Splendid Exchange, A

by Bernstein, William L

  But this is not a book about numbers; if you want detailed data on trade volume and commodity prices through the ages, they can be found in the book’s reference sources. The history of world trade is best told through carefully selected stories and ideas. My fondest hope is that the narratives and concepts contained herein will inform participants and challenge assumptions on both sides of the great ideological divide over free trade.

  This book is organized as follows: Chapters 1 and 2 deal with the origins of world trade, beginning with the first fragmentary evidence of long-range commerce during the Stone Age. The unmistakable footprints of trade in the earliest Mesopotamian records tell of the exportation of surplus grain and cloth from the rich land between the Tigris and Euphrates rivers, as well as the importation of strategic metals, particularly copper, utterly lacking in its alluvial soil. This earliest axis of trade ran three thousand miles from the hills of Anatolia, through Mesopotamia, out the Persian Gulf, across the shores of the Indian Ocean, and up the Indus River. The hubs of this trade were the successive great centers at Ur, Akkad, Babylon, and Nineveh (all located in modern Iraq). The volume and sophistication of trade through these cities slowly expanded over time, first in the Middle East, then spread westward through the Mediterranean and out into Europe’s Atlantic coast, and eastward all the way to China. By the time Rome fell, goods moved through scores of hands, all the way between London and the Han Chinese capital at Chang-an. The end of the Roman Empire in the West provides a natural caesura between the world of vigorous ancient trade and the era that followed.

  Chapters 3 through 6 trace the rise of trade in the Indian Ocean. This story properly begins in remote western Arabia in late antiquity and recounts the explosive spread of the religion of trade, Islam, whose influence ranged from Andalusia to the Philippines, and whose chosen conduit of divine revelation, the Prophet Muhammad, was himself a trader. Islam provided the glue that held together an advanced system of great commercial ports, where tangles of local and mercantile families and castes from far and wide mingled together with one purpose: profit. This system, we might add, was almost completely devoid of Europeans, who had been excluded from the Indian Ocean for nearly a millennium by Muslim conquests in Arabia, Asia, and Africa. Each one of the nations in this system faced the basic “trilemma” of trade—to trade, to raid, or to protect. Then, as now, how each government, from that of the humblest city-state to that of the grandest empire, approached these three choices dictated the shape of the trading environment and, indeed, the fates of nations.

  Chapters 7 through 10 recount how this vast multicultural trade system was shattered when Vasco da Gama outflanked the Muslim “blockade,” which had previously stopped European merchants at the western gates of the Indian Ocean. The Portuguese rounding of the Cape of Good Hope ushered in the current era of Western commercial dominance. Within a few decades after that momentous event, Portugal took the commanding heights of the Indian Ocean at Goa and sealed its eastern and western choke points at Malacca and Hormuz. (It would, however, fail to take the Red Sea entrance at Aden.) A century later, the Portuguese were shoved aside by the Dutch, who in their turn were eclipsed by the English East India Company.

  Whereas the ambitions of kings and merchants and the religion of the Prophet drove premodern history, secular ideologies have largely propelled the modern era. Chapters 11 through 14 examine today’s global trade in light of its underlying modern economic doctrines. As so famously put by Keynes:

  Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.21

  Trade’s modern scribblers—David Ricardo, Richard Cobden, Eli Heckscher, Bertil Ohlin, Wolfgang Stolper, and Paul Samuelson—will help us to understand the massive upheavals seen in our ever more integrated global system.

  Although the structure of this book is chronological, its many interwoven narratives will supersede the flow of mere dates and events. For example, two closely related stories, the south Arabian incense trade and the domestication of the camel, both span thousands of years. At the other extreme, the memoirs of medieval travelers who left us extensive and intact records of their journeys—Marco Polo, the Moroccan legal scholar Ibn Battuta, and the Portuguese apothecary Tomé Pires—will provide isolated but detailed snapshots of world trade spanning only a few decades.

  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. Simply by allowing nations to concentrate on producing those things that their geographic, climatic, and intellectual endowments best enable them to do, and to exchange those goods for what is best produced elsewhere, trade has directly propelled our global prosperity. Ricardo’s law of comparative advantage tells us it is far better for the Argentinians to grow beef, the Japanese to make cars, and the Italians to turn out high-fashion shoes than for each nation to attempt to become self-sufficient in all three areas. Moreover, over the centuries camels and ships have conveyed in their packs and holds history’s fabulous stowaways, the intellectual capital of mankind: “Arabic” (actually, Indian) numerals, algebra, and double-entry bookkeeping. Without the need for long-range navigation, accurate watches and clocks would surely not have become available until much later; without the desire to transport large amounts of perishable foodstuffs long distances, it is unlikely that the unsung but essential household refrigerator would grace virtually every home in today’s developed world.

  Modern life flows on an ever-rising river of trade; if we wish to understand its currents and course, we must travel up its headwaters to commercial centers with names like Dilmun and Cambay, where its origins can be sought, and its future imagined.

  A Note to the Reader

  Uncertainty shrouds more than a few of the topics covered here. Further, I have found it difficult to completely ignore the myriad of fascinating minutiae surrounding many of the tales. In order to maintain narrative flow, I have consigned areas of controversy and engaging trivia to the endnotes; interested readers are encouraged to consult these. They can otherwise be safely ignored.

  The events described herein took place in many places around the world. Rendering the names of them into Latin script was often problematic; in each case, I have employed the most commonly used spelling in the English-language academic literature as determined by the online database Journal Storage (JSTOR).

  There is also the issue of money over the millennia. The basic unit of currency of the premodern world was remarkably constant: a small gold coin weighing approximately four grams—one-eighth of an ounce—and about the size of a present-day American dime, appearing in various times and places as the French livre, Florentine florin, Spanish or Venetian ducat, Portuguese cruzado, dinar of the Muslim world, Byzantine bezant, or late-Roman solidus. At the current price of gold, this corresponds to a modern value of roughly eighty American dollars. The three major exceptions to this rule were the Dutch guilder, which weighed about one-fifth as much, and the English one-pound sovereign and the early Roman aureus, each of which weighed twice as much. The Muslim dirham, Greek drachma, and Roman denarius were silver coins of roughly the same size and weight, each equivalent to the daily wage of a semiskilled worker, with a value ratio of about twelve to one between the gold and silver coins.

  1

  SUMER

  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 Boorstin1

  Sometime around 3000 BC, a tribe of herders attacked a small community of Sumerian farmers a
t harvest time. From a safe distance, the attackers used slingshots, spears, and arrows that allowed them to achieve surprise. The farmers responded by closing in on the attackers with maces. The mace—a rounded stone attached to the end of a stout stick, designed to bash in the head of an opponent—was the first weapon specifically intended for use solely against fellow humans. (Animals had thick, angulated skulls that were rarely presented at an ideal angle to mace wielders.) Capable of crushing a man’s fragile, round skull whether he was coming toward an attacker or running away, the mace proved especially effective.2

  There was nothing unusual about an attack at harvest time; the herders’ goats and sheep were highly sensitive to disease and the vagaries of climate, and thus the nomadic tribe’s survival required frequent raids to take grain from its more reliably provisioned crop-growing neighbors. In this particular battle, the herders wore a strange, shiny piece of headgear that seemed to partially protect them. Hard, direct mace blows, once lethal, now merely stunned, and many blows simply glanced off the headgear’s smooth surface. This protective advantage radically changed the tactical balance of power between the two sides, enabling the herders to devastate the defending farmers.

  After the attack, the surviving farmers examined the headgear from the few fallen herders. These “helmets” contained a sheet, one-eighth inch thick, of a wondrous new orange material fitted over a leather head cover. The farmers had never seen copper before, since none was produced in the flat alluvial land between the Tigris and Euphrates. Their nomadic rivals had in fact obtained the metal from traders who lived near its source hundreds of miles to the west, in the Sinai Desert. It was not long before Sumerian farmers obtained their own supplies, enabling them to devise more lethal spiked copper-headed maces, to which the herders responded with thicker helmets. Thus was born the arms race, which to this day relies on exotic metals obtained through commerce.3

  How did these farmers and herders obtain the copper for their helmets, and how was this trade conducted over the hundreds of miles between their farms and pastures and the copper mines? Paleoanthropologists believe that the best place to begin is about sixty to eighty thousand years ago, when the first genetically modern populations of humans in Africa began to develop more complex tools, pierce shells (presumably used in necklaces), and produce abstract images with pieces of red ochre. About fifty thousand years ago, small numbers of them probably migrated via Palestine into the Fertile Crescent and Europe. At some point prior to this trek, language developed, enabling more complex, uniquely “human” behavior: adroitly carved animal bone and antler tools, cave paintings, sculpture, and refined missile technologies, such as the atlatl, a specially crafted stick used to improve the range and accuracy of the spear. These increasingly sophisticated skills probably made possible yet another activity characteristic of modern humans: long-distance trade in the new weapons, tools, and knickknacks.4

  Historians, on the other hand, traditionally start with Herodotus’s description, written around 430 BC, of the “silent trade” between the Carthaginians and “a race of men who live in a part of Libya beyond the Pillars of Hercules” (the Strait of Gibraltar), most likely today’s west Africans:

  On reaching this country, [the Carthaginians] unload their goods, arrange them tidily along the beach, and then, returning to their boats, raise a smoke. Seeing the smoke, the natives come down to the beach, place on the ground a certain quantity of gold in exchange for the goods, and go off again to a distance. The Carthaginians then come ashore and take a look at the gold; and if they think it represents a fair price for their wares, they collect it and go away; if, on the other hand, it seems too little, they go back aboard and wait, and the natives come and add to the gold until they are satisfied. There is perfect honesty on both sides; the Carthaginians never touch the gold until it equals in value what they have offered for sale, and the natives never touch the goods until the gold has been taken away.5

  Alas, Herodotus’s description of the decorum displayed on each side has an aroma of myth.6 Yet he probably got the basic scenario right. On some unrecorded occasion deep in prehistory, a man, or several men, initiated early long-distance trade by setting out on the water in boats.

  Hunger most likely got man into those primitive craft. Twenty thousand years ago, northern Europe resembled modern Lapland: a cold, uncultivated panorama dotted with fewer and smaller trees than are there today. Europe’s first Homo sapiens, probably fresh from wiping out their Neanderthal rivals, subsisted primarily on large game, particularly reindeer. Even under ideal circumstances, hunting these fleet animals with spear or bow and arrow is an uncertain enterprise. The reindeer, however, had a weakness that mankind would mercilessly exploit: it swam poorly. While afloat, it is uniquely vulnerable, moving slowly with its antlers held high as it struggles to keep its nose above water. At some point, a Stone Age genius, realized the enormous hunting advantage he would gain by being able to glide over the water’s surface, and built the first boat. Once the easily overtaken and slaughtered prey had been hauled aboard, getting its carcass back to the tribal camp would have been far easier by boat than on land. It would not have taken long for mankind to apply this advantage to other goods.

  Cave paintings and scattered maritime remains suggest that boats first appeared in northern Europe around fifteen thousand years ago. These early watercraft were made from animal skins sewed over rigid frames (most often antler horns) and were used for both hunting and transport, most commonly with a paddler in the rear and a weapon-bearing hunter or passenger in front. It is no accident that the reindeer-bone sewing needle appears simultaneously in the archaeological record, since it is necessary for the manufacture of sewn-skin vessels. These first boats predate the more “primitive” dugout canoe, for the cold, steppe-like vista of northern Europe could not grow trees wide enough to accommodate a fur-clad hunter.

  Only the most durable remnants, mainly stone tools, survive to provide hints about the nature of the earliest long-range commerce. One of the earliest commodities traded by boat must have been obsidian, a black volcanic rock (actually, a glass) that is a favorite of landscapers and gardeners around the world. Prehistoric man valued it not for its aesthetic properties, but rather because it was easily chipped into razor-sharp, if fragile, cutting tools and weapons. The historical value of obsidian lies in two facts: first, it is produced in only a handful of volcanic sites, and second, with the use of sophisticated atomic fingerprinting techniques, individual samples can be traced back to their original volcanic sources.

  Obsidian flakes dating to over twelve thousand years ago found in the Franchthi Cave in mainland Greece originated from the volcano on the island of Melos, one hundred miles offshore. These artifacts must have been carried in watercraft, yet there are no archaeological remains, literary fragments, or even oral traditions that inform us just how the obsidian got from Melos to the mainland. Were these flakes conveyed by merchants who traded them for local products, or were they simply retrieved by expeditions from the mainland communities who valued them?

  Obsidian atomic fingerprints have been used to examine flows of the material through regions as disparate as the Fertile Crescent and the Yucatán. In the Middle East, the researcher Colin Renfrew matched up sites with sources dating from around 6000 BC. The amount of obsidian measured at each excavation site fell off dramatically with distance from its source, strongly suggesting that this was a result of trade. For example, all the stone blades found in the Mesopotamian sites came from one of two sites in Armenia. At a site 250 miles away from its volcanic source, about 50 percent of all of the chipped stone found was obsidian, whereas at a second site five hundred miles away from the source, only 2 percent of the chipped stone was obsidian.7

  These Stone Age obsidian routes put into modern perspective the costs of prehistoric commerce. Transporting a load of obsidian between Armenia and Mesopotamia was the prehistoric equivalent of sending a family Christmas package from Boston to Washington, DC. But instead of p
aying a few dollars and handing the package over to a brown-clad clerk, this ancient shipment consumed two months (including the return trip) of a single trader’s labor—very roughly, about $5,000 to $10,000 in current value.

  With the advent of agriculture, this new maritime technology spread to settled farmers, who adopted the skin-and-frame design for river travel. A pattern of commerce commenced that would remain unchanged for thousands of years: traders from advanced farming communities would transport grain, farm animals, and basic manufactured items such as cloth and tools downriver to exchange for the wares, mainly animal skins, of the hunter-gatherers. Archaeologists usually find the remains of these prehistoric markets on small, unforested river islands. This is no coincidence; these locations not only took advantage of boat transport but also minimized the odds of a successful ambush.

  Ax and adze (chisel) blades, dating to about 5000 BC, survive as the main evidence of this Stone Age waterborne commerce. Archaeologists have identified Balkan quarries as the source of the ax and blade material, fragments of which are found all the way from the mouth of the Danube at the Black Sea to the Baltic and North seas. These durable stone artifacts, found far from their identifiably unique sources, attest to a lively long-distance exchange in a rich multitude of goods.8

  Water transport is by its nature cheaper and more efficient than land carriage. A draft horse can carry about two hundred pounds on its back. With the help of a wagon and a good road, it can pull four thousand pounds. With the same energy expenditure, the same animal can draw as many as sixty thousand pounds along a canal towpath, a load that could be managed by small ancient sailing ships.9