SPECIALIZATION, TRADE,
AND INTERDEPENDENCE
Lesson 4
Specialization
Part 1
The Uneven Distribution of the Factors
of Production

The factors of
production- land,
labor, capital, and
entrepreneurship- are
not spread evenly
around the world.
The Uneven Distribution of the Factors
of Production

Different parts of the
world have different
climates, different
soils and landforms,
different bodies of
water, and different
mineral resources.
 These
differences are
not limited to natural
resources.

Different areas also
have people with
different training,
education, and
experiences as well.
The Uneven Distribution of the Factors
of Production

Ancient Egypt, for
example, had many
important mineral
resources.
 These
resources
included copper, tin,
gold, and iron.
 Egypt’s copper and tin
were used to make
bronze.
The Uneven Distribution of the Factors
of Production

Later, Egyptians used
their iron ore to make
iron tools and
weapons.
 Gold
was used for
decoration and
became a form of
wealth.

Other places in the
Mediterranean region
did not have the same
mineral resources that
Egypt possessed.
Specialization

Even in ancient times, the uneven distribution of
both natural and human resources around the
world encouraged specialization.
 Specialization
is the making of only some types of
goods and services.
 Each region began making more of certain types of
goods based on the productive resources it had
available.
 These
specialized products were then traded with others to
obtain other goods.
Specialization

For example, the ancient Greeks lived on rocky
hillsides that received plenty of sunshine.
 They
could grow grapes and olive trees, but not much
wheat.
 They crushed their olives to produce olive oil for
cooking, eating, and using as skin lotion; they crushed
their grapes and turned the juice into wine.
Specialization

The Greeks also
became skilled at
making clay pottery.

The ancient Egyptians,
on the other hand,
lived along the banks
of the Nile.
 They
were able to
grow wheat on the
flat, fertile lands
alongside the river.
Advantages to Specialization

Economists see several important advantages to
such specialization.
 Each
region can take advantage of its own productive
resources.
A
region may have fertile soil and a mild climate that is
suitable for growing particular crops.
 By specializing in the production of these crops, farmers
take advantage of these local characteristics.
Advantages to Specialization

As a result, each region tends to produce those
goods and services it can make at the lowest
opportunity cost.
 It
sacrifices less labor and time to make those goods
than it would to make their other goods.
Advantages to Specialization

By providing just a few kinds of goods or services,
producers in a region become more skilled at
making them.
 Producers
also learn how to make these goods faster
and more efficiently.
 For
example, producers in a region might invest in special
tools and training to produce these goods.

This helps to lower production costs even further.
Trade
Part 2
How Specialization Encourages Trade

Because regions specialize, they rarely produce
everything they need.
 Instead,
different regions depend on one another to
supply many goods and services.
 They
exchange these goods and services
 Merchants bring goods from one place to another, and then
sell them in markets.
 Countries and regions thus export products they make and
import from others.
How Specialization Encourages Trade
Imports
Goods from foreign
countries brought into a
country for use or sale.

Exports
Goods and services sold
from one country to other
countries.
There are many examples in history that illustrate
how specialization leads to trade between regions.
How Specialization Encourages TradeThe Maya

The ancient Maya, for
example, inhabited the
Yucatan Peninsula in
Mexico.

The salt beds that lined the
coast of the Yucatan
provided salt to the Maya.


Salt is an important
ingredient in the human
diet.
In addition to salt, the
Maya had obsidian
(volcanic glass), cacao,
seashells, and pottery.
How Specialization Encourages TradeThe Maya

They exported these goods to their neighbors in the
central lowlands of Guatemala.
 The
city-states of Tikal and Copan served as major
trading centers.
 In return, these Guatemalan city-states gave the Mayan
their turquoise, jade, and quetzal (bird) feathers--goods greatly valued by the Maya as symbols of
wealth and status.
How Specialization Encourages TradeAncient Egypt and Greece



Because the Egyptians could grow large amounts of
wheat, they could exchange their surplus grain with
other Mediterranean peoples, such as the Greeks, for
olives, wine, and pottery.
It was easier for the Greeks to exchange their olives,
wine and pottery for Egyptian grain than it was for
them to grow their own wheat on the rocky hillsides of
Greece.
It was also possible for these peoples to ship their
products easily, since they could be carried by boat
across the Mediterranean Sea
How Specialization Encourages TradeRoman Empire

The ancient Romans also engaged in extensive
trade.
 Like
the Greeks, the Romans shipped goods across the
Mediterranean .
 They exported olive oil and wine from the hillsides of
Italy.
 Sicily and North Africa grew wheat, which was
shipped to Rome.
How Specialization Encourages TradeRoman Empire


Romans also obtained marble from Greece, gold
and silver from Spain, and iron from Britain.
The Romans even traded along overland routes
across the steppes, deserts, and mountains of
Central Asia in order to obtain cotton and spices
from India and silk from Han China.
The Effects of World Trade

The need to exchange goods led to the
development of trade and distinct trade patterns
between peoples very early in human history.
Trade Routes

Because of geographical factors, trade has often
proceed along certain fixed routes--- usually along
rivers, across seas, and through valleys and plains.
 In
contrast, mountains, deserts, and dense forests often
act as barriers to trade.
Trade Routes

Trade routes usually connect places with different
resources or center of population.
 The
Mediterranean Sea and the Silk Road across
central Asia are two examples of trade routes
 Later, the Atlantic Ocean provided routes linking ,
Europe, Africa, and the Americas.
Trade Routes

Merchants are people who buy goods to sell to
others at a higher price.
 They
risk their money to order goods they think others
may want.
 Merchants often pay to ship goods along trade routes
from one place to another in order to sell these goods
at a higher price.
The Growth of Cities

The establishment of specific trade routes has often
led to the growth and development of cities.
 Cities
arise where goods are sold or where goods are
unloaded to be placed onto a different type of
transportation.
The Growth of Cities- Examples

Alexandria
Located where the Nile
River flows into the
Mediterranean Sea,
became an important
Egyptian port.
 Merchants gathered to
trade goods with
merchants arriving from
other places around the
Mediterranean.


They traded spices,
textiles (cloth and
clothing), silver, gold,
and foods.

Because merchants living
in Alexandria needed
food, clothing, homes
and other goods, they
provided work to local
craftsmen.

This encouraged the city
to grow.
The Growth of Cities- Constantinople

Another famous city that developed along trade
routes.
 Located
on the Black Sea, where Europe meets Asia.
 Traders
between these two continents crossed through this
city.
 Here, merchants exchanged European goods for Chinese
silks and Asian spices.
The Growth of Cities- Venice


Like other cities in Italy, Venice was situated along
major trade routes for East-West trade.
During the Crusades, merchants in Venice built
large fleets to carry Crusaders to the Holy Land.
 These
same fleets were later used to open new markets
in the Middle East.
The Growth of Cities- Timbuktu


Arose in West Africa north of the Niger River, on
the southern edge of the Sahara.
The city was an important center for the gold-salt
trade.
 Arab
traders crossed the desert to bring salt, cloth and
horses.
 In exchange, they received gold and slaves.

Under Mansa Musa, the city became a center of
learning.
The Growth of Cities- European
Colonial Empires and Trade


After the European conquest of the Americas, trade
routes shifted and cities closer to the Atlantic grew.
Several countries established colonies in the “New
World.”
 Spain,
Portugal, Holland, France, and Britain are
located in the western end of Europe and benefited
from the rise in Atlantic trade.
The Growth of Cities- European
Colonial Empires and Trade

Cities like Lisbon in Portugal, Seville in Spain, and
Amsterdam in Holland grew quickly.
 Merchants
exchanged slaves from Africa, precious
metals (silver and gold) from Mexico, sugar cane, fur,
tobacco, rice and indigo (a blue dye), from the
Americas, and furniture, clothes, and foodstuffs from
Europe.
Interdependence
Part 3
The Interdependence of Regions

Over time, specialization and trade have made
different regions of the world increasingly
interdependent.
 Regions
become interdependent when they depend on
each other to obtain goods and services to meet their
economic needs.
The Interdependence of Regions


In ancient times, areas
bordering the Mediterranean
grew interdependent through
trade.
Under Roman rule, goods
were shipped back and forth
across the Mediterranean or
carried to different parts of
the empire along roads built
by the Romans.
After the fall of Rome,
long-distance trade declined.

The Interdependence of Regions

By the end of the Middle Ages, trade had revived
and goods from the Middle East, India, and China
found their way into the fairs and markets of
Europe.
The Interdependence of Regions

In 1492, the European encounter with the Americas
greatly stimulated the rise of long-distance trade,
specialization, and the interdependence of
regions.
 New
food products like the potato spread from its
origins in the Andes Mtns. across the ocean to Portugal
and Spain.
 From
there, the potato spread to other countries in Europe,
and finally, to all regions and continents.
The Interdependence of Regions

Sugar provides another important example of the
interdependence of regions.
 Most
sugar is produced from sugar cane--- a plant that
only grows in warm, humid, climates.
 Sugar cane was first grown in India.
 From there it spread to the Mediterranean.
The Interdependence of Regions

After the conquest of the Americas, Europeans set
up sugar plantations in the West Indies and South
America.
 Enslaved
Africans were sent to the Americas to work
on these plantations
The Interdependence of Regions


In the 1500’s, sugar was still a luxury good
consumed only by kings.
By 1700, it had become a widespread household
good, sold in street markets.
 The
production of such large quantities of sugar only
became possible because of specialization and trade.
The Interdependence of RegionsTriangular Trade

Plantations in the Caribbean grew sugar cane for
export.
 European
ships carried this sugar to Europe.
 Meanwhile, foods from the English colonies in North
America were sent to workers on the plantations
The Interdependence of RegionsTriangular Trade

Enslaved Africans were shipped across the Atlantic
to provide an unending supply of labor.
 The
plantation owners imported furniture and clothes
from Europe in exchange for the sugar.

To produce large quantities of sugar, these different
regions of the world had thus grown highly
interdependent.
Triangular Trade