Evolutionary anthropologists date the origins of modern human behavior in eastern and southern Africa to around 100,000 years ago.13 One of these behaviors, the innate tendency to “truck and barter,” has yielded an ever-increasing volume and variety of goods. Although world trade grew in tandem with the technological innovations of land and sea transport, political stability was even more important. For example, soon after Octavian’s forces defeated those of Anthony and Cleopatra at the battle of Actium in western Greece in 30 BC and greatly expanded the ambit of the Roman Empire, Rome was flooded with pepper, exotic animals, ivory, and precious jewels from the Orient. Chinese silk was the most famous and coveted of these new commodities, yet no native of the Italian peninsula had ever met a Chinese person, and, as we’ve already seen, even Roman cartographers were unaware of China’s precise location. Then, just as rapidly as the trade between Rome and the East had swelled during the early empire, it abruptly decreased to a trickle as Rome began a long decline after the death of Marcus Aurelius in the late second century. The silk of Elagabalus was in fact one of the rare luxuries to arrive from India after that period.
The dramatic increase in long-distance trade following the battle of Actium and its waning two hundred years later had nothing to do with changes in maritime technology. Certainly, the Roman, Greek, Arab, and Indian traders who plied the Indian Ocean trade routes did not suddenly lose their maritime abilities after the reign of Marcus Aurelius.
Now consider the contribution of trade to our planet’s agricultural bounty. Try to imagine Italian cuisine without the tomato, the highlands around Darjeeling without tea plants, an American table without wheat bread or beef, a café anywhere in the world beyond coffee’s birthplace in Yemen, or German cooking without the potato. Such was the world’s limited range of farm produce before the “Columbian exchange,” the invasion of billions of acres of cropland by species from remote continents in the decades following 1492. How and why did this occur, and what does it tell us about the nature of trade?
During the seven centuries between the death of the Prophet Muhammad and the Renaissance, the Muslim states of Europe, Asia, and Africa outshone and towered over western Christendom. Muhammad’s followers dominated the great conduit of long-range world commerce, the Indian Ocean, and in the process spread his powerful message from west Africa to the South China Sea. Then, with breathtaking speed, a newly resurgent West took control of global trade routes in the decades following the first roundings of the Cape of Good Hope by Bartholomew Diaz and Vasco da Gama. Can we understand these events under the larger banner of the history of trade?
The great national trading organizations, particularly the English and Dutch East India companies, spearheaded Europe’s commercial dominance and made world trade the nearly exclusive province of large corporate entities and, in the twentieth century, of the multinational corporation. Today, these organizations—fountainheads of Western, and particularly American, cultural and economic dominance—are often objects of virulent resentment and animosity. What are the roots of the modern international corporate giant, and is today’s trade-related cultural conflict, with its rampant anti-Americanism, a new phenomenon?
The world’s increasing dependency on the continuous flow of trade has made us both prosperous and vulnerable. A major disruption of the Internet would wreak havoc in the international economy—an amazing circumstance, considering that its widespread use is merely a decade old. The developed world has become addicted to fossil fuels from the world’s most unstable nations, the greatest share of which flows through a single narrow strait guarding the entrance to the Persian Gulf. Does the history of trade offer us any landmarks that can guide us through these dangerous waters?
Today’s conventional wisdom has it that the communications and transportation revolutions of the late twentieth century have for the first time brought nations around the world into direct economic competition with each other. We shall see, however, that this is nothing new. In previous centuries, this leveling—the “flattening” of the world—produced both winners and losers, who, not unsurprisingly, tended, respectively, to favor or oppose this process. What does the history of previous trade revolutions tell us about today’s titanic political struggle over globalization?14
How, then, did we get from the world of the ancient silk trade and the Geniza papers, in which the trader’s job was so solitary, expensive, and heroic that only the most precious of cargoes paid their way, to the modern corporate world of wines from Chile, cars from Korea, and apples from New Zealand?
Stable countries are trading countries. Commerce between Rome and East Asia took off after Octavian’s victory at Actium and ushered in nearly two centuries of relative peace throughout the Mediterranean and Red Sea trade routes. While the Romans controlled, at most, the western third of the route between Alexandria and India, their influence was felt as far east as the Ganges.
Although individual merchants rarely carried goods all the way from India to Rome, there were frequent face-to-face diplomatic contacts between various Indian states and Rome. Within a few years of Octavian’s ascension as Augustus, Indian rulers honored him with elaborate embassies and wondrous gifts—snakes, elephants, precious gems, and gymnasts, all of which the emperor exhibited at home—and in India itself, temples were built to honor him. Most significantly, Roman citizens were granted free passage through much of the subcontinent; an archaeological site excavated near Pondicherry between 1945 and 1948 revealed evidence of a Roman trade colony that had functioned until about AD 200.15
Local goods in India were purchased with durable gold and silver coins, each dated by the image of the emperor. Caches of these coins are still being discovered in south India, offering us a glimpse of trade patterns two thousand years ago. They include gold and silver coins from the reigns of Augustus and Tiberius (27 BC to AD 37), suggesting a vigorous trade in a large volume of goods. After the death of Tiberius, the composition of the Indian coin caches changes. Significant numbers of only gold, but not silver, coins bearing the heads of Caligula, Claudius, and Nero (AD 37–68) are found. According to the historian E. H. Warmington, this absence of silver coins suggests a trade mainly in luxury goods during that period. Few Roman coins of any type are found after the death of Marcus Aurelius in AD 180.16 When Roman and Han authority finally collapsed around AD 200, trade with the East came to an almost complete standstill.
The other great advance in commerce during this period came from Greek sailors who exploited the summer southwest monsoon of the western Indian Ocean. Initially, the Greeks used the monsoons, which drove them out into the open sea, merely to avoid pirates off the Persian coast. By about 110 BC, however, they were making the treacherous summer blue-water passage directly east across the Arabian Gulf from the Red Sea entrance at Bab el Mandeb to India’s southern tip and beyond in just under six weeks, one thousand years before the Chinese invented the magnetic compass. Legend has it that a navigator by the name of Hippalus “discovered” the Arabian Gulf trade winds (hence the origin of the term), although they were undoubtedly also well known to Indian and Arab sailors. The willingness of the Greeks to drive themselves directly across vast open stretches of the Indian Ocean before the terrifying seasonal monsoons, rather than creep along thousands of miles of endless coasts, was a major factor in the expansion of long-range maritime trade.
After clearing Bab el Mandeb in late spring or late summer, the mariner headed east on the following wind. If his goal was the Indus basin (in present-day Pakistan), he might steer north, and if he was heading to the Malabar Coast in southwestern India, he might steer south. Midsummer, when storms were the fiercest, was generally avoided, and the Malabar route held the additional risk of passing south of the subcontinent, usually a fatal mistake. The return journey on the cool and relatively calm northeast monsoon was safer; missing the Bab el Mandeb by even a wide margin to the north or south could be more easily tolerated, since that took the sailor to shelter and supplies in either A
rabia or east Africa.
The Greek traders of Ptolemaic Egypt had the additional advantage of metallurgical expertise, enabling them to bind their ships with iron nails. (The timbers of early Arab and Indian vessels were stitched together with coconut fiber, which fell apart in rough seas.) Nailed hulls proved critical during the southwest summer monsoon, whose ferocious storms would occasionally tear apart even the most solidly bound vessels. Until the nineteenth century brought the clipper ship and steam, the seasonal dance of the monsoons—southwest in summer, northeast in winter—would dictate the annual rhythm of trade in the Indian Ocean.
If man’s innate desire to challenge nature at sea paid handsome dividends, his decision to do so on land, by rescuing the slow, large, and defenseless camel from the brink of oblivion, reaped similar rewards. Already extinct in North America, and quickly headed for extinction in Eurasia, the camel was first valued, about six thousand years ago, solely for its milk. Not until twenty-five hundred years later, around 1500 BC, would humans begin to exploit the camel’s ability to carry hundreds of pounds of cargo across otherwise impenetrable territory. Without the domestication of the camel, the trans-Asian silk and trans-Arabian incense routes would have been impossible.
It is a little-known fact that 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. Although swift herds of camels or horses might manage the perilous journey from the heartland of North America to that of Eurasia in a matter of decades, it was a much tougher trek for fragile plant species from a temperate area. Such plants had little chance of surviving an accidental intercontinental journey via ocean currents or thousands of years of haphazard migration across the frigid land bridge from their North American habitat to a similar one in Eurasia. Thus, whereas animal species might migrate across the Bering Strait during the ice ages, crop species could not.
That all changed in 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. Columbus’s seventeen vessels were Iberian Noah’s arks, carrying to the New World around 1,300 colonists and nearly the entire Western inventory of crops and domesticated animals. They spread like wildfire. Even exchanges of “minor” crops—squashes, pumpkins, papaya, guava, avocado, pineapple, and cocoa from the western hemisphere; and grapes, coffee, and a battery of fruit and nut trees from Europe—assumed major economic importance.
Of all the plant and animal passengers on the second expedition, none had more immediate impact than the pig. Far closer in appearance and temperament to the mean, lean, fast wild boar than to the modern farm hog and capable of transforming 20 percent of feed weight into protein (versus only 6 percent for cattle), these prolific herbivores fed voraciously on the New World’s plentiful tropical grasses, fruits, and roots. Further, large predators had nearly disappeared from both North and South America following the arrival of the first native Americans, and no serious diseases threatened the animals. In such a paradise, the pigs soon became independent of the expedition’s swineherds and multiplied swiftly, not only on Hispañola (the object of the 1493 expedition, the island containing modern-day Haiti and the Dominican Republic) but also on Cuba and Puerto Rico, and on many smaller Caribbean islands. The Spaniards soon found that tossing a breeding pair of the animals onto a promising uninhabited island guaranteed an abundance of pork there within a few years. In such an agreeable habitat, not only pigs but also horses and cattle thrived without human intervention. From their increasingly well-stocked bases in Hispañola and Cuba, the Spanish now had the wherewithal to attack the mainlands of the Americas. Their columns of Caribbean-bred horses and war dogs were followed by enormous herds of swine, a veritable “commissariat on the hoof.”17 Armed with guns and swords of steel, this fearsome mounted war machine would destroy far larger native formations with near impunity.
Within a few decades after the conquests of Cortés and Pizarro, the cattle population of Spanish America doubled as rapidly as every fifteen months. From Mexico to the pampas of Argentina, the vast open spaces of the New World swarmed black with livestock. One French observer in Mexico wrote in wonderment at the “great, level plains, stretching endlessly and everywhere covered with an infinite number of cattle.”18
The tiny local populations could consume but a minuscule fraction of the burgeoning mountain of beef, almost all of which was left to rot after the skin and hooves, the only salable parts of the animal, had been secured. By 1800, a million hides per year were being exported from Argentina alone.
The advent of the refrigerated ship late in the nineteenth century changed all that and gave the Continent access to cheap steak. This damaged European butchers in the same way that the twentieth-century flood of cheap textiles and electronics from Asia hurt American manufacturers. If the New York Times’s columnist Thomas Friedman had been writing in 1800, he would have had little trouble explaining the flattening of world commerce to European tanners; neither would European cattlemen have had any problem with the concept in 1900.
With plenty often comes tragedy. For thousands of years, Europeans dwelled in close proximity to their highly specialized domesticated animals and became immune to many virulent pathogens, to which America’s indigenous peoples were highly susceptible. The sword and the musket worked side by side with smallpox and measles, which in many cases arrived hundreds of miles in advance of the white man’s physical presence. One Spaniard remarked that the Indians “died like fish in a bucket.”19 Worse, substantial damage was also done to the local ecosystems, as livestock eroded the landscape by overgrazing and monotonous stretches of European crops and weeds displaced diverse local species.
Native American seed stock, particularly potato and corn, changed the diet of Europe. Both crops produce far more calories per acre than wheat; the potato will grow in poor soils and in a wide variety of environments, from sea level to ten thousand feet. Corn is more fastidious, requiring rich soil and long stretches of hot weather, but it can grow in “in-between” climates too dry for rice but too wet for wheat. An impoverished swath of southern Europe stretching from Portugal to the Ukraine filled this bill precisely. By 1800 it had become one of the world’s largest corn growing regions.
Corn and potatoes not only allowed Europe to escape from the deadly jaws of the Malthusian trap but directly stimulated trade. At the dawn of the Industrial Revolution, these crops provided Europeans with excess food to exchange for manufactured goods and freed agricultural laborers for more productive manufacturing. The increased crop yields, in turn, created a vast demand for fertilizer, which was initially met by stripping Latin American and Pacific islands of guano. Similarly, the introduction of yams, corn, tobacco, and peanuts into China allowed the newly ascendant Qing (or Ching) dynasty to expand its influence in the seventeenth and eighteenth centuries.20
“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 world did not abruptly become “flat” with the invention of the Internet, and commerce did not suddenly, at the end of the twentieth century, become dominated by large corporations with worldwide reach. Beginning at the dawn of recorded history with high-value cargoes, then slowly expanding into less precious and more bulky and perishable goods, the markets of the Old World have gradually become more integrated. With the first European voyages to the New World, this process of global integration accelerated. Today’s massive container ships, jet planes, the Internet, and an increasingly globalized supply and manufacturing network are just further evolutionary steps in a process that has been going on for the past five thousand years. If we wish to understand today’s rapidly shifting patterns of global trade, it serves us very well indeed to examine what came before.
For the past decade or so, I’ve been involved in the world of finance and economics; during this period, I’ve written three books. The first was a
treatise on theoretical and practical finance through which ran a strong historical theme. With each successive title, I’ve moved further into historical territory. My third book, The Birth of Plenty, dealt with the institutional origins of the global prosperity that occurred after 1820. Few readers found the book’s basic premise—that 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 all controversial. The failure of the communist experiment and the current wealth and poverty of individual nations testify to the power of these critical institutions.
This book enjoys no such ideological shelter. The pain and dislocations in the lives of individuals, industries, and nations caused by the globalization of the planet’s economy are real, and the debate is rancorous. 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.
And as long as we’re throwing statistical terms around, the synonymous terms “mean” and “average” have of late begun to carry their own ideological freight. The political right embraces the mean, but rarely uses a different bit of jargon, the median—that is, the income or wealth at the fiftieth percentile, the “person in the middle.” When Bill Gates walks into a roomful of people, their mean income skyrockets while their median income changes hardly at all—a concept usually ignored by pro-market conservatives.
Splendid Exchange, A Page 2