Trade was the mainstay of the urban economy in the Middle East, as caravans negotiated the surrounding desert, restricted only by access to water and by mountain ranges. This has been so since ancient times, partly due to the geology of the area, which is mostly limestone and sandstone, with few deposits of metallic ore and other useful materials Ancient demands for obsidian (a black volcanic rock useful for making mirrors and tools) led to trade with Armenia to the north, while jade for cutting tools was brought from Turkistan, and the precious stone lapis lazuli was imported from Afghanistan. One can trace such expeditions back to ancient Sumeria, the earliest known Middle Eastern civilization. Records show merchant caravans and trading posts set up by the Sumerians in the surrounding mountains and deserts of Persia and Arabia, where they traded grain for raw materials, such as timber and stones, as well as for metals and gems.

Reliance on trade had several important consequences. Production was generally in the hands of skilled individual artisans doing piecework under the tutelage of a master who was also the shop owner. In these shops differences of rank were blurred as artisans and masters labored side by side in the same modest establishment, were usually members of the same guild and religious sect, lived in the same neighborhoods, and often had assumed (or real) kinship relationships. The worker was bound to the master by a mutual contract that either one could repudiate, and the relationship was conceptualized as one of partnership.

This mode of craft production favored the growth of self-governing and ideologically egalitarian craft guilds everywhere in the Middle Eastern city. These were essentially professional associations that provided for the mutual aid and protection of their members, and allowed for the maintenance of professional standards. The growth of independent guilds was furthered by the fact that surplus was not a result of domestic craft production but resulted primarily from international trading; the government left working people to govern themselves, much as shepherds of tribal confederacies were left alone by their leaders. In the multiplicity of small-scale local egalitarian or quasi-egalitarian organizations for fellowship, worship, and production that flourished in this laissez-faire environment, individuals could interact with one another within a community of harmony and ideological equality, following their own popularly elected leaders and governing themselves by shared consensus while minimizing distinctions of wealth and power.

The mercantile economy was also characterized by a peculiar moral stance that is typical of people who live by trade—an attitude that is individualistic, calculating, risk taking, and adaptive to circumstances. As among tribespeople, personal relationships and a careful weighing of character have always been crucial in a mercantile economy with little regulation, where one's word is one's bond and where informal ties of trust cement together an international trade network. Nor have merchants and artisans ever had much tolerance for aristocratic professions of moral superiority, favoring instead an egalitarian ethic of the open market, where steady hard work, the loyalty of one's fellows, and ntrepreneurial skill make all the difference. And, like the pastoralists, Middle Eastern merchants and artisans unhappy with their environment could simply pack up and leave for greener pastures—an act of self-assertion wholly impossible in most other civilizations throughout history.

Dependence on long-distance trade also meant that the great empires of the Middle East were built both literally and figuratively on shifting sand. The central state, though often very rich and very populous, was intrinsically fragile, since the development of new international trade routes could undermine the monetary base and erode state power, as occurred when European seafarers circumvented Middle Eastern merchants after Vasco da Gama's voyage around Africa in the late fifteenth century opened up a southern route. The ecology of the region also permitted armed predators to prowl the surrounding barrens, which were almost impossible for a state to control. Peripheral peoples therefore had a great advantage in their dealings with the center, making government authority insecure and anxious.