Early Commerce – the Phoenicians & Africans
The history and evolution of trade have always straddled two primary dialectics: (a) expeditious delivery of goods and services to the marketplace [medium of exchange] and (b) securing payment [mode of exchange].
Way before catchphrases like “unleashing value” would appear in our lexicon, the father of history, Herodotus, had told us the history of the Phoenicians – the master seafarers and original global traders of antiquity.
Emerging from Sidon and Tyre (today’s Lebanon) to build Carthage (today’s Tunisia) – the richest city in Africa and the entire Mediterranean basin and later the envy of the covetous Romans, the Phoenicians’ means of delivering goods was their Gaulois – the trading ships that set sailed from the “Pillars of Hercules” (today’s Gibraltar) to Africa’s western coast.
The “Dumb Trade”
The Phoenicians were the first to be documented to have made it to the African coast, where they discovered and made a fortune in the “trust-based” trade. The Gaulois would land on the western coast and deposit their cargo from Europe on the coastline. The Africans would emerge at night and examine the goods.
When satisfied, they would return with deposits of ivory, gold, and other valuable items to the Phoenicians and light a huge bonfire to signal satisfaction. Trade was complete.
But when the Africans were unsatisfied, there were no bonfires or deposits of payment because they did not accept the value proposition initially conveyed. The Phoenicians would have to pony up and unload more cargo during the day – a process that was sometimes repeated over many days until their customers signaled satisfaction with payments and real bonfires that signaled the conclusion of the deal.
Only then would the Phoenicians know that the medium of exchange had concluded [their customers were satisfied] and that payment in gold, ivory, and other valuables [mode of exchange] was deposited and ready to be picked up.
At daybreak, they then collected their payment and set sail.
While many aspects of history combine legend and fable, Herodotus lived in the 4th century BCE – not a time when Europeans were vested in portraying the Africans as simple. So even if inexact, we can accept Herodotus’ version of this part of history as the truth.
This “dumb trade,” as it was translated from Herodotus’ Greek hundred of years later (Herodotus might have likely meant “primitive trade”), was an early example of satisfying the two most basic principles of commerce – establishing a medium of exchange of goods and services and the mode of exchange – getting paid.
Dawn of the “Smart Trade”
Since then, the path from basic bartering to mercantilism to global trade and commerce to online e-Commerce (rightfully, digital commerce) has been a path of simplicity to complexity, now reverting to simplicity with the aid of technology.
As nation-states organized into global nations, laws spanning the spectrum of protectionism to liberalism emerged, disappeared, and re-emerged in countries across the globe.
As free markets developed, multi and mega-national intermediaries would later step between the Phoenicians and the Africans and even between local producers and their local customers. Global levies [excise taxes] and necessary intermediary fees & markups added to the cost of delivering goods and services while diluting value to both sellers and customers. Where transnational imbalances emerged, national governments granted subsidies or other currency-valuation mechanisms.
Alexander The Great made the Phoenicians a spent commercial force, and Rome finished the job by the time of the 2nd Punic War. Arab traders filled the vacuum, and “history” is too small a word to describe Africa’s trade post its heydays of exchanges with the men from Tyre and Sidon.
2,500 years and we can see how different things would be for both if the Phoenicians and Africans lived in a world of DHL or FedEx and with online platforms through which the African reseller or end customer could place an order directly with a Phoenician supplier and vice versa through an e-Commerce platform, pay for it, and have it fulfilled within days.
Modulated Phoenician”
Imagine the crafty Phoenician (they were known as the craftiest merchants of antiquity) who, as a result of the volume of his business or transactions with his African customers, decided, or was mandated by the African states, to go one step further and set up local entities across the continent – media through which he could expand his trade and ensure compliance with national laws to collect and pay sales or value-added taxes as well as corporate taxes.
He would be obliged to hire international lawyers, who would then outsource the local incorporation of their entities to local lawyers, accountants, or expediters to file documents to protect priority trade (today’s intellectual property) from his crafty compatriots. And he would have to travel to Africa to present his credentials / prove his identity, or otherwise establish power of attorney in order to sign his articles of incorporation and other required documents.
Additionally, he would need to staff his African entity – at least, with accountants to do his accounting/bookkeeping, file and pay his taxes, and fulfill his statutory obligations. He may need to hire larger staff for operational management, inclusive of human capital management and a payroll function to pay staff net of applicable withholdings mandated by the government.
Depending on the level of his business, he may also need external auditors to assure the market and government (of his corporate tax basis) that his financial disclosures are in accordance with generally accepted accounting practices (GAAP). You get the picture.
Despite quantum leaps in the technological factors of production and distribution and advancements in practices and modes of payments [credit and clearing houses], businesses were little more than modulated Phoenicians dealing with their African markets before the digital era.
At the risk of sounding “cryptoesque,” this is how business has been done since the dawn of the industrial revolution and modern capitalism.
This is not just a scenario of our imaginary Phoenicians and Africans. In the real world, these requirements incur prohibitive costs of intermediaries borne by suppliers and businesses and passed on to consumers.
Digital-Era Transition
While the digital age and updated government regulations have been putting that model on life support for a decade, the proliferation of digital -commerce [e- and m-Commerce] has all but killed it, with a massive Covid-era funeral service when giants like Amazon and others saw some of their biggest historical sales increase.
Add the bifurcation of traditional employment with the massive employee walkout and widespread adoption of remote working post-Covid, and a new era has really dawned. In the United States, bosses are trying to roll back the latter, but that ship has long sailed, given the level of work now being remotely offshored to Gig workers anyway.
The Gig economy of accessible global subject matter experts in online exchanges has brought us a decentralization that enables an irrevocable new approach. Top-level skilled employees will walk – exchanging security for a better quality of life.
Business life and life’s business will now intertwine at the individual-entrepreneurial level, no longer at the mega-centralized legacy levels of work we have known all of our lives. Going international with your business and talents is only a few clicks away.
Individual entrepreneurs, small businesses, and the independent talent pool will be the solution engines of the future because of the agility inherent in the medium of exchanges and the modes of facilitation (even by crypto).
Brick and mortar will never be a thing of the past, even in the imagined “metaverse,” because products and their delivery are tangible aspects of commerce. But the tools for ease of delivery to the marketplace improve daily, and the modes of seamless exchange [payments] continue to improve and multiply at lightning speed.
We’re still Phoenicians and Africans but gone is the “dumb trade” and the Gaulois and bonfires. Today, we carry smartphones that intersect with online marketplaces, digital money wallets, etc., that facilitate direct exchanges with each other as suppliers, customers, or both.
