3. The Beginnings of Trade
The original entrepreneurs were, of
course, traders and merchants. The first
known instance of humans trading comes
from New Guinea around 17,000 BCE,
where locals exchanged obsidian, a black
volcanic glass used to make hunting
arrowheads for other needed
goods. These early entrepreneurs
exchanged one set of goods for another.
5. The importance of specialization in various
tasks (versus self-sufficiency in all) cannot
be overstated. As some individuals in a
community focused on one activity or
another, they got much better at it,
speeding up the pace of innovation. As
different people got better at different
tasks through specialization, they were
then able to exchange with one another for
the various goods and services needed,
increasing the benefits for all.
6. The First Cities
Human civilizations began to spring up near
rivers like the Nile, the Tigris and Euphrates,
the Indus, and the Yellow and Yangtze. In the
first cities, writing was developed to keep
track of crops. In this period, the first armies
developed and the first city governments
were formed. Agricultural settlements had
put humanity on a rapidly developing path
toward intellectual and scientific
advancement.
7. Trade Routes Allow Ideas and Memes to
Spread
Trade routes between the new cities soon
sprang up. Donkeys, horses, and camels
enabled trade caravans between civilizations,
moving both goods and ideas. Ships were
built to carry trade over the seas. Networks
and hubs soon formed and more complex
structures emerged. Great Pyramids were
built in Cairo. Temples were built in Sumeria.
8.
9. Between 500 BCE and 117 CE, small cities turned into
the Persian Empire, Alexander’s Empire, Han Chinese
Empire, and Roman Empire with complex political
systems and philosophies and beliefs.
Judaism, Christianity, Hinduism, Buddhism, and Islam
formed and became the world’s five major religions
between 1300 BCE and 600 CE.
10. Trade routes expanded. Salt from Africa reached
Rome, and the secrets of making paper were
transferred from China to Europe.
Around 800, gunpowder was discovered in China
when carbon and sulphur were combined with
potassium nitrate. Around the year 1200, an Italian
trader named Leonardo Fibonacci brought the
standard system of numbers.
11. The Invention of Money
Early trade consisted of barter .The demands of
growing business and trade gave rise to a money
system. Silver rings or bars are thought to have been
used as money in Ancient Iraq before 2000 B.C. Early
forms of money (called specie) would be often be
commodities like seashells, tobacco leaves, large
round rocks, or beads.
12. The Creation of Markets
As Robert L. Heilbroner says in The Worldly
Philosophers,
“The precapitalist era saw the birth of the
printing press, the paper mill, the windmill, the
mechanical clock, the map, and a host of other
inventions. The idea of invention itself took
hold; experimentation and innovation were
looked upon for the first time with a friendly
eye.”
13. “It is not from the benevolence of
the butcher, the brewer, or the
baker that we expect our dinner,
but from their regard to their self-
interest.” – Adam Smith, The
Wealth of Nations
14. Robert L. Heilbroner’s book The Worldly
Philosophers
“A man who permits his self-interest to run away
with him will find that competitors have slipped in
to take his trade away; if he charges too much for
his wares or if he refuses to pay as much as
everybody else for his workers, he will find
himself without buyers in the one case and
without employees in the other.”
15. The Start of the Industrial Age
The Industrial Age truly began in 1712 with
the invention of Thomas Newcomen’s steam
engine in Devon, Britain. But it wasn’t until
James Watt’s steam engine in 1763 that things
really got moving, enabling work to be done
through the movement of pistons rather than
the movement of muscle.
16.
17. From the Industrial Revolution, the concept of mass
production and economies of scale came about.
Bigness, trusts, and vertical integration became the
key to riches at that time. It was Andrew Carnegie and
J. P. Morgan in steel, John D. Rockefeller and Frank
Kenan in oil, and Henry Ford in automobiles. While
some of these titans had questionable ethics, no one
can deny that they were innovators. They forged
alliances, developed new ways of doing business, and
created efficiency across industries.
