What is the main message of A Splendid Exchange?

The main message of A Splendid Exchange is the history and significance of global trade.

Who is the author of A Splendid Exchange?

The author of A Splendid Exchange is William J. Bernstein.

History

A Splendid Exchange Book Summary - A Splendid Exchange Book explained in key points

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A Splendid Exchange summary

Name: A Splendid Exchange
Rating: 4.5 (37 reviews)
Author: William J. Bernstein

William J. Bernstein

How Trade Shaped the World

4.5 (37 ratings)

22 mins

Brief summary

A Splendid Exchange by William J. Bernstein is a historical account of global trade and its impact on civilization. From the Silk Road to modern-day globalization, Bernstein traces the evolution of commerce, culture, and exchange.

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A Splendid Exchange
Summary of 9 key ideas

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Key idea 1 of 9

What’s in it for me? Learn about the ups and down of global trade over the past millennia.

These days, the marvel of trade is often taken for granted. Take the device you are reading these blinks on; it is almost definitely a result of global trade. Companies like Apple design their products in the United States, gather parts from all around the world to be assembled into devices in China and sell the finished products on the international marketplace. Global trade is a simple fact of life, linked to countless aspects of our daily lives.

However, global trade has not always been this easy or ubiquitous. Before the Industrial Revolution, long travel times and primitive technology hampered efforts to expand international markets. However, since World War II, free trade has blossomed and, in many senses, has become indispensable for modern societies. It has produced both winners and losers, though, and many aspects of free trade indicate some possibly worrying times for the future.

In these blinks, you’ll learn

that the history of long-distance trade stretches back thousands of years;
how a desire to speed up trade led to the discovery of the Americas; and
why protectionism helped exacerbate the Great Depression.

Trade began in Mesopotamia with early agriculture and the materials for simple tools.

At your local supermarket, you might find fruit and vegetables from places as far away as Peru, New Zealand or Portugal; at Western appliance stores, you’ll see TVs from Japan or Taiwan; and at the clothing store, you’ll find shirts made in China or Bangladesh.

Today’s globalized trade touches every part of our lives – but we hardly notice it anymore.

To get the full story of how we reached this point, we have to rewind several thousands of years to Mesopotamia, where commerce began.

Some of the earliest trade routes formed around the Persian Gulf, where agriculture was being developed and basic manufacturing methods were being used to create advanced tools.

One of the earliest goods to be traded was obsidian, a black volcanic rock that was valued in prehistoric times because it was easy to turn into a razor-sharp weapon or tool.

Archeologists have found obsidian flakes in the Franchthi Cave in Greece that date back over 12,000 years. And the only way for that obsidian to have ended up there was by having been transported from somewhere else, most likely from Mesopotamia.

The region of Mesopotamia is often called “the cradle of civilization.” The ancient and fertile land was located between the Euphrates and Tigris rivers, two waterways that connect to the Persian Gulf.

Mesopotamia was rich in many goods, including barley, fish and wool. But it also lacked some vital resources, including the timber, metals and stone needed to build weapons, boats and shelters.

The benefit of trade thus quickly became clear, and the Mesopotamian nations of Sumeria, Assyria and Babylonia used their surplus goods to trade for metals from Oman, marble from Persia and lumber from Lebanon. This is how the Persian Gulf became an early center for trade and commerce by 3000 BC.

As civilization slowly spread westward to Egypt and Greece, new trade routes emerged in the Red Sea and the Mediterranean. Greece exported wine and oils in exchange for the grains it lacked, like the wheat it imported from Egypt.

Camels revolutionized trade in Asia and Muslim Arabs opened trade with China.

The Pleistocene is better known as the Ice Age, a period of millions of years in which massive glaciers formed. It ended around 10,000 years ago, but not before humans were able to migrate over the ice that formed to connect east Siberia to the American continent.

Humans weren’t alone in using this ice bridge; species such as horses traveled in the opposite direction, from North America to Asia. These early horses were the evolutionary predecessors of camels. They developed a unique ability to preserve water and became perfect for Asia’s driest regions, especially Arabia.

Spices became hugely popular, while slavery and disease were exacerbated by trade.

When a Westerner buys a pair of sneakers, chances are they only have a vague idea of where it was produced. China? Maybe India?

The same thing applied to the spice trade, as European merchants in Genoa or Venice would be at a loss to name the precise origin of cinnamon or nutmeg. All they knew is that it came from the East.

Spanish and Portuguese explorers greatly expanded the known world and its trade routes.

By the fifteenth century, the rising star of the trade world was Portugal. Having developed a new and improved cargo ship called the caravel, the Portuguese perfected the maritime technology that would allow Europeans to open their own trade routes in the Indian Ocean.

Portuguese merchants set up strategic ports along the east coast of Africa, and they were the first to make it all the way around South Africa and back up toward the Indian Ocean.

The seventeenth century marked the start of worldwide trade, with Holland as the center of commerce.

With the amazing sea voyages of the sixteenth century, including those of Columbus and Magellan, humanity’s understanding of the world was expanding, along with the business of trade. It was now possible for a truly global economy to take shape.

We can trace today’s globalized market back to the seventeenth century.

Though England was once under the spell of mercantilism, free trade eventually won out.

While Holland may have been top dog in the 1600s, as the years went on, European economic supremacy shifted toward England.

By the eighteenth century, the world’s biggest corporate enterprise was the English East India Company (EIC), which had supreme control of the highly profitable cotton trade between India and Britain.

Steamships and refrigeration revolutionized global and transcontinental trade.

Today’s manufacturing industry is like an elaborate dance with multiple partners.

Different nations produce various pieces of cars, computers, TVs and stereos, then they’re shipped off and assembled somewhere else entirely. Sections of certain products might cross and recross two or more oceans before they become part of a final product ready for purchase.

The Great Depression was the result of protectionist acts that limited free trade.

Heading into the twentieth century, free trade appeared healthy and harmonious. But then came the events of the 1920s that sank free trade into an abyss that eventually led to the Great Depression.

It all began in 1922, with the Fordney-McCumber Tariff, which set off a wave of protectionism in the United States.

The United States embraced free trade in the post-war years, but globalization has also created dangerous inequality.

While the United States may have put the kibosh on free trade at the start of the twentieth century, by the 1950s, it was embracing it with open arms.

This change of attitude happened in 1945, as World War II came to an end.

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What is A Splendid Exchange about?

A Splendid Exchange (2008) offers a comprehensive look at the events and inventions that enabled free trade on a global scale. It also shows how the fight between isolationism, or protectionism, and free trade had been going on long before the term “globalization” was ever coined. History shows us how natural and beneficial trade is between nations but reveals its dark and dangerous side as well.

A Splendid Exchange Review

A Splendid Exchange (2008) is an insightful exploration of the history and impact of global trade. Here's why this book is worth reading:

Offering a comprehensive view of trade throughout history, it reveals the complex and interconnected nature of economic exchange.
Backed by extensive research and filled with interesting anecdotes and examples, the book provides a rich and engaging account of the topic.
By examining the cultural, political, and economic consequences of trade, it brings to light the far-reaching effects of global commerce, making it anything but boring.

Best quote from A Splendid Exchange

Alone among the worlds religions, Islam was founded by a trader.

—William J. Bernstein

Who should read A Splendid Exchange?

Economists and historians
People curious about the roots of globalization
Free-market adherents and trade protectionists

About the Author

William J. Bernstein is a retired neurologist whose popular writing has focused on modern investment strategies and financial history. His books include The Birth of Plenty: How the Prosperity of the Modern World Was Created and The Four Pillars of Investing.

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