Leave a comment

World Building Wednesdays: Coin of the Realm-Trade


Tweet of the Day: When Your Backstory Becomes Your Story

——-

The Trader.

The Middleman.

The Banker.

The Ship’s Captain.

The Railway Tycoon.

The engine of commerce.

Welcome to the realm of trade, the engine of commerce. The trader, whatever his title maybe is the person that brings goods to market, sets up the market and exchanges said good and services between supplier and costumer. Trade is also the engine of civilization. While cities grew around artisans and craftsmen the link between them were plied by traders. They also encouraged the use of money over barter, as a gold sovereign, silver mark or dollar note has the same value every where (comparable of course to other currencies) at the same time. Much easier to pay coin for a good than trying to figure out how many pigs will get you a horse and saddle. Also modern mathematics are tied to trade in the form of architecture (roads), navigation, engineering (ships, trains and aircraft/spacecraft) and plain old accounting.

Resource gatherers and manufacturers could do the trading themselves, but that means taking on the risks associated with transporting and safe guarding the goods.  Much easier to sell the grain, silk or iron to a trader and reinvest that money on your core business than to take the extra risk/expense of taking it to market. The principle under which this is done is risk, that is how much does the trader stand to lose in the exchange commensurate to the cost in transporting/safeguarding the goods. A storm, piracy, war or fire could easily destroy the goods or modes of transportation and leave the trader with nothing. That’s why today we have the insurance markets.

Traders (and trade routes) are of such importance that they become the lynchpin of most economic activity. Therefore traders are in a strong position to dictate prices to both sides of the chain.  Most monopolies are born at this level of economic activity. Yet, push to far and he may be outflanked by the competition. This makes the best traders also crafty diplomats as they not only haggle for the best deals but often navigate different cultures as well. It should come as no surprise that the term lingua franca comes straight from the world of commerce, as traders needed to be understood in any city or port they found themselves in as did their customer/suppliers with them. Same goes with currency standards such as the Dollar Standard today, or regional currencies like the Euro.

Finally, trade is the most flexible yet weakest link in the chain and tends to generate the most illegal activity. Pirates and highwaymen pray on traders, smugglers ship what is illegal or heavily taxed and more than one uncrupulous trader may decide that it is less risky to cheat a costumer than to pay/sell full price. Thus governments raise armies, navies and police forces to protect/police trade.

——-

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: