Trade
As with barter, the reason people traded is that someone had something they wanted. Even prehistoric societies were not entirely self-sufficient. Stone Age peoples traded for obsidian to make weapons. During the Bronze Age, as shipping and overland routes developed, people traded for lumber, spices, furs, and tin (Carr, 2013, par. 2). Ancient Rome may have been the first true superpower. The Romans eventually controlled most trade routes in the Mediterranean and built a network of roads that spanned a transcontinental empire. This also facilitated trade.
What does trade involve? Then as now there were risks. Long sea voyages were always a gamble, and time and competition were always factors. If you were an owner you risked capital; if you were a ship's captain or a crew member, you potentially risked your life. Perhaps your ships would return later than a competitor's, and you would receive a lesser price for the commodity you carried into port. There was also the risk of piracy (a risk that has returned today, with pirates off the west coast of Africa attacking container ships). But if all went well, you would be rewarded by a profit that enlarged your capital, allowing you to pay yourself and your employees and possibly expand your ventures. The same is true today.
There was also cooperation, another form of interdependence. In the 1600s, Lloyd's of London, a society of underwriters, began issuing cargo insurance for international traders (Marine, n.d., par. 6). Some traders would band together to pool their resources as a group of London merchants did in 1600, when they were chartered as the "Governor and Company of Merchants Trading into the East Indies," initially to trade for spices. Later, as the British East India Company, their trade expanded into indigo, cotton, silk, silk, salt, and opium, as well as slave-trading (East India, n.d., pars.2-3). This company eventually founded colonies (for example, the company purchased Singapore and transformed it into a great world port) and was an imperial power in its own right until the British Parliament began regulating it in 1773 (Landow, 2013, pars. 1-5).
Trade also may involve consequences. While colonization was considered beneficial by those who did the colonizing, those populations in the colonized countries did not always agree. The demand for certain commodities such as silver or cotton brought with it the demand for slave labor in silver mines and cotton fields. Trade can also shift the location of economic prosperity, as in Africa, when interior trade routes shifted to the coasts during the 17th and 18th centuries (Silver, n.d., 15-3, par. 3).
The example of the silver trade in the 15th through the 18th centuries shows how the demand for a commodity can open borders, initiate cultural exchanges, and increase economic interdependence among nations (as well as have the potential for negative consequences, such as slavery).
Prior to the above period, China limited its trade to domestic markets although its silk, tea, and porcelain were much desired by Europeans. In the mid-1500s, after the Ming dynasty's system of paper currency collapsed, China adopted silver as its preferred medium of exchange—however, the country was not rich in silver, and so opened its border to trade with other countries. Japan was an early trading partner, but when the Chinese demand outpaced the Japanese silver supply, China turned to European trading partners who had established silver mines in Peru (Silver, n.d., 15-1, pars. 1-3). This trade involved the Americas (as suppliers of silver and forced Indian labor), China (as customer for silver and trader of its own commodities), Africa (as supplier of slave labor), and Europe (as consumers of slave labor and as traders) in a truly global network (Silver, n.d., 15-3, pars. 1-5).
To read more about the British East India Company, one of the world's earliest global trading powerhouses, click the link below.
https://www.historic-uk.com/HistoryUK/HistoryofEngland/The-East-India-Company/
Read "What Is International Trade?" at the following link.
http://www.investopedia.com/articles/03/112503.asp
Comparative advantage
An aspect of international trade is the concept of comparative advantage. Countries that are able to manufacture goods, produce commodities, or, in a global economy, provide services more efficiently and at lower cost will gain this comparative advantage. "Some of the factors that influence comparative advantage include the cost of labor, cost of capital, natural resources, geographic location, and workforce productivity" (How does, 2018). A nation's comparative advantage (or lack thereof) also affects decisions on what products to export or import. For an example of how this works in a global economy, click the below link.
https://www.ecnmy.org/learn/your-world/globalization/what-is-comparative-advantage/
