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The Difference Between Trade And Trading



It can be slightly odd, a reaction to a book. So it is with “Around The World In 80 Trades” which is a lightly amusing look at trade around the world by one of the City’s teenage scribblers. The contention is that some young shaver, employed as an economist in The City, goes off around the world and tries to trade things along some of the old and some of the new trade routes. What japes.

The problem – as I see it – is that there’s too much trading here and not enough trade. To explain.

Of course, the two are intimately connected but they’re not the same thing. To the economist and in those libraries full of books about the subject trade is a glorious thing. By moving something – anything at all, from tin to the ability to exchange cat pictures – from people who value it less to people who value it more then more value is enjoyed by humans. As the aim of having an economy at all is to increase the amount of value enjoyed by peeps then trade is simply a good thing.

One scenario looked at in the book is that in a part of Central Asia (the Tian Shan I think, mebbe the Pamirs, but it wasn’t the Altai) heavier and larger horses are more highly valued on the flatter bits, smaller and lighter on the more pointy. So, trade in horses of the relevant sizes up and down the hillsides is value enhancing. Quite how big a horse gets being one of those imponderables of genetic mixing, feeding and so on that really only resolves as it grows.

OK, that’s trade. Value is created by moving something from a lower valued to a higher valued place, use or position. Cool.

Trading on the other hand is – and this is perhaps invention by me, right here, but the concept works – is the detail of the prices. How negotiation is done – and the description of horse traders on a flatter bit is well done – leads to us finding out who captures some and how much of that value being added. But this is that distinction. Trading is who gets that value added, trade is that there is value added.

This book is much more about trading than it is trade. Not all that much of a surprise when you consider that City background but there it is.

This could of course just be sour grapes. In my own working life I’ve often been good at trade and rarely at trading.

That there aren’t 80 trades in the book doesn’t matter, it’s clearly an allusion to Verne. It isn’t really about trade though, it’s about trading.



  1. You’re making me think about Cecil the lion. Mr Ndlovu was bothered by Cecil roaming about his farm. So he contacted white hunter Mr Bronkhorst, who rounded up the dentist to pay $US50 000 to shoot him (I mean the lion not Ndlovu.)

    Now if I’d owned the farm, I’d probably have tried to steal an RPG7 from the nearest army base and blow the damned thing to pieces. I’d never have thought of getting someone to pay me to get rid of it.

    So though I’d have gained the value of getting rid of Cecil, I’d never have gained my share of the $50 000. But anyone’s a better businessman than me.


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