Forex: The Early Trade
Trade was unknown in early prehistoric times. Each man was independent of other men. He built his own home, hunted his own food, and made his own clothes. Later, man learned that he could have more of the good things of life by trading with other men.
The rise of trade led to specialization. A community specialized in making one or more products, such as olive oil or pine lumber, and then traded these articles to another group that had different surplus products, such as corn or wool. As civilization expanded, exchanges became so common that some men did nothing but conduct trade. This class of men became known as merchants, or persons who dealt in merchandise.
The most famous early land merchants were the Babylonians, and, later, the Arabs. These traders traveled on foot or rode donkeys or camels; for long trips though they use caravans.
The Phoenicians were the chief sea traders of ancient times. For about 400 years, their small, crude boats carried most of the trade along the Mediterranean Coast. Phoenician traders also crossed the Isthmus of Suez and sailed to the Persian Gulf and India.
Trade had considerable importance during the hundreds of years that the Roman Empire ruled over the known world. Roman ships brought tin from Britain, and slaves, cloth, and germs from the Orient.
Two things made trading difficult in early days. First, there were no safe and speedy methods of transportation. Second, there was no international currency. Some of the trading nations had their own coins, but usually would not accept other money. Each item had to be exchanged for items of equal value.
This system of trade in goods is known as barter. It was not until many years later that money became common as a means of exchange. However, mediaeval trade developed largely because of increased contacts between people. Men traveled to new lands, learned about new products, and met new people, too. But trade did not flourish in most of Europe during the middle ages, except in a few densely populated centers.
During this era, most commodities supplied their own needs. People wanted a few simple things, chiefly because they did not know about anything else. Most trade existed on an exchange or barter basis. Only the wealthy could enjoy goods other than those produced in the locality. During the middle ages and the Renaissance, trade gradually became broader in scope, and its methods and organization became more complex. Banking, which began in Italy, greatly aided the development of trade.