<div>Adam Smith wrote that man has an intrinsic &#147;propensity to truck, barter, and exchange one thing for another.&#8221; But how did trade evolve to the point where we don&#8217;t think twice about biting into an apple from the other side of the world? In this sweeping narrative history of world trade, William J. Bernstein tells the extraordinary story of global commerce from its prehistoric origins to the myriad controversies surrounding it today. He transports readers from ancient sailing ships that brought the silk trade from China to Rome in the second century to the rise and fall of the Portuguese monopoly in spices in the sixteenth; from the American trade battles of the early twentieth century to the modern era of televisions from Taiwan, lettuce from Mexico, and T-shirts from China. Lively, authoritative, and astonishing in scope, <i>A Splendid Exchange</i> is a riveting narrative that views trade and globalization not in political terms, but rather as an evolutionary process as old as war and religion--a historical constant--that will continue to foster the growth of intellectual capital, shrink the world, and propel the trajectory of the human species.</div>

Splendid Exchange

How Trade Shaped The WorldBy WILLIAM J. BERNSTEIN

Grove/Atlantic, Inc.

Copyright © 2008 William J. Bernstein
All right reserved.
ISBN: 978-0-87113-979-5

Contents

Introduction.......................................................11 Sumer............................................................182 The Straits of Trade.............................................393 Camels, Perfumes, and Prophets...................................494 The Baghdad-Canton Express.......................................715 The Taste of Trade and the Captives of Trade.....................1036 The Disease of Trade.............................................1217 Da Gama's Urge...................................................1418 A World Encompassed..............................................1879 The Coming of Corporations.......................................20210 Transplants.....................................................22811 The Triumph and Tragedy of Free Trade...........................26512 What Henry Bessemer Wrought.....................................30013 Collapse........................................................32014 The Battle of Seattle...........................................345Bibliography.......................................................363Notes..............................................................383

Chapter One

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 Boorstin

Sometime around 3000 B.C., a tribe of herders attacked a small community of Sumerian farmers at harvest-time. From a safe distance, they used slingshots, spears, and arrows, allowing them to achieve surprise. The farmers responded by closing in on their attackers with maces. This weapon-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 designed 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 towards an attacker or running away, the mace proved especially effective.

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 grain-seeking raids on 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 glanced off the headgear's smooth surface entirely. 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 an eighth-inch thick sheet 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 first arms race, which to this day relies on exotic metals obtained through commerce.

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 the best place to begin is about 60,000-80,000 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 incise abstract images into pieces of red ochre. About 45,000-50,000 years ago, small numbers of them probably migrated via Palestine into the Fertile Crescent and Europe. At some point in this trek, language developed, which enabled more complex, uniquely "human" behavior: adroitly carved animal bone and antler tools, cave paintings and sculpture, and improved missile technologies, such as the atlatl, a specially crafted stick used to improve the range and accuracy of the spear. This increasingly sophisticated skill set likely made possible yet another activity characteristic of modern humans: long-distance trade in the new weapons, tools, and tsotchkes.

Historians, on the other hand, traditionally start with Herodotus's description, written around 430 B.C., 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 Straits 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.

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

Hunger most likely got man into those primitive crafts. Twenty thousand years ago, northern Europe resembled modern Lapland, a cold, uncultivated panorama dotted with fewer and smaller trees than today. Europe's first Homo sapiens, 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, possessed 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, realizing the enormous hunting advantage he would gain by being able to glide over the water's surface, 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 15,000 years ago. These early watercraft were made from animal skins sewn 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 archeological record, since it is necessary for the manufacture of skin-sewn 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 did not value it for its aesthetic properties, but rather because it was easily chipped into razor-sharp, if fragile, cutting tools and weapons. Obsidian's historical value lies in two facts: first, it is produced in only a handful of volcanic sites, and second, using sophisticated atomic fingerprinting techniques, individual samples can be traced back to their original volcanic sources.

Obsidian flakes dating to over 12,000 years ago found in the Francthi Cave on 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 that valued them?

Obsidian atomic fingerprints have been used to examine flows of the material through regions as disparate as the Fertile Crescent and the Yucatan. In the Middle East, researcher Colin Renfrew matched up sites with sources dating from around 6000 B.C. The amount of obsidian measured at each excavation site fell off dramatically with distance from its source, which strongly suggests that this was the result of trade. For example, all of 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% of all of the chipped stone found was obsidian, whereas at a second site 500 miles away from the source, only 2% of the chipped stone was obsidian.

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 D.C. But instead of paying a few dollars and handing the package off 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-$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. Archeologists 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.

Axe and adze (chisel) blades, dating to about 5000 B.C., survive as the main evidence of this stone-age water-borne commerce. Archaeologists have identified Balkan quarries as the source of the axe and blade material, fragments of which are found all the way from the Danube's Black Sea mouth 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.

Water transport is by its nature cheaper and more efficient than land carriage. A draft horse can carry about 200 pounds on its back. With the help of a wagon and a good road, it can pull 4,000 pounds. With the same energy expenditure, the same animal can draw as many as 60,000 pounds along a canal towpath, a load that could be managed by small ancient sailing ships.

Herodotus also described similar 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 Tigris to Babylon. Here, then, is the direct descendant of maritime trade's earliest cargo ship, relatively round in shape-and thus slow-so as to accommodate the most weight with the minimal amount of crew and building material. (By contrast, warships since ancient times have been narrow and fast, with somewhat smaller carrying capacities.)

The largest of these boats carried about fourteen tons and came equipped with several donkeys, so that at journey's end the wood frames could be scrapped and the precious skins packed up and carried back to Armenia on the beasts. Herodotus explains:

It is quite impossible to paddle the boats upstream because of the strength of the current, and that is why they are constructed of hide instead of wood. Back in Armenia with their donkeys, the men build another lot of boats to the same design.

After returning to Armenia, the farmers would refit the skins over new frames and load the boats with fresh cargo, and the several-month journey to bartering centers would begin anew. No doubt, the Stone Age hunter-gatherers and farmers of northern Europe also paddled their goods downstream and packed their craft upstream in similar fashion.

Such were trade's likely nascent beginnings. Yet out of the desire to attack (or defend) territory was born one of the earliest and most enduring motifs of trade's history-the exchange of grain from advanced farming communities living in alluvial areas for metals, generally found in less fertile locales.

Around six thousand years ago, man figured out how to purify the abundant copper ore found just below the layers of the pure metal of the first virgin mines. Not long after, the Ergani mines in mountainous Anatolia (modern-day Asian Turkey) began shipping the metal to the early settlements at Uruk (in what is now southern Iraq, about a hundred miles west of Basra). The Tigris River connected Ergani and Uruk, and while the vessels of the day could easily float several tons of copper downstream to Uruk in a few weeks, the transport of hundreds of tons of grain to Anatolia, against the current, would have been much more problematic.

Later Mesopotamian civilizations took advantage of more favorably placed Persian Gulf mineral sources. The appearance of written records just before 3000 B.C. offers fleeting glimpses of a massive copper-grain trade that flourished along this route. The land of milk and honey from the ancient Sumerian creation myths was a place known as "Dilmun," celebrated for its wealth and probably located in modern-day Bahrain. Its prosperity, however, did not come from its relatively fertile soil, but rather from its strategic position as a trading post for copper produced in the land of Magan, in what is today Oman, just outside the Persian Gulf's entrance at the Strait of Hormuz.

Not far from modern-day Qal'at al-Bahrain, the archaeological excavation of ancient Dilmun's likely location has yielded a treasure trove of Bronze Age objects. The site covers only about fifty acres but contained a population of about 5,000, likely far more than could have been supported by the city's agricultural hinterland. Cuneiform texts record that small shipments, usually consisting of a few tons of barley, began to travel down the Gulf towards Dilmun and Magan around 2800 B.C. By the end of the millennium, these grain cargoes increased to as much as several hundred tons per shipload. At an astonishingly early point, history affords an ancient equivalent of Las Vegas-a large population living in relatively barren surroundings whose very survival depended upon large amounts of food imported from hundreds of miles away.

Dilmun's excavation provides a tantalizing, and oft times highly personal, window on what the Sumerian Persian Gulf grain-copper trade might have looked like. The town sat on an island and was supplied with a generous spring issuing what the ancients called "sweet," or fresh, water. By 2000 B.C., its city walls enclosed an area almost the size of the biggest Mesopotamian city, Ur. In its center sat a municipal square, one end of which opened on the sea gate; at the other end stood a building filled with seals and scales, almost certainly a customs house. Piled high around the square would have been huge baskets of barley and dates from the banks of the Tigris, while the more precious cargo-Mesopotamian cloth as well as ivory and ingots of copper bound for Ur-stood just outside the customs house, guarded by nervous sailors while their officers argued, bribed, and cajoled the officials inside.

If the year was 1800 B.C., these ingots would likely have been bound for the warehouses of Ea-nasir, the largest copper merchant in Ur, where archaeologists have discovered a large cache of clay tablets detailing this strategic trade. One tablet records a shipment of twenty tons of the metal, while another bears the complaint of a client, one Nanni: You said, "I will give good ingots to Gimil-Sin." That is what you said, but you have not done so; you offered bad ingots to my messenger saying "Take it or leave it." Who am I that you should treat me so? Are we not both gentlemen?"

The curiosity and drive of the first metal craftsmen who produced the copper in Ea-nasir's warehouses must have been remarkable. The process in which sulfur, oxygen, chlorine, or carbonate, depending on the type of ore, are removed from it to yield the pure metal-smelting-first saw the light of day in approximately 3500 B.C. The metallurgists of the Fertile Crescent soon began mixing their local copper with an exotic imported metal, tin. Not only was the new hammered copper/tin alloy as hard and durable as that of the previous copper/arsenic and copper/antimony alloys, but it melted at a much lower temperature than pure copper. Better yet, it did not bubble and was thus easily cast.

(Continues...)

Excerpted from Splendid Exchangeby WILLIAM J. BERNSTEIN Copyright © 2008 by William J. Bernstein. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.