Trade is the voluntary, often asymmetric, exchange of goods In macroeconomics and accounting, a good is contrasted with a service. In this sense, a good is defined as a physical product, capable of being delivered to a purchaser and involves the transfer of ownership from seller to customer, say an apple, as opposed to an (intangible) service, say a haircut. A more general term that preserves the, services A service is the intangible equivalent of a good. Service provision is often an economic activity where the buyer does not generally, except by exclusive contract, obtain exclusive ownership of the thing purchased. The benefits of such a service, if priced, are held to be self-evident in the buyers willingness to pay for it. Public services are, or money Money is any object that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally, a standard of deferred payment. Trade is also called commerce Commerce is a division of trade or production which deals with the exchange of goods and services from producer to final consumer OR commerce is the exchange of goods and services from the point of production to the point of consumption to satisfy human wants. It comprises the trading of something of economic value such as goods, services, or transaction A transaction is an agreement, communication, or movement carried out between separate entities or objects, often involving the exchange of items of value, such as information, goods, services, and money. A mechanism that allows trade is called a market A market is any one of a variety of different systems, institutions, procedures, social relations and infrastructures whereby persons trade, and goods and services are exchanged, forming part of the economy. It is an arrangement that allows buyers and sellers to exchange things. Competition is essential in markets, and separates market from trade. The original form of trade was barter Bartering is a medium in which goods or services are directly exchanged for other goods and/or services without a common unit of exchange . It can be bilateral or multilateral, and usually exists parallel to monetary systems in most developed countries, though to a very limited extent. Barter usually replaces money as the method of exchange in, the direct exchange of goods and services. Later one side of the barter were the metals, precious metals (poles, coins), bill, paper money. Modern traders instead generally negotiate through a medium of exchange, such as money Money is any object that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally, a standard of deferred payment. 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.

Trader in Germany, 16th century

Trade exists for man due to specialization and division of labor, most people concentrate on a small aspect of production, trading for other products. Trade exists between regions because different regions have a comparative advantage In economics, the law of comparative advantage refers to the ability of a party to produce a particular good or service at a lower opportunity cost than another party. It is the ability to produce a product with the highest relative efficiency given all the other products that could be produced. It can be contrasted with absolute advantage which in the production of some tradable commodity, or because different regions' size allows for the benefits of mass production Mass production is the production of large amounts of standardized products, including and especially on assembly lines. The concepts of mass production are applied to various kinds of products, from fluids and particulates handled in bulk (such as food, fuel, chemicals, and mined minerals) to discrete solid parts (such as fasteners) to assemblies. As such, trade at market prices Market price is the economic price for which a good or service is offered in the marketplace. It is of interest mainly in the study of microeconomics. Market value and market price are equal only under conditions of market efficiency, equilibrium, and rational expectations between locations benefits both locations.

San Juan de Dios Market in Guadalajara, Jalisco Guadalajara is the capital of the Mexican state of Jalisco, and the seat of the municipality of Guadalajara. The city is located in the central region of Jalisco in the western-pacific area of Mexico. With a population of 1,579,174 it is Mexico's second most populous municipality. The Guadalajara Metropolitan Area includes seven adjacent

Retail Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" trade consists of the sale A sale is the pinnacle activity involved in the selling products or services in return for money or other compensation. It is an act of completion of a commercial activity.[not in citation given] of goods or merchandise from a very fixed location, such as a department store A department store is a retail establishment which specializes in satisfying a wide range of the consumer's personal and residential durable goods product needs; and at the same time offering the consumer a choice multiple merchandise lines, at variable price points, in all product categories. Department stores usually sell products including, boutique A boutique, from the French word for "shop," is a small shopping outlet, especially one that specializes in elite and fashionable items such as clothing and jewellery or kiosk In the Mediterranean Basin and the Near East, a kiosk is a small, separated garden pavilion open on some or all sides. Kiosks were common in Persia, India, Pakistan, and in the Ottoman Empire from the 13th century onward. Today, there are many kiosks in and around the Topkapı Palace in Istanbul, and they are still a relatively common sight in, or by mail Mail, or post, is a method for transmitting information and tangible objects, wherein written documents, typically enclosed in envelopes and also small packages are delivered to destinations around the world. Anything sent through the postal system is called mail or post, in small or individual lots for direct consumption Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined by opposition to production. But the precise definition can vary because different schools of economists define production quite differently. According to some economists, only the final purchase of goods and by the purchaser.[1] Wholesale Wholesaling, jobbing, or distributing is defined as the sale of goods or merchandise to retailers, to industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services. In general, it is the sale of goods to anyone other than a standard consumer trade is defined as the sale of goods or merchandise Merchandising is the methods, practices, and operations used to promote and sustain certain categories of commercial activity. In the broadest sense, merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products available for sale and the to retailers Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer", to industrial, commercial, institutional, or other professional business A business is a legally recognized organization designed to provide goods or services, or both, to consumers, businesses and governmental entities. Businesses are predominant in capitalist economies. Most businesses are privately owned. A business is typically formed to earn profit that will increase the wealth of its owners and grow the business users, or to other wholesalers and related subordinated services.[2]

Trading can also refer to the action performed by traders In finance, a trader is someone who buys and sells financial instruments such as stocks, bonds, commodities and derivatives. A broker who simply fills buy or sell orders is not a trader, as they are merely executing instructions given to them and other market agents in the financial markets In economics, a financial market is a mechanism that allows people to buy and sell financial securities (such as stocks and bonds), commodities (such as precious metals or agricultural goods), and other fungible items of value at low transaction costs and at prices that reflect the efficient-market hypothesis.

Contents

History of trade

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Part of a series Categories: Economic history | Ancient roads and tracks | Commercial item transport and distribution | Trade | Routes | International road networks on Trade routes A trade route is a logistical network identified as a series of pathways and stoppages used for the commercial transport of cargo. Allowing goods to reach distant markets, a single trade route contains long distance arteries which may further be connected to several smaller networks of commercial and non commercial transportation
Amber Road The Amber Road was an ancient trade route for the transfer of amber. As one of the waterways and ancient highways, for centuries the road led from Europe to Asia and back, and from northern Africa to the Mediterranean Sea · Hærvejen Hærvejen is the name given to an ancient trackway in Denmark and Schleswig-Holstein. The route passes from Viborg over Flensburg to Hamburg, the territory of which it entered at Ochsenzoll ("ox-toll", "toll" in the meaning of "customs") and where it connected with other roads. It has been known by several other names . Incense Route The Incense trade route or the Incense Road of Antiquity comprised a network of major ancient trading routes linking the Mediterranean world with Eastern sources of incense , stretching from Mediterranean ports across the Levant and Egypt through Arabia to India. The incense trade flourished from South Arabia to the Mediterranean between roughly
Kamboja-Dvaravati Route The Kamboja–Dvaravati Route was an ancient land trade route that was an important branch of the Silk Road. The route dates from the Indus Valley Civilization period in the 3rd millennium BCE, and was a major trading pathway through to the 1st millennium CE. It connected the Kamboja Kingdom in today's Afghanistan and Tajikstan to Dvaraka and . King's Highway The King’s Highway was a trade route of vital importance to the ancient Middle East. It began in Egypt, and stretched across the Sinai Peninsula to Aqaba. From there it turned northward, leading to Damascus and the Euphrates River
Roman-India routes Roman trade with India through the overland caravan routes via Anatolia and Persia, though at a relative trickle comparative to later times, antedated the southern trade route via the Red Sea and Monsoons which started around the beginning of the Common Era following the reign of Augustus and his conquest of Egypt. Having extended the Empire's . Royal Road The Persian Royal Road was an ancient highway reorganized and rebuilt by the Persian king Darius I of the Achaemenid Empire in the 5th century BC. Darius built the road to facilitate rapid communication throughout his very large empire from Susa to Sardis . Mounted couriers could travel 1,677 miles (2,699 km) in seven days; the journey from Susa
Silk Road The Silk Road (or Silk Routes) is an extensive interconnected network of trade routes across the Asian continent connecting East, South, and Western Asia with the Mediterranean world, as well as North and Northeast Africa and Europe. The Silk Road gets its name from the lucrative Chinese silk trade, a major reason for the connection of trade · Spice Route The spice trade is a commercial activity of ancient origin which involves the merchandising of spices, incense, herbs, drugs and opium. Civilizations of Asia were involved in spice trade from the ancient times, and the Greco-Roman world soon followed by trading along the Incense route and the Roman-India routes. The Roman-Indian routes were . Tea route The Ancient Tea Route was a network of mule caravan paths winding through the mountains of Yunnan Province in Southwest China. It is also referred to as the Southern Silk Road. From around a thousand years ago, the Ancient Tea Route was a trade link from Yunnan, one of the first tea-producing regions: to India via Burma; to Tibet; and to central
Varangians to the Greeks The trade route from the Varangians to the Greeks was a trade route that connected Scandinavia, Kievan Rus' and the Byzantine Empire. The route allowed traders along the route to establish a direct prosperous trade with Byzantium, and prompted some of them to settle in the territories of present-day Belarus, Russia and Ukraine · Via Maris Via Maris is the modern name for an ancient trade route, dating from the early Bronze Age, linking Egypt with the northern empires of Syria, Anatolia and Mesopotamia — modern day Iran, Iraq, Turkey and Syria
Triangular trade Triangular trade, or Triangle trade, is a historical term indicating trade among three ports or regions. Triangular trade usually evolves when a region has export commodities that are not required in the region from which its major imports come. Triangular trade thus provides a mechanism for rectifying trade imbalances between these regions .Volga trade route In the Middle Ages, the Volga trade route connected Northern Europe and Northwestern Russia with the Caspian Sea, via the Volga River. The Rus used this route to trade with Muslim countries on the southern shores of the Caspian Sea, sometimes penetrating as far as Baghdad. The route functioned concurrently with the Dnieper trade route, better
Trans-Saharan trade Trans-Saharan trade is trade across the Sahara desert between Mediterranean countries and sub-Saharan Africa. While existing from prehistoric times, the peak of such trade extended from the eighth century until the late sixteenth century . Salt Route The Old Salt Route was a medieval trade route in northern Germany, one of the ancient network of salt roads which were used primarily for the transport of salt and other staples. In Germany it was referred to as Alte Salzstraße
Hanseatic League The Hanseatic League was an economic alliance of trading cities and their guilds that established and maintained a trade monopoly along the coast of Northern Europe. It stretched from the Baltic to the North Sea and inland, during the Late Middle Ages and early modern period (c.13th–17th centuries). The Hanseatic cities had their own law system . Grand Trunk Road The Grand Trunk Road is one of South Asia's oldest and longest major roads. For several centuries, it has linked the eastern and western regions of the Indian subcontinent, running from Bengal, across north India, into Peshawar in Pakistan

Prehistory

Trade originated with the start of communication The history of communication dates back to the earliest signs of life. Communication can range from very subtle processes of exchange, to full conversations and mass communication. Human communication was revolutionized with speech about 200,000 years ago. Symbols were developed about 30,000 years ago, and writing about 7,000. On a much shorter in prehistoric Prehistory is a term used to describe the period before recorded history. Paul Tournal originally coined the term Pré-historique in describing the finds he had made in the caves of southern France.[citation needed] It came into use in France in the 1830s to describe the time before writing, and the word "prehistoric" was introduced into times. Trading was the main facility of prehistoric people, who bartered goods and services from each other before the innovation of the modern day currency. Peter Watson Peter Watson is an intellectual historian and former journalist, now perhaps best known for his work in the history of ideas dates the history of long-distance commerce In the era before the rise of the nation state, the term 'international' trade cannot be literally applied, but simply means trade over long distances; the sort of movement in goods which would represent international trade in the modern world from circa Circa means "approximately", usually referring to a date 150,000 years ago.[3]

Ancient History

Trade is believed to have taken place throughout much of recorded human history. There is evidence of the exchange of obsidian and flint during the stone age. 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. From the beginning of Greek civilization until the fall of the Roman empire in the 5th century, a financially lucrative trade brought valuable spice 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 significant piracy.

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.

Middle Ages

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 centeres 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.

Age of Discovery

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, Holland was 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 Netherlands 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 17th century

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 at the expense 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

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