Customer Reviews

A Splendid Exchange: How Trade Shaped the World

5 star:		(27)
4 star:		(10)
3 star:		(4)
2 star:		(4)
1 star:		(4)

 

 

What makes a big-think book stand out is its successful combination of disparate fields of knowledge (think of Jared Diamond's combination of environmental geography AND physiology AND evolutionary biology). In A Splendid Exchange, William Bernstein's multiple areas of expertise come together to produce something extraordinary. Very few professional historians could approach his theoretical understanding of financial economics, fewer still share his practical experience of the functioning of markets, and hardly any share his knowledge of medical science. (Bernstein is a retired neurologist who holds a doctorate in chemistry, and a noted authority on financial investing who is regularly quoted by the Wall Street Journal and whose books on the topic are core reading.) Yet each of these strands of knowledge is critical to fully understanding the rise and development of trade.

To these, add another essential strand - encyclopedic knowledge of world history - and then Bernstein's ability to weave it all into an engaging tale. He knows how to clarify abstract points with apposite stories, which range from exotic historical figures to everyday kitchen items. The writing entertains while the thinking enlightens.

A Splendid Exchange illuminates more than you would expect. Consider military history: if you think of history as a chronicle of war, here you will learn just how much of that conflict resulted from trade agendas, in ancient times as well as modern. An example is the discussion of geographical "choke points"; I had never before understood how big a role they played in causing historical wars, nor had I understood the role they are likely to play in our own era.

Trade is naturally a hot issue in an election year when the economy is rocky; this book helps you put the debates in the largest historical perspective. (You will find previews of today's trade rhetoric going back to the Renaissance.) But don't think of reading this book as a duty; it is a gripping, addictive pleasure.

I loved this book when I read it in manuscript form, and I loved it even more when I read the beautiful published version, well-edited and laced with explanatory maps and lovely illustrations.

Begin with the long sweep of world trading history;add its remarkable relevance to the global issues in the headlines today; revel in the plethora of entertaining anecdotes of personalities and events, large and small; then mix with a graceful writing style that turns an educational treatise into a suspenseful page-turner. Result: a book as good as--if not better than--any other book you'll read in 2008.

John C. Bogle

I began "A Splendid Exchange" with enthusiasm. The topic is fascinating, and writing is good if not excellent. But very soon into the book I began to feel uncomfortable with the authors periodic interjection of personal, subjective conclusions and characterizations of cultures and events. The further into the book I got, the more I was irritated by this. For example, the Portuguese are on numerous occasions characterized as cruel and evil... even as the "most brutal trading nation" of the period. However the atrocities of the conquering Mongols and Muslims are either ignored or dispassionately stated as fact (no moral judgement, in other words). It almost seems that the author has a double standard; he feels free to make moral judgments on the West, but takes a far more PC and non-judgemental view of other cultures. I do not suggest that his facts are wrong. I simply feel a historian needs to either present all the facts dispassionately (which is preferable), or else be evenhanded and consistent in his/her moral judgments.

That aside, the book did present a fairly comprehensive overview of the topic, and was relatively easy and enjoyable to read. It did help me solidify the links between different economic and geopolitical events. I would say that the authors strong suit is in economics more than history... some of his facts are inaccurate. But as a general overview it succeeds.

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.

By the title, the liner and the introduction, I assumed that this book was going to be about global trade. Not really. By the middle of the book, the main action is taking place in Europe and the Americas. I'll grant that the majority of this book's readers might be American or European, as I am. However, even we find the story of how the rest of the world evolved into their trading systems interesting.

That's one complaint. Another is that the author is not a good storyteller. He begins several chapters with an anecdote, a related question and then says he's going to answer it. The answer is usually hidden within the middle of the chapter, but it feels like the story is left dangling by the end because he doesn't close the loop. For example, he opens with the story of the violence and protests in Seattle in 1998. His point is that even in the civilized, privileged United States, we're still going to see the same passions stirred up that less prosperous people saw in earlier times. However, while he speaks in generalities of who some of the alienated parties were, his lack of specifics is very unsatisfying.

Further, some of his chapter titles are misleading. One would think that a chapter entitled "Collapse" would be focused on a period of some degree of economic collapse. Indeed, the chapter does spend a good bit of time on the Great Depression. However, the chapter spends just as much if not more time on the recovery after the Depression, highlighting especially the work of the GATT Treaty to back down high American tariffs. That sounds like it belongs in a chapter called "Recovery".

He is also, frankly, not a very good writer. Twice he makes a reference to Croesus, or being as rich as Croesus. There was no better analogy? He also uses flowery prose that both annoys and oversimplifies. He opens Chapter 12 with: "The dance of modern international manufacturing dazzles the imagination." The best I can say is that by page 316 the reader is used to this.

The author also manages to make the reader cringe in a couple of places. On page 279, he describes the Chinese as being "self-sufficient and self-satisfied". That's a little bit much. He also seems to shrug off opium and the Opium Wars, writing the equivalent of "everyone was doing it" and "it wasn't that bad". On page 384, he writes "Revenge is sweet" to describe the irony of Indians taking call center jobs from American corporations in the 20th century after having been so badly hurt by free trade in the 18th and 19th centuries. Point taken, but it seemed like the way a college junior would end a thesis, not the way a professional writer would end his book.

His material on the Stolper-Samuelson theory and his explanation calling for social safety nets to balance the "winners and losers" of free trade is clear and easy to follow. However, these are at the very end of the book, and feel like they were pasted in as an afterthought.

The evolution of our trading systems around the world (not just in Europe and the United States) is a fascinating story. Read Power and Plenty: Trade, War, and the World Economy in the Second Millennium (Princeton Economic History of the Western World) to get that.

William J Bernstein's "A Splendid Exchange" is another insightful, decisive and highly readable piece in the picture of the world's growth and development which he started with "The Birth of Plenty" his first work of this type. The sheer competence and professional nature of his story telling is matched perhaps only by "the other Bernstein" - Peter.

Like Peter,

William has a brilliant turn of phrase and a great way of settling on apparently trivial incidents which serve to make crucial points.

The analytical strength of the work is the way he elaborates the ubiquity of trade - not through simple assertion with anecdotal back up - but through assembling stories which let the reader see the components and processes which were the meat and drink of the ancient, the medieval and the modern world. The coverage is comprehensive, the reach daunting.

The most innovative treatments for me are:

1. The great story of the "margin versus volume" business model which lurked behind the Dutch success in profiting from spices contrasted with the later English success with the volume model which allowed tea to generate comparable profits.

2. The relentless manner in which rational and logical pursuit of profit sees businessmen throughout time and from culture to culture twist and turn from free trade to protectionism and back. It's a wonderful history of rent seeking. One underlying lesson is that the institutional arrangments these events unfold in are critical in determining outcomes.

3. A third lesson is the vital roles played by price and value. Bernstein's historical documentary shows the way alterations in scarcity coupled with changes in factor costs - especially through technological change which is itself propelled by profit seeking - value identical resources differently and consign the same players to different and differently valued roles.

From the perspective of writing and as a commentator on the wider canvas perhaps Bernstein's greatest accomplishment here is his ability to be realistically depressing while simultaneously expressing awe and optimism. Nowhere is this more apparent than in his discussion of the benefits of free trade relative to protectionism. Some
will quibble with the conclusions. None will be left unchallenged.

Thoroughly recommended on every count.

Do you remember the feeling you've got from the great adventure book, like one of Jules Verne's novels? If you remember the thrill, you may find it again in the serious and unexpected place - on the pages of A Splendid Exchange by William Bernstein.
This narrative, full with real stories and adventures of the past is as spicy and colorful as a tale of spice and silk trade. Bernstein takes us along the marine and caravan routes with fearless and adventurous Sindbads of ancient and new world, to show how the trade moved people to discover the far lands and make the world we know today.
The idea, that trade is a powerful vehicle of progress gets a brilliant and convincing proof in A Splendid Exchange, full with historical evidence from as far as ancient Egypt to modern America.
Author shows, how the hot topics of modern discourse, such as globalization, can be traced to the dawn on history.
The scope of this book is amazing. Bernstein manages to cover history of trade from prehistoric to modern times, and reader does not feel rushed through. This book will be interesting to both history and economy minded. No matter how old you are, and how much you know, you'll find this is a fascinating story about human nature and character.

On the basis of Amazon reviewers, I picked up Bernstein's _A Splendid Exchange_, hoping for an incisive economic world history of commerce. This is the primary thrust of the book, and to Bernstein's credit, he does an admirable job of explaining some economic laws that (previously) I had a difficult time understanding. Yet frequently I was left wondering if his primary focus was economics (and economic history), history (in the narrorwer political sense), or social history. Certainly all three interplay with one another and to an extent are interdependent on one another - yet there seemed to be a real lack of cohesion and direction as he discussed inter-global trade.

The material he presents is fascinating - we humans are, afterall, consumers. Our quest for new, better and cheaper material truly unites us beyond language, politics or religion. Bernstein's strongest moments in his book reiterate this time and again across time as we seek faster trade routes and new materials to buy or sell. Towards these ends, however, he only briefly touches on the importance of currency and exchange rates, on the development of banking systems, and the impact and influence changes in commerce have had on populations, instead favoring a broader look at the rise and fall of nations (or empires) due to fluxuations and changes in international trade.

Bernstein's history of the Dutch East India Trading Company, and the British East India Company is among the best I've read - while he is brief, he also is clear and concise, detaling not only the political climate from which they originated, but also the econcomic role these companies played in enriching their countries. So too was his detailing of 19th century east-west trade in silk, tea and opium - in a little over 50 pages he provides the reader with a fairly detailed explaination behind the gradual decline of the Qing dynasty, the causes of the Opium War, and the rise of British power in the region. However, the impact on the people of Indonesia, China, Holland and Britain is ony mentioned in passing - this felt a little odd to me, as these consumers were being directly impacted by the changes in commecial relations.

Bernstein is inconsistent in his discussion of Spanish and Portugese colonies in the New World by comparison. While the economic impact of silver and later, sugar is discussed, he spends more time explaining the social costs of these industries on Natives and Africans than he does with similar economic changes in Europe and Asia His remarks on Ottoman and trans-African commerce was similarly skinny.

The last chapter of the book was the most problematic for me, as Bernstein covered the WTO and the demonstrations that occurred in Seattle in 1999. Bernstein points out that the concerns and fears of demonstrators are historically not new (a point with which we are in agreement on), and that efforts to stifle "the instinct to truck and barter" are doomed to failure. (Again, we are in agreement). However, Bernstein goes on to argue that free trade an an engine of growth is weak at best. While I am hardly a supporter of laissez-faire commerce, I think that Adam Smith and David Ricardo are right in the free marketplaces ability to stimulate innovation and that competition is best for the consumer - and that, given human nature to seek a bigger, better deal (as evidenced throughout the book), unimpeded trade fosters growth.

In the final analysis, it is a fascinating read. I do wish there was a more consistent, clearer narrative thread given the number of topics Bernstein covers. Recommended for part-time historians and arm-chair economists.

Great book! It gives a detailed narrative of trade through the ages, beginning in Mesopotamia times. I bought this book for myself and instead a friend eneded up wanting to read it first after they found it interesting. Very good read.

The review process is really stupid. I want to be able to rank on mere stars, and not write a review. In the future, all my reviews will look like this until you bring back the star system.

Thanks,