natural resources, such as metal, was the most important factor in deter-
mining imports and exports. As a society with a desirable commodity
became part of an integrated network in which other societies with other
commodities were doing the same, all parties should have reaped advantages.
And as commercial networks expanded, competition increased, requiring
more efficiency, which often meant increased specialization.
New goods that came in through exchange were often transformed from
desirables into necessities. Demand could expand to cover an almost infinite
range of commodities, but supply was usually limited and not veryflexible.
As an item came to dominate the production of a society’s economy, that
society came to depend more and more on trade. Thus, a larger and more
varied economy had less need to trade with outsiders than a smaller econ-
omy. A place that had a lot of copper, olive oil, or horses but little else, or
whose people were especially adept at producing beautiful jewelry or potent
medicines and were capable of making more than they needed, was more
likely to engage in trade than a place that had all of the above.
Natural resources were not always the most important factor. A place that
had plenty of skilled labor but little in the way of natural resources was more
likely to produce a labor-intensive product more efficiently and thus more
cheaply than an area that had lots of minerals, forests, or fertile land but a
smaller, more scattered, or less skilled work force. However, an export
market was not likely to be based on an unskilled labor force: in the pre-
modern world, unskilled labor was everywhere. Some qualitative difference
had to be evident to induce customers to pay for an import. From earliest
times the ancient Greeks exported olive oil and wine, products that were
carried in pottery. By the classical period, the ceramics being produced by
craftsmen in cities such as Athens were so beautiful that they became items
for export themselves.
Demand endowed a commodity with value, which was assigned through
the process of exchange. The value differed for each side: it was this judg-
ment that made the exchange desirable. The value may have been based on
the usefulness of the commodity, some social meaning that was attached to
it, or some aesthetic property associated with it. In basic barter, to gain a
desired commodity, a trader had to sacrifice something that he believed was
of less value than the item he was getting. The key to this process was that
each side had to be convinced that it was getting more for less. Looking at
the transaction from the outside, however, an observer ought to conclude
that these commodities had an equivalent value.
The long-distance trader made his profit by taking advantage of the dif-
ferent values accorded to commodities from area to area. He bought an item
in one place and sold it in another where he knew the price was higher. He
subtracted his costs, and the result was his profit. In theory, no one was the
loser: bargains were made only when both sides could realize a profit. The
exploitation, and there was plenty of it, took place on the production rather
Some introductory musings 3