The Rise and Fall of World Commerce
Part 2—Branching Out to Consolidate Power
ORIGINALLY, the development of the world of commerce was severely restricted by the unavailability, the slowness, and the expense of transportation and communication. Trade by sea was time-consuming. Overland routes were fraught with danger. But all of this was due to change.
Trade Becomes International
During the Hellenistic period, from 338 B.C.E. to 30 B.C.E., Mediterranean cities became major trading centers. These included Alexandria, Egypt, founded by Alexander the Great in 332 B.C.E. But “by the second century B.C.[E.], the Hellenistic East,” says professor of history Shepard B. Clough, “began to show signs of economic stagnation; in the first century B.C.[E.], it was manifestly on the decline.” Greece was replaced as a world power by Rome. Later, under Roman control, Alexandria became a provincial capital, second only to Rome itself.
The Eastern counterpart and successor of the Western Roman Empire, the Byzantine Empire, reached its zenith between the 9th and the 11th centuries. Its capital, Constantinople (today Istanbul), with a population of one million, was by far the largest city in the world. A marketplace for the silks, spices, dyes, and perfumes of the East and the furs, amber, timber, and iron of the West, it served as a strong economic bridge between Europe and Asia.
But in 1204, during the Fourth Crusade, the empire suffered a setback. Its capital was seized and sacked, a victim of economic greed. How so? According to The Collins Atlas of World History, “the Western drive to go in search of the wealth of the Orient is at the origin of the crusades.” This clearly indicates that the church, although supposedly driven by religious fervor, had other motives as well.
Meanwhile, in medieval Europe, merchants were establishing commercial, or trade, fairs where they could display goods from various lands along the routes they traveled. Of the particularly successful exhibitions held in the Champagne region of northeastern France, The New Encyclopædia Britannica says: “Transactions by merchants at the fairs were often made through letters that promised payment at a future fair and that were transferable to another person. Such transactions were the beginnings of the use of credit. By the 13th century the fairs served as a regular banking centre for Europe.”
During the 15th century, conquests by the Ottoman Turks threatened to cut off the trade routes between Europe and Asia. So European explorers set out in search of new ones. Vasco da Gama, a Portuguese navigator, led an expedition from 1497 to 1499 that successfully sailed around the Cape of Good Hope of Africa, thereby establishing a new sea route to India that helped make Portugal a world power. The new route also robbed Alexandria and other Mediterranean ports of their commercial importance as major trade centers.
Meanwhile, Portugal’s neighbor, Spain, was financing the attempt of Italian navigator Christopher Columbus to reach India by sailing westward around the world. In 1492—exactly 500 years ago next October—Columbus stumbled, as it were, upon the Western Hemisphere. The English, on the other hand, instead of seeking to reach the East by sailing south as had Vasco da Gama or west as had Columbus, kept searching for a northeast or northwest passage. All this exploration helped trade become international. And by being a decisive factor in the discovery of the Americas, the world of commerce demonstrated its powerful influence over world affairs.
Economic Power—Builder of Empires
The world of commerce has built powerful organizations. An example, according to the book By the Sweat of Thy Brow, is “one of the most far-reaching and long-lasting socioeconomic innovations of the ancient world: the craft corporation or guild.” Reminiscent of similar powerful organizations today, these guilds, along with accomplishing good, at times blatantly abused their power, so much so that Bible translator John Wycliffe is said to have denounced some of them in the 14th century as “false conspiratours . . . cursed of God and man.”—See box on page 13.
The world of commerce has even built empires, the British Empire undoubtedly having been the most successful. But before it began emerging in the 16th century, other commercial ventures in Europe began grasping for the economic power that makes the world go round. One of these was the Hanseatic League.
The old high German word Hanse, meaning “troops,” gradually came to be applied to any one of a number of guilds or associations of merchants that arose. During the late 12th and early 13th centuries, a Hanse centered in the northern German city of Lübeck gained mastery over Baltic trade and successfully linked Germany with Russia and the other countries bordering on the Baltic. Meanwhile, to the west, the Hanse in the German city of Cologne was strengthening trade connections to England and to the Low Countries.
These merchant associations passed legislation to defend themselves and their wares, generally regulating trade for the common good. They also undertook united efforts to suppress piracy and robbery on land or sea. As trade expanded, the need for greater cooperation among the various groups became apparent. So by the end of the 13th century, all the major north German cities had joined together into a single league that came to be known as the Hanseatic League.
By reason of its geographical position, the league controlled the main currents of northern trade. To the west it traded with the economically advanced countries of England and the Low Countries, which, in turn, had trade contacts with the Mediterranean and the Orient. On the east it had easy access to Scandinavia and Eastern Europe. Besides the wool trade with Flanders, the league thus came to control the fish trade with Norway and Sweden as well as the fur trade with Russia.
Although not a political federation, and without a permanent governing body or permanent officials, at its peak the league nevertheless exercised great power. One of its greatest accomplishments was the development of a system of maritime and commercial laws. While expanding into new markets, the league was quick to defend its old ones, using force if necessary. In most cases its large merchant navy was able to break resistance by enforcing economic embargoes or blockades.
The Hanseatic League reached its peak about the middle of the 14th century. Its decline started in the 15th, when the English and the Dutch began to grow in power and to dominate world trade. The Thirty Years’ War doomed the League. Its members met for the last time in 1669. Only a few cities, among them Lübeck, Hamburg, and Bremen, still pride themselves on being Hansa cities, relatively impotent members of a once powerful commercial giant.
Other larger, more powerful commercial giants were waiting to take the place of the Hanseatic League. Learn about them in Part 3 of this series: “Greedy Commerce Shows Its True Colors.”
[Box on page 13]
The Power of Guilds and Labor Unions
By the fourth century B.C.E., some Mediterranean cities were specializing in certain commodities, with practitioners of the same craft gathering to the same area within these cities. Initially, these craft guilds were evidently religious-social in nature. By the Sweat of Thy Brow tells us that “each association had its patron god or goddess, and its members held their own communal religious services.”
Medieval guilds were designed to provide welfare assistance to their members and to protect the craft as a whole by regulating production and setting standards, possibly even controlling prices and wages. Some became monopolistic, manipulating prices by secret agreements, aiming to protect the guild’s market and to prevent unfair competition.
As a follow-up of ancient craft guilds, merchant guilds came into existence in the 11th century, when traveling merchants organized them to gain protection against highway dangers. But the guilds gradually lost their original character. Geared to local trade, their power and prestige slipped as regional, national, and international markets became predominant and as merchants began to overshadow craftsmen.
In the late 18th and early 19th centuries, as an outgrowth of the Industrial Revolution, labor unions originated in Britain and the United States as associations of workers with the same skills. Started partly as social clubs, they developed into protest movements against the prevailing social and political system. Today, some unions strive simply to determine wages, hours, working conditions, and job security for their members, achieving this either by collective bargaining or by resorting to strikes. Others, however, are overtly political in nature.