WEBVTT NOTE 30. The Debt We Owe to Trade 1 00:00:00.000 --> 00:00:04.680 The Debt We Owe to Trade 2 00:00:04.680 --> 00:00:10.340 It was the year 1600, and coffee had become wildly popular all over Europe, just as it 3 00:00:10.340 --> 00:00:16.620 had been popular all over the Muslim world since its discovery 900 years earlier. 4 00:00:16.620 --> 00:00:20.080 The sitting pope was Clement VIII. 5 00:00:20.080 --> 00:00:24.560 His advisors urged him to do something to stop the coffee mania then spreading across 6 00:00:24.560 --> 00:00:26.000 Christendom. 7 00:00:26.000 --> 00:00:33.800 He tasted the coffee, reflected on its properties, and then, to the astonishment of his advisors, 8 00:00:33.800 --> 00:00:38.520 blessed it as a Christian beverage. 9 00:00:38.520 --> 00:00:42.800 Long live the Pope! 10 00:00:42.800 --> 00:00:46.120 Matters weren't so simple in the Protestant world. 11 00:00:46.120 --> 00:00:50.820 The beverage was still a raging controversy in parts of Germany in the eighteenth century, 12 00:00:50.820 --> 00:00:56.460 as J.S. Bach's hilarious Coffee Cantata demonstrates. 13 00:00:56.460 --> 00:01:00.820 The story, which is apparently true from all the checking I've done, appears on page 14 00:01:00.820 --> 00:01:06.760 247 of a marvellous book that covers not only the expansion of the coffee trade, but trade 15 00:01:06.760 --> 00:01:11.920 of all goods and services from the Stone Age to the present day, and does so in a marvellously 16 00:01:11.920 --> 00:01:14.120 intriguing way. 17 00:01:14.120 --> 00:01:21.400 The book is A Splendid Exchange How Trade Shaped the World by William J. Bernstein. 18 00:01:21.400 --> 00:01:28.340 The book is long, 494 pages, but engaging on every page. 19 00:01:28.340 --> 00:01:33.640 After finishing the book, I found myself thinking about its contents constantly. 20 00:01:33.640 --> 00:01:39.460 Its subject is so ubiquitous that it is hardly ever closely analyzed. 21 00:01:39.460 --> 00:01:42.120 The time period stretches from age to age. 22 00:01:42.120 --> 00:01:48.880 The geography covers the planet, and the items covered include spices, coffee, silk, pigs 23 00:01:48.880 --> 00:01:56.080 and pork, precious metals, oil, and really just about everything else. 24 00:01:56.080 --> 00:02:02.040 Bernstein demonstrates thousands of times that the world as we know it would be unrecognizable 25 00:02:02.040 --> 00:02:09.740 without trade, and shows that trade has shaped who we are in ways that none of us fully recognize. 26 00:02:09.740 --> 00:02:13.300 The historical detail is amazing. 27 00:02:13.300 --> 00:02:19.100 The writing is scholarly but clear and fascinating on every page. 28 00:02:19.100 --> 00:02:26.580 Try to imagine Italian cuisine without the tomato, the highlands around Targiling without 29 00:02:26.580 --> 00:02:33.200 tea plants, an American table without wheat bread or beef, German cooking without the 30 00:02:33.200 --> 00:02:39.960 and a potato, or a cafe anywhere in the world beyond coffee's birthplace in Yemen without 31 00:02:39.960 --> 00:02:41.800 coffee. 32 00:02:41.800 --> 00:02:48.080 Such was the world prior to 1492, before billions of acres of farmland were taken over with 33 00:02:48.080 --> 00:02:50.840 species from remote lands. 34 00:02:50.840 --> 00:02:57.440 It is not part of natural law – it was a result of deliberation and work. 35 00:02:57.440 --> 00:03:00.480 Fantastic economic and physical risks were involved. 36 00:03:00.480 --> 00:03:04.480 It is one of the ways in which the garden of this world has been tilled and kept by 37 00:03:04.480 --> 00:03:09.120 mankind inch by square inch. 38 00:03:09.120 --> 00:03:14.980 The Bernstein book helps keep all the controversy about globalization in context. 39 00:03:14.980 --> 00:03:22.680 There is absolutely nothing new about globalization – nothing. 40 00:03:22.680 --> 00:03:28.200 The progress of globalization has been on its current trajectory for the whole of recorded 41 00:03:28.200 --> 00:03:29.760 history. 42 00:03:29.760 --> 00:03:34.920 This trade has made the world ever more prosperous, and why? 43 00:03:34.920 --> 00:03:41.700 Because trade has permitted populations across the globe to cooperate to their mutual betterment. 44 00:03:41.700 --> 00:03:47.940 Without trade, the human population would shrink, and most of us would die. 45 00:03:47.940 --> 00:03:53.040 Even a slight curtailment of trade can bring on economic depression and dramatically shrink 46 00:03:53.040 --> 00:03:55.480 our standards of living. 47 00:03:55.480 --> 00:03:59.720 It is one of the great failings of the human race that we tend to regard the wealth that 48 00:03:59.720 --> 00:04:04.240 surrounds us as a given, something that is just part of the world that will last forever 49 00:04:04.240 --> 00:04:08.180 and requires no work to acquire. 50 00:04:08.180 --> 00:04:13.160 Part of the reason we commit this error is our general tendency to contemplate only what 51 00:04:13.160 --> 00:04:16.820 we experience in our lifetimes. 52 00:04:16.820 --> 00:04:22.500 But the wealth that surrounds us is the fruit of the whole of history, the accumulated capital 53 00:04:22.500 --> 00:04:26.100 of the Human Race from all time. 54 00:04:26.100 --> 00:04:31.540 We are born into it, it grows while we live, and then we die. 55 00:04:31.540 --> 00:04:38.460 Appreciating the bigger picture entails transcending one's own brief interval of experience. 56 00:04:38.460 --> 00:04:43.000 This is precisely what Bernstein's book does. 57 00:04:43.000 --> 00:04:48.520 It takes us outside the here and now and helps us understand the big picture. 58 00:04:48.520 --> 00:04:52.960 And he does this by looking at the details of goods traded and lands far away during 59 00:04:52.960 --> 00:04:55.200 all times. 60 00:04:55.200 --> 00:04:58.520 This book is beautifully written and wonderfully interesting on every page. 61 00:04:58.520 --> 00:05:01.820 I can't recommend it enough. 62 00:05:01.820 --> 00:05:04.760 My only complaints are minor ones. 63 00:05:04.760 --> 00:05:10.560 Bernstein doesn't seem to have a solid theory of trade that goes beyond neoclassical economic 64 00:05:10.560 --> 00:05:12.560 conventions. 65 00:05:12.560 --> 00:05:18.120 Had he put one up front, he would have been able to go beyond the very good chronicle 66 00:05:18.120 --> 00:05:29.640 It is another example of how Smith's propensity to truck and barter has misled, instead of 67 00:05:29.640 --> 00:05:35.680 seeing trade as an extension of human rationality, a mutually beneficial exchange that extends 68 00:05:35.680 --> 00:05:38.960 from the desire to better one's lot in life. 69 00:05:38.960 --> 00:05:43.760 He treats the entire subject as if it were an instinct of some sort. 70 00:05:43.760 --> 00:05:50.180 But that is a regrettable oversight that in no way diminishes the contribution here. 71 00:05:50.180 --> 00:05:56.180 My second complaint concerns the final chapter, which conforms to a rule often cited by the 72 00:05:56.180 --> 00:06:03.560 late Murray Rothbard, that all final chapters of books should just be removed. 73 00:06:03.560 --> 00:06:08.640 Bernstein spends the entire book showing us how trade can take place without any government 74 00:06:08.640 --> 00:06:15.200 Management, and then uses the last chapter to argue for government-managed trade in the 75 00:06:15.200 --> 00:06:19.640 form of the North American Free Trade Agreement and the World Trade Organization. 76 00:06:19.640 --> 00:06:27.000 You just want to shout, read your own book, Mr. Bernstein! 77 00:06:27.000 --> 00:06:31.680 In general, I would have appreciated a less tentative conclusion, something along the 78 00:06:31.680 --> 00:06:36.460 lines of pointing out that trade is what makes it possible for all great and glorious things 79 00:06:36.460 --> 00:06:40.660 is to take shape in this world, and without which only a few people would be alive, living 80 00:06:40.660 --> 00:06:44.980 in caves and eating whatever they could hunt or gather. 81 00:06:44.980 --> 00:06:49.340 The book is even more important than the author knows.