3 ms·

I can easily imagine people wanting spices and for the purposes benbreen (the OP) says, including as components of drugs (in the medieval sense of drugs as desc

I can easily imagine people wanting spices and for the purposes benbreen (the OP) says, including as components of drugs (in the medieval sense of drugs as described). But a key to spice trade puzzle, for me, is the transport cost. Some shipped almost all the way around Eurasia, the long way. I know sea transport was and is relatively very inexpensive, but how much did it cost in the technology of the time? And they also had the overhead of military costs. What was the total cost of procuring spices, if that can be calculated? (Also, I'm not quite clear about the time period this history describes. Freedman's book's title says it's about the medieval period, but most examples in the article seem to be early modern. It's starting to sound like a wide swath of history.)

chewz 3y ago
The key to spice trade is TINA - There is no alternative - in financial terms. The largest form of investment in Middle Ages had been farmland with average ROI of c.a. 7-8 percent but no guarantee (wars, diseases, crop failure). The ROI of spice trade was 200-300 percent over similar period. So if you wanted double you capital it was either spice trade or investing in land for 20 years. And the cost? It is like asking Citadel about their servers costs....
resolutebat 3y ago
Sea transport was hugely expensive and risky: building giant ships, supplying and paying crews for voyages lasting years, and huge rates of loss (20% was common). But unlike land transport, it scaled very well, so this was a direct trigger for creating companies as we know them: merchants would band together to finance the expeditions, and then collect outsize returns (400%+ was not uncommon) for successful ones, much like VCs today.
- Cthulhu_ 3y ago
  I'm sure this is well-known, but the dutch East India Company invented investing, having investors invest in a future voyage, paying the upfront cost of the journey, reducing the risk of the company, and if the journey was successful they would get a profit. https://en.wikipedia.org/wiki/Dutch_East_India_Company https://en.wikipedia.org/wiki/Dutch_East_India_Company
  - merry_flame 3y ago
    Risk sharing with investors predates the VOC by a few centuries if not millennia. iirc Hansa merchants invested in the modern sense and the Code of Hammurabi, written around 1700 BCE, provides a legal framework to things that could be construed as invested. The Italian republics, China, etc. probably have more of the same.

chewz 3y ago

The key to spice trade is TINA - There is no alternative - in financial terms. The largest form of investment in Middle Ages had been farmland with average ROI of c.a. 7-8 percent but no guarantee (wars, diseases, crop failure). The ROI of spice trade was 200-300 percent over similar period. So if you wanted double you capital it was either spice trade or investing in land for 20 years. And the cost? It is like asking Citadel about their servers costs....

resolutebat 3y ago

Sea transport was hugely expensive and risky: building giant ships, supplying and paying crews for voyages lasting years, and huge rates of loss (20% was common). But unlike land transport, it scaled very well, so this was a direct trigger for creating companies as we know them: merchants would band together to finance the expeditions, and then collect outsize returns (400%+ was not uncommon) for successful ones, much like VCs today.

Cthulhu_ 3y ago
I'm sure this is well-known, but the dutch East India Company invented investing, having investors invest in a future voyage, paying the upfront cost of the journey, reducing the risk of the company, and if the journey was successful they would get a profit. https://en.wikipedia.org/wiki/Dutch_East_India_Company https://en.wikipedia.org/wiki/Dutch_East_India_Company
- merry_flame 3y ago
  Risk sharing with investors predates the VOC by a few centuries if not millennia. iirc Hansa merchants invested in the modern sense and the Code of Hammurabi, written around 1700 BCE, provides a legal framework to things that could be construed as invested. The Italian republics, China, etc. probably have more of the same.