I’m reading a book called Spice: The History of a Temptation by Jack Turner. As the review said, “There was a time, for a handful of peppercorns, you could have someone killed. Throw in a nutmeg or two, you could probably watch. There was a time when grown men sat around and thought of nothing but black pepper. How to get it. How to get more. How to control the entire trade in pepper from point of origin to purchase.”
[mainbodyad]The history buffs among you know this, but throughout much of human experience, wealth was not measured in stocks and bonds, but in real estate, spices, gold, and silver. It’s odd for us to think of it today but two thousand years ago, Pliny the Elder left written records indicating the price of cinnamon to be worth roughly 15x the value of silver on a weight basis. Wars have been fought over spices, and it was the promise of a bounty of new spice trade that convinced many European monarchs to back expeditions that eventually resulted in the colonization of North and South America.
It makes sense. Food was typically rancid and / or heavily salted for preservation before the rise of electricity and effortless refrigeration. Travel was difficult so transporting large amounts of spice quickly enough to stay fresh and remain halfway around the world was almost impossible. Now, even someone who can barely make ends meet and lives on food stamps can walk into Wal-Mart and pick up a generic bottle of cinnamon for less than $2.50 and a gourmet bottle of Vietnamese cinnamon for less than $5.00. Some spices are still extraordinarily valuable – a cup of the highest quality saffron will cost you $150 – but the world has changed. Peasants now live like kings.
Two thousand years ago, this spice rack would have been extraordinarily valuable. It could have been converted into almost anything – including real estate, gold, silver, merchandise, or even Roman slaves. People would have killed you to take possession of these spices. Now, these six bottles cost around $40 at Wal-Mart.
Go to your pantry or cabinet and grab some cinnamon or, if you don’t have cinnamon, some other spices. Shake some into your hand. Look at it. For thousands of years, your forefathers and foremothers would have looked at that little brown powder with the same wonder as you might holding a large, rare diamond or a pile of gold.
That’s where the interesting thing about psychology comes into the picture. If you are like most people, you don’t even bother to have a decent spice collection in your house. The bounty available at the corner store is so far beyond what our ancestors could have imagined that it now sits, almost ignored, by a vast majority of the population simply because it is common.
Spices are so common that the undisputed global leader in the spice trade, McCormick & Company, is publicly traded and valued at around $8.5 billion. Anyone with a brokerage account and some cash can become an owner. (It is, in my opinion, overvalued relative to its intrinsic value so I won’t be buying shares anytime soon, but if they were to become cheap enough, it’s exactly the sort of the business I would want to pick up for the KRIP portfolio.)
Even the “cheap” non-gourmet line of spices would have been enough to cause a war in the right time and place in days gone by. Those McCormick peppercorns would have been locked in a vault under armed guard.
What are the spices of tomorrow? That is, what sort of things do we consider valuable today that will be common place centuries from now?
On the flip side, what sort of things are common today that will be rare in the future?
Humans value things that give pleasure to their basic biological makeup – sight, sense, smell, taste, and touch. They vote with their claim checks on society (money) to acquire these things; studying how they vote is called economics. We use these words to describe individual sub-areas of life but they are all the same thing. Almost everything is rooted in biology and genetics. The human brain wants novelty and comfort, as well as actively seeking to avoid boredom and discomfort. Art, music, love, food – it all goes back to the brain demanding sensory input.
The next time you are in a store and see spices, don’t just look at the little bottles. Consider that the entire course of human history was radically altered because of those tiny herbs, plants, and seeds. Fortunes were built and lost. Lives taken. Wars fought.
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Reader Comments (9)
Comments are presented chronologically, with replies indented beneath the comments to which they respond.
Vinay
January 2, 2013
Hi,
How do you find such diverse books and genres to read ?? Do you have any list's you follow or such ???
Joshua Kennon
January 2, 2013
Replying to Vinay
1. Walk into almost any bookstore I pass
2. Look at recommendation from Amazon based on past purchases
3. Randomly browse book reviews from The New York Times, Wall Street Journal, etc.
4. Any time I see a book mentioned almost anywhere, I will at least pull up a synopsis and consider ordering it
5. Look at the upcoming releases from major publishing houses
6. Scan the sales charts for the book industries to see what is interesting to other people
The amount of time I read dwarfs the amount of time I spend cooking, or playing video games, or virtually anything else in my life. I tend to focus heavily on history, economics, finance, science, biology, psychology, and sociology.
I almost never read non-fiction. It's not efficient time-wise as a form of entertainment and is far more expensive per hour of functional entertainment than, say, Skyrim or Civilization V is.
Sometimes, a mail bag submission will get me interested in a certain topic. I also have quite a few people randomly send in book suggestions through the contact form.
Anon
January 5, 2013
Replying to Joshua Kennon
This is good stuff!
Paarthurnax
January 2, 2013
As a little token to remind myself of ingenuity and possibilities - I have a VoC coin in my wallet that I'll pull out occassionally. Some people twirl a pen in their hand while trying to think of ideas, or a baseball bat (if you've ever seen A Few Good Men). For me it's the coin. It encourages me to think outside of the box. It's amazing the size of empire the VoC created through spice trade and much of what they did (issueing stocks for example) had never been done before. Interesting to look back in our history and see how much times have changed... And also how much they're the same.
Michael Starke
January 2, 2013
I find spices to be an integral part of cooking, and cannot imagine living without them. So many people cook what I consider to be appallingly bland food that my spouse and I rarely eat outside of the house anymore. I think some of my favorites spices are in the "curry family." Though curry (as a word) is well overloaded in US English, I find it interesting the myriad of different flavors one can obtain. It seems each town or village in South East Asia has a different interpretation of what curry actually means. I tend to favor those that contain ground chilies, as I like the heat profile.
"On the flip side, what sort of things are common today that will be rare in the future?"
To create such a fervor, and such a lucrative arbitrage opportunity as the spice trade, I would suspect that an environment of scarcity (natural, or artificially-imposed) would need to exist for a good or service with imperfect substitutes. There has to be some amount of utility gained as a result of choosing a specific option relative to its opportunity cost in order to command a higher price. In the modern era, with what technology has done for eliminating (or at least drastically reducing) scarcity via the internet and international travel, I find it hard to think of an idea. Just please don't tell me it's tulip bulbs... 😉
Andrew
December 30, 2013
Replying to Michael Starke
Very easy: Privacy.
I think we all value not being watched and recorded and analyzed 24/7, but it's going to become a past fantasy. IMO it's related to freedom.
Cameras will be so small they will be invisible. And cheap enough for anyone to buy by the handful.
Everyone will know everything about everyone else. The word "secret" or "hidden" will fall out of the human vocabulary one day. (Schools actually are ran like prisons now. Cameras everywhere and chips that track kids like cattle. For no benefit of the kids I might add...Only liability reasons. It makes me sick to my stomach the way we're training our kids to be jarheads.)
Andrew
December 30, 2013
Replying to Michael Starke
Sorry for the spam.
What will be common is "knowledge". (I think all "joys" will become virtual one day.)
We will all have access to specialized information (a little like we do now). We'll know what the best doctors, engineers, lawyers, scientist etc know. It'll match every member of the working class being replaced by machines or robots. I personally think it's going to be weird and "cold". (And eerily quiet from an external point of view.)
crabhooves
January 4, 2013
I love these articles on economics and goods throughout history. Keep them coming!
Red OnRed
January 3, 2017
Hey Joshua! Long time lurker here from Silicon Valley! Was wondering about the pics you share of your spice collection - do you prefer pre-ground spices over buying whole spices and grinding them yourself? If so, why? I have a $15 electric spice grinder and mortar and pestle, both of which I use to grind my cinnamon, cardamom, coriander, allspice, etc (and I also first like to dry roast my spices as well to bring out the flavors). I find the flavors much more intense than what I can get from pre-ground stuff personally but was curious to know if there are advantages of using pre-ground spices. Thanks!