Problem
Neoclassical economics posits that trade based on voluntary exchange yield gains to each party and is therefore preferred. It is argued that the trade would not occur if it was not mutually advantageous. Neoclassical economics, therefore, concludes that free trade is much preferred to protectionism ( placing high tariffs and restrictions on import goods that compete directly with local producers of the same good) and mercantilism (trade only between mother country and colonies).
In 1624, history has it that the Lenape people, one of two Indigenous peoples that inhabited the greater New York area in the 17th century, exchanged the entire island of Manhattan measuring 13.4 miles by 2.3 miles at its widest for the equivalent of glass beads, mirrors, and metal tools worth approximately 60 Dutch guilders. The Dutch people had settled the region of Lower Manhattan and established a trading post called New Amsterdam, purchasing animal pelts from the Native Americans in exchange for manufactured goods (guns, gunpowder, bullets, metal axes, knives, glass, metal fish hooks, etc.). The trade-n beaver belts was lucrative. Native Americans received goods they could not produce on their own and the Europeans sold the beaver belts for high prices in Europe to make fur goods because fur being animals in Europe had been overhunted and were scarce. Dutch Governor Peter Minuit formalized the purchase of the entire island by exchanging the equivalent of 60 Dutch Guilders of trade goods. The equivalent value of 60 Dutch Guilders is approximately US$1000 in present-day value. After the formalization of the land purchase, the Dutch were able to fortify the island.
In 1667, the Dutch ceded New Amsterdam/ New York (the island of Manhattan and Brooklyn) to the British in exchange for the colony of Suriname located on the Northeast coast of South America, a colony that a major sugar producer and considered much richer and desirable that New Amsterdam. The area of Suriname is 64,000 square miles in rich in gold, diamond, bauxite, forested lands, and rich agricultural lands whereas Manhattan is 22.7 square miles and has thin soils, no minerals, but a massive granite bedrock)
Explain how the Lenape People benefited from the exchange made with the Dutch settlers and how the Dutch settlers benefited from purchasing the land. Does the axiom of voluntary exchange being beneficial to both parties hold in this case or was it violated and how or why? Does the axiom hold only if we place ourselves back into the conditions of 1624 and not judge from a distant historical perspective and the knowledge of all that has transpired since then, (ie. the Lenape people now live on reservations in Oklahoma and Manhattan is now constitutes some of the world's most expensive real estate ($5.7 million per acre) and New York is the financial capital of the entire world with the largest investment banks and the world's largest stock exchange worth 27.7 trillion).
Similarly, do you think the English benefited from the land exchange in 1667? Why? Do you think the Dutch benefited from the land exchange in 1667? Why?