A Splendid Exchange. How Trade Shaped the World
By
William J. Bernstein
The affairs which are tied over the borders which separate the peoples do not mean that
these borders do not exist " noted Émile Durkheim in 1895 (1895: 113). A little over a century
later, William J. Bernstein's book A Splendid Exchange with the inspired caption How Trade
Shaped the World comes to provide a substantiated confirmation to the French sociologist. From
Sumer, where the copper trade was introduced 3000 years BC, to Seattle where the third WTO
ministerial conference was held in 1999, the author shows how the propensity to trade, identified
as a specificity of the species human by Adam Smith, shaped the world. By detailing the routes
taken over the centuries to supply Europe, Asia then Africa and the Americas with rare or exotic
foodstuffs, it presents a detailed historical panorama of the “deals” that have been formed around
the world while that “borders" separated peoples and their mosaic of nations.
In doing so, Mr. Bernstein is in line with historians and geographers such as Fernand
Braudel, Paul Bairoch, Jacques Lévy or Peter Taylor, who have interpreted the spatiality of
economic phenomena by articulating topological arguments (networks) and topographical
arguments (territories). On the one hand, the author recalls, the world was shaped by the incessant
flow of global networks destined for the quest for silk, incense, spices, slaves, precious metals or,
more recently, coffee. , sugar, opium and petroleum. On the other side, he points out, the world
has also been subjected to wars and territorial conquests of empires, kingdoms or states.
Network logic and territorial logic sometimes come into conflict for a long time. This is
the case of China, which, following the victory of the Confucian bureaucracy in the XV th century,
issues imperial decrees forbidding any construction vessels. The Empire then locked itself in a
long commercial silence, even though the Chinese had previously undertaken trips taking them to
Indonesia and East Africa. In the same way, the Pax Islamica which follows the Moslem conquests
in Europe makes of the Mediterranean a border separating Moslems and Christians whereas this
sea constitutes one of the great axes of trade of the world before the VIII century. In other cases,
the market logic merges into the territorial play of political powers, as when the Doge of Venice
agrees to lead the Fourth Crusade of Geoffroi de Villehardouin in exchange for the capture of
Zadar located on the coast of present-day Croatia and the sack of Constantinople (1203).
These historical episodes allow the author to recall that trade and violence have often gone
hand in hand. This is particularly true of the Great Discoverers, motivated by the search for new
trade routes to “India”. Mr. Bernstein then recalls that if Vasco da Gama (circa 1469-1524) was
an outstanding navigator, able to take the route of the maritime trade winds which was to lead him
to cross the Cape of Good Hope, he was also known for his propensity kidnapping, theft and
murder. What is less known is to what extent the daily life of Portuguese and Dutch merchants
who followed the great navigators on the coasts of Asia was marked by violence against their
trading partners? In the Moluccas Islands for a long time remained unknown to Europeans for
example, the nutmeg and clove producing populations were massacred and reduced to slavery. The
degree of brutality, exacerbated by Catholic fundamentalism, was exceptional, even for the time,
the author notes.
From 1650, while the Great Discoveries opened the door to the Americas and knowledge
of the complex system of winds made it possible to rally the four corners of the globe more quickly
than before, the intensity of the exchanges of goods and people takes on a global dimension.
Therefore, the question of the benefits of free trade and protectionism will not cease to arise. On
this point, the author recalls that if, as argued by Adam Smith and David Ricardo, the lowering of
tariff barriers in principle slightly improves the average living conditions of companies, this also
has the consequence of increasing internal disparities between rich and poor and to push certain
social groups into extreme poverty.
M. Bernstein then devoted several pages to the foundations (and limits) of the theorems of
Heckscher-Ohlin (1933) and Stolper-Samuelson (1941). The first stipulates that the fall in
transport costs leads to an intensification of trade and to an overall convergence of the prices of
the goods traded as the remuneration of the factors of production. The second asserts that the
relative increase in the price of a good will increase the real income of the factor of production
used most intensively in the production of that good and decrease the real income of the factor
used the least intensively. Considering the three factors of the classical economy that are labor,
capital and land, the resulting standard model of international trade theory then makes it possible
to show that the main beneficiaries of the intensification of trade will be the owners of the market.
factor of production abundant in each country, while the owners of the factor less abundant will
oppose the lowering or elimination of tariffs.th century.
An additional interest of the book is to provide detailed information on the techniques and
on the physical factors which allowed the trade to unfold on a global scale. Particular care is taken
in describing the means of transport, in particular the different types of boats (caravels, junks,
clippers) which made navigation possible on a global scale while several well-documented pages
are devoted to the presentation of the maritime trade winds that allowed sailors to circulate between
Europe and Asia before the invention of the steam engine. The control of the means of maritime
transport and the winds thus increased the importance of strategic passages, in particular Hormuz
(Iran-United Arab Emirates-Oman), Malacca (Malaysia), Bab el Mandeb (Yemen-Djibouti) or
even Suez (Egypt) and the Bosphorus (Turkey). The author's interest in the physical setting
sometimes leads him to a certain overestimation of natural factors on social behavior, for example
when he explains tribal solidarities by the desert environment or the multiplicity of European states
by the presence of many mountains and rivers.
The fact remains that the historical examples developed by Mr. Bernstein convincingly
illustrate the principle that, while trade has brought stability between nations, it has not necessarily
abolished their borders. From Sumer to Seattle, the author's merit is to remind us of the interest of
a geography attentive to the diversity of the world and to ways of reducing its disparities.