amount of silver to begin with, you are forced to use less silver per coin to mint the same amount of “money” as your rivals.

Also, you have to consider the cost of minting. A government would declare a higher face value for the coin, compared to its real value, to cover the cost of producing that coin. (Incidentally, in today’s economy, the face value of a coin is often less than its real value, due to the rising price of metals. [4])

Anyway, as far as the people of that country is concerned, they have no choice over the matter. If the government declared by law that 2 ounces of silver is equal to 25 units of debt, then 2-to-25 it is.

How do you know if the government actually used 2 ounces of silver in the first place? Ah…actually, you don’t know. You have take it on faith that the government did indeed use that declared amount. Besides, the government can’t get away indefinitely by minting “cheap” coins — sooner or later, merchants would lose confidence in its currency and stop using it for trade. In such scenarios, that country would be majorly screwed — it can no longer buy anything because no one, not even the local population, would accept its currency.

Therefore, this is one possible way for mercantilist societies to “wage war” on each other — by destroying society’s trust in a rival’s currency.

Medieval speculation
The difference in face-vs-real value of currencies is what made medieval currency speculation possible.

Suppose that everyone in a medieval society places an equal value on silver. 1 ounce of silver in Florence is equal to 1 ounce of silver in Venice (this is an extremely simplified example — in real-life, it was actually much more complex). But 1 ounce of silver in Florence may be declared, by legal tender, to be worth 5 florins (the face value), while Venice may declare it to be worth 10 florins.

So, smart medieval traders (like Lawrence) would try to profit from this difference, if they can. The main objective is to collect as much bullion as possible, because the more silver you own, the greater your real wealth.

For example, referring to the analogy I coined (pun intended) above, 1 ounce of silver from Venice (10 florins) would buy 2 ounces of silver from Florence (5 florins x 2). So, if I could get a Venetian and a Florentine to trade their respective currencies at face value, ultimately the Venetian would profit, because he would effectively end up with more silver.

National governments and banking families would do much the same, except on a far larger scale. Remember that this was a time before Adam Smith’s economic theories for maximising the common good. It’s a zero-sum game. I win, you lose.

And nobody likes to lose.

The cake is a lie
By the way, modern currency is no longer pegged to the value of gold or silver. This is, in fact, a very recent development that started after Nixon unpegged the US dollar from the gold standard in 1971. [5]

Since then, the major trading currencies such as the US dollar, the British pound and the Japanese yen, have “free-floating” values. This in turn has turned currency exchange into a highly speculative, and obscenely lucrative activity, for reasons that are too complex for me to explain here.

In 1975, about 80% of foreign exchange was used to pay for real goods — real imports and exports. For example, if you, an American, wanted to buy that yummy Horo doujinshi (huba-huba) published in Japan, you must first trade US dollars for Japanese yen, in order to import that manga. [6]

Currency speculation did exist back then, but only at around 20% of all forex. Today, however, well over 90% of all foreign exchange is speculative — the value of money is no longer tied to physical imports or exports. Instead, money itself has become a tradable commodity, not unlike how you would trade comic books, for example.

What used to be the frosting has now become the cake. The value of money no longer corresponds to the value of tangible goods. It is almost entirely based —to use that common phrase— on “market sentiment”.

And, ahem, we all know how reliable “market sentiment” is, don’t we? :heh:


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References:
[1] Forex History (http://www.forexrealm.com/forex-for-beginners/forex-history-01.html)

[2] Origins of Money and Banking (http://www.projects.ex.ac.uk/RDavies/arian/origins.html)

[3] Legal tender (http://en.wikipedia.org/wiki/Legal_tender)

[4] Coins cost more to make than face value (http://www.usatoday.com/money/2006-05-09-penny-usat_x.htm)

[5] The Bretton Woods Accord (http://www.forexrealm.com/forex-for-beginners/forex-history-02-1.html)

[6] Global currency speculation and its implications (http://www.twnside.org.sg/title/nar-cn.htm)


...something tells me I ought to start a blog...

[Vexx]

market sentiment == packs of crazed loonies manipulated by a few powerful players. I could rant on the basic insanities of "the market" for hours. But I'd rather watch Horo, thank you.

[TinyRedLeaf]

Lawrence:
“I don’t pay for the salt I buy from a company in Yorentsu. It’s because I sell the same [value] of wheat to a branch from the same company in another city. In exchange for not receiving a fee for the wheat, I don’t need to pay for the salt. Basically, I can fulfill both contracts without exchange any money. This system is called bartering and was invented by merchants to deal with [foreign exchange] in various regions.” — Spice and Wolf, Episode 2, “Wolf and Distant Past”


The concept that was alien to the vineyard owner is billing, or promising to pay later. Although it does seem like Lawrence is bartering, he is merely "playing the books." When he sold wheat, instead of "cash" he received a promise of payment, or a bill (although I think its closer to credit).


After a bit of research, I think “bartering” remains the better way to describe what Lawrence did. Because he wasn’t using bills per se. From what I understand, I think the transaction worked this way:

Lawrence has a bag of silver. Rather than risk travelling with the silver on hand, he invests it on a shipment of cold-resistant wheat.

He starts his journey and visits the Yorentsu HQ. He learns that the Yorentsu Branch A has an order of wheat to fill, and offers to deliver his wheat. In exchange, he takes a shipment of salt from Yorentsu HQ.

He travels to Yorentsu Branch A to deliver his wheat as promised. (He was left with only one bushel of wheat after the delivery.) What had once been a full load of wheat has now become a full load of salt.

Lawrence travels to another town to exchange the salt for marten pelts.

Lawrence stops over at Pasroe. Something goes *thud* in his cart.

Lawrence (now with Horo) travels to Pattsio, to cash in the pelts for silver.

If I’m not wrong, this is known as “contra dealing”, to use the modern term. Whatever it’s called, I think the vineyard owner was puzzled probably because —like most medieval people— he seldom travelled further than the nearest market town to sell his grapes. He would return home immediately after the sale. Actually, according to him, he didn’t even need to travel — the merchants came to the vineyard instead. Which is very risky for him, because he wouldn't know if these merchants are offering him a fair market price. (The merchants would want to take their cut as middlemen.)

Of course, I’m not an economic historian by training, so I could be wrong.

If the various transactions had been done through billing, the process would have been slightly different. Lawrence would not have had to carry so many different commodities — he would only need to carry a single bill of exchange ( http://www.e-articles.info/e/a/title/What-are-Bills-of-Exchange/). This could have happened instead:

(same as above)

Lawrence receives a bill of exchange from the Yorentsu HQ to pay for his wheat.

Lawrence delivers his wheat to Yorentsu Branch A.

(would Lawrence still need to stop over at Pasroe?)

Lawrence travels to Pattsio to cash in the bill for silver at Yorentsu Branch B.

That’s it. No need to make one more stop at another town to trade salt for pelts (“time is money”).

What's more, it's safer to carry bills of exchange rather than commodities. Commodities have trade value. If Lawrence did encounter bandits, what's to stop them from robbing his wheat/salt/pelts, if they can't get his silver? Either way, he would still be equally bankcrupt.

[TinyRedLeaf]

Anyone know the associations with wolves from Japanese mysticism/folklore? Like how raccoons (tanuki) are related to slyness and foxes (kitsune) to various supernatural powers.

Cold mountain
The most striking feature of Japanese agriculture is the shortage of farmland. However, the land is intensively cultivated, including the remote valleys nestled among the thickly forested mountains. Upland farming communities were able to cultivate rice, wheat and barley by employing terrace cultivation techniques.[1]

In Japan, mountains are dangerous, frightening places that are associated with death, not only as sites of physical burial but also as the abode of the spirits of the dead. Man's presence there is a potential infringement on the kami's territory, and thus potentially provocative.[2]

The mountains form a world with its own separate way of thinking and ethics, one that belongs to the yama no kami (mountain spirits). Similarly, many forest animals are associated with these spirits, including the wolf. The association of the wolf with the mountains is indicated by the many wolf-related place-names found in uplands areas of Japan.

In the mountains of the Kii Peninsula, for example, there are places known as Ōkamitaira (Wolf Plateau), Ōkamizawa (Wolf Marsh), Ōkami'iwa (Wolf Rock) and Kobirotoge (Howling Wolf Pass). These tend to be sites of past encounters with or sightings of the wolf.

Beyond good and evil
The Japanese wolf is neither good nor evil.[2] Rather, like a human being, a wolf can be helpful or dangerous, depending on how humans conduct their relationship with the animal. Provided that a relationship of reciprocity is properly and faithfully maintained, the wolf is a benign beast. Dangerous wolves are more a sign of human infidelity than of the animal's bad nature.

In practice, wolves were on occasion killed in Japan. Indeed, there are tales of villages organising wolf-hunts (inugari) in response to livestock predations. However, through his actions, the wolf-killer exposes himself and his family to the risks of spiritual retribution.

Ghost hound
Among the upland farming communities of Japan, the wolf is regarded as a protector of mankind, a sort of banken (watchdog) of the mountains.[2] This watchdog role appears in the benign okuri-ōkami (sending wolf) stories: "When someone is walking along mountain roads at night, sometimes a wolf follows without doing anything. On nearing the house the wolf disappears."

In Japanese folklore, wild animals such as the fox (kitsune), racoon dog (tanuki), and snake are often able to assume human (often female) forms to hide among people. Curiously, Japanese wolf-lore has little to say about wolf shapeshifting. Rather, the Japanese wolf is concealed by the natural environment itself: “The wolf can hide even where there is only a single reed."

Forest guardians
I don't understand the idea of wheat harvest being controlled by wolves. What does wolves got to do with wheat? Wolves are hunters so they shouldn't have anything to do with agriculture isn't it?

A common reason given for the positive view of the wolf in Japan is that, far from being a threat to village livelihoods, it helped to protect them from farm-raiding forest animals such as wild boar, deer, and hares. The autumn incursions of the wild boar have long been a major source of anxiety among upland farmers on account of the devastation the animals can cause to maturing crops.[2] I think this is a possible reason why the Japanese associate wolves with agriculture and good harvests. ;)

A lost era
Today, the Japanese equate the extinction of the wolf with the loss of their connection to nature. (Remember Moro the wolf god of Mononoke Hime?) Perhaps the stubborn refusal in some quarters to accept that the wolf is gone reflects romantic memories of this past.[3] After all, the wolf is kami, able to stay invisible to human eyes, or so the Japanese would like to believe, similar to how Americans like to believe in the existence of Bigfoot.

=========
References:
[1] Agriculture, forestry, and fishing in Japan ( http://en.wikipedia.org/wiki/Agriculture,_forestry,_and_fishing_in_Japan)

[2] On the extinction of the Japanese wolf (http://www.wolfsongalaska.org/Wolves_Japan_on_extct.htm)

[3] Extinct wolf a symbol of what Japan has lost (http://www.wolfsongalaska.org/Wolves_Japan_symbol.htm)

[TinyRedLeaf]

“It’s the last stack of wheat! Did your greed hide the wheat stack? Check it well or Horo will escape! So who caught the wolf? Who? Who? Who?”
—Spice and Wolf, Episode 1, "The Wolf and Best Clothes"

The Corn Spirit as an Animal
(source: The Golden Bough (http://en.wikipedia.org/wiki/The_Golden_Bough), by Sir James George Frazer [1854–1941], first published in 1890)

"Amongst the many animals whose forms the corn-spirit is supposed to take are the wolf, dog, hare, fox, cock, goose, quail, cat, goat, cow (ox, bull), pig, and horse. In one or other of these shapes the corn-spirit is often believed to be present in the corn, and to be caught or killed in the last sheaf.

"The person who cuts the last corn or binds the last sheaf gets the name of the animal, as the Rye-wolf, the Rye-sow, the Oats-goat, and so forth, and retains the name sometimes for a year.

"Sometimes the creature is believed to be killed by the last stroke of the sickle or scythe. But oftener it is thought to live so long as there is corn still unthreshed, and to be caught in the last sheaf threshed. The corn-spirit is believed to live wherever the corn is still being threshed.


"Once upon a time, in a village, an abundance of wheat would ripen or sway in the wind, and a Wolf could be seen running through it.
Wheat that fell due to the wind would be trampled upon by the Wolf. When the crop was poor, the Wolf would then eat it."
—Spice and Wolf, Episode 1, "The Wolf and Best Clothes"

The corn-spirit as a Wolf or Dog
"We begin with the corn-spirit conceived as a wolf or a dog. This conception is common in France, Germany, and Slavonic countries. Thus, when the wind sets the corn in wave-like motion the peasants often say, 'The Wolf is going over, or through, the corn,' 'the Rye-wolf is rushing over the field,' 'the Wolf is in the corn.'

"In the neighbourhood of Feilenhof (East Prussia), when a wolf was seen running through a field, the peasants used to watch whether he carried his tail in the air or dragged it on the ground. If he dragged it on the ground, they went after him, and thanked him for bringing them a blessing, and even set tit-bits before him. But if he carried his tail high, they cursed him and tried to kill him. Here the wolf is the corn-spirit whose fertilising power is in his tail.

"In Silesia, when the reapers gather round the last patch of standing corn to reap it they are said to be about 'to catch the Wolf.' In various parts of Mecklenburg, where the belief in the Corn-wolf is particularly prevalent, every one fears to cut the last corn, because they say that 'the Wolf is sitting in it'. Hence every reaper and every woman similarly fears to bind the last sheaf because 'the Wolf is in it.' So both among the reapers and the binders there is a competition not to be the last to finish.

"[To] the woman who binds [the last sheaf] they say, 'The Wolf is biting her,' 'She has the Wolf,' 'She must fetch the Wolf' (out of the corn). Moreover, she herself is called Wolf; they cry out to her, 'Thou art the Wolf,' and she has to bear the name for a whole year.

"The young woman who bound the last sheaf of wheat used to take a handful of stalks out of it and make 'the Wheat-wolf (http://en.wikipedia.org/wiki/Corn_dolly)' with them; it was the figure of a wolf about two feet long and half a foot high, the legs of the animal being represented by stiff stalks and its tail and mane by wheat-ears.

"This Wheat-wolf she carried back at the head of the harvesters to the village, where it was set up on a high place in the parlour of the farm and remained there for a long time. In many places the sheaf called the Wolf is made up in human form and dressed in clothes. Generally the Wolf is brought home on the last waggon with joyful cries.

"Again, the Wolf is supposed to hide himself amongst the cut corn in the granary, until he is driven out of the last bundle by the strokes of the flail. The men thresh the last sheaf till it is reduced to chopped straw. In this way they think that the Corn-wolf, who was lurking in the last sheaf, has been certainly killed.

"Sometimes it appears to be thought that the Wolf, caught in the last corn, lives during the winter in the farmhouse, ready to renew his activity as corn-spirit in the spring. Hence at midwinter, when the lengthening days begin to herald the approach of spring, the Wolf makes his appearance once more."

[Vexx]

Nice find.... I've not read the Golden Bough in decades.... its a good read for fantasy settings and D&D campaigns even if a fair amount of it is Victorian era pseudo-anthropology.

[dahl_moon]

I'm stunned speechless. I think I've just discovered the most probable source material for Hasekura's novels. And if I'm right, he couldn't have chosen from a richer source.

The Golden Bough (http://www.amazon.com/Golden-Bough-Dover-Value-Editions/dp/0486424928/ref=pd_bbs_sr_2?ie=UTF8&s=books&qid=1201542066&sr=8-2), by Sir James George Frazer, first published in two volumes in 1890. The Wikipedia entry for this book, which supposedly laid the foundation for modern anthropology, particularly in the study of "pagan" myths and magic, can be found here (http://en.wikipedia.org/wiki/The_Golden_Bough)

I'd give you a cookie, but I can't at the moment:( I had a feeling it was so, if we look back to the beginning. It really helps bring out your imagination, but also quite clearly shows how the "folk" religion came to affect the culture. Quoting from memory:
When the wheat was blowing in the wind, they called it "the Wolf is running."
When the wheat fell down because of the wind, they called it "the Wolf stepped on it."
When the harvest was poor, they called it "the Wolf ate it."

[Slice of Life]

Interesting find. Never heard of something like that before. But one should be careful to quickly file such customs away under "old pagan religion". The old European religions were AFAIK mainly polytheistic, with patheons of mostly human-like deities that stood outside of nature. The animistic idea of a "corn spirit" doesn't really fit there. These traditions might well be no more "religious" in origin than the belief in Rudolf the red-nosed reindeer.

I'm just saying that because there seems to be a tendency in "neo-pagan" movements to label everything as "old religion" what catches their interest. Much to the dismay of archaeologists and historians i assume.

It's good not to live on an island BTW, so the wolves could take their chance to come back.

[Vexx]

Actually, the OLD religions in england and the germanic/french territories (Kelt and related areas) were an older form of polytheism -- basically a two-tiered set of animism and polytheism.

That's the well from whence all the pixies, sprites, brownies, trolls, and other demi-gods ... as well as the harvest/fertility gods come from.. the "lesser" gods. It isn't exactly like Shinto but there's some strong parallels.

Yeah, its very difficult to parse out all the Victorian insertions of fanciful religion but there are a number of real celebrations in Europe that really are hundreds and hundreds of years old if you trace them (though often very few are aware of the pre-christian roots). And yes, historians are routinely dismayed :)

The Golden Bough suffers mightily from 19th C. Victorian delusions about such things :) so it has to be taken with lots of salt.

OTOH, its a *great* source for writing fiction like this (or using as a D&D source).

[Slice of Life]

Those Celtic, Germanic, Slavic lesser gods are the cousins of the Roman fauns or Greek satyrs. All these religions might have a common indo-european origin anyway. I wouldn't call their existence an animistic trait. They are numerous, but also individuals, separated from nature, like angels are. Of course, you can find animistic traits everywhere if you look (and argue) long enough. Doesn't Jesus materialize in bread and wine?

[Vexx]

Well.. actually I was referring to things like "the little people", pixies, brownies, the trolls, nature-spirits of that kind, the land of Faerie.

Not the Big Name religions you describe (and I agree none of those really might be considered remotely animist unless they're directly attached to some natural action like lightning bolts or thunderstorms) ... but the actual "pagan" (i.e. country rural) beliefs.:) That which you throw salt over your shoulder to appease ... or make taboos over.

[TinyRedLeaf]

I should clarify that when I wrote "pagan", it was in relation to the Catholic Church, which was supposed to be the official religion of Christian Europe during the Middle Ages. I believe it used to suggest witchcraft as well, which conjures all sorts of negative connotations, but for the most part, that is no longer the case today. I think it's difficult to pin down what pagan actually means. It could refer to any number of beliefs and practises derived from folklore. But that's just within Europe. In the wider world, anything that wasn't Christian could be considered pagan as well. From the Medieval European worldview, even world religions such as Buddhism and Hinduism would have been considered "pagan."


The Golden Bough suffers mightily from 19th C. Victorian delusions about such things so it has to be taken with lots of salt.

From what I understand, anthropologists today dismiss Sir James' theory that Christianity has its roots in the "pagan" belief of a "dying king that is reborn every year." Based on what little of the book I've read, the idea does sound like a great deal of wishful thinking.

But the belief in a "harvest spirit" that needs to be protected through the winter is not the product of Victorian fantasy. Apparently, it does indeed exist in various forms throughout Europe. In Cornwall, UK, (Thomas Hardy Country) it's known as "Crying the Neck (http://en.wikipedia.org/wiki/Crying_The_Neck)." There is even a popular folk-song based on the custom, "John Barleycorn (http://en.wikipedia.org/wiki/John_Barleycorn)." The making of corn dollies is also very well-documented. It is no longer connected to any religious belief, but survives today as a rural craft (http://www.strawcraftsmen.co.uk/faq_straw.html).

The fact that we've forgotten entirely about the custom is an indication of how far removed we are from rural life and traditions. I think this is part of the "change" that Horo felt in Episode 2. She sensed correctly that an era was passing and that her time was coming to an end. If people stopped believing in you, would a god still exist?

[Vexx]

Heh, that was the problem in an Original Star Trek episode... if no one believed in the gods they faded away (ref: Who Mourns Adonis?). Its campy Trek but posed an interesting question.

Pagan practices were equated to "witchcraft" or for that matter *any* sort of non-christian practice (unless it had been reformulated for Church purposes, like Christmas, Easter, All-Saints Day and other formerly pagan holidays) -- the Church at the time was *very* serious about total domination and eliminating *any* competition (I credit the Roman Empire mindset for that). A lot of herbalists, alchemists, and "country doctors" fell to the efforts to drive competition to extinction. Its one reason so much information has been lost over the millenia.

Aye... I keep trying to minimize my post size so I end up over-simplifying my explanations. The "country beliefs" or underlying village lore had little to do with the Big Name pantheons (even the Keltic versions). It was a whole "down home" system of goblins, gremlins, "little spirits", and things that went bump in the night to explain a very spooky world from the viewpoint of someone with no science background. Its one of the amusing appeals of Shinto to me since those beliefs have, to some extent, survived to present day even if people practice it with a wry smile.

Much of technology today might as well be "magic" or "full of spirits" to the majority of the population.... after all, whats an "electron" but some sort of "daemon" :)

[Vexx]

This was being discussed in the Image thread but I feel like the data belongs more over in this thread.

Pertaining the "Horo==whore in Finnish" joke meme.

I can find nowhere any validation that "horo" （ほろ） is related to the Finnish word for whore. The closest/only example is "huora" which would be rendered quite differently in Romaji (probably ふおら　hu-o-ra). The only other word is "hitto" which is even less coincident in pronunciation or writing.

huora † a female prostitute, whore note useful when insulting a woman by calling her Saatanan huora, literally Devil's whore. The verb for calling someone with the name whore is huoritella. (from the Alternative Finnish Dictionary)

Hitto, probably from pagan (http://uncyclopedia.org/wiki/Paganism) origin, is a considerably mild swear word, but still considered an expletive. Also used in a diminutive form "hittolainen". It is a reference to a sacred chamber or honeymoon site, or a mythical being hiisi (http://uncyclopedia.org/index.php?title=Hiisi&action=edit) associated with them (and possibly Hittavainen (http://uncyclopedia.org/index.php?title=Hittavainen&action=edit)). It can nowadays be translated as "succubus tramp whore" or some other little hellish being, like Ann Coulter (http://uncyclopedia.org/wiki/Ann_Coulter).
The Uncyclopedia is a very funny wiki if you like that sort of thing...

I've found a few implicit references for the Ainu word for "wolf" but most of them are under the JSTOR locked down documentation and a pain to extract. The only direct online reference I've found is "While his name is Ainu for 'Wolf'," describing Horo of the Shaman King in the IMDB database -- hardly proof. Its been amazing difficult to find anything converted on the Internet about Ainu (which is sad)... a problem I noticed when researching Utawarerumono the other year.

So... although it may be funny to some and possibly an interesting way to insult her (many people as children get their names twisted into something insulting), there's very little evidence of an actual connection. I could imagine someone from the Church in the story calling Horo a "hitto" if he were from the far north though :)
:)

[Sam the Onion]

This was being discussed in the Image thread but I feel like the data belongs more over in this thread.

Pertaining the "Horo==whore in Finnish" joke meme.

I can find nowhere any validation that "horo" (ほろ) is related to the Finnish word for whore. The closest/only example is "huora" which would be rendered quite differently in Romaji (probably ふおら　hu-o-ra). The only other word is "hitto" which is even less coincident in pronunciation or writing.




The Uncyclopedia is a very funny wiki if you like that sort of thing...

I've found a few implicit references for the Ainu word for "wolf" but most of them are under the JSTOR locked down documentation and a pain to extract. The only direct online reference I've found is "While his name is Ainu for 'Wolf'," describing Horo of the Shaman King in the IMDB database -- hardly proof. Its been amazing difficult to find anything converted on the Internet about Ainu (which is sad)... a problem I noticed when researching Utawarerumono the other year.

So... although it may be funny to some and possibly an interesting way to insult her (many people as children get their names twisted into something insulting), there's very little evidence of an actual connection. I could imagine someone from the Church in the story calling Horo a "hitto" if he were from the far north though :)
:)

Just thought that I should help to clear some of this as a finn.

Horo is a widely known slang term for huora. Basicly the difference is that horo is worse. (Like butt being huora and ass being horo. Yeah we can call whores even worse :eyespin:) You won't find it in any real encyclopedias but everybody knows what it is.

And hitto is directly translated into damn. That uncyclopedia article for 'nowadays' translation is either untrue or something that only those that study finnish literature would know.

It's not common in anime to find something that is something complitely different in finnish. Mostly these just cause slight snickering and can be thrown away easily. I didn't think for one second that Horo and horo had something in common.

Horo is not a real word so there is nearly zero changes the author would have known it unless he/she (can't bother to check) would have visited Finland and found out it by him/herself. Hope this clears some things up.

[Vexx]

Thanks for the enlightenment .... I think the author *intended* that he was using the Ainu word for wolf and probably had no idea that it meant something else in Finnish slang.

I read a story about writing for the Star Trek series and they were *always* running into disaster with "Made Up Words or Names" that turned out to mean something filthy in another language.

But given that there's a direct explanation for the source of the name *in* the author's home of Japan, I'll go with that until I discover better data. :) Basically the whole thing reminds me of the type of people who snicker when someone says "tool".

[TinyRedLeaf]

I don't know about Star Trek, but Singaporeans had a snickering "good" time when Star Wars Ep I first arrived to our shores.

"I'm the ruler of Naboo."

"Oi! Why you scold my mother?" (ie, "WTF?! Why are you swearing at my mother?")

"Na" is the local slang for "you/your", with extremely rude connotations, while "boo" means "mother." "Naboo" basically means "f*ck your mom" over here in Singapore. :D
Meanwhile, back on topic:

==============================

"When I first started out, all merchants seemed like monsters to me."
— Lawrence, Episode 2, “Wolf and Distant Past”

A hated parasite
Somewhere inside the generic discussion thread, I've highlighted how Confucianist East Asia tended to despise merchants. It is pertinent to point out that merchants were not very highly regarded in Medieval Europe either.

The old, feudal model of society was dominated by the concept that there were three divinely ordained orders: knights, clergy, and peasants. Each of these groups had a role to play, either defense of the realm, maintenance of the soul of society, or the growing of essential foodstuffs.[1]

The merchant, as a class, was hated for not contributing to these essential duties, but rather for aiming to get rich himself. His pursuit of gain was considered against the laws of God, because he was not a producer of real goods, but rather a resaler, or a usurer (someone who charges interest on loans). He was considered a parasite and a sinner, barely tolerated for his questionable contribution to society's output.

The merchant, during this transitional period, had to contend for respect and honor with the nobility and the knighthood, which stood at the head of medieval civic society. The nobility cultivated a disdain for the petty details of moneymaking and money-saving and prided themselves on their ability to spend, to be showy and magnanimous. These qualities were directly at odds with the careful attention to profit and loss which characterised the commercial man.

The traditional role of the merchant in popular literature reflected their lost status. In moral tales, they are subjected to a variety of tortures in hell, or dreams, as a result of their "evil" way of life.

The rise of commerce
Nonetheless, medieval society increasingly came to rely upon the merchant's services in distributing and obtaining items not produced locally. This reflected the rising commercialism that developed during the so-called High Middle Ages (roughly between the 1000s to 1300s).

Bear in mind that prior to this period, Christian Europe was essentially a feudal economy where a noble's wealth is entirely dependent on territorial property. However, the Crusades produced a powerful economic effect. Knights and nobles had to sell many of their possessions to merchants in newly developing towns, to raise cash for their military expeditions.[2]

The growing independence of the towns and its merchants acted against the power of the landed aristocracy. As the towns grew bigger, people began specialising in various crafts, which widened the scope of commerce between the towns and the countryside.[3] This in turn led to improved methods of transportation and communication, which facilitated the growth of international trade.

By the Late Middle Ages (1300s to 1500s), the merchant class had become very rich, often intermarrying with impoverished members of the nobility, and they held positions of power in civic government. Merchants dressed more elaborately, were housed more elegantly, and enjoyed greater entertainment than most of their fellow citizens. Even so, they never completely overcame the general contempt for the way in which they acquired their wealth.[1]

==============================

References:
[1] Medieval Merchant Culture (http://www.brown.edu/Departments/Italian_Studies/dweb/society/structure/merchant_cult.shtml)

[2]The Middle Ages (http://socserv2.mcmaster.ca/~econ/ugcm/3ll3/ingram/ingram03.html)

[3]Muck and Misery in the Middle Ages (http://www.thinkinghistory.co.uk/Issues/IssueSocialMA.html)

[Valentine]

Pagan practices were equated to "witchcraft" or for that matter *any* sort of non-christian practice (unless it had been reformulated for Church purposes, like Christmas, Easter, All-Saints Day and other formerly pagan holidays) -- the Church at the time was *very* serious about total domination and eliminating *any* competition (I credit the Roman Empire mindset for that). A lot of herbalists, alchemists, and "country doctors" fell to the efforts to drive competition to extinction. Its one reason so much information has been lost over the millenia.
Are you sure about that? Apart from the repurposed pagan holidays, I've always understood this to be just the fantasy of modern-day neo-pagans. Belief in witchcraft was actually considered heresy for most of the time the church was spreading throughout Europe - it certainly wasn't something the church was actively trying to get rid of at the time. I've never heard of the church getting rid of herbalists and so on either except in the 'burning times' type neo-pagan versions of history.

[Vexx]

Hmm.... the preferred method of "christianizing" a tribe or kingdom was to convert the leadership by persuasion or threat. The population was *commanded* to convert. What followed was often a lengthy cultural destruction or assimilation of any prior belief system. It is true the usual charge was "heresy" -- promulgated in trumped up charges against anyone who 'disturbed the new order of things'. Midwives were often targets, local festivals were at best suspicious, even monks had to be careful about how they did their research.

Most of the time it wasn't a top-down coordinated effort .. but more like what you see in extremist Islam ... many instances of local leadership going completely overboard in their zealotry (like the recent case of the journalist female sentenced to death by a Sharia court for downloading a file off the internet that criticized treatment of women in Afghanistan). What histories have you read that didn't include references to the Church forcefully eliminating any competition while in its expansion during the latter Dark Ages and Early Middle Ages?

In some regard, it was a replay of the Roman Imperial drive to destroy the culture of the Kelts hundreds of years earlier while expanding into Western Europe.

[Valentine]

What histories have you read that didn't include references to the Church forcefully eliminating any competition while in its expansion during the latter Dark Ages and Early Middle Ages?
Sorry, I should have been clearer, anything I've read suggests that more of Europe was converted by the sword than not. It was the "pagans as witchcraft" thing I was wondering about - as you said heresy would have been the usual charge for pagans rather than witchcraft, and your clarification that you were talking about the actions of local churches rather than a concerted effort by the whole church was more in line with what I've read. My misinterpretation there, I think.

Incidentally, why do you spell it Kelt instead of Celt? I don't think I've seen that used as the modern spelling before.

[Vexx]

It is pronounced with a "hard k" sound rather than a "soft C" .... and is an accepted 'alternate' spelling for a word that wasn't originally English anyway :)


Unfortunately, so many people see the "Celt" and pronounce it "selt" that many scholars of Scots/Irish and other European pre-Roman cultures resort in desperation to the "Kelt" spelling just so people will stop "selt-ing" ... no thanks to the so-named Boston Celtics.

[Valentine]

Ah right, I suppose that makes sense. I live in Ireland, and the word is in common enough use here that mistaken pronunciation isn't really a problem. :)

[Vexx]

aye... I live in a place where its nearly impossible to underestimate the stupidity in the general population :)

[TinyRedLeaf]

What does spice signify within the context of the title? I can't figure out what it's referring to. Is it literally a spice? If so, how does a spice figure into the story?


"Pepper. Do you have pepper? It's light and it won't be unwieldy. It will be winter soon, and if there are more meat dishes, the price will rise."
— Spice and Wolf, Episode 6, "Wolf and Silent Farewell"

Spice up your life
A spice is a dried seed, fruit, root, bark or vegetative substance used in nutritionally insignificant quantities as a food additive for flavoring, and sometimes as a preservative by killing or preventing the growth of harmful bacteria.[3]

Spices were among the most luxurious products available in Europe in the Middle Ages, the most common being black pepper, cinnamon, cumin, nutmeg, ginger and cloves. They were all imported from plantations in Asia and Africa, which made them extremely expensive. From the 8th until the 15th century, Venice had the monopoly on spice trade with the Middle East. The trade made the region phenomenally rich.

It has been estimated that around 1,000 tons of pepper and 1,000 tons of the other common spices were imported into Western Europe each year during the Late Middle Ages. The value of these goods was the equivalent of a yearly supply of grain for 1.5 million people.

Black gold
Black pepper (piper nigrum) is a flowering vine in the family Piperaceae, cultivated for its fruit, which is usually dried and used as a spice and seasoning. The same fruit is also used to produce white pepper, red pepper and green pepper.[4]

A popular modern-day misconception is that medieval cooks used liberal amounts of spices, particularly black pepper, to disguise the taste of spoiled meat. However, a medieval feast was as much a culinary event as it was a display of the host's vast resources and generosity. As such, the use of ruinously expensive spices on cheap, rotting meat would have made little sense.

Historically, dried ground pepper is one of the most common spices in European cuisine and its descendants, having been known and prized since antiquity for both its flavour and its use as a medicine. Lawrence was most probably buying this type of pepper in Episode 6, but this is debatable, as Horo was referring to red pepper in Chapter 5 of the manga.

Pepper has been used as a spice in India since prehistoric times. Its most important source was India, particularly the Malabar Coast, in what is now the state of Kerala. Until well after the Middle Ages, virtually all of the black pepper found in Europe, the Middle East, and North Africa travelled there from India's Malabar region.

The preciousness of pepper and other spices encouraged European efforts to find a sea route to India and consequently to the European colonial occupation of that country, as well as the European discovery and colonisation of the East Indies and the Americas.

“We seek Christians and spices”
In 1498, Vasco da Gama of Portugal became the first European to reach India by sea. When the Arabs in Calicut (who spoke Spanish and Italian) asked why they had come, de Gama’s representative replied, "We seek Christians and spices." Though this first trip to India by way of the southern tip of Africa was only a modest success, the Portuguese quickly returned in greater numbers and used their superior naval firepower to gain complete control of trade on the Arabian sea.[4]

The Portuguese proved unable to maintain their stranglehold on the spice trade for long. The old Arab and Venetian trade networks successfully smuggled enormous quantities of spices through the patchy Portuguese blockade, and pepper once again flowed through Alexandria and Italy, as well as around Africa. By the 17th century, the Portuguese had lost almost all of their valuable Indian Ocean possessions to the Dutch and the English.

Going Dutch
By the end of the 16th century, the highly profitable sea trade routes between Europe and Asia had been established and dominated by the Portuguese. In 1596, a group of Dutch merchants from the Dutch East India Company (Vereenigde Oostindische Compagnie or VOC in old Dutch spelling, literally "United East Indian Company") decided to circumvent the Portuguese monopoly.[5]

The Dutch East India Company was established in 1602. It was the first multinational corporation in the world and the first company to issue stock. In addition, the VOC possessed quasi-governmental powers, including the ability to wage war, negotiate treaties, coin money, and establish colonies.

In 1596, a four-ship VOC expedition established contact with Indonesia. The expedition reached Banten, the main pepper port of West Java, where they clashed with both the Portuguese and indigenous Indonesians. Half the crew were lost before the expedition made it back to the Netherlands the following year, but with enough spices to make a considerable profit.

By 1603, the first permanent Dutch trading post in Indonesia was established in Banten, West Java and in 1611, another was established at Jayakarta (present-day Jakarta).

But a new competitor soon entered the fray — the British East India Company.

The Company
Like the VOC, the British East India Company (“the Company”) was an early joint-stock company with similar powers to wage war and establish colonies.[6]

The Company was founded by a variety of enterprising and influential businessmen in 1600. They obtained the Crown's charter for exclusive permission to trade in the East Indies for a period of 15 years.

Initially, however, the Company made little impression on the Dutch control of the spice trade because it did not have a lasting outpost in the East Indies. Eventually, ships belonging to the Company arrived in India, and established a trade transit point at Surat in 1608. Within the next two years, it built its first factory (ie, a trading post) in the town.

From this foothold, the Company began spreading its activities throughout India and the East Indies. It eventually ruled India with a private army of 260,000 native troops (twice the size of the contemporary British Army).[2] It encountered severe VOC hostility that triggered the Anglo-Dutch Wars, fought over access to spices. The English eventually gained control of all Dutch colonies in the East Indies after Napoleon conquered the Netherlands in 1810.[7]

Competitive advantage
The company’s past is often more dramatic than its present. Early businessmen took risks with their lives as well as their fortunes. Send a fleet to the Spice Islands at the beginning of the 17th century, and you might be lucky if a third of the men came back alive. This was a time when competitive advantage meant supplying an English lady for the sultan’s harem and when your suppliers might put your head on a stick.

On hindsight, companies have become more ethical: more honest, more humane, more socially responsible. In contrast, the early history of companies was often one of imperialism and speculation, of appalling rip-offs and even massacres.

The company has been one of the West’s great competitive advantages. It has rendered human effort productive. Companies increase the pool of capital available for productive investment. They allow investors to spread their risk by purchasing small and easily marketable shares in several enterprises. And they provide a way of imposing effective management structures on large organisations.[2]


=============
References:
[1] Spice: The History of a Temptation, Jack Turner, Vintage (2005) (http://www.amazon.com/Spice-History-Temptation-Jack-Turner/dp/0375707050/ref=sr_1_1?ie=UTF8&s=books&qid=1203322940&sr=8-1)

[2] The Company: A Short History of a Revolutionary Idea, Micklethwait & Wooldridge, Phoenix (2003) (http://www.amazon.com/Company-History-Revolutionary-Library-Chronicles/dp/0812972872/ref=sr_1_1?ie=UTF8&s=books&qid=1203330497&sr=8-1)

[3] Spice (http://en.wikipedia.org/wiki/Spice)

[4] Black pepper (http://en.wikipedia.org/wiki/Black_pepper)

[5] Dutch East India Company (http://en.wikipedia.org/wiki/Dutch_East_India_Company)

[6] British East India Company (http://en.wikipedia.org/wiki/British_East_India_Company)

[7] The Anglo-Dutch Wars (http://en.wikipedia.org/wiki/Anglo-Dutch_Wars)

[creamyhorror]

A late observation:

The system mentioned in episode 2 is more complex than mere "bartering" (in the historical sense of the word). The term the anime uses, kawase (為替), refers specifically to a system of credit notes, according to Japanese Wikipedia　(although it can also refer to modern monetary exchange). While I don't think credit notes were specifically mentioned in the show, I think they're implied in the very system. The basic idea is that merchants are credited by companies with a certain paper value for their goods, which they can redeem from the company in the form of other goods at other locations. I think a "credit system" would be a better term for this.