Ancient Trade Issues

Ancient Trade Issues

Long-distance trade is an enduring characteristic in the history of civilizations. Even if limited, it played an important role in the diffusion of ideas and cultures. However, up to the 16th century, limited trade took place for two major reasons:

  • Nature of trade. Market tended to be limited in size, even where there were large populations. Income levels were low, and limited discretionary income was present outside the elite. Therefore, many trade items were high-value luxury commodities (e.g. spices, gems, perfumes) that conferred the joint advantage of better mobility and demand focus. Still, when maritime transportation and river shipping were available, long-distance trade of bulk commodities such as grain, wine, and olive oil was available.
  • Limiting factors. The main technical constraint to trade was the limited capacity and speed of inland transportation, implying the maritime focus of long-distance trade. This maritime focus was, however, a risk factor because of unreliable navigation. Various currencies and units of measure further impeded trade, even if gold or silver-based. The high value of trade goods provides a strong incentive to tax them, so each time a good entered a jurisdiction such as a city-state, a tariff was levied. Further, the high value of goods also represented a risk for piracy and the additional security costs this involves.

There were exceptions to these general conditions that made long-distance trade more prevalent. The Chinese and Roman empires maintained extensive transportation systems, supporting an active trade related to their relative prosperity.