Splendid Exchange, A

by Bernstein, William L

  High I.Q. secondary school graduates in South Dakota, who had been receiving . . . wages one-and-a-half times the U.S. minimum wage for handling phone calls about my credit card, have been laid off since 1990; a Bombay outsourcing unit has come to handle my inquiries. Their Bombay wage rate falls short of South Dakota’s, but in India their wage far exceeds what their uncles and aunts used to earn.38

  The historical irony here is almost too delicious: perhaps no place was hurt as badly by free trade during the eighteenth and nineteenth centuries as India. Revenge is sweet.

  At the end of World War II, the United States accounted for almost half of world GDP; its share has since fallen to less than one-fourth. Had America in 1945 slammed shut the door first opened by Cordell Hull a decade earlier, it would have almost certainly retained a larger slice of the world’s wealth, the only problem being that the pie itself would have been much smaller, and rancid to boot. In 1900, Britannia ruled the waves; today, it plays a weak second fiddle to the American hegemon. Yet who in his right mind would rather live in the England of 1900 than in the England of today?

  Samuelson continues:

  It does not follow . . . that nations should or should not introduce selective protectionisms. Even where a genuine harm is dealt out by the roulette wheel of evolving comparative advantage in a world of free trade, what a democracy tries to do in self defense may often amount to gratuitously shooting itself in the foot.39

  When governments erect tariff barriers, Samuelson asserts, the result is industrial stagnation; it is far better to protect workers than to protect industries. Even so, Samuelson is not overly optimistic about the ability to “bribe the suffering factor” in a nation where a majority of people are worse off. (Neither is Rodrik, who notes the difficulties of paying for such social welfare schemes with taxes in a world in which corporations can easily move their capital and factories across national borders.)40

  World trade has yielded not only a bounty of material goods, but also of intellectual and cultural capital, an understanding of our neighbors, and a desire to sell things to others rather than annihilate them. A significant minority of citizens are unavoidably harmed in the process. As people, goods, and financial assets whiz around the world ever more easily, the inevitable dislocations caused by free trade will increase along with these blessings.

  The dilemmas of free trade are reminiscent of Churchill’s famous assessment of democracy: “the worst form of Government except all those other forms that have been tried from time to time.”41 From time to time, the forces of protectionism will indeed suggest reversing the movement toward free trade, but as the twentieth-century history of both the developed and the developing nations has shown, there really is no alternative.

  Few would argue that mankind is not the better for having made the trading expedition from Sumer to Seattle. To turn back would risk revisiting the darkest episodes of the twentieth century. By remembering the straits navigated along the way, we might just avoid the shoals that lie ahead.

  ACKNOWLEDGMENTS

  No author writes a nonfiction work of any length and scope without shamelessly relying upon family, friends, colleagues, publishing staff, and total strangers for advice and direction. I could not have written this book without the help of numerous individuals.

  Leonard Andaya, Liam Brockey, Peter Downey, Lee Drago, Christopher Ehret, David Eltis, Mark Garrison, Dermot Gately, Katheryn Gigler, Peter Gottschalk, Michael Guasco, Jonathan Israel, Glenn May, Joel Mokyr, J. P. McNeill, the late Clark Reynolds, Giorgio Riello, Patricia Risso, Dani Rodrik, Ron Roope, Bradley Rogers, Sanjay Subrahmanyam, Steve Vinson, David Warsh, Roger Weller, Jonathan Wendel, and Willem Wolters provided much needed referencing information.

  In particular, I would like to thank the following for help in these specific areas: Walter Bloom and Jeremy Green, Australian silver coin finds; Roger Burt, British and American mining history; Fred Drogula and Jean Paul Rodrigue, maritime chokepoints; Michael Laffan, the Ternatan Rebellion; Jonathan Rees, the mysteries of early refrigerated shipping; Ronald Rogowski, the politics of the Stolper-Samuelson theorem; Richard Sylla, the early planning stages of the book; Daniel Trefler, recent Canadian trade history; Carl Trocki, opium addiction in nineteenth-century China; Shelly Wachsmann, early maritime history; and Jeffrey Williamson, the quantitative aspects of recent economic history.

  I pestered several people unmercifully; they are owed not only thanks but apologies: Donald Kagan for helping me disguise, if only thinly, my deficiencies in Greek history; Mark Wheelis for reminding me of the things I should have learned in microbiology about the plague bacillus; Sidney Mintz for providing valued guidance on the history of the Caribbean sugar trade; and last, and most certainly not least, Doug Irwin for assistance in picking my way through the intellectual history of the never-ending battle between protection and free trade.

  Two giants of economic and financial journalism—Peter Bernstein and Jason Zweig—offered priceless advice, as did other friends: Barney Sherman, Bob Uphaus, and Ed Tower, as well as Ed’s students in his Neat New Books in International Trade and Economic Development course at Duke University, particularly Eric Schwartz and Mark Marvelli.

  Wesley Neff generously lent his long years of literary experience to the project from start to finish; Toby Mundy, Morgan Entrekin, Luba Ostashevsky, and Michael Hornburg at Grove/Atlantic Press provided expert editorial guidance; Matthew Ericson created the book’s maps; Lewis O’Brien provided permission and imaging assistance; and Molly Blalock-Koral helped secure obscure reference materials.

  Two editors at Grove/Atlantic, Brando Skyhorse and Jofie Ferrari-Adler, deserve special mention. Brando taught me a multitude of narrative skills that I sorely lacked and supplied the fortitude to attack what seemed an insurmountably broad topic, while Jofie polished it to a smoothness that I could not have achieved on my own and adroitly shepherded the book through the production process.

  Finally, my wife Jane Gigler supplied, in addition to superhuman quantities of patience and large blocks of her precious free time, what can only be described as literary alchemy. Over the past several years, she showed me how to transform an amorphous mass of jumbled, disorganized prose into pages I could send to my editors with a clear conscience. I do not deserve her.

  NOTES

  Introduction

  1. T. E. Page et al., eds., The Scriptores Historiae Augustae (Cambridge, MA: Harvard University Press, 1940), II: 115, 157.

  2. G. G. Ramsay, trans., Juvenal and Perseus (Cambridge, MA: Harvard University Press, 1945), 105.

  3. William Adlington, trans., The Golden Ass of Apuleius (New York: AMS, 1967), 233.

  4. E. H. Warmington, The Commerce between the Roman Empire and India (New Delhi: Munshiram Manoharlal, 1995): 147–165, 174–175, 180–183. For cotton in the Roman Empire, see 210–212. For the extreme difficulty of cotton production in the preindustrial world, see this book, 253–254.

  5. Modern comparisons are difficult, but in the ancient world the average daily wage of a skilled worker was about one Greek drachma, a small silver coin weighing about one-eighth of an ounce. At a ratio of twelve to one for gold to silver, then, one ounce of gold or silk represented ninety-six days’ wages.

  6. S. D. Goitein, A Mediterranean Society (Berkeley: University of California Press, 1967), I: 347–348.

  7. Ibid., 298.

  8. Ibid., 299–300.

  9. Ibid., 340–342.

  10. Ibid., 219. Only in the twentieth century did economists begin to fully appreciate the unpredictability of market prices. By a strange coincidence, the founder of chaos theory, Benoit Mandelbrot, drew his original inspiration by connecting the pattern of cotton prices with that of the flooding pattern of the Nile.

  11. The dinar, like most of the standard gold coins of the premodern period, weighed about one-eighth of an ounce, worth about eighty dollars at current value. Thus, an annual income of one hundred dinars corresponds to about $8,000 per year in today’s currency.

&
nbsp; 12. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Chicago: University of Chicago Press, 1976), I: 17.

  13. Paul Mellars, “The Impossible Coincidence. A Single-Species Model for the Origins of Modern Human Behavior in Europe,” Evolutionary Anthropology, 14:1 (February, 2005): 12–27.

  14. Thomas L. Friedman, The World Is Flat (New York: Farrar, Straus and Giroux, 2005).

  15. Warmington, 35–39; see also William H. McNeill, Plagues and Peoples (New York: Anchor, 1998), 128.

  16. Warmington, 279–284. See also Ian Carapace, review of Roman Coins from India (Paula J. Turner) in The Classical Review, 41 (January 1991): 264–265.

  17. Alfred W. Crosby, The Columbian Exchange (Westport, CT: Greenwood, 1973), 75–81.

  18. Quoted ibid., 88.

  19. Quoted ibid., 21.

  20. Patricia Risso, personal communication.

  21. John Maynard Keynes, The General Theory of Employment Interest and Money (New York: Harcourt, 1936), 383.

  Chapter 1

  1. Daniel Boorstin, Hidden History (New York: Harper and Row, 1987), 14.

  2. Robert L. O’Connell, Soul of the Sword (New York: Free Press, 2002),

  3. Ibid.

  4. Mellars, 12–27.

  5. Herodotus, The Histories (Baltimore: Penguin, 1968), 307.

  6. P. F. de Moraes Fairas, “Silent Trade: Myth and Historical Evidence,” History in Africa, 1 (1974): 9–24.

  7. Colin Renfrew, “Trade and Culture Process in European History,” Current Anthropology 10 (April–June 1969): 151–169. A more readable and available version of this work may be found in J. E. Dixon, J. R. Cann, and Colin Renfrew, “Obsidian and the Origins of Trade,” Scientific American, 218 (March 1968): 38–46.

  8. Detlev Elmers, “The Beginnings of Boatbuilding in Central Europe,” in The Earliest Ships (Annapolis, MD: Naval Institute Press, 1996), 10, 11, 20.

  9. Phyllis Deane, The First Industrial Revolution (Cambridge: Cambridge University Press, 1981), 82.

  10. Herodotus, 92–93.

  11. Gil J. Stein, Rethinking World Systems (Tuscon: University of Arizona Press, 1999), 83–84.

  12. Christopher Edens, “Dynamics of Trade in the Ancient Mesopotamian ‘World System,’ ” American Anthropologist, 94 (March 1992): 118–127.

  13. Jacquetta Hawkes, The First Great Civilizations: Life in Mesopotamia, the Indus Valley, and Egypt (New York: Knopf, 1973), 110–111, 138–139.

  14. Ibid.; see also A. L. Oppenheim, “The Seafaring Merchants of Ur,”Journal of the American Oriental Society, 74:1 (January–March 1954): 10–11.

  15. Robert Raymond, Out of the Fiery Furnace (University Park: Pennsylvania State University Press, 1968), 1–18; and R. F. Tylcote, A History of Metallurgy (London: Metals Society, 1976), 9, 11.

  16. Donald Harden, The Phoenicians (New York: Praeger, 1962), 171.

  17. Christoph Bachhuber, “Aspects of Late Helladic Sea Trade,” master’s thesis, Texas A&M University, December 2003, 100.

  18. James D. Muhly, “Sources of Tin and the Beginnings of Bronze Metallurgy,” American Journal of Archaeology, 89 (April 1985): 276. See also Peter Throckmorton, “Sailors in the Time of Troy,” in The Sea Remembers (New York: Weidenfeld and Nicholson, 1987), 32.

  19. Oppenheim, 8.

  20. H. E. W. Crawford, “Mesopotamia’s Invisible Exports in the Third Millennium BC,” World Archaeology, 5 (October 1973): 232–241.

  21. Edens, 130.

  22. Ibid., 118–119.

  23. Albano Beja-Pereira et al., “African Origins of the Domestic Donkey,”Science, 304 (June 18, 2004): 1781–1782.

  24. Stein, 88.

  25. Ibid., 117–169.

  26. George F. Hourani and John Carswell, Arab Seafaring (Princeton, NJ: Princeton University Press, 1995), 7.

  27. Shelley Wachsmann, “Paddled and Oared Boats before the Iron Age,” in Robert Gardiner, ed., The Age of the Galley (Edison, NJ: Chartwell, 2000), 21–22.

  28. 1 Kings 9:26–28, King James Version.

  29. The identification of “Ophir” as India is a matter of some dispute; historians have also suggested Yemen, Sudan, and Ethiopia as possibilities. See Maria Eugenia Aubert, The Phoenicians and the West, 2nd ed. (Cambridge: Cambridge University Press, 2001), 44–45.

  30. Harden, 157–179.

  31. Herodotus, 255.

  32. Not until 205 BC—well over two centuries after Histories was written—would Eratosthenes correctly calculate the circumference of the earth from the difference between the angles of the sun at Alexandria and Syene, putting the equator well south of even Alexandria.

  33. Hourani and Carswell, 8–19.

  34. Ibid., 19.

  35. Carol A. Redmount, “The Wadi Tumilat and the ‘Canal of the Pharaohs,’” Journal of Near Eastern Studies, 54:2 (April 1995): 127–135; and Joseph Rabino, “The Statistical Story of the Suez Canal,” Journal of the Royal Statistical Society, 50:3 (September 1887): 496–498.

  36. Jack Turner, Spice (New York: Vintage, 2004), 69–70.

  37. Warmington, 183, 303–304.

  38. Quoted in Sonia E. Howe, In Quest of Spices (London: Herbert Jenkins, 1946), 26.

  39. Pliny, Natural History (Bury St. Edmunds: St. Edmundsbury, 1968), v 4, 21.

  40. Ibid., 61 (12: 83).

  41. Warmington, 261–318.

  42. Ibid., 273.

  43. Dennis Flynn and Arturo Giráldez, “Path dependence, time lags, and the birth of globalization: A critique of O’Rourke and Williamson,” European Review of Economic History, 8 (April 2004): 81–86.

  44. Rustichello, as told to Marco Polo, The Travels of Marco Polo (New York: Signet Classics, 2004), xxiv.

  45. Flynn and Giráldez, 85. Italics added.

  Chapter 2

  1. Thucydides, History of the Peloponnesian War, VII: 68.

  2. Tomé Pires, The Suma Oriental of Tomé Pires and The Book of Francisco Rodrigues, Armando Cortesão, ed., (Glasgow, Robert Maclehose, 1944), II: 87.

  3. Thucydides, VII: 87.

  4. The concept that an obsession with control of sea lanes and maritime choke points has its origins in Europe’s uniquely convoluted and mountainous geography is best expressed by Chaudhuri: “The phenomenon that is in need of explanation is not the system of peaceful (Asian) but that of armed (European) trading. A comprehensive and convincing explanation has not been attempted as yet by historians. In the Mediterranean, however, from Graeco-Roman times, and perhaps even earlier periods of history, it was essential to exercise control over the vital sea-routes in order to control both economic resources and political settlements. Except in the Persian Gulf and the inland sea of the Indonesian islands, no such combination of geography, politics, economic factors, and historical experience was to be found in the Indian Ocean.” See K. N. Chaudhuri, Trade and Civilization in the Indian Ocean (New Delhi: Munshiram Manoharlal, 1985), 14.

  5. William H. McNeill, Plagues and Peoples, 112.

  6. Thucydides, I: 2.

  7. Ellen Churchill Semple, “Geographic Factors in the Ancient Mediterranean Grain Trade,” Annals of the Association of American Geographers, 11 (1921): 47–48, 54.

  8. Amasis was the pharaoh’s Greek name. He was known in Egypt as Khnemibre Ahmose-si-Neit.

  9. Herodotus, 172.

  10. Ibid., 49.

  11. Donald Kagan, The Peloponnesian War (New York: Viking, 2003), 8–9, 65, 85–86.

  12. Thucydides, VI: 20.

  13. Quoted in Semple, 64, from Xenophon, Hellenes, II: 2:3.

  Chapter 3

  1. Leila Hadley, A Journey with Elsa Cloud (New York: Penguin, 1998), 468.

  2. Bertram Thomas, Arabia Felix (New York: Scribner, 1932), 172–174.

  3. Richard W. Bulliet, The Camel and the Wheel (New York: Columbia University Press, 1990), 28–35.

  4. Jared Diamond, Guns, Germs, and Steel (New York: Norton, 1999), 168–175.

  5. Only the camel’s sensitivity to moist climates and the tsetse fly, the vector for camel trypanos
omiasis, prevents it from replacing the donkey over a much wider territory.

  6. Bulliet, 37–78, 87–89, 281.

  7. Ibid., 141–171.

  8. Food and Agriculture Organization of the United Nations, accessed at http:­/­/­www.fao.org­/­AG­/­AGAInfo­/­commissions­/­docs­/­greece04­/­App40.pdf; Australian camel population from Simon Worrall, “Full Speed Ahead,” Smithsonian, 36:10 (January 2006): 93.

  9. Janet Abu-Lughod, Before European Hegemony (Oxford: Oxford University Press, 1989), 176.

  10. Nigel Groom, Frankincense and Myrrh (Beirut: Librairie du Liban, 1981), 5, 148–154, 177–213.

  11. Proverbs 7:16–20, King James Version.

  12. Numbers 16:18, King James Version: “And they took every man his censer, and put fire in them, and laid incense thereon, and stood in the door of the tabernacle of the congregation with Moses and Aaron.”

  13. Pliny, 45 (12:64).

  14. Ibid., 43 (12:58).

  15. T. E. Page et al., eds., Theophrastus, Enquiry into Plants (Cambridge, MA: Harvard University Press, 1949), 237–239.

  16. Groom, 136.

  17. Ibid., 6–7.

  18. Pliny, 12:111–113.

  19. Ibid., (12:65).

  20. Ibid., 43 (12:59).

  21. Groom, 149–162.

  22. Maxime Rodinson, Mohammed (New York: Pantheon, 1971), 11–14.

  23. Ibid., 39–40.

  24. Groom states that the route ran about 100 miles east of Mecca, whereas Hodgson puts Mecca squarely on the main north-south caravan trail. See Groom, 192; and Marshall G. S. Hodgson, The Venture of Islam (Chicago: University of Chicago Press, 1974), I:152.