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Trade involves the transfer of the ownership of goods or services from one person or entity to another in exchange for other goods or services or for money. Possible synonyms of "trade" include "commerce" and "financial transaction". A network that allows trade is called a market.

The original form of trade, barter, saw the direct exchange of goods and services for other goods and services. Later one side of the barter started to involve precious metals, which gained symbolic as well as practical importance. Modern traders generally negotiate through a medium of exchange, such as money. As a result, buying can be separated from selling, or earning. The invention of money (and later credit, paper money and non-physical money) greatly simplified and promoted trade. Trade between two traders is called bilateral trade, while trade between more than two traders is called multilateral trade.

Trade exists due to the specialization and division of labor, in which most people concentrate on a small aspect of production, trading for other products. Trade exists between regions because different regions may have a comparative advantage (perceived or real) in the production of some trade-able commodity, or because different regions' size may encourage mass production. As such, trade atmarket prices between locations can benefit both locations.

Retail trade consists of the sale of goods or merchandise from a very fixed location, such as a department store, boutique or kiosk,online or by mail, in small or individual lots for direct consumption or use by the purchaser.^[1] Wholesale trade is defined as the sale of goods that are sold as merchandise to retailers, and/or industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services

History[edit]

Prehistory[edit]

Trade routes
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Trade originated with human communication in prehistoric times. Trading was the main facility of prehistoric people, who bartered goods and services from each other before the innovation of modern-day currency. Peter Watson dates the history of long-distance commercefrom circa 150,000 years ago.^[3]

In the mediterranean region the earliest contact between cultures were of members of the species Homo sapiens principally using the Danube river, at a time beginning 35-30,000 BC.^[4]^[5]^[6]

Ancient history[edit]

Trade is believed to have taken place throughout much of recorded human history. There is evidence of the exchange of obsidian andflint during the stone age.

Obsidian[edit]

Main article: Obsidian

Guinea[edit]

Trade in obsidian is believed to have taken place in Guinea from 17,000 BC.^[7]^[8]

Mediterranean and Near East[edit]

The earliest use of obsidian in the Near East dates to the Lower and Middle paleolithic.^[9]

— HIH Prince Mikasa no Miya Takahito

Trade in the stone was investigated by Robert Carr Bosanquet in excavations of 1901.^[10]^[11] Trade is believed to have first begun in south west of Asia.^[12]^[13]

Archaeological evidence of obsidian use provides data on how this material was increasingly the preferred choice rather than chert from the late Mesolithic to Neolithic, requiring exchange as deposits of obsidian are rare in the Mediterranean region.^[14]^[15]^[16]

Obsidian is thought to have provided the material to make cutting utensils or tools, although since other more easily obtainable material were available, use was found exclusive to the higher status of the tribe using "the rich man's flint".^[12]

Obsidian was traded at distances of 900 kilometres within the region.^[17]

Trade in the Mediterranean during the Neolithic of Europe was greatest in this material.^[14]^[18] Networks were in existence at around 12,000 BCE^[19] Anatolia was the source primarily for trade with the Levant, Iran and Egypt according to Zarins study of 1990.^[20]^[21]^[22]Melos and Lipari sources produced among the most widespread trading in the Mediterranean region as known to archaeology.^[23]

Lapis Lazuli[edit]

The Sari-i-Sang mine in the mountains of Afghanistan was the largest source for trade.^[24]^[25] The material was most largely traded during the Kassite period of Babylonia beginning 1595 BCE.^[26]^[27]

Later trade[edit]

Mediterranean and Near East[edit]

Ebla was a prominent trading centre during the third millennia, with a network reaching into Anatolia and north Mesopotamia.^[23]^[28]^[29]^[30]

A map of the Silk Road trade route between Europe and Asia.

Materials used for creating jewelry were traded with Egypt since 3000 BC. Long-range trade routes first appeared in the 3rd millennium BC, when Sumerians in Mesopotamia traded with the Harappan civilization of the Indus Valley. The Phoenicians were noted sea traders, traveling across the Mediterranean Sea, and as far north as Britain for sources of tin to manufacture bronze. For this purpose they established trade colonies the Greeks called emporia.^{[citation needed]}

From the beginning of Greek civilization until the fall of the Roman empire in the 5th century, a financially lucrative trade brought valuablespice to Europe from the far east, including India and China. Roman commerce allowed its empire to flourish and endure. The Roman empire produced a stable and secure transportation network that enabled the shipment of trade goods without fear of significantpiracy.^{[citation needed]}

In ancient Greece Hermes was the god of trade^[31]^[32] (commerce) and weights and measures,^[33] for Romans Mercurius also god of merchants, whose festival was celebrated by traders on the 25th day of the fifth month.^[34]^[35] The concept of free trade was an antithesis to the will and economic direction of the sovereigns of the ancient Greek states. Free trade between states was stifled by the need for strict internal controls (via taxation) to maintain security within the treasury of the sovereign, which nevertheless enabled the maintenance of a modicum of civility within the structures of functional community life.^[36]^[37]

The fall of the Roman empire, and the succeeding Dark Ages brought instability to Western Europe and a near collapse of the trade network in the western world. Trade however continued to flourish among the kingdoms of Africa, Middle East, India, China and Southeast Asia. Some trade did occur in the west. For instance, Radhanites were a medieval guild or group (the precise meaning of the word is lost to history) of Jewish merchants who traded between the Christians in Europe and the Muslims of the Near East.^{[citation needed]}

The Orient[edit]

Archaeological evidence (Greenberg 1951) of the first use of trade-marks are from China dated about 2700 BC.^[38]

Central America[edit]

The emergence of exchange networks in the Pre-Columbian societies of and near to Mexico are known to have occurred within recent years before and after 1500 BC.^[39]

Middle Ages[edit]

A map showing the main trade routes for goods within late medieval Europe.

During the Middle Ages, Central Asia was the economic center of the world.^[40] The Sogdians dominated the East-West trade route known as the Silk Road after the 4th century AD up to the 8th century AD, with Suyab and Talas ranking among their main centers in the north. They were the main caravan merchants of Central Asia.

From the 8th to the 11th century, the Vikings and Varangians traded as they sailed from and to Scandinavia. Vikings sailed to Western Europe, while Varangians to Russia. The Hanseatic League was an alliance of trading cities that maintained a trade monopoly over most of Northern Europe and the Baltic, between the 13th and 17th centuries.

The Age of Sail and the Industrial Revolution[edit]

Vasco da Gama pioneered the European Spice trade in 1498 when he reached Calicut after sailing around the Cape of Good Hope at the southern tip of the African continent. Prior to this, the flow of spice into Europe from India was controlled by Islamic powers, especially Egypt. The spice trade was of major economic importance and helped spur the Age of Discovery in Europe. Spices brought to Europe from the Eastern world were some of the most valuable commodities for their weight, sometimes rivaling gold.

In the 16th century, the Seventeen Provinces were the centre of free trade, imposing no exchange controls, and advocating the free movement of goods. Trade in the East Indies was dominated by Portugal in the 16th century, the Dutch Republic in the 17th century, and the British in the 18th century. The Spanish Empire developed regular trade links across both the Atlantic and the Pacific Oceans.

Danzig in the 17th century, a port of theHanseatic League.

In 1776, Adam Smith published the paper An Inquiry into the Nature and Causes of the Wealth of Nations. It criticised Mercantilism, and argued that economic specialisation could benefit nations just as much as firms. Since the division of labour was restricted by the size of the market, he said that countries having access to larger markets would be able to divide labour more efficiently and thereby become more productive. Smith said that he considered all rationalisations of import and export controls "dupery", which hurt the trading nation as a whole for the benefit of specific industries.

In 1799, the Dutch East India Company, formerly the world's largest company, became bankrupt, partly due to the rise of competitive free trade.

Berber trade with Timbuktu, 1853.

19th century[edit]

In 1817, David Ricardo, James Mill and Robert Torrens showed that free trade would benefit the industrially weak as well as the strong, in the famous theory of comparative advantage. In Principles of Political Economy and Taxation Ricardo advanced the doctrine still considered the most counterintuitive in economics:

When an inefficient producer sends the merchandise it produces best to a country able to produce it more efficiently, both countries benefit.

The ascendancy of free trade was primarily based on national advantage in the mid 19th century. That is, the calculation made was whether it was in any particular country's self-interest to open its borders to imports.

John Stuart Mill proved that a country with monopoly pricing power on the international market could manipulate the terms of trade through maintaining tariffs, and that the response to this might be reciprocity in trade policy. Ricardo and others had suggested this earlier. This was taken as evidence against the universal doctrine of free trade, as it was believed that more of the economic surplus of trade would accrue to a country following reciprocal, rather than completely free, trade policies. This was followed within a few years by the infant industry scenario developed by Mill promoting the theory that government had the "duty" to protect young industries, although only for a time necessary for them to develop full capacity. This became the policy in many countries attempting to industrialise and out-compete English exporters. Milton Friedman later continued this vein of thought, showing that in a few circumstances tariffs might be beneficial to the host country; but never for the world at large.^[41]

20th century[edit]

The Great Depression was a major economic recession that ran from 1929 to the late 1930s. During this period, there was a great drop in trade and other economic indicators.

The lack of free trade was considered by many as a principal cause of the depression.^{[citation needed]} Only during the World War II the recession ended in the United States. Also during the war, in 1944, 44 countries signed the Bretton Woods Agreement, intended to prevent national trade barriers, to avoid depressions. It set up rules and institutions to regulate the international political economy: the International Monetary Fund and the International Bank for Reconstruction and Development (later divided into the World Bank and Bank for International Settlements). These organisations became operational in 1946 after enough countries ratified the agreement. In 1947, 23 countries agreed to the General Agreement on Tariffs and Trade to promote free trade.

During the early years of the Cold-war, the United States of America and the then Soviet USSR were engaged in talks to exchange two captured military personnel, a "trade" carried out during 1962 (Polmar p. 142).

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Trade - Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Trade

Trade involves the transfer of the ownership of goods or services from one person or entity to another in exchange for other goods or services or for money. Possible synonyms of "trade" include "commerce" and "financial transaction".

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