Don Thurston Blog

Follow the Commodities and the Money

Read a book about any commodity and you will learn a great deal about history. Natural resource exploration and exploitation built massive fortunes, dismantled others, drove slave trades. triggered warfare, created new economies, and led to the decline of others.

A profound example is sugar. A combination of excellent growing condition in virgin territories, sweet teeth in the old world, land with no cost, and slavery created a completely new international business, not all the consequences were positive. Wars were waged, huge subsidies were implemented and obesity and diabetes ran rampant. The industry has changed, partly because of synthetics … but many of the issues are still with us.

Rubber, led by demand from the auto industry, shared similarities in harvesting and processing. Naturally occurring rubber in Brazil generated huge wealth, horrendous labour exploitation, and one of the world’s finest opera houses in the middle of the Brazilian jungle. After years of production as a natural material, the importance of natural rubber declined as World War II forced the development of synthetic alternatives. Currently about 40% of the world’s rubber demand is satisfied by real (versus synthetic) sources.

Study salt. Here is the development of a commodity that has no significant substitute. Initially harvested to enhance flavour and health, it evolved to become an important preservative. Now, road de-icing is a major source of demand for a commodity slightly modified from that used for consumption.

Tea is another wonderful example of the consequences of growing demand for a fledgling commodity. Its popularity expanded exponentially. As tea was shipped abroad, silver was imported into China; an unintended consequence was the opium wars. In due course, a new tea industry opened up in India, not to the benefit of all. A recently published book entitled: A Brief History of Tea authored by Rox Maxum is a worthy read.

Name the commodity and you will find a story worth reading. Silk, gold, maize, cotton, tobacco, fertilizer, copper and more all had major influences on the economies and politics of societies around the world.

Oil is a relatively new comer to the commodity story. On a broad scale the story may follow earlier examples of discovery, exploitation, fortunes made and lost and eventually substitution. The stakes have to be high and they certainly are in this case.

Thanks for reading!

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Mount Pleasant Don Thurston

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