Nephew Hong and his friends traveled into the jungle with the local men and learnt to hunt for their own food. As they journeyed farther into the interior, he saw red rattan fruits, porcupines, monkeys, and bats. When they returned to the longhouse village, Ladong showed him animal furs and horns of birds or stags.
Six months later, Captain Hong returned to Igan with a full load of merchandise. His trade in China was a huge success and the net profit he received was three times the cost of the cargo. He invited Ladong for a drink on the beach with him.
The Captain said, "You see, my friend. Your participation in my business has brought me good luck. I have returned with more profit than I originally expected."
The Chief squared his shoulders and smiled wide. He said, "How much is my people's share of the profit."
Nephew Hong unfurled a scroll filled with Chinese characters and pointed each out to Ladong as he read out, "The total sales revenue of the cargo is 40,000 beads. After we set aside the original cost of 10,000 beads for the cargo, we have a profit of 30,000 beads.
| Sales | 40,000 beads |
| Cost of Cargo | [ - ] 10,000 beads |
| Profit | 30,000 beads |
Ladong nodded. "Then a one tenth share means my people and I get 3,000 beads."
"Yes," Captain Hong said as he raised his cup for a toast. "We did excellently, my friend. Let us drink to our partnership. May it continue for many generations."
Ladong responded with a raised cup and a laugh. In the following days, his people used their new found wealth to buy jars, silver bells and more cloth from Hong. Based on his nephew's feedback, Hong again went into discussion with Ladong about the prices to set on other produce such as bezoar stones from the bellies of monkeys and porcupines, red dye from ripe rattan fruits and ikat woven cloth.
When Captain Hong again set sail to follow the trade winds to other lands, the younger Hong and five men offered to stay behind. They built huts for themselves and their new wives as well as storage houses for the produce that the people brought to them for trade. Soon news began to spread into the interiors about strange men who would trade wonderful things for jungle produce, and more things poured into the storehouses. To avoid scuffles and rowdiness, the younger Hong began to pay 10% of all his profits to Ladong as a form of tax to gain his protection.
Business thrived as everyone made full use of their skills to find or make products to sell. They were disappointed that Young Hong was not interested in buying human heads, but at least he was partial to animal furs.
When Captain Hong again returned to the coast, he was pleasantly surprised to see the full storehouses. He was also very proud of the things his nephew had done.
Note:
International trade exists because different cultures have different needs and surpluses. Value is created by the prices that people are willing to pay for a service or a product. Hence value is based on functionality. For example, most modern supermarkets now carry produce from many parts of the world. As you walk down the aisles and study the shelves, you will see rows and rows of familiar or exotic products. If you don't like blue cheese, then you will not buy it regardless of the price, but if you like it then you will put it in your cart at least once in a while.