Customer Reviews

A Splendid Exchange: How Trade Has Shaped the World from Prehistory to the Present

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The book is a fine primer in trade and the ideas of Adam Smith, David Ricardo and more recent economists, such as Paul Samuelson.

The entertaining and lively writing style of the author should not obscure the underlying strength of the book which rests on its analytical rigour and the way in which the author weaves in the theoretical and the practical.

The book is a timely reminder of the benefits accrued by trade in an era in which globalisation gets a bad press. People tend to focus on the undesirable effects such as the threat to the environment by the phenomenal growth of Chinese manufacturing exports, the outsourcing by corporations and the re-emergence of inflation as oil and food prices soar. At the same time they underplay the benefits such as the boost to Western living standards from inexpensive Chinese goods and the lifting of literally hundreds of millions of Asians above poverty level.

We follow the author as he unfolds his story to show how trade evolved and shaped the world. The story begins with Sumerian farmers in the third millenium BC who bartered grain surpluses generated in the Mesopotamian fertile crescent for copper obtained from Sinai several hundred miles to the West to make weapons to repel nomadic raiders.

The author discusses the Peloponessian war between Athens and Sparta to highlight the wider point about the importance and vulnerability of sea-lanes.

The story continues with the rise and fall of Venice and Genoa, the devastation caused by the Black Death, the Portuguese-led age of discovery, the establishment of the Dutch and British East India trading companies, the golden period of the late 19th century in which trade flourished under the British empire and the 20th century's descent into protectionism.

The author emphasizes the role of technology in promoting trade, especially the advent of steam and refrigeration.

Finally the author articulates the fringe benefits derived from trade such as exchanges of art, science and ideas and in promoting understanding among peoples in different lands.

This is, quite simply, a superb book, combining the virtues of Findlay and O'Rourke's Power And Plenty (my top book of 2008) and Landes's Prometheus Unbound, and better in many ways than Ferguson's The Ascent Of Money and Maddison's Contours Of The World Economy, and unlike the latter manages to steer clear of significant errors (on p155 he puts Aceh in India, not Indonesia, and on p216 he manages to render "Cyprus" as "Cypress").

Its subject matter crisscrosses all of the aforementioned works, with some pretty well inevitable overlap, even down to a quote from Jan Pieterzoon Coen - "We cannot carry on trade without war, nor war with out trade" - also used by Findlay and O'Rourke. But whilst Bernstein cannot avoid the viability of the central thesis of Power And Plenty - that trade and might are irrevocably conjoined - the emphasis is less on the martial than on the ineluctable urge, in Bernstein's thesis, of human beings to treat with each other in the exchange of goods or their proxy, money.

Reaching back initially to the fourth millennium BCE, Bernstein's story strictly speaking begins around 2500 BCE with the first known use of silver as a means of exchange in Sumeria (see also Ferguson's book and Cynthia Stokes Brown's Big History) and traces the history of Trade thenceforward through numerous nations and empires.

En route he throws in some enlightening asides. He speculates that the tendency of the channel between the Great Bitter Lake and the Gulf of Suez to occasionally dry up was the origin of the story of the Israelites' escape across the Red Sea. He tells us that Aden's name derives from the Arabic for Eden. And he reveals that, like the Christians, the Muslims were not above adopting existing traditions, such as the hajj.

Perhaps one of the highlights of the book is his exposé of the story of how the great plague was able to propagate, with the aid of trade. Something my old history teacher never told me was that the bacillus's victim of choice was a ground rodent called the tarabagan. The black rat, commensal with (living alongside) tarabagan and humans, acted as a bridge between the two courtesy of the vector, the flea, and all of those unfortunates were likely to fall victim to the bacillus. The fleas, which took longer to die than their sources of nutrition, would also use horses and camels as "hotels" after the rats had died, but were also likely to find sustenance in other creatures: Bernstein reports accounts of the ground littered with plague-infected birds.

Later he explains in detail the provenance of the Spanish dollar, or piece of eight, which was so unwieldy that it was often divided into its eight parts, hence the origin of the US quarter as "two bits". The Spanish dollar was legal tender in the United States until 1857. He also covers the origins of the coffee trade (a subject close to my heart - plenty was imbibed as I read), the reason why cotton is so widespread globally (because of its buoyancy and saline tolerance), and how, in the 17thC, the East India Company effectively invented the fashion industry, and product placement, by gifting wardrobes of cotton-based product to the most influential stars of the day, the royal family.

To finish, Bernstein warns of the dangers of a repeat of such excrescences as the Smoot-Hawley act, admits nevertheless that the benefits of global trade are not as clear cut as some would have us believe, but also contends that, on balance, the world is maybe a better, and more completely known, place for it.

The appeal of this comprehensive history of world trade is rooted in its valuable information, thoughtful insights and brilliant writing. But, you'll also be delighted with the fascinating, little-known details that financial theorist William J. Bernstein throws in along the way. For example, did you know that the Boston Tea Party, the legendary event that helped launch the American Revolution, was not a selfless act of patriotism, but a venal stunt by greedy smugglers and merchants that actually cost the colonists a lot of money? How about the fact that an Ethiopian herder may have discovered coffee in A.D. 700 when he noticed that his goats and camels bounced merrily around all night after chewing on the red berries of an unknown shrub? Or that the early Chinese sometimes adulterated their precious tea exports with sawdust? Bernstein fills his book with such beguiling minutiae, but primarily he presents a knowing, comprehensive, discerning report on world trade from its prehistoric beginnings to the present. getAbstract predicts that Bernstein's saga will engage you from the first page to the last, and from sea to shining sea.

In this book the author tells the story of the world through trade from Sumer to our days. You learn something new in every chapter and what's more important it's now just a collection of facts or stories. By the end you have a framework to think about the world history so that you can even explain events outside the book.

The highlights are: the role of Islam in trade and growth, the role of diseases, the role of particular spices, the real story behind the War for Independence and so on.

The only problem with the book is that it spends a bit too much time talking about ancient history and virtually zero time on the 20th century. I assume this is done because recent history is less ambiguous but it would still be nice to read.

A Splendid Exhange is a 'must read' for anyone wishing to understand world economics today. It gives a thorough historical perspective of Trade throughout the ages and summarises clearly the advantages and disadvantages of Free Trade as a conclusion.

In addition to the wide range covered by this book, as reviewed clearly elsewhere, I found that it gives a new perspective of world history and how considerations of trade affected historical events to an extent that I had not realized. I have learnt a great deal from this clearly written account that I have greatly enjoyed reading.