Adam Smith wrote that man has an intrinsic “propensity to truck, barter, and exchange one thing for another.” But how did trade evolve to the point where we don’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, A Splendid Exchange 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.
Birth of More Plenty in A Splendid Exchange William J Bernstein's "A Splendid Exchange" is another insightful, decisive and highly readable piece in the picture of the world's growth and development which he started with "The Birth of Plenty" his first work of this type. The sheer competence and professional nature of his story telling is matched perhaps only by "the other Bernstein" - Peter.
Like Peter,
William has a brilliant turn of phrase and a great way of settling on apparently trivial incidents which serve to make crucial points.
The analytical strength of the work is the way he elaborates the ubiquity of trade - not through simple assertion with anecdotal back up - but through assembling stories which let the reader see the components and processes which were the meat and drink of the ancient, the medieval and the modern world. The coverage is comprehensive, the reach daunting.
The most innovative treatments for me are:
1. The great story of the "margin versus volume" business model which lurked behind the Dutch success in profiting from spices contrasted with the later English success with the volume model which allowed tea to generate comparable profits.
2. The relentless manner in which rational and logical pursuit of profit sees businessmen throughout time and from culture to culture twist and turn from free trade to protectionism and back. It's a wonderful history of rent seeking. One underlying lesson is that the institutional arrangments these events unfold in are critical in determining outcomes.
3. A third lesson is the vital roles played by price and value. Bernstein's historical documentary shows the way alterations in scarcity coupled with changes in factor costs - especially through technological change which is itself propelled by profit seeking - value identical resources differently and consign the same players to different and differently valued roles.
From the perspective of writing and as a commentator on the wider canvas perhaps Bernstein's greatest accomplishment here is his ability to be realistically depressing while simultaneously expressing awe and optimism. Nowhere is this more apparent than in his discussion of the benefits of free trade relative to protectionism. Some will quibble with the conclusions. None will be left unchallenged.
Thoroughly recommended on every count.
Something new on every page What could be more boring than a book about the history of trade? This may well be the thought that passes through most people's minds when they contemplate the rich cover of Bernstein's latest tome. Yet such an expectation turns out to be totally incorrect. A Splendid Exchange is also A Splendid Read.
Bernstein has a remarkable ability to inter-leave arcane details with big-picture perspectives and the result is a work that delights as it informs. I personally learned something new on almost every page, even though I thought I was already fairly well informed about several of the subject areas covered in the book. Second-rate writers often try to impress with displays of recondite learning or excessive verbosity; Bernstein does neither. His prose is light and assured and carries the flow of his thesis forward as on a bubbling ever-cresting wave.
He superbly illustrates a general historical point with the specifics of an individual life, as when he notes almost in passing that the first human to circumnavigate the globe was not a well-known historical personage such as Magalhaes (Magellan) or Drake, but rather a slave who has hitherto largely remained absent from the annals of nautical history.
As Bernstein points out, humans are the only species to engage in trade. It is a fundamental characteristic of our species, and all the rest of human nature comes into play in its furtherance. The rapid expansion of Islam is partly explained by the fact that Muslims were under religious injunction not to pillage fellow believers, but could consider pillage an almost blessed act when perpetrated on non-believers. Not surprisingly, upon learning of this useful distinction the non-believers rapidly converted, thus sparing themselves further depredations - but forcing the might of Islam to push its boundaries ever-forward in search of new people to loot and slaughter. And lest we fall into the lazy trap of equating Islam alone with violence and intolerance, there's a salutory chapter of the Portugese expansion into the East, which amply demonstrates that no religion, nationality, or ethnic group has any monopoly on repellant behavior.
Equally interesting is Bernstein's observation that the Boston Tea Party, far from being all about "no taxation without representation" as faithfully portrayed in the Disneyesque world of American school text books, was actually cant to disguise the protection of middle-men and thus ensure the continuation of overly-high prices for the hapless American consumer of tea.
Despite the catalogue of stupidities, atrocities, and double-dealings that is inevitably a large part of any history of humanity, this book ultimately is an optimistic work. Trade, as Bernstein enables the record to show, has been almost single-handedly responsible for the fact that the vast majority of humankind no longer has to grub roots out of parched ground nor resort to trying to bring down the occasional ruminant with wooden spears. Just as today finds no shortage of anti-globalisation protesters, so throughout history people have complained that this wicked invention called trade has been upsetting cozy monopolies and creating social unrest. In the process, it has also created opportunity and wealth and well-being for the vast majority of humankind. This really should be a basic text book for anyone at undergraduate level who has any curiosity at all about why humans have been able to construct this modern world in which we live.
If there were only three books I could take into exile, this would be one of them. The other two would be The Constitution of Liberty by Hayek and the History of the Peloponnesian War by Thucydides. All three shed important light on the human condition in realms both large and small, and all three are a pleasure to read and re-read at one's leisure.
Engaging Romp through History from an Economist It is not often that the history of the world is told by an economist in such a readable and entertaining fashion.
Much of popular history is written for us from the point of view of political power, military conquest, religious conversion or ideological domination. The roles of consumption and trade in shaping the course of history is often forgotten because economic historians rarely produce popular reading and popular historians rarely mention economics.
Bernstein's book is a wonderful journey through time and the basic trading relationships between civilisations - silk, porcelain, coral, coffee, opium, tea, sugar. It also shows us how control of the trade in these various commodities led to wars, the movement of slaves (of both caucasians to the east and negros to the west) and the rise and fall of the wealth of nations.
Many of the criticisms in the reviews seem focused on factual errors, non-standard conventions and accusations of political bias (curiously enough, of being both left and right). Bernstein has played it loose in his story telling style and there is no way one would mistake this book as an attempt at a thorough and conservative piece of academic work.
But it is the often speculative nature of the narrative and the attempt to pull together a grand picture that makes this book so engaging. Many of the criticisms have missed the forest for the trees I'm afraid and there few books that tell the tale of the economic history of the world in so engaging a romp.
The Urge to Trade For those who like their history on a broad canvas, this book will certainly satisfy. William Bernstein, who has written books on finance and economics, including The Birth of Plenty : How the Prosperity of the Modern World was Created, takes a look at global trade from ancient Sumeria to the present day. He has written in the words of David Landes a "big history," taking one idea or observation and tracing through the ages.
That trade has always existed and that it is beneficial is not exactly a new idea, but in Bernstein's account he gives it a new primacy. Trade can be said to be war by other means. Countries can acquire goods and materials peacefully rather than belligerently. Bernstein emphasizes that trade has always been and always will be a great deterrent to war. If wars have loudly made history, trade has done so quietly in influencing its course.
This book can be read a resounding defense of the principle of comparative advantage in that trade always benefits all parties involved. (Granted that this principle is still debatable.) It shows how countries, regions, and individuals sought to possess goods and resources that they could not produce or acquire locally. The history of global trade is vast, but Bernstein focuses mainly on the pre-modern age, dealing more with the commodities of the pre-industrial world.
Toward the end of the book, Bernstein discusses some of the issues of global trade today. He concedes that globalization has not benefited everyone uniformly, indeed many of the workers of the industrial world have lost their jobs to offshoring. However, in the aggregate, trade has created economic growth and wealth. It is still better than protectionism and isolationism. The eponymous splendid exchange has brought a bounty of goods and reduced the chances of war. Not a bad deal when one considers the alternatives.
A Disappointing letdown Unfortunately, this is not a serious work of history, and is full of contradictions of 'facts' in addition to mistakes. The list of references is impressively long, but often irrelevant. There were many passages in which the author seemed to have suspended incredulity of his references. The subtitle "How Trade Shaped the World", while perhaps not chosen by the author, leads the reader to believe that the explanation will be found in the book. However, those expectations were dashed. There are major international trade goods that are not even mentioned, nor is there any attention given to the development of currencies and the impact on the barter system of trade. It also becomes apparent that global trade and transportation are joined at the hip, yet the author doesn't seem to understand how sails and ships operate, contradicting himself regarding the merits, and thus trade advantages of owners of square-rigged ships versus dhows (relating to the ability to sail into the wind, very important for 2,000 years of sailing). Then there are the nitpicking things that a good editor should have caught, like rounding the Cape of Good Hope and sailing westward to the Spice Islands. Great theme, but not well executed.
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