The history of London dates back to the early years of the first century. The evolution of London in the commerce sector has proved to be a timeless phenomenon. Much has changed since the first century, and continues to change in the current day in the economy of London. These days, London is one of the three major centers of the world economy. In addition, it is considered to be one of the main financial centers for the international commerce.
According to Jeffrey A. Frankel, ” London is the world’s largest center for trading foreign exchange, with 31 percent of the global total turnover” (2008). Considering the fact that this city was the first one to develop a service-based economy, the economy of London has developed successfully over the decades and has always been one of the most “active participants” in the international trade.
There are various factors that has been contributing to the London’s successful development of the service industry over the decades which resulted into broad international trade of London with foreign countries and which has shaped the economy of London as it is today. In this paper we are going to provide discussion of the changing patterns of trade in London for the last 2000 years with regards to its historical development.
At around 40AD, merchants who came from Rome settled along the bridge on the Thames River and created a new town. It can be said that before Romans created a city on the bank of the river, there had not been any permanent settlements in the region. However, after the Romans had invaded Britain in the 43AD, and built a port along the river, the city of Londinium has become an important trade center. become The town was therefore built as a port city that was to act as a docking for the ships and merchants (Brigham, 1998, p. 36).
The goods were mainly delivered by the river by boats. During the Roman period, trading was primary a private trading, however, Roman state also made contracts with merchants to get products necessary to support the military forces. The main “partners” involved into international trade with London were Gauls, the Rhine provinces, and southern Spain. The main products imported were coin and pottery from Gaul tribes, olive oil from Spain and glass, as well as agricultural products from Rhine.
However, this did not last long as after 18 years, the town was invaded and burnt down by the army of Queen Boudicca. Her rebellion was afterwards crushed and the town was rebuilt (Caroline, 2004, p. 286). The main trade that was going on during this period was the pottery, bakeries, grain mills and brickworks.
In the fifth century, Romans left London and this is a period that is referred to as the dark age of London. It ceased from being a town and the major economic activity happening was fishing and farming (Caroline, 2004, p. 286). This was due to the fact that locals began to pay more attention to local production, as imported goods were quite expensive. One of the reasons is the development of the economy in the city and the fact that officials wanted to save money on foreign import which also was very expensive.
In the seventh century, the town rose again, but this time it was outside the walls that had been built in the second century. Until then, trade in London had not become advanced since the town had an economy that was home-based and home focused.
The second stage in the development of the international trade in the city is the medieval period when international trade was growing steadily and, as a result of this growth, the city of London has grown rapidly. During the medieval period, trade started expanding in London and it is at this time when many businesses were formed.
The fourteenth century saw a rise of the Mercers’ company (Anne, 2005, p. 511). This company developed to own majority of businesses in England. The population of the city has also grown significantly, even despite several outbreaks of plaque which took away many lives.
In the fifteenth century, the Mercers became dominant and trade grew by a significant portion. The main trade partners during this period were the overseas’ Low Countries. The mercers took over a majority of businesses in London including cloth industry which was at the time a very lucrative business.
In the 16th century trade was enhanced to the east as sailors set out for Moscow, Russia to establish trade ties with London. This was quickly followed by other ventures and maritime companies started flourishing. The economic challenge of the 16th century can be compared to the London economy of the 20th century. The country initiated trade with continental Europe and established strong ties with those countries in regards to the profitable export of cloth.
There were born many financial institutions as a result of new opportunities that had appeared in the country and changing conditions of the international trade. Several companies got established during this time. The main trigger of the formation of these merchant companies was the promise of monopoly to those companies which opened trade with new countries (Caroline, 2004, p. 302). This is the period that saw a tremendous increase in international trade as London virtually connected to almost all cities of Europe, both east and west.
Some occurrences in the international arena at this period favored trade development in London greatly. These include the revolt against the Spanish invaders by the Low Countries’ people. This offered a perfect opportunity for making the city the center of commerce in the whole world. During subsequent centuries, the trade in London fluctuated due to various circumstances such as wars and diseases. The subsequent years saw a great development in trade in London.
The industries grew and the trade was more formalized. Rules and regulations were formulated to govern the trade and many industries flourished. This continued into the twentieth century where a significant advancement has been recorded.
Currently the port of London handles over 50 million tones of trade. The port has been stretched along various locations in London and this has helped the city to handle the ever increasing volumes of trade. Today’s trade performance of the UK is characterized by comparatively lower growth in exports. “The UK exports nearly as many products as the USA and Germany to key markets, but in considerably lower volumes” (Lees & UKTI, 2010).
This is due to the higher quality of the UK products and new internationalization strategies of the UK companies (Lees & UKTI, 2010). With the globalization and the advancements in the information technology the history of London trade continues to be written.
References
Anne, FS 2005, The Mercery of London. Ashgate, Aldershort.
Brigham, T, 1998, The Port of Roman London. Cushing-Malloy, Michigan.
Caroline, MB, 2004. London in the Later Middle Ages: Government and People. Oxford University Press, New York.
Frankel, J A, 2008. ‘Foreign Exchange‘ The Concise Enciclopedia of Economics. Web.
Lees, Ch & UK Trade & Investment (UKTI) Economics and Evaluation Team 2010, ‘UK trade performance: Patterns in UK and global trade growth.’ BIS ECONOMICS PAPER NO. 8. Web.