Terms of Trade

Location: If the trade takes place in Florida, then oranges will be much easier to come by than apples, so a fair trade would require more than one orange for each apple. By the same logic, if the trade takes place in Maine, then the opposite would be true.

Time of the year: If the exchange occurs at the end of the harvest season, then apples and oranges should be equally plentiful and their value should be similar. However, apples store much better than oranges, so if the exchange takes place six months after the harvest, apples were be more common than oranges, and the value of oranges will be higher than that of apples.

Relationship of the trader(s) to the product: If either trader is seeking to satisfy immediate consumption needs, then he/she will be more inclined to pay a higher price for a good. If, on the other hand, a trader is actually a speculator who plans to resell the apples or oranges at a later date for a profit, then he/she can demand to receive a lower price by threatening to walk away from the deal. This illustrates the problem for producers that occur when they try to sell their apples or oranges to a large well- financed commercial wholesale operation.


Joint-Stock Companies

Traders formed partnerships at least as early as the Roman Empire, and probably much earlier than that. By the time of the European Medieval Period, European crafts guilds provided credit and other forms of assistance to their members, and the Hanseatic League of northern European cities operated an extensive trading betwork that reached from England to Finland and south into the central German plain.

By the 9th century AD, Muslim traders in West Africa operated large entreprises with contacts on either side of the Sahara Desert, using extended family relationships to maintain employee loyalty and divide out the profits. Similar operations appeared on the East African coast by the 11th century, and no doubt operated throughout the Indian Ocean even earlier than that.

The modern form of "joint-stock company" began to emerge in Europe in the 16th century. They were created to invest in risky trading voyages of long duration. They were formed by groups of individuals who pooled their money to buy a ship, fill it with cargo and hire a crew. If the ship returned successfully, the participants divided up the profits based on the amount of their investment, and dissolved the company immediately. If the ship failed to return, then the investors were responsible for settling any claims made by supppliers or the families of deceased crewmen.

By the 17th century, joint-stock companies began to remain in existence for more than one voyage after the creation of a "stock market" made it possible for one investor to liquidate holdings without forcing the entire company to dissolve. Personal pledges to the company were reinforced by family and friendship ties, much as they were in African long-distance trade, because the notion of "limited liability," which limited the amount of damages that any partner would have to pay out in event of a loss, did not become widespread until the 19th century.

One other important innovation was the creation of national banks that served as clearinghouses for financial transactions and offered credit to businessmen. The Bank of England was founded in 1694 to provide credit to the government for its wars against the French, but during the next century, it and its imitators began to offer credit for other purposes.


Steam Engines

The first commercially successful steam engine was developed by Thomas Newcomen in England in 1712. He used it to pump water from the lower levels of a coal mine. Later in the century, James Watt created the first modern steam engine with a separate condensor that made it many times more efficient than Newcomen's engine (and therefore less expensive to operate).

James Rumsey operated the first successful steam-powered vessel on the Potomac River in 1787, and other inventors produced working steamboats in the next two decades. Steam engines of that period were not very efficient, so they required large amounts of fuel that made them impractical for long distance voyages. However, beginning in 1820 on the West African coast, small steamships began to navigate upstream along major rivers like the Senegal and Gambia. During the rest of the century, several major breakthroughs made it possible to use steamboats for long distance trade, including the use of efficient propellors to replace side paddles, multiple expansion steam engines that consumed less fuel, and better plate steel to built stronger ships that could withstand ocean storms.

The first steam powered railroad began to operate in England in 1825, and the idea spread quickly to both sides of the Atlantic. However, the railroad had little impact on the Atlantic trade until the end of the 19th century when European companies began to constuct railroads in Africa and Latin America.


European Wars

Here is a list of European wars during the late 17th and 18th centuries:


African Wars

It is not practical to give a complete list of wars along Africa's Atlantic Coast in the 18th century, but here are some general themes. A number of larger coastal states like Benin (Niger River) suffered internal revolts as tributary leaders acquired enough guns from the slave trade to assert their independence. Meanwhile, Muslim reform movements had their first successes in Futa Toro (Senegal River) and Futa Jallon (Gambia/Senegal headwaters), creating new theocratic states that served as the models for a wave of 19th century West African jihads. In addition, European wars spilled over to Africa in the form of assaults against each others' trading posts, so that the French posts on the Senegal River fell under British control from 1763 to 1783.


Chartered Companies

The best known examples of chartered companies are the Dutch East India Company and the British East India Company, but there are many other examples from the 17th and 18th centuries. Chartered companies were formed when individuals sought government sponsorship and protection for their efforts to colonize new areas or open new trade routes. Governments participated in part because they expected to receive payment for the charter, but more often because they wanted to deny new territory to their rival governments, and chartered companies offered the cheapest way to extend a country's borders.


European-educated Africans

Among English abolitionists, several Africans became prominent, including educated ex-slaves like Olaudah Equiano and Ottobah Cugoano. Equiano's autobiography became a best-seller after he made a speaking tour of England. Ougoano is best remembered for his 1787 proposal that the British navy station a squadron off of West Africa. Samuel Ajayi Crowther, who studied at Freetown's Fourah Bay College, became the first African Anglican bishop, led a mission to the Niger River, and wrote the first grammar of the Yoruba language.


Government Interest in Abolition

The British decision to abolish slavery in 1807 is usually explained in terms of the desire by the British government for a pretext to search enemy ships during the Napoleonic Wars. By the same token, the French abolition of slavery was a byproduct of the French Revolution, and undercut the fortunes of wealthy nobles who controlled the Caribbean sugar trade. Of course, the American decision to abolish slavery at home came as a result of a destructive civil war.