Tumultuous Trade and the Heavenly Horses

The USA’s current embrace of opportunistic trade deals underscores the reality that international trade has since been, for 2,000 years, a messy affair where competition, conflict and outright warfare coexist. Prior to World War II and the GATT agreement of 1947, trade often followed the flag, with countries using gunboatsand strong-arm tactics to gain outlets for their products. Trade provided not just wealth, but a measure of national security—with real war being a common outcome of trade wars.  No story better illustrates this continuum between war and trade than the origins of the Silk Road. China’s Han dynasty (202 BCE – 220 AD) faced a powerful trade challenge in the form of the nomadic Hun empire.  After almost one hundred years of conflict, the Han succeeded in upending what they perceived as an unfair trade relationship, but at an enormous cost.  What are the lessons for statesmen and mercantilists today?

In theory, trade is a mutually beneficial relationship where two parties exchange what each side has in surplus, for what each side lacks.  In the case of Han China and the Hun empire, the Chinese needed horses.  The core regions of the Han empire provided poor conditions for raising these animals, so essential for transportation and warfare. China’s wet, warm climate did not suit horses. Land-hungry farming occupied much of what might have been used for pasture. Even the soil lacked trace minerals like selenium, essential for horses growth and health. 

To the north, the steppes of what is now Mongolia thronged with horses, who thrived in the cooler temperatures and abundant grasses. The horse-breeding peoples of the steppes sold thousands of horses to their Chinese neighbors, from the beginning of steppe horse breeding, around 1500 BCE.  In return they received manufactured goods, silks, and foodstuffs.

The steppe people had to sell their excess horses, because in good years the herds grew too big for the available pastures.  But when they rode down to China in their massive trading caravans, the prices they received for their horses would fall, reflecting oversupply.  Often, protesting against these lower prices, the steppe people raided China, kidnapping and plundering.  Paradoxically, not only did these raids enrich the steppe people, they forced the Chinese to buy more horses and so drove the price of horses back up.  Inasmuch as the Chinese resented the greedy and violent behavior of their neighbors, they wound up rewarding the raiders.  Worse was to come.

As long as the steppe peoples were divided into smaller tribes, China could defend itself against these pin-prick raids. By 209 BC, however, an ambitious steppe chief named Modun took control of his tribe, and using extreme violence, federated the peoples of the northern steppe into a great empire, the Huns. Modun centralized trade, war and diplomacy into a tool for extracting the maximum wealth from China.  Faced with a monopolistic partner, the Chinese had to pay high prices for horses, or incur a major attack. The Huns kept Han China in a constant state of war or submission for a century.

Finally, a new emperor,  the Han Wudi, or “the Martial Emperor” decided to  break the Hun horse monopoly. But how? The Huns controlled pastures in a wide arc around northern China.  To the west lay the Taklamakan desert. To the south, the mountains of Yunan.  It seemed unlikely that China could find another, competing supplier.

Wudi consulted the oracles of the I Jing, divining that heavenly horses would be found in the far west.  The emperor’s spies traveled 2,000 miles, to today’s Uzbekistan, encountered the Ferghana horses, superior to anything the Huns could supply. 

The Han Wudi sent trading missions to Ferghana.  Some were captured on the way and enslaved by the Huns.  Others reached their goal , but Ferghana’s rulers refused to sell horses to China out of fear of Hun reprisal.  When Ferghana executed on a particularly obstreperous envoy, the emperor took this as an insult to China, and vowed revenge.

In 104 BCE he assembled an army of 100,000 soldiers, with over 100,000 pack animals.  The expedition crossed the Taklamakan desert and scaled the Tian Shan range with passes at 12,000 feet. They laid siege to Ferghana and forced the surrender of 30 heavenly horses and several hundred ordinary horses.  It had taken a year from the expedition to reach Ferghana, and one year to return to China. When the emperor saw the fine horses, he exclaimed, “The heavenly horses are come from the West. I shall ride them into the Mountains of Heaven.”

The expedition cost the Han several years of tax revenues. The heavenly horses did not flourish in China, and worse, their offspring grew up spindly and weak. Some Chinese men of the pen condemned the expedition as a “folie de grandeur”.  It looked like China would be condemned to trade with the Huns, who would continue to raid China whenever they liked.  But the expedition for the heavenly horses set a bigger trend into motion.

The horse breeders of the west learned that China would pay top dollar for their herds, and that it was possible to bring these horses from as far away as Ferghana.  This broke the Hun monopoly.  This horse caravan trail, from West to East is what we now call the Silk Road.

The story of the heavenly horses represent an early instance of a major state going to war for both trade and national security, and not the last time either.  When China looks at its trading partners for metal ores, petroleum or microchips, do not imagine for a second that the history of the Han Wudi emperor is far from their minds.  As the post-World War II trading order weakens, we may see the pattern of raiding and trading reemerge.