Trade creates specialisation. Specialisation creates efficiency. Efficiency drives development. Specialisation also creates diversity and complexity, creating a web of interdependence. This interdependence is an economic ecosystem.
Trade creates economic ecosystems. Just as every living thing in a rainforest has an impact on the rainforest, every trade in an economic ecosystem has an impact on that economic ecosystem. As particular types of trades grow and others shrink, the economic ecosystem also changes.
Some economic ecosystems, such as hunter gatherer tribes, are less complex. They have fewer specialisations and trades and they are inefficient. Some economic ecosystems are very complex, such as those in the developed world. They have a high level of specialisation, trade and efficiency. For example, farmers in the developing world produce enough food to feed themselves and one other person, while farmers in the developed world produce enough food to feed themselves and at least ten other people – in the USA only 1% of the people work in agriculture compared to 40% in 1900. In contract India still has over 70% of its workforce employed in agriculture.
Some developments are interruptive and have a major impact on economic ecosystems. For example, the mechanisation of transport, where a horse breeder, stable hand and many others who made their living from supporting the use of horses as the main mode of transport, may not have found work in the mechanised transport industry as, for example, a car maker, or garage mechanic. Most interruptive developments will improve our standard of living, but they all come at a cost, causing disruption and hardship for some or many.
International trade and governments can also play a major role in shaping an economic ecosystem. By its nature the existence of trade redefines the boundaries of an economic ecosystem. The significance of this depends on its scale. It may be the equivalent of the well-established migration of a species of birds, important but not interruptive. Or it could be the equivalent of unleashing a plague of feral animals into a delicate ecosystem – which could be devastating. Or it may in fact be one of the best things to happen to an ecosystem. China provides examples of both of these – its trade with the USSR in the 1950s resulted in severe hardship, its latter day role as the world’s factory is creating genuine prosperity.
The key issue at present is that economic ecosystems are almost universally out of the control of those being held responsible for them. This is because the economic ecosystems have outgrown government boundaries of control.