Sunday, July 19

What happened after Vasco da Gama came to India?

While looking at this site with some lovely photographs, I was reminded of a paper I had read about how the spice trade in Europe was impacted by Vasco da Gama’s trip to India. Quite simply, the pattern of the spice trade changed:


Here’s the abstract:

This article explores the impact of the 'Voyages of Discovery' on European spice markets, asking whether the exploits of Vasco da Gama and others brought European and Asian spice markets closer together. To this end we compare trends in pepper and fine spice prices before and after 1503, the year when da Gama returned from his financially successful second voyage. Other authors have examined trends in nominal spice prices, but this article uses relative spice prices, that is, accounting for inflation. We find that the Voyages of Discovery had a major impact on European spice markets, and provide a simple model of monopoly and oligopoly to decompose the sources of the Cape route's impact on European markets. Finally, we offer some speculations regarding the impact of the Cape route on intra-European market integration.

Opening new trade routes help in improving competition and is good for the consumer. When people talk about globalisation, they forget the long history behind this increasing trade amongst nations and how it has been very good for the consumer broadly. And the sad thing is, people will keep on trading between themselves, just like the air and intellectual ideas, you cannot stop the propagation of trade.

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