The History of Free Trade

While we tend to think of free trade as a very modern phenomenon, steeped in globalization and an evermore interconnected world economy, the reality is that the history of free trade extends far into the past.

Ancient Free Trade

In the ancient world, free trade was seen within the contexts of civilizations. In many cases, it was seafaring cultures that made the biggest headway in trade, using shipping to bring goods from one part of the world to another. One of the first and most successful in doing this were the Phonecians, who from around 1500 BC to 800 BC created trade routes that covered the entire Mediterranean. Their alphabet, which was used to track shipments, eventually became the basis for every western language.

Greek and Roman Free Trade

Following the Phoenicians, the Greek and Romans established trade routes goings as far out as Britain in the West, and China in the East. The Greeks spread their culture and ideas through this trade, and the Romans spread their organization and laws. It was a truism back then as it is today, that free trade tends to make the traders quite wealthy, and thus it formed the basis for Athenian, and later Roman power.

After the Fall of Rome

While the Middle Ages saw a lowering of trade in and out of Western Europe, Islamic civilization and the Byzantine Empire continued to move goods around the known world. By the Renaissance and the Age of Exploration, Europe was poised to expand trade through better navigational methods and more robust ships. While the trading of this era was not very free, it nonetheless spanned countless cultures and for the first time was truly global in nature.

The First Age of Globalization

Through the technological developments of the Industrial Revolution, European nations such as Great Britain were able trade raw materials and finished goods across the entire face of the Earth. Coupled with increasing financial sophistication and the invention of the telegraph, the burgeoning trade of the late 19th century is seen as a precursor to the free trade and globalization we know today.

The Fall and Rebirth of Free Trade

Due to periods of economic instability, and the devastating impact of World War I, many of the free trade policies that had existed at the turn of the last century were eventually canceled in favor of protectionism and autarky. This lasted for around 20 years until the end of World War II and the establishment of the Breton Woods system. Breton Woods standardized trade policies and exchange rates, allowing countries to once again freely trade with one another without fear of economic chaos. This created ever-increasing trade volumes within the areas not under control of the Communist bloc.

Contemporary Free Trade

When the Soviet Union fell in 1989, the remaining closed markets in Eastern Europe opened up to trade, making a global free trade system once again possible. Free trade accelerated during the 1990s and the beginning of the 2000s, resulting in our current globally interconnected economic system.

References

• The handbook of globalisation