Posted by PITHOCRATES - October 31st, 2011

Economics 101

People Traded the Things they Made to have Things they couldn’t Make

Agricultural advances gave us food surpluses.  Food surpluses gave us the division of labor.  And spare time.  For the first time everyone didn’t have to hunt or gather food.  They could do other things.  Think.  Experiment.  Innovate.  Create.  And they did.  Becoming specialists.  A middle class.  Artisans.  People who became very good at doing one thing.  So they kept doing that one thing.  Finding ways to improve that one thing.  And created surpluses of their own.  Potters made excess pottery.  Shoemakers made excess shoes.  Tanners made excess leather goods.  Metalworkers made excess metal goods.

Cities grew in the center of the sprawling farmland.  And it was in the cities where these artisans lived.  Where they honed their specialties.  And met.  With other specialists.  And with farmers.  To trade.  The potter would trade pottery for shoes.  The farmer would trade food for shoes and metal goods.  The tanner would trade leather goods for pottery, shoes and food.  And so on.  People traded the things they made.  To have things they couldn’t make.  Everyone was able to have more things.  Thanks to this trade.

This unleashed the vast human capital of the people.  Their cities.  And their civilization.  Cities on the coast fished.  Cities closer to the forest harvested wood.  Cities closer to the hills mined silver, gold and copper.  And coal.  And the cities traded their surpluses with other cities.  Metal workers and potters traded their goods for fuel for their forges and kilns.  Miners traded their ore and coal for grain and fish.  Either directly.  Or indirectly.  When other people traded their large surpluses with other people in other cities.  With the miners getting a portion of these large-scale trades for all their efforts to make those trades possible.

As Civilizations became more Complex they became more Dependent on Trade

All of this trading made cities grow.  And as a result the civilization they belonged to grew.  And became more advanced.  People ventured further.  Looking for other resources.  And met people from other civilizations.  Who had raw materials that were different and interesting.  As well as finished goods that were different and interesting.  And these civilizations traded with each other.

Civilizations established trade routes with each other.  Which connected civilizations with others in the unknown world.  Beyond the civilizations they knew.  Markets appeared on these trade routes.  Bringing the exotic from the furthest corners of the world to everyone.  As well as new ideas.  And innovation.  The civilized world grew more advanced.  More interdependent.  More peaceful.  And better.  There was more food.  More technology.  More goods and services.  And more leisure.  Giving rise to the arts.  And entertainment.

But it was not all good.  As cities grew they grew attractive to the uncivilized barbarians beyond the frontier.  Roving bands of hunters and gatherers.  Who were more partial to plunder than trade.  So a portion of their surpluses had to be set aside for city defenses.  The building of city walls.  Implements of wars.  And standing armies.  To defend their cities.  Their civilizations.  And their trade routes.  For as civilizations became more complex they became more dependent on trade.

Trade Improved the Quality of Life which is the Hallmark of an Advanced Civilization

Trade unleashed our human capital.  Because it drove innovation.  There was a big world out there.  Creating a lot of fascinating stuff.  And the only way to get it was to trade your fascinating stuff for it.  And when we did everyone won.  Life got better.  We learned new and interesting things.  That we used as building blocks for further innovation.  And further advancement.  Which led to a better quality of life.  The hallmark of an advanced civilization.


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