From the dawn of civilization to modern times, the desire to purchase products from other regions of the world has led to increased interaction between different social and ethnic groups. In the process, individuals engaged in trade have developed the tools and skills necessary to conduct commercial transactions including forms of communication, political structures, means of transportation, mediums of exchange, and accepted practices that have become codified in laws. Consequently, this examination of the history of trade includes interdisciplinary and cross-cultural studies that illustrate the dynamics linking human anthropology and the development of commerce. When trade has occurred between peoples after their initial contact, historians have noted the syncretism and cultural borrowing that have transpired. Trade has operated as more than just an economic activity; it also shaped human relations and the history of humanity.
Throughout the millennia, trade has expanded from a local to a regional to a global market. At first, individuals conducted trade among themselves or with neighboring villages and towns. With the rise of empires in the Middle East, the purview of trade grew from a local to a regional basis. Local trade remained important, as luxury items from places farther away, such as silks, spices, perfumes, and jewelry, became available to the wealthy classes. As trade networks developed and the volume of goods being shipped increased, everyday items—including olive oil from Greece and wheat from Egypt and then North Africa—were shipped from one region to another. The rise of mighty empires, such as that of Alexander the Great and the Romans, spread trade from the Atlantic Ocean to China. The de sire to find a water route from Europe to China led to the discovery of the New World and the transfer of items from Spanish America to the Old World in Europe began the process of globalization. Over the next 500 years, the pattern remained the same, although the volume of trade steadily rose. The abandonment of mercantilism and protective tariffs allowed further blossoming of trade. The ability to overcome the problems imposed by time and space through new communication and transportation technology has forever transformed trade relations.
Trade and civilization are mutually dependent. All the great empires and cultures of the world have relied on trade to increase their power. Harbors and urban marketplaces allowed merchants to meet with customers and sell their goods. As trade became more lucrative, rulers used some of their tax revenues to provide protection either on land or sea; in particular, navies developed in part to guard against pirates who raided merchant vessels. Harbors were developed and ships outfitted to discourage pirates and thieves from interfering with trade transactions.
Along with trade came new ideas, technologies, and forms of communication. For example, under the British, the use of the English language spread throughout the world from the sixteenth through the nineteenth centuries. New ideas, such as representative government, also spread to many countries that had formerly been part of the British empire, much as Roman law spread throughout western Europe during the Roman empire. The invention and improvement of the steam engine occurred in Great Britain where it was used in industry, while an American, Robert Fulton, applied the new technology to develop the steamship. The west European and North American countries developed extensive trade networks on a global basis long since and continue to exert power and influence throughout the world, while countries that engaged in less trade are more likely to experience poverty.
Although trade is usually beneficial, it can either create or be adversely affected by warfare and unrest. Wars have usually upset the traditional patterns of trade. The attacks of the Sea Peoples disrupted trade of the Hittites, Phoenicians, Mycenae, and Egyptians. The attacks of the Germanic tribes on Rome led to the fall of the Western Roman empire and the end of most trade across Europe for a thousand years. The Mongol invasion spread the Black Death and reduced trade again during the thirteenth century. During the Napoleonic Wars, France and England ordered blockades on each other’s territory in an effort to prevent neutral countries, like the United States, from trading with the enemy. The initial U.S. response was to impose an embargo and then to trade with whichever country would promise to respect its neutrality. When Napoléon Bonaparte accepted that offer, the United States declared war on Great Britain, thus beginning the War of 1812. During World War I, merchant ships became the target of German submarines. Only by using the convoy system, coupled with sonar and depth charges, could goods from the United States reach Europe.
Another principal way in which trade can be disrupted is through the erection of trade barriers—the most common one being the tariff. Designed to protect domestic industry, industrializing countries, such as the United States and Germany, raised duty rates during the nineteenth century. The high rates prevented Great Britain from selling many of its manufactured items in these two countries, which had traditionally purchased goods from it. After World War I, when the three major empires of Europe were divided into twelve different countries, they employed such tariffs. These tariffs, combined with the overproduction of products around the world, forced the United States to raise its tariff rates again in 1930. Many scholars blame these increased rates, and their subsequent effect on disrupting trade, for the severity of the Great Depression.
Although trade can be affected by both tariff and nontariff barriers imposed by one country or another, the threat that is the most disruptive in the current environment is terrorism, used by nonstate actors, usually with an agenda that goes beyond an economic motivation. It was no coincidence that the target of the terrorists on September 11, 2001, was the World Trade Center, which stood as a symbol not only of the United States in particular but of the modern global economy in general. Disrupting trade has been just one of the tactics used by terrorists as part of their strategy to foment chaos and turmoil. The resultant instability is bad for all kinds of business, not limited to tourism, which is a mainstay of many of the areas targeted by terrorists, such as Israel and Bali in Indonesia. The use of airplanes as missiles severely hurt the airline industry. The service sector was particularly hard hit, especially indirectly, as the general level of fear reduced confidence and had a ripple effect on business generally.
Disruptions notwithstanding, trade will remain a basic human activity. Food and other necessary goods will remain the foundation of world trade, but the rapid development of technology has led to the exchange of more sophisticated products. Communication and transportation revolutions have served as catalysts that stimulate and facilitate increased trade. The globalization of trade since the fifteenth century has linked world economies. Trade relations have also affected the formation or stability of governments, social issues, and cultural developments. World trade plays a vital role in the interactions of all people.