Age of Pacific Lecture Series: Dr. William Bernstein

By Gayathri Selvaraj

Dr. William Bernstein is a doctor, financial advisor, and famous author of several history and economics books. Originally from Portland, Oregon, he began his career as a medical practitioner. He started his writing career with finance, but he was soon approached to write a book on the history of world trade. In 2006, he took this opportunity and wrote the book, titled A Splendid Exchange: How Trade Shaped the World, which soon became one of his best sellers. On February 24, 2014, Dr. Bernstein visited Portland State University to give the Master of International Management students a speech on the importance of the history of world trade.

Dr. Bernstein started his speech with two vignettes from the seventeenth century. The first one begins in 1635, when the Spanish barbers in Mexico City complained about the presence of Chinese barbers. The second one begins in 1931, when a small boy walked on the beach in Western Australia and discovered a handful of silver coins, which were later found to be Spanish coins from the seventeenth century. They start searching for a shipwreck, but there is no sign of one. Thirty years later, fishermen find the destroyed ship, which originated from Amsterdam in 1655, and recover thousands of such silver coins. These stories make one wonder what the Chinese barbers were doing in Mexico City in 1635 and how a Dutch ship made it to Australia before the country was even discovered. To understand, we need to know about the three luxury international trade commodities during that period, which were spices, silk, and silver.

Spices were very valuable once. Everyone believed they came from the “Spice Islands,” and whichever nation controlled spice trade was considered to be very wealthy. Silk, which originated in China nearly 5,000 years ago, made its way to Europe, Persia, and India. The farther from China, the lower the quality of the silk. At the time, Europeans had silver, which the Asians wanted to exchange for goods. Although, the Spanish were responsible for discovering silver, which soon became the global currency.

Putting together the different pieces, Dr. Bernstein explained that the Spanish took the silver and shipped it to Manila, where they exchanged it for spices and silk. On the way to Mexico, the traders also brought a few Chinese people. The standard route westerners took was through the Cape of Good Hope, but it was important to know when to turn left or else they would crash into western Australia. In 1635, one such ship suffered that fate and was destroyed. The rescuers who dived to find chests of silver failed to find anything worthy, and instead, a small boy walking on the beach discovered the silver coins. Furthermore, Dr. Bernstein explained to us the role of transportation systems existing at the time: land and water. The availability of cheap goods and labor resulted in protectionist attitudes and was seen as one of the root causes for World War II. By the end of the nineteenth century, all the elements of globalization were in place—trade wars that culminated with the Smoot-Hawley tariff act.

Dr. Bernstein’s speech was very informative and educational. His descriptions of globalization and international trade were very helpful to understanding how important it is to learn history in order to recognize patterns.


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