A Splendid Exchange: How Trade Shaped the World

by William J. Bernstein

The sea route was cheaper, safer, and faster than overland transport, and in the premodern world had the added advantage of bypassing unstable areas.

Today, the most ordinary cargoes span such distances with only a modest increase in price. That the efficient intercontinental transport of even bulk goods today seems so unremarkable is in itself remarkable.

travelers in the medieval Muslim world required a rafiq, or companion, usually another trader.

For most of recorded history, the primary manufactured trade commodity was cloth.

Although world trade grew in tandem with the technological innovations of land and sea transport, political stability was even more important.

Stable countries are trading countries.

rescuing the slow, large, and defenseless camel from the brink of oblivion, reaped similar rewards.

the progenitors of the modern camel (along with the horse) originated in North America and migrated east across the Bering Strait land bridge to Asia.

1493 with Christopher Columbus's second voyage, which would turn the agriculture and the economies of both the Old World and the New World upside down.

none had more immediate impact than the pig.

The advent of the refrigerated ship late in the nineteenth century

potato and corn, changed the diet of Europe.

"Globalization," it turns out, was not one event or even a sequence of events; it is a process that has been slowly evolving for a very, very long time.

the recent wealth of the modern world was underpinned by the development of property rights, rule of law, capital market mechanisms, and scientific rationalism-at

In the language of economics, human well-being is affected not only by the mean (the prosperity of the average citizen) but also by the variance (the increasing dispersion between rich and poor). In plainer English, the incentives and equal opportunity afforded by free trade simultaneously improve the overall welfare of mankind and increase socially corrosive disparities of wealth. Even if trade slightly improves the real income of those at the bottom, they will feel the pain of economic deprivation when they fix their gaze at the growing wealth of those above them.

"mean" and "average" have of late begun to carry their own i...

"trilemma" of trade-to trade, to raid, or to protect.

Vasco da Gama outflanked the Muslim "blockade,"

Ultimately, two deceptively simple notions anchor this book. First, trade is an irreducible and intrinsic human impulse, as primal as the needs for food, shelter, sexual intimacy, and companionship. Second, our urge to trade has profoundly affected the trajectory of the human species.

The messages we receive from [the] remote past were neither intended for us, nor chosen by us, but are the casual relics of climate, geography, and human activity. They, too, remind us of the whimsical dimensions of our knowledge and the mysterious limits of our powers of discovery.-Daniel BoorstinI

The mace-a

Thus was born the arms race, which to this day relies on exotic metals obtained through commerce.-

obsidian,

Herodotus also described similar sewn-skin vessels carrying wine "stored in casks made of the wood of the palm-tree." The ships were "round, like a shield," made of hide, and propelled by two Armenian merchants down the Euphrates to Babylon.

The largest of these boats carried about fourteen tons

ancient equivalent of Las Vegas-a

ancient Mesopotamia was far worse.

This cradle of ancient civilization was, however, nearly completely devoid of the era's strategic materials: metals, large timbers, and even stone for building.

The very survival of Mesopotamia's great nations-the Sumerians, Akkadians, Assyrians, and finally the Babylonians-hinged on the exchange of their surplus food for metals from Oman and the Sinai, granite and ma...

around 2000 BC, increasing copper supplies devalued the metal.

The businessmen who ran the trade in metals and grain, the so-called alik-Dilmun (literally, "go-getters of Dilmun"), had to purchase massive amounts of agricultural products and then outfit and man ships large enough to transport them to Dilmun.

by 2000 BC long-range Sumerian commerce had fallen largely into private

the Phoenicians took over the Red Sea trade.

is likely that the Phoenicians were the first people to engage in direct long-distance trade. The first book of Kings records:

By 400 BC, most of the western European coastline, as well as the coasts of both eastern and western Africa, were familiar to the Phoenicians.30

Darius the Great completed a canal at Suez

Alexander the Great's

canal across the Suez

Herodotus records that Necho's attempt resulted in the deaths of more than 120,000 conscripts.

The channel between Great Bitter Lake and the Gulf of Suez was shallow and tenuous; a brisk east wind combined with a low tide often rendered it high and dry. (Such a circumstance could easily have afforded Moses and his followers their probably mythical crossing. Shortly thereafter the water could have swallowed up the pursuing Egyptians.

Pax Romana, the environment of stability in which ancient long-range trade blossomed.

so-called "ballast goods" such as wine, lumber, and even jugs of water were traded in great volume.

What investment banking is to the ambitious and acquisitive today, the pepper trade was to the Romans-the most direct route to great riches.

Roman decadence, mirrors what is commonly understood today: that the East-West trade contributed to the fall of the Roman Empire by draining it of its gold and silver to pay for fleeting luxuries.

Not only did Italy consume more than she produced, not only was Rome a city and Latium a district poor in manufactures ... but the Empire taken as one unit was often unable to offer to foreign regions in general and to oriental nations in particular sufficient products of its own to balance the articles imported from them in large quantities, and the result of this was the draining away from the Empire of precious metals in the form of coined money without any adequate return

While silver flowed east, gold from India moved west in impressive quantities.

"There was no imbalance of trade-East-West, North-South, Europe-Asia, or otherwise-for which monetary resources had to flow in compensation. There was just trade. "41

just as the cultural and institutional foundations of Western civilization first saw the light of day in ancient Greece, so did the obsession of the modern West with the control of vital sea lanes and strategic maritime choke points derives from Greece's unique agricultural and geographic configuration, which left it dependent on imported grain.

Thus the Greek farmer depended on trade not only to feed his family, but also to allow him enough excess income to afford the time and resources needed for participation in the assembly and in the basic local military unit, the hoplite formation.5

Arabian trade diasporas thousands of miles from their homeland.