?As nomadic man settled in land to cultivate crops and graze his cattle, some began to engage in specific occupations as carpenters, barbers, tailors, ironsmiths, goldsmiths, washermen and many more. Thus began the exchange of different goods and services among the producers of diverse farm crops and livestock products and the varied service providers. The barter trade evolved as a result and soon emerged the bazaars or markets. Civilisation began to develop around the market towns and as civilisations spread across the world, ships began to sail over the sea carrying goods and merchants.?
In the first millennium, India contributed 33% of the world GDP and was the world?s largest economy. The country was also one of the world?s biggest exporter of goods such as textiles, steel and iron products, and spices until the 11th century. At the onset of the 17th century, more than half of the world?s exports were from India and China. These are among the interesting facets of history brought out by Back to the Future: Roots of Commodity Trade in India, by Jignesh Shah, chairman and CEO of the $ 1.84-billion Financial Technologies Group (he also launched Multi Commodity Exchange in 2003) and Biswajeet Rath, assistant vice- president (editorial) of Takshashila Academia of Economic Research, relied upon to trace the evolution of commodity trade in the country.
The book says commodity trade is one of the oldest trades and its history can be traced back to the roots of ancient civilisations. In the 1400s, India was a nation blessed with wealth. Commodities such as wheat and rice, and cotton for cloth were grown in the country. Around then, Vasco da Gama, in his search for new trade routes, discovered India with its rich abundance in spices and other commodities, and introduced an important trading nation to the rest of the world.
The book, while providing an interesting insight on the antiquity of commodity trade in India, uses carto- graphic tools for plotting the spread of commodities and their trade in various parts of ancient and medieval India. The authors have admitted that it was likely that futures or, more particularly forward trade, was carried out in ancient India, but more evidence is needed to support such a conclusion. ?Till now, we can only say that Kautilya?s Arthashastra seems to suggest the probability of the existence of forward trade in ancient India,? they say.
The book not only traces ancient trade routes over land and by sea, but also deliberates on specific commodities that were traded at different times. Relying on ?gathered and interpreted archeological data and inscriptions and studied ancient literature and historical records?, the book says the expansion of trade and the development of markets were central to the growth of both urbanisation and civilisation from antiquity. Even the regulations of trade bodies such as artisan guilds and the state supervisors was not overlooked by earlier rulers.
The book mentions the first dockyard built in Lothal (in present-day Gujarat) to transport goods and the remains of the huge granary discovered at Harappa where grain was stored during the Indian subcontinent?s first civilisation about 5,000 years ago. ?The means might have changed, mechanisation must have set in, but we are in various ways still where we started?trading commodities and building relationships,? the authors note.
Criticising those who blame the current market system for the current financial turmoil, the book says ?there is no better system for rapid and sustainable economic growth and development than a properly regulated market system?.
Through tracing commodity trade, the book is an attempt to depict narrative economic history.
The authors also make a case for a robust, enabling environment for futures trading, which had been often criticised by Left-oriented economists for promoting speculative trading in commodities.