gE Blog Series: globalEDGE Book Series Part 1 - A Splendid Exchange

Globalization often gets a bad rap and serves as the punching bag for many international issues. Because of this harsh under appreciation of the increasingly influential force that connects the world, global trade also comes under fire. The reliance of superpower nations on multinational corporations is perceived more frequently as a weakness due to inescapable interdependence. In A Splendid Exchange, William Bernstein manages to provide the reader with insight on key economic concepts found in trade since the origin of the first silk passages. Refreshingly honest, Bernstein accounts the major events and development of the global market, theorizing that trade is the single common denominator through past eras. Often villianized in terms of the global marketplace, trade is something that has shaped the world we so comfortably inhabit in the present.

The journey through time begins in Sumer, where Bernstein explores the development of bartering practices amongst Mesopotamian farmers who had ended the year with a surplus. The members of society who could afford to bargain for goods they could not produce themselves set a precedent that lead to financial accountability, so to speak. Better armed with weapons that they could now afford, farmers were able to prevent attacks and lootings of their farms, unwittingly moving toward the permanence of a settled civilization and ditching the hunter-gatherer lifestyle.

Here we begin to observe the manifestation of the quintissential market: a buyer, a seller, and many differentiated products.  Complications arise, however, when merchants along trade routes bring with them the deadly diseases- diseases that restructure the human population and leave it, for better or for worse, to rebuild itself. With the arrival of the black death to Europe came change in a very rapid form. Traders were left to barter with and for scraps, while those who could afford to spend were perishing away, unable to purchase anything that would prolong death.

Despite the loss and mass levels of destruction that humans may or may not have been responsible for, one thing always manages to rebound flawlessly, as if it had never felt the sting of failure. Yet trade is amoral, but there are always those who will prosper under it and those who will not. Trade, fickle endeavor that is, will always make some party resent it. Just as it introduced commodities like sugar and tea to the rest of the world, it also brought about slavery, disease, and sometimes war. And yet, it seems it is human nature to carry on, as we always have, letting the invisible hand guide our actions as a bartering society. As the book gets closer to the end, Bernstein’s idea that 'primates share food, but only Homo sapiens trade,’ becomes increasingly apparent through the rise & fall of civilizations and proves itself to be the mantra of trade.

I urge anyone who wants to learn more about the history of the world’s economy to invest some time in this book. One of its great advantages is that you can open virtually any chapter and delve right in, without any fear of disorientation; nearly every section could stand independently. Mr. Bernstein’s true forte lies not in his expertise of financial theory and deep understanding of world history, but rather in the seamless manner in which he marries his theories of economics with the practicality of recorded fact.