Spatial Barriers and Development of Capitalism

Remoteness is the basis of not only diversity but also large scaleand mass-production. If all commodities were homogeneous, there would be no need to exchange them. Comrnodities are exchanged because they are heterogeneous. Capitalism commoditized heterogeneous elements. Exotic comrnodities are a case in point. To Europeans they were presented as Asian goods and to Asians as European goods. Rarity of goods arises because of differences in natural conditions and culture from place to place as well as geographical remoteness between the supplier and consumer. If people were satisfied with products of their locality, which they consume in a daily life, there would be no exchange of goods with other localities. Precisely because there are products not produced locally, is exchange activity stimulated, division of labor accelerated, and, eventually, cost reduction by large-scale production brought about. Strong desire to obtain goods that existed in remote areas was the driving force to internationalize commercial activities. European merchants ventured to go as far as Asia to satisfy this desire. The larger the space to traverse, the higher the risks the traveler and the means of transportation must run. They may meet accidents, natural disasters, or other mishaps. The merchants may fall ill on the way. The farther the destination, the greater the danger of the comrnodities being stolen or broken on the way. As regards movement of goods, the differential between the price at the forwarding end (FOB price) and that at the arriving end (CIF price) is defined as "space overcoming cost," which includes the risks involved as well as the transportation cost. It is recalled that damage insurance business began as maritime insurance. This demonstrates not only the importance of maritime transport but also the fact that the risks of transportation by seas went down at a