Customer Reviews: Read 8 more reviews...
 Engaging Romp through History from an Economist August 12, 2008
2 out of 2 found this review helpful
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 July 29, 2008
6 out of 7 found this review helpful
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 July 18, 2008
11 out of 18 found this review helpful
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.
I like this fact filled book on the origins of trade, its influence on people/societies July 12, 2008
2 out of 5 found this review helpful
This possibly is one of the best books i read on influence of trade on society as a whole. This book traces trade back to thousands of years BC. What is so revealing is how smart decisions and dumb decisions by leaders/societies have such profound impact. What we see in today's world have lots of parallels to older times . This is very useful book and i recommend this to any one interested in business
Free Trade Polemics: Nothing New on the Horizon June 30, 2008
4 out of 9 found this review helpful
William Bernstein convincingly shows that trade is inseparable from human nature and has played a pivotal role in the history of mankind (pp. 15, 18, 89). Any effort to stifle trade is doomed to failure in the long run, to do so would invite smuggling, retaliation, and eventually a real war (pp. 261-65, 356, 367, 376).
Bernstein begins his history of trade around 3000 B.C.E. in Sumer in what is today Iraq and ends with the contemporary ambivalence about globalization. Climate, geography, natural resources, germs, openness to outside influences, technological advances, economically efficient institutions, political stability, and consumer preferences have all played a role in influencing trade (pp. 10-11, 34, 41-42, 53, 75-79, 86, 96-99, 103, 106-09, 129-51, 155-57, 167, 170-73, 187, 189-95, 199, 208, 215, 221-26, 232, 240, 243, 248, 254, 263, 270, 278, 286-87, 294, 307-12, 319-37, 356, 375-83).
Bernstein notes that in the absence of any authority beyond the tribe, entrepreneurs will prefer to raid instead of either trading or protecting trade (p. 67). Few things excite the envy and belligerence of the ruling elites of a nation as much as wealth derived from commerce (pp. 43-53, 90, 103-06, 116-29, 174-97, 214, 238-40, 284, 314, 354, 376).
Bernstein also shows with much conviction that the controversy about a positive trade balance has been around since the Antiquity (pp. 41-42, 258, 264, 279, 287, 290). Prominent Roman citizens such as Pliny the Elder and Seneca were complaining in the 1st century C.E. that Romans were wasting precious metal on fleeting luxuries such as silk and pepper imported from China and India.
The perception that one nation's gain comes only at the expense of another pleads for both a positive trade balance and mercantilism. Ideally, a nation should import raw materials and export finished manufactured products, which has a positive impact on employment. Bernstein correctly points out that nations grow wealthy mainly by improving their industrial and agricultural productivity. A nation's true wealth is also defined by how much it consumes (p. 258).
Like Erik Reinert, Bernstein emphasizes that most industrial countries first industrialize behind a protectionist wall and are then slowly and systematically integrated economically with nations at the same level of development. The United States followed the example of England to industrialize behind such a wall for about 150 years based on Adam Smith's Wealth of Nations (pp. 319-20, 349-51, 372-75).
Bernstein also reminds his audience that anti-globalization rallies are nothing new (pp. 199, 256-59, 270, 283, 302-05). Think for example about the dumping of tea into Boston harbor on December 16, 1773, under the pretext of "no taxation without representation." In reality, local smugglers and tea merchants feared the competition of the English East India Company that could import tea directly from Asia into America for the first time based on the Tea Act of May 1773. These local players couched their arguments in the predictable protectionist language of national interest. Protectionism benefits the economic agents who predominantly own a relatively scarce resource, say, labor, land, or capital, and harms those who own a relatively abundant one (p. 342).
Unsurprisingly, the losers of the Boston Tea Party were the end consumers who ended up paying more for their tea in the absence of more robust competition (pp. 241-43). Protectionist trade legislation usually strikes hardest at the weak and powerless (p. 307).
In addition, Bernstein cogently demonstrates that the Western powers, leveraging their superior military and maritime technologies, gave up on their armed monopolistic ways and embraced free trade, regardless of the wants and needs of non-western powers such as India and China (pp. 198-240, 294-95). The elites of these two countries have not forgotten how badly western-inspired free trade hurt their countries in the preceding centuries (pp. 297-300, 363, 383-84). To be fair, other factors unrelated to western trade policy also played a major role in the troubles of both nations (pp. 75, 99-103, 285, 300).
Although free trade benefited western powers in their interactions with one another, it also produced losers before WWI. Bernstein correctly points out that free trade offers modest benefits for most of the population while greatly harming small groups in specific industries and occupations (p. 358).
Before WWI, decreasing shipping costs led not only to the global convergence of commodity prices, but also to the leveling out of wages (labor), rents (land), and interest rates (capital) (pp. 338-42). Trade losers, who could not be expected to passively accept the situation, turned the tide against free trade between the 1880s C.E. and the middle of the 20th century C.E. (pp. 312-15, 337, 343-49). However, that increased protectionism did not stop the growth in international commerce until WWI (p. 349). The U.S. learned the hard way that protectionism and isolationism invite retaliation and can start a real war (p. 356).
The U.S. has spearheaded globalization through an American-dominated system, based on Pax Americana, since the end of WWII (pp. 356, 376). Contemporary existence is supported by ever-rising trade flows (p. 18). Bernstein reminds his audience that free trade and democracy have been hand in hand in most developed countries since that time (p. 361). However, agriculture and textiles, two economic heavy-weights, remain largely protected from foreign competition around the world for a variety of reasons (pp. 356-65, 376). Furthermore, resistance to free trade has increased in the U.S. since 1945 C.E. because some farmers, workers, and capitalists have more to fear from foreign competition than in the past (p. 357). Not treating these losers fairly and compassionately undermines the consensus needed to sustain free trade (pp. 377-83).
Finally, Bernstein draws the attention of his readers to the enduring importance of what he calls the maritime choke points such as the straits at Malacca, Hormuz, and Bab el Mandeb, on top of the two man-made Suez and Panama Canals. Guaranteeing freedom of the seas is a vital U.S. interest since about 80% of world commerce is carried on ships (pp. 367-71). Today's greatest threat to free trade comes from terrorism based in the world's failed states (p. 376).
To summarize, Bernstein compellingly demonstrates that for all its shortcomings, free trade is the worst form of trading except all those other forms that have been tried from time to time to paraphrase Winston Churchill (pp. 384-85).
|
