False Economy - Alan Beattie [38]
In the second, contemporary, scenario, the market for wheat has expanded to encompass the world. If Herodotus turned up in today's Egypt he would still recognize the country's staple food—the flatbread that has been eaten since before pharaonic times. But standing at the Alexandria docks, he would be surprised to see not ships full of grain departing for Rome but oceangoing vessels arriving, laden with wheat from Odessa, Montreal, Louisiana, and South Australia. One of the Mediterranean's wetter countries is one of the world's drier ones. An economy with a natural advantage in a limited market may turn out to be rather a poor performer in a larger one. There is little point throwing away its precious water on growing food that can be bought from abroad much more efficiently. Much like ancient Rome, modern Egypt imports half its staple food.
Egypt has allowed its new relative scarcity of water to determine—if only partially, as we shall see later—what it does with its own resources and what it imports. When economies specialize in a particular kind of product, it is often determined by their relative abundance of land, water, other natural resources, and labor. This is the case markedly for agricultural crops, whose connection with the local geography and climate is so immediate. By trading with one another, countries can benefit from a resource owned by their trading partners while sharing the benefits of their own.
Thus modern-day Egypt is importing more than grain. It is importing water. There may be no ships laden with forty-foot containers full of fresh water lining up outside the ports of Alexandria and Cairo. But by importing wheat, Egypt is, invisibly and implicitly, importing millions of tons of the water that is used to grow it. This commerce in "virtual" or "embedded" water, like many of the most remarkable achievements of the world trading system, happens on its own, without intelligent, or at least manifest, design. No grand plan; no treaties; no teams of international bureaucrats. Just the market.
In fact, it is remarkable not how much embedded water, labor, and land is shipped around the world economy but how little. Powerful constraints of transport costs, inertia, and political resistance stop economies becoming dependent on produce from abroad. The political constriction became much more prominent in recent years when sharp hikes in food prices sparked panic buying and riots across the world. The desire for self-sufficiency intensifies for something as visceral and as bound up with senses of identity and nationhood as our daily bread.
For trade to be worthwhile, transport costs—shipping charges, time, the risk of spoil or loss, and the uncertainty of price and demand—have to be outweighed by the extra profit to be gained by taking goods from a place of plenty to one of scarcity. Unsurprisingly, the history of trade is one of the small, light, durable, and reliably expensive being the first to establish regular trade routes. The heavy, bulky, perishable, and cheap follow on slowly behind. As the cost of transport declines and its speed increases, so the range of tradable goods widens. But this process can take centuries.
Though his intent was to contrast the beauty of ancient and medieval trade with the ugliness of the modern, John Masefield, the great twentieth-century British poet, described this in a poem of elegant simplicity, "Cargoes."
Quinquireme of Nineveh from distant Ophir,
Rowing