Sometimes while watching a particularly gruesome edition of the evening news, I think dark thoughts about the human race.
You probably have them, too.
Perhaps it wouldn’t be so bad if we were all wiped out by a new and horrible virus. Rather than see us as masters of the planet, it might be more reasonable to think about humanity as an infestation, something akin to a swarm of cockroaches.
That’s when I know it’s time to read some real history.
Not history as we usually experience it--- the quick summaries and timelines of what has happened here or there since 1970 or 1999--- but broader history,
That’s what you’ll find in “A Splendid Exchange” (Grove/Atlantic, $30) by William J. Bernstein. Modestly subtitled “How Trade Shaped the World From Prehistory to Today,” the 385 page book literally starts around 3,000 B.C. and ends at what Dr. Bernstein calls “The Battle of Seattle”--- the protests about free trade that accompanied the Third Ministerial Conference of the World Trade Organization in 1999.
Five thousand years is a long time. We appear to have learned a few things, ever so slowly. And trade has--- in spite of all the killing, malice, betrayal, conspiring, disease, greed, outright theft, piracy and suffering recounted in the book--- actually improved and lengthened lives around the world massively over that period.
It’s just not pretty when you examine today or any other particular time.
Today, we worry about the transfer of American jobs to Asia and India. We worry about global pressures that are killing hard-won work-security measures such as healthcare benefits and pensions. We wonder where the promised leisure went and why we accept the commitment of 24/7 workplaces. We worry about the need to import scientists and engineers because we are producing so few. And we worry about China producing so many.
We worry about the value of the dollar against other currencies, gold, and oil. And we worry about how we are building massive debt to other nations as we consume without saving. We know the shelves of Wal-Mart would be empty without imports from China. We know that status would not be so obvious without cars imported from Germany.
In fact, none of these worries are new. They just change with the technology of production and transportation.
Conflict and a rush for wealth dominate the entire history of trade. Bernstein tells us of the time when only a Roman emperor could afford to be fully clothed in Chinese silk. Today it requires only a Visa card and a trip to Target. He tells us how Europeans worried about trading all their silver for pepper and other spices. He also tells us how the plague ended the medieval Muslim superiority over the West and how Britain later caused the deindustrialization of China and India, beginning with the domination of textiles. (Historian Samuel P. Huntington points out that India accounted for 24.5 percent of world manufacturing in 1750, but only 1.4 percent by 1913. Since its 1928 peak, however, western domination of world manufacturing has declined from 84.2 percent to 57.8 percent in 1980. )
Bernstein’s constant theme, however, is that we are creatures born to trade. Trading is part of us. Always has been, always will be. So rather than try to control trade, he concludes, we should focus on helping those hurt by it to adjust. Human beings, the book clearly shows, are adaptable as well as creative. The introduction to the book is available as a free download on his website, www.efficientfrontier.com.
Sidebar: An Unusual Career
If his name sounds familiar, you’ve been reading my column for a long time. Although Dr. William J. Bernstein is a neurologist in Oregon, he has become a major contributor to the entire process of thinking about investments in the last 15 years. I first became aware of him through his website, www.efficientfrontier.com, in the mid-‘90s and count one of his early books, “The Four Pillars of Investing,” as one of the four or five books that should be the start of every investor’s library.
On the web:A Splendid Exchange on Amazon:
The Four Pillars of Investing on Amazon:
Earlier columns mentioning William J. Bernstein or providing links to his work: