An author’s conclusions or reflective summaries are normally reserved for insertion at the end of a book. But I have always been impressed by the writing style of Pulitzer Prize writing author Jared Diamond who offers the reader an insight into what he has learned in his introductory chapters.1 Let me follow suit and share my own thoughts, as a number of amazing concepts came out of my research and editing of this book. Overall, the essential contention of this book is that globalization incites and magnifies humanity’s strengths while exposing its weaknesses. It thereby acts as a prime provocateur for the growth and development of civilization. Built on a system of multiterritorial, economically inspired social mobility, it facilitated cross-cultural relationships, thereby engineering not only the exchange of products but also the sharing of ideas and talents through competition, which alter the human experience and continue even today. Modern business principles were born out of this process. More specifically, the text attempts to show that, first, the exchange process is a man-made event. It originated everywhere on earth and no specific society or specialized civilization can take credit for its invention, as it is a unique human trait shared by all. While other species on earth do in fact horde or store food resources for future use, share their kills in the field with other hunters, bring back to the pride or nest their finds for the benefit of others, and engage in a division of specific labors for collective survival, only man trades.
Second, without the exchange process, the world would have never progressed. Civilization would not have evolved. Hence, the two are intertwined with trade, the golden thread in the tapestry of civilized development. Exchange fuels men’s actions toward each other and is fundamental to the establishment of relationships. It rewards specialized individual abilities within the context of a group. Trade allows for society to be organized and brings us together.
These two conceptual considerations led me to examine the research of anthropologists, archeologists, and the writings of historians in regard to the importance of the element of cross-cultural exchange in their inspections. While these scientific and scholastic fields report on finding ancient physical artifacts, products, or goods from other territories or societies, usually pottery shards and other detritus objects as evidence of foreign trade, they do not always discuss the influence of cross-regional and even intercontinental associations in respect to the evolution of mankind. Answers as to where, when, how, and by whom advancements in civilization were made require inserting the trade factor into the examination of life on earth. It is a key factor, an important link in the appreciation of how people developed in settlements around the world.
The numerous merchant transactions that accompanied cross-territorial trade produced a myriad of interpersonal relationships and with it the transfer, sharing, and borrowing of knowledge and ideas on living. Sometimes, the process of information exchange is hidden or its identity masked; it does not have the physical properties to evidence itself in the surviving ancient artifacts, as rarely were philosophical thoughts or advanced technological skills written down and preserved. They were passed on orally or via demonstration. We tend to attribute learning to the group that first offered it to us, forgetting that perhaps they learned it from others. For example, the Arabs are credited with inventing Western-style mathematical numerals, advancements in chemistry, and star navigation. But what if they learned these from Indian traders crossing the Indian Ocean who had in turn first learned them from the Chinese with whom they also traded? Each time a new discovery from antiquity is made, evidence is found in the cross-contaminated nature of cultures due to the trading phenomenon. This makes it more and more difficult to determine where anything first began. In my research, I observed that every society at one time or another had contact with alien societies. Even a seemingly isolated island always attempted to reach out to another remote island. For others, the desire for foreign contact stretched out from their singular territorial land borders, while still others crossed continents and eventually circumnavigated the globe. Often we see only two sides of a trade link and forget that it is part of an elongated sequence that is connected to all the others, an interlocking elongated series. Each link dispenses and receives information not just from the links on either side that it is attached to but from all the other links in the chain. When you touch one you are really touching all the others, essentially forming stepping stones across the world pond, each influencing the other.
Third, most of the modern-day basic business concepts, commercial instruments, organizational models, legal regulations, and the administration of institutions involved in profit-making activities were developed and used in antiquity. They have not changed dramatically but have merely improved due to technological advances. While on the subject of technological improvements, it should further be noted that the motivation behind new inventions that have bettered mankind over history are either traceable to the commercial imperative or owe their spread across the globe to the business imperative. The need for, and the investment in, developing them arose out of entrepreneurs whose visionary understanding provided the value incentive.
Fourth, the exchange process begot cross-territorial trade and emerged into what we now call the globalization phenomenon. This mechanism contributed at all times in the history of mankind to the advancement of civilization even if such an apparatus came with pluses and minuses. It has opened new areas and brought people together, offering the bounties of the world to an ever-widening audience. But the process also depressed and robbed people of their human freedoms, did not result in shared equal economic returns, and destroyed natural environments. The process is not perfect as it emanates from man who himself is not perfect. All one can do is recognize its creative and destructive forces, hoping that future business managers strive to make it a positive component in the sociopolitical and economic system it initially helped to create.
Globalization is the final chapter in the spreading and widening of the natural human exchange process, a commercialization of the need for reciprocity between people. It has been going on since mankind first engaged in a bartering transaction wherein the fruits of one’s knowledge, physical labors, or both in respect to their interaction with the varying environments around them, allowed them to swap or replace the products of their skills and abilities with those of another. In the process, a materially measured worth was assigned to each man’s harvesting, alteration, or both of the earth’s bounties and a relative value was established between the parties. While the principles first used in the exchange process have evolved over time into a more mature and sophisticated system, the conceptual imperative remains the same. People are connected and they need each other to survive and progress. Exchange is the bedrock on which civilization was constructed. It is the socially induced phenomenon that allows for growth and change. It has been with mankind since the beginning of time on earth and will remain with us in the coming millenniums as we search the stars.
History is a maiden, and you may dress her however you wish.
—Chinese proverb
History can be approached from numerous vantage points. I have chosen to clothe her in the context of commercial imperative. This distinctive garment shows off history’s greatest accomplishment—the development of civilization—with the threads woven from the remnants of the vital exchange arrangement. The process of exchange or bartering, where one thing is traded for another, is perhaps the oldest social system known to man. With the exception of man’s survival relationship with nature and the establishment of the family unit through sexual attraction, it represents one of mankind’s most basic instincts. It may have predated ancient organized religion and even forms of early social order, government, in many cultures. Called the splendid exchange by author William J. Bernstein,1 the principle of trade is at the cornerstone of the development of civilization. Its influence on global societal development via the emergence of the commercial profit imperative as it evolved from the simple exchange process has been both progressive and destructive. Nonetheless, it is hard to argue that it has not been a prime component in the history of mankind, possessing both good and bad elements.
Jeffrey A. Tucker, a guest blogger for The Christian Science Monitor, relates a simple purchase in a grocery store with the familiar refrain “thank you, you’re welcome” as evidence of the “essence of exchange and core magic of what happens … trillions of times every day all over the world.”2 He calls this process “a system of mutual benefaction, unrelenting and universal,” increasing a sense of personal if not social welfare. Tucker cites the teachings of St. Thomas Aquinas, who described the action of exchange on its own as a “means of increasing the well-being of all people” and that the “mere fact of exchange-based human associations” enhances social wealth. Tucker also mentions the 16th-century Spanish theologian Bartolome de Albornoz, who wrote that “buying and selling is the nerve of human life that sustains the universe,” as it unites the world, joining distant lands, people, and ways of life. In his conclusion, he observes that “the market is rarely given the credit it deserves for helping humanity improve its lot,”3 as it enforces cooperative interaction, a socially worthwhile event.
While these comments contain religiously infused, socially based platitudes for the exchange process are noteworthy and appear in the doctrines of other spiritual organizations, the ethical actions of the commercial practice are not without critical opposition. Buddhist teachings encourage followers to engage in the right livelihood. In Christianity and Islam, their scriptures contain a condemnation of interest or usury while Jewish law talks of earning money in a kosher or right fashion. All religions advise people to be honest in their dealings with others as they recognize that life is a series of constant reciprocal arrangements with one’s fellow men. Therefore, prodding them to do so in an equitable fashion promotes harmony and social order. A more detailed analysis of the interplay between religion and the exchange process is presented later in the text, but as religious institutions evolved to assist in providing social orderliness and direction, their acknowledgment of business as a subject of interest, worthy of comment, is indicative of its influence on daily activities and the development of civilization.
Historic ventures in the name of economic improvement, the quest for wealth, and dominance by one nation over another have resulted in wars triggered by trading disputes, no less the outright conquering of lands and the colonization of their people to merely appropriate them for slavery and plunder their resources. Name almost any war throughout history and one uncovers that the underlining, if not the key motivational intent, has a financial or wealth-creating incentive to it. Throughout human history, commercial exploration, as further presented later in the text, and at times partnering with governments and endorsed by religious organizations, has resulted in destructive consequences for those involved.
There is no purity of the marketplace as created by the exchange or trade process. Mankind is flawed and the mechanisms he creates to help manage his life contain the human errors. However, the commercial system, as during its beginning in antiquity and continuing today, has allowed mankind to sustain their lives and improve their lot. It is the lifeblood of civilization; its nurturing agent supplies the world with its necessities. Its by-products gave the world the impetus for developing language, record keeping of written documents, mathematical systems, and a multitude of inventions and advancements in science while providing the capital funding for the arts to name just a few of its beneficial properties. Perhaps, the best way to describe the effect of exchange initiative on civilization is to compare it with water in the formation and maintenance of life on earth. Like all forces of nature, it brings both the good and the bad. Rain nourishes crops and replenishes rivers and streams while refilling our precious water reservoirs. At the same time, its overflow washes away valuable land and can destroy the social settlements placed around it. The exchange process both gives and takes like any other natural occurrence. In its wake, it sets up social stratification—that is, those who are abundant and those who are needy (i.e., the well-to-do and the poor). It is not an equal system. The capitalistic system, a branch of the exchange process, is an economic model for creating wealth but not for its equal distribution. Hopefully, all observers and commentators can at least agree that the concept exists and that the business students of today, the managers of tomorrow, will live in the tide of modern globalization created by the trade waves of those who have gone before.
As this book was being composed the intent behind the text presentations was clear. The book argues that the ancient economic process of barter or the exchange of one thing, be it a product or service or even knowledge, for another thing, evolving into the trade initiative with the substitution of mediums of exchange (money) for tangible or intangible things and culminating in modern times as a fundamental factor in the globalization phenomenon, has throughout human history influenced and propelled the development and growth of civilization. The book is not intended to be a history of economic thought nor is it a review of the history of socioeconomic models. It is not an elongated position paper in praise of or in condemnation of free-trade principles or the capitalistic system. Whether one subscribes to these ideas or to an engineered or managed trading theory or the socialistic approach or a communist-type handling of the means of production or any other definition of economics one cares to apply, the operative underlying connecting word in all systems is trade and its actionable results. Ha-Joon Chang, in his book making a case against free-trade orthodoxy, although balances his perspective, reminds the reader of the simple fact that “the importance of international trade for economic development cannot be overemphasized.”4
The investigation presented in the book is intended to acquaint business managers with the effects of their institutional actions—their commercial operations—on the human social condition known as civilization. The power and reach of the commercial imperative have always impacted mankind—sometimes as a positive force and sometimes as a negative force—but its significant relative positioning in the expansion and maturity of civilization should not be dismissed or relegated to a minor fragment in the inspection of history.
Business history is too often regarded by mainstream historians and business school economists as a rather narrow area of study, with little intellectual merit. A number of scholars even doubt if the subject really deserves classification as a separate and distinct subdivision of history. Others feel that it is best delegated to a subsection of the science of economics or placed in the context of other social sciences from anthropology to archeology and the subtexts of cultural determinations that are embedded within such areas of study. The Journal of Management Studies has announced that it wants to theme a special issue devoted to business history in order to encourage a discussion among scholars as to the advantages of a closer engagement between business history and management studies, a collaboration that the editors feel is worthy of further deliberation in the academic arena.
For business managers who must conduct their responsibilities and obligations in today’s commercially expanding world, acquiring an education of their heritage as influential social interlopers in the establishment and continuing growth of the human condition is valid. Knowing how their ancestors impacted the world gives them a greater understanding of their role in the continuing process as they assume such mantles of responsibility.
Globalization Defined
We will never really know who invented the word globalization. The term could have rolled off anyone’s lips as it constructs itself naturally in the English language by combining the word “global” with the standard suffix ization. It would obviously be used to convey the process when things, events, or systems expand beyond a constrained territory or recognized border to become global, signifying a wider influential reach or something along these lines. According to the Oxford English Dictionary, the word globalization was first employed in 1930. It is defined as “the act of globalizing,” from the noun “global” meaning “pertaining to or involving the whole world,” “worldwide” or “universal.” This publication’s Dictionary of Economics denotes it a process by which the whole world becomes a single market. This means that goods and services, capital, and labor are traded on a worldwide basis, and information and the results of research flow readily between countries. It entered the Merriam-Webster Dictionary in 1951 as the development of an increasingly integrated global economy marked especially by three prime factors: free trade, free flow of capital, and the tapping of cheaper foreign labor markets. The term was widely used in academe by economists and social scientists by the 1960s. The Cambridge Academic Content Dictionary places the world in the social studies category defining it as the development of closer economic, cultural, and political relations among all the countries of the world. The common theme in all definitions is the recognition that the word denotes a continuing developmental process, a perpetual state of being as opposed to a single act or event. This would mean that globalization has been occurring, hence it has a history and will continue to evolve, and hence it has a future. If something has a past then it seems natural that one can look to trace the roots of its existence and how it advanced. This is one of the objectives of this book.
One should not confuse globalization with other terms that play off the global reference such as Marshall McLuhan in 1962 analyzing the impact of mass media on society creating the phrase “global village” to describe the result. Many in the business scholastic field attribute the actual printed use of the world to Theodore Levitt, a former professor at the Harvard Business School. His concept that business was becoming globalized, which Mr. Levitt defined as the changes in technology and social behaviors that allow multinational companies such as Coca-Cola, McDonald’s, IBM, and Sony to sell the same products worldwide, first appeared in a 1983 Harvard Business Review article “The Globalization of Markets.”5 He said, “Gone are accustomed differences in national or regional preferences.” Although critiqued by some for exaggerating the idea, the recognition that companies actually had to balance persistent national cultural patterns with the general trend toward embracing global brands, was a growing phenomenon. Levitt said that the “world is flat” more than 20 years before Tom Friedman used the term.6
Some economists refer to the word to denote a historical stage of accelerated expansion of market capitalism, like the one experienced in the 19th century with the Industrial Revolution. Many academics place the term within the perspective of modern times, describing it as a fundamental transformation in societies because of the recent technological revolution, which has led to a recombination of the economic and social forces on a new wider or extraterritorial dimension. Almost everyone everywhere wants all the same things they have heard about, seen, or experienced via the new technologies but a similar driving motivation occurred in the past. Because the word globalization began to appear in scholastic circles, no less in the literature, in the last 50 years, the misapprehension is that it describes a current wave or trend in a time framework. It is rarely used to portray an ancient time when, in fact, it was, and still is, a process that has been continuing since man began to exchange things with his fellow men over increasing distances.
The term globalization as a social engineering phenomenon that emerged in the early 1960s, with some attributing the new word to an article in an undistinguishable magazine.
It was used to describe a coming period in world commerce and economic conditioning when the timeless integration of global markets would have a more important social impact than ever before. The scale and degree of movement to an interlinked world, while always occurring, were beginning to move to such a critical mass that the phenomenon was worthy of developing a term to characterize the event. Once created, such designations became subject to further identification and examination. Researchers penned numerous articles while international business textbook writers incorporated the idea into their opening chapters to explain and comment on its effect. In short, whether one depicts the phenomenon as a positive or negative force, it gets a lot of attention as it is the dominant economic system in place today and for the near future.
The current antagonistically disapproving use of the term is well exemplified by the title of a recent book using a dictionary approach. Called Globalization: n. The Irrational Fear That Someone in China Will Take Your Job,7 the authors debunk the often misguided contention that international trade, the mythical interloper in one’s life, is a domestic, economic, and destructive force. They argue that there are limits to the effect of outside agents bestowing material advantages on some national markets to the disadvantage of others. The book dispels such misunderstandings by showing that countries control their own economic fate and that global trends can both aid and hinder economic progress. The authors, aided by U.S. statistical abstracts of occupational employment in various industries since 1983, demonstrate that overall job growth has been strong and that in areas where losses have occurred, they have been in low-level positions with the primary culprit being automation and not job movement overseas. In their introduction, the authors dramatically demonstrate that a search on Amazon.com would turn up more than 4,000 results that have the term globalization in them and that the New York Public Library contains close to 500 books devoted to the subject with more to come. Chapter 1, “It May Be News, But It Isn’t New, A Brief History of Globalization,” confirms that the phenomenon has a history but states “it is hard to say precisely when it began.”8 The Roman Empire is offered as a starting point but because it did not cover the entire world, such a time frame is dismissed. The British Empire after 1815 is considered but dismissed, as international trade was insignificant during its origination as the far-flung global colonies were created to basically service Britain and not other nations. The authors settle on the late 19th century when barriers to international trade were reduced and new technology was shrinking the world with increased efficiencies in communication and transport coupled with increased cross-country immigration.9 Such considerations resulted in a key determinant, the diminished economic power of historic national rivalries according to the authors who themselves cite Norman Angell’s timeless book The Great Illusion as the theoretical engineer of the concept.10 Hence globalization, if defined as a decline of national economic influence and the emergence of an independent global force built on a worldwide interconnected system, but allowing for bumps in the coordinated structure due to world wars and the great 1920 depression, would be considered a modern 19th-century phenomenon. According to Bruce Greenwald and Judd Kahn, it really began its ascent in the 1950s.
What these learned authors fail to account for in their brief history of globalization primarily is that technological advances have always been part of mankind’s desire to reach and touch others with continuing progress, always being made to tie the world closer together (see Chapter 6). That the economic power and prestige of nation-states in antiquity to effect trade outside their borders were always augmented by independent merchant traders who partnered with sovereign countries to pursue international commercial ventures. Today these merchants, in the guise of multinational corporations (MNCs), are challenging the global strength of the nations they once serviced. Dan Rodrik opens The Global Paradox with a chapter titled “Globalization in History’s Mirror” with a profile of the beaver trade in the Native American territories of 1671.11 He follows with references to the Hudson’s Bay Company and East India Company, the mercantilist chartered trading companies of that era, noting that they operated with “statelike enforcement powers … imposing their own rules over foreign populations in distant lands.”12 Rodrik seems to indicate that such quasi-government-public enterprises, the forerunners of today’s modern MNCs, were the provocative agents for the beginning of globalization. While learned authors on the subject of globalization chose varying periods in history to mark its emergence, there is no doubt that its roots were planted in ancient times. What we see today are its mature trunk and branches—the continuance of its development. It is not a modern-day birth no matter which specific group of events and parties is used to illustrate its time line.
The term is used most commonly to define a more globally integrated system of economic interdependence among nations as reflected in increasing cross-border flows of (a) goods and services, (b) capital, and (c) know-how as fueled by advancements in technology shrinking the world via more connected communication and transport mechanisms. Using a historic time portal, globalization can be profiled as a process of intensification of cross-border social interactions due to declining costs of connecting distant locations through advancements in technology affecting transport and communication. It is further actuated by the increased transfer of capital, goods, and people between and through sovereign territories. This process has culminated in the modern era with the transnational interdependence of economic and social actors, an increase in both opportunities and risks, and intensified competition.
Today globalization is accelerated by a myriad of factors. Government-driven and financially based decisions, as exemplified by reductions in barriers for trade and more liberal privatization and deregulation policies, have allowed for increased flows of foreign direct investment (FDI), capital, and related services. Political upheaval—such as the removal of the iron curtain and the independence of former Soviet Union states, partial transformation of communist China into a more open economy, and the growth of emerging nations—has contributed to the faster pace of modern globalization. Rapid technological advancements in respect to information processing and enlarged communication highways via the Internet and wireless devices using satellite transmissions, coupled with more efficient transportation mechanisms, have allowed for faster and more efficient connections between and among dispersed global supply chains. Sociopolitical developments have always accompanied international trade, allowing for increased migrations, creation of new identities, and the spread of human knowledge between and across social groups. The quickness of these developments has propelled the modern phenomenon we call globalization, but its beginnings are firmly planted in and have evolved from the ancient exchange imperative, which contained elements of all these considerations.
Globalization also possesses a social opportunity ingredient. It slowly eats away at isolation, integrating people, and thereby changing people’s ideas and relationships, reshaping the world just as it has been doing for thousands of centuries. It is a reengineering of the global economic system, with repercussions that would influence the sociopolitical climate around the world, and a time when the economic good fortune or, in reverse, the economic ills of any one sovereign would impact others—the coming of a more interlinked borderless world.
The term globalization ushered in a whole new genre of book offerings, most notably the popular best-selling book series by Thomas L. Freidman, as noted earlier, beginning with The Lexus and the Olive Tree published in 1999 to The World Is Flat in 2005 and the most recent update Hot, Flat, and Crowded in 2008. The newly coined word became a touchstone for its overriding notion that the world was expanding both economically and socially with more players in the game and more spectators being affected by a new structure. At the same time, the world was shrinking as technological advancements in communication and transportation made it easier to reach out to one another. Thomas Friedman summed up such a novel world force by concluding that globalization, as he defines it, has replaced the Cold War as the prime international socioeconomic political system and is neither a trend nor a fad.13
One of the problems with the term globalization is that by first being coined in the latter part of the 20th century it has taken on a meaning associated with more recent events that seem to justify its emergence. Globalization is an action word to describe a writer’s interpretation of a mounting trend that was beginning to affect the world like never before and perhaps reengineer the global economic system with repercussions that would influence the sociopolitical climate around the world, as Friedman’s conclusion suggests. In essence, the word was to exemplify the growing interdependence among nations, a time when the economic good fortune or in reverse the economic ills of any one sovereign nation would impact other nations to a degree never before experienced. As noted earlier, the actual start date of the phenomenon is subject to numerous interpretations. It is often portrayed as a collection of modern historic events within the opening chapters of most textbooks, critical and supportive essays, and journal articles on the subject of international business treating the subject as a modern and perhaps 20th-century proceeding. They all too often describe the phenomenon as duly emerging from the decline in governmental barriers to the free flow of goods, services, and capital as driven by industrialized nations after World War II and fueled by dramatic advances in technology, most notably communication, information processing, and transportation.14 These two macro-events and changes in the political economies of a number of nations in the latter part of the 19th century certainly contributed to the strong emergence of modern globalization, resulting in a linked and more integrated world. But the process did not begin in recent history; it was only altered with more fuel-efficient components added at that period. Some textbooks in their opening chapters provide a triparagraph historical retrospective15 while others use a page inset16 to give the reader a sense of the developmental process extending back to the ancient world. But such limited inspection is deserving of an increased introspective.
The start date for globalization is subject to numerous conclusions. Mike W. Peng offers a good insight into this academic discourse, describing three approaches. He first considers the arguments of perhaps agenda-driven antiglobalization parties who view it as a new phenomenon that originated in the late 20th century with the dual result of technology coupled with “Western hypocrisy designed for MNEs [multinational enterprises] to exploit and dominate the world.”17 His second approach contains a historical commercial signature as he references the existence of the multinational enterprises (MNEs) starting 2,000 or 8,000 years ago back to the Assyrian, Phoenician, and Roman Empires.18 The third proposed initiative cites Joseph Stiglitz’s pendulum degree definition, stating that globalization is a “closer integration of the countries and peoples of the world that has brought about by the enormous reduction of the costs of transportation and communications, the breaking down of artificial barriers to the free flow of goods, services, capital, knowledge and (to a lesser extent) people across borders.”19 All three of Peng’s proposals on the emergence of globalization have an economic pedagogy to them that is constructed on the commercial imperative, which of itself is tied to the simple process called trade, a fundamental practice built on exchange—the handmaiden to mankind’s overall civilized development. Friedman’s reference, as noted earlier, that it has replaced the Cold War marks the event in a modern time period, the late 1960s. But in his second book on the subject, Friedman slightly alters this view, suggesting that there are three great eras of globalization, a theory accepted by many scholars. The first was in 1492 with the voyage of Christopher Columbus, the second was from 1800 to 2000 (including the Industrial Revolution), further changing the world but interrupted by the Great Depression and World Wars I and II, and the third being the modern current era as individuals from every corner of the world are being empowered,20 leading to a flattening of the world. Alan Beattie offers a growth-layered definition with the base level, the first great era of globalization, between 1880 and 1914, or also the age of what some historians called High Imperialism—the apotheosis of the dominance of European colonial powers over the rest of the world21 followed by the Industrial Revolution and the modern era.
Globalization as defined by economic statisticians, and typically illustrated in a series of factual charts in most textbook opening chapters, uses a series of quantitative trends to portray the rapid growth of cross-border trade (volume and production) as well as foreign financial investment (FDI flows) along with changes in percentages of world output and exports as supportive evidence that a more integrated world economy has developed. A time frame beginning around 1950 and running to the present is the normal periodic reference.
While statistical data to define globalization do offer valid examples of its financial affect, the term is more complex than objective numbers portray. The word needs to contain a subjective human face to really define what is happening. Anand Giridharadas offers such an insight by describing the polar opposites of the phenomenon’s impact on the Indian society.22 He notes the reaction of some in this caste-conscious nation to view the process as reducing people to their specifically assigned global economic task, stripping them of their humanity just as their traditional socially ordered system did to their individual dignity. On the other hand, he uses the same measurement criteria—historic caste classification—to show that it has allowed Indians to imagine a revolutionary realization that perhaps their lives may not be controlled by fates (kismet) and prescribed roles (karma). Globalization has brought opportunistic ambition and with it self-invention that allows servants to become masters of their own destiny. He uses the example of rural townsfolk demanding reliable electricity so that they can use the Internet and satellite television, today fundamental necessities in their lives, where before they would humbly accept the historic interruptions as part of their place in society and as not to be challenged. These opposing viewpoints of the effect of globalization on the human condition may be appropriate to describe the dual reactions of people in many of the emerging nations around the world.
Friedman’s book collection uses advances in technology around the mid-1960s (presumably the Internet as the prime motivator) as factors that propelled globalization. He sees an economic flattening of the world where more and more participants will be entering the global commercial arena because they have more equal access to the same information. Some theorists even dispute the whole idea of globalization. In an article by Alan Rugman and Chang H. Oh,23 the authors deconstruct Friedman’s globalization theory and base their definition of true globalization on the global reach of MNEs. They use empirical realities to show that MNEs do not operate globally but in fact regionally; hence, true globalization, a process that encompasses the whole world per their testing criteria, does not exist.
I find myself disagreeing with the offered definition proofs to portray globalization and propose that the phenomenon, if tempered by the term known world, actually occurred throughout the history of man while quantitatively and qualitatively growing in size and influence. The concept is well characterized by many historians like Michael Rostovtzeff, observing that the differences between the ancient economy and the modern economy are differences of scale, not of kind, a restatement of the Stiglitz pendulum degree definition.24 As defined by William J. Bernstein in A Splendid Exchange: How Trade Shaped the World, “Globalization, it turns out, was not one event or even a sequence of events; it is a process that has been slowly evolving for a very, very long time.”25 Globalization is not a definable destination with a precise beginning and end result but rather a term that portrays the journey. It is not a singular condition in time but a process that happens in steps. Such progression continues to this day and will continue to play out. Like water it will appear in many forms, from liquid to gas to a frozen state and perhaps back again, but it will always contain its base element—that is, the exchange imperative, the golden thread that binds mankind together with each other and the environment. The process of globalization is likened to a tree with the phenomenon rooted in ancient trading activities via the bartering system, the emerging stem, developing into the trunk during the age of discovery as the world is explored, and finally growing branches as it continues to spread out and touch all areas of the globe in the modern era.
Exchange Nourishes Civilization
The study of business at the university level does not contain a prestige equal to the other scholastic degrees. It is often relegated to a secondary or tertiary status, as the disciplines involved do not always qualify as life sciences nor liberal arts that contribute to the development of life on earth and the human condition. While the subject of economies is often considered closer to a scientific inquiry and hence worthy of scholastic inquiry, the disciplines of commercial management and the history of its growth across recorded time do not receive the academic prominence they should. The reason for this prejudicial view is that business, while recognized for providing people a system to receive the necessities of life, is not seen as a contributor, no less a supporter, of civilization. Nothing can be further from the truth.
The study of trade (i.e., the commercial imperative) is deeply intertwined with the development of civilization. The simple fact is that the exchange process, the grandfather of today’s modern globalization, was a prime ingredient for the growth of the world’s society while being responsible for many of the collateral improvements of the human condition and at other times a destructive force. Trade allowed indigenous peoples to exchange products and services among themselves to foster their lives and was the impetus to venture outside their domestic territories in search of new resources. The desire to explore new lands and engage new societies was and still is inherent in the exchange imperative. It is a process that is fundamental to the survival of mankind as well as the underlying driver to integrate with others and learn from them. When trade broke down, it was also one of the prime drivers for making war on those who would not share in an equitable arrangement the bounties of their land with others. It should be noted that other conditions do result in armed conflicts as the pure greed of man and his desire to dominate others are strong provocateurs. Trade, as sections in the book illustrate, was the onus for the development of linguistics and the emergence of common languages, as well as the recording of events and activities. Deeply ingrained in the study of archeology is the recovery and classification of the remnants of the past having a commercial base. Trade influences the sciences of anthropology and sociology as they are part of the study of the human condition. The emergence of mathematics (weights, measures, and calculations) and astrology for directional application has a direct correlation with the exchange desire and the trading process. It not only motivated the quest for thousands of inventions and processes in a variety of fields but also allowed for such advances to be shared with others. Commercial operations and their applied decisions manipulated politics and governments, thereby becoming a prelude to wars that changed history. It was intertwined with the spread of religion around the world and is reflected in the teachings of spiritual texts that recognized that part of securing social order required addressing how exchanges between people should be regulated. Many of mankind’s early laws to control ancient societies had at their core principles of trade and the recognition of property rights. The commercial imperative was instrumental in the organization of the exploration of the world’s oceans and land masses. It is responsible for cross-cultural exchanges and for the modern phenomenon called globalization. While such considerations paint a positive picture of the exchange process, they also harbored negative and destructive events. As noted earlier, it was a motivator for war, enslavement, and geographical redistribution of people for commercial gain. It has partnered with tyrants and repressive governments to meet its materialistic goals to the detriment of numerous societies across the globe. It has been accused of unethical behavior, creating a world that promotes the rich and keeps the poor entrenched in economic hardship. The process has been blamed for repressing the freedom of workers (i.e., to assemble and redress the wrongs) and for creating labor conditions that are unsafe and harmful. Its activities are condemned for the destruction of the natural environment that affects the entire global population. No wonder business has been labeled as an immoral pursuit without any redeeming social value that destroys mankind’s altruistic responsibilities and duties to fellow men, as the profit motive trumps all other considerations. No wonder such activity is portrayed as evil and devoid of charity and caring for others.
Whether in the final analysis the commercial imperative is characterized as good or bad, its impact on the world cannot be underestimated. Hence, an inquiry and therefore understanding of its role in the development of civilization is right for inspection and reflection. Students learning the various disciplines of commerce in order to become better future managers need to know that their ancestral brethren, the traders and merchants of ancient times, helped transform the world. As much as the reign of any regional royalty, the gifts bestowed on society by masterful inventors and scientists; the inspirational writing of great philosophers; the works of accomplished composers, painters, and sculptors; and the creativity of skillful architects and endowed craftsmen (those involved in the commercial process) also contributed to altering societies around the world and in many instances fostered and supported their efforts. Merchants were instrumental in spreading the words of the great religious prophets beyond the abilities of their own clergy. They walked beside the great conquerors from Alexander the Great to Genghis Khan, helping to sustain their empires as well as those royalties around the world. Businessmen have supported democratic as well as totalitarian governments in the sustainability of economies under their respective political systems.
Trade: The Incubator for the Growth and Development of Civilization
Civilization is defined as an advanced state of human society in which a higher level of culture science, industry, and government has been reached. According to Ian Morris, it is a process of
social development—basically, a group’s ability to master its physical and intellectual environment to get things done. Putting it more formally, social development is the bundle of technological, subsistence, organizational and cultural accomplishments through which people feed, clothe, house and reproduce themselves.26
When used in a broader sense, with trade advancing the state of human society by providing a breeding ground for the developmental process, ancient commercial activities fueled the pursuit of proactive positive change, acting as a forcible element for social progress, the attainment of basic necessities. Civilization therefore is linked to an economic derivative. It began when a certain surplus of resources was built up and people began trading the excess after their immediate needs were satisfied, a reference to mankind’s change from daily foraging and hunting to harboring his collected. Seed cultivation in agriculture was the first step. Instead of gathering naturally available resources, organized planting of crops developed. This led to the harboring of seeds to plant for the future as opposed to planting everything and eating everything that grew. Seed modification followed as some yielded better results than others, thereby producing a potential excess over consumable need. From such a consideration, the idea of using the surplus developed, which in turn could be exchanged. The domestication of wildlife from fowl (chicken) to sheep, goats, cows, pigs, and horses begot herding, and recultivation of the stock, as opposed to stalking and killing, followed.
Such activities acted as a prelude to the exchange process and the eventual bartering of what was not immediately consumed, which was followed by the intermediary commercialization process that gave rise to the profit incentive. The first recorded state-sponsored public storage of surplus grains organized by governmental decree is to be found in ancient Egypt. The idea was also cultivated in the Jordan Valley around 9300 BCE as evidenced by archeological findings of clay storage chambers (about 10 ft. wide and 10 ft. tall), which were presumably constructed by regional administrators in conjunction with private individuals.27 Such granaries, underground silos, were initially constructed with the goal of surviving periods of bad harvest for the collective good, itself a symbol of civilized social behavior. However, such a practice during good harvests gave rise to the trading imperative: the selling of the surfeit, which was not required to sustain the local population. The concept of surplus—that is, the accumulation of things in excess of current and projected needs as an ancient stimulus for the commercial trading function—is a principle still driving the mercantile practice today. Many companies got their start in the export process from selling redundant domestic inventory to new foreign markets. Even surplus-seasonal goods that do not move in periodic climate influenced regions and are rerouted abroad to other hemispheres, offering multinational firms a more year-round global sales experience. The new bathing suits that do not sell in the summer in the northern hemisphere find a revolving market in the upcoming southern hemisphere as their temperatures warm up. If cross-cultural social integration or internationalization—the crossing of national boundaries—has contributed to the growth of civilization on earth, then certainly the provocateurs of such human endeavors were the merchants of old. Their commercial pursuits paved the way for mankind to venture beyond their home territories, resulting in linkages between different societies, with the relative contributions of each furthering the development of the others. If civilization is the culmination of the human learning curve, such a process was advanced on the commercial pathways constructed on the ancient trading imperative. As these activities occurred long ago, the term globalization in its most generic content is not a current phenomenon but merely the branches of the roots planned earlier in time. The globalization directive has been around for centuries and has taken numerous forms, expressed in terms of worldwide systems including political, economic, cultural, and technological to name just a few. But when added together, the result is civilization. Even when characterized from a fiscal accounting monetary perspective, the concept pays tribute to an ancient heritage. Globalization is simply the economic philosophy in vogue now but it is not a new concept. It is merely a part of the natural evolution begun when man exchanged the fruits of his labors with his fellow men, maturing into the cross-territorial intercontinental trading process, which affects most of the world today. In the end, modern globalization is just a phrase to describe a period of advanced civilization—a part of mankind’s cycle on earth when cross-border trade was reaching new heights and as such a piece of human history on earth.
People without Trade
Jared Diamond, in his book Collapse: How Societies Choose to Fail or Succeed,28 uses the failure to trade as one of the cornerstones in the eventual disintegration and disappearance of historic societies, the fall of their civilization. Such a conclusion, although well sustained by this Pulitzer Prize–winning author, requires one to hypothesize on events in the past and does not allow for a purer scientific investigation, a living example. However, the proof supporting the theoretical hypothesis that a society becomes more civilized and does not die but perhaps lies dormant can be exemplified by examining an existing group whose growth has been stymied by its desire not to develop an exchange process either among themselves or with foreign entities.
Daniel Everett, a linguistic anthropologist, studied and wrote about an Amazonian tribe called the Piraha (pronounced piria) in his book Don’t Sleep, There Are Snakes.29 Their semiclosed society, with the exception of the occasional contact with foreign parties along their territorial river bank, has not altered their tribal cultural existence, nor has it made any progress in their daily lives. They have little knowledge or no inclination to commercialize their lives, no less change them. An investigation into their culture reveals that they do not possess any of the universally recognized values consistently found in other groups around the world that would form the basis of an exchange-related society. They live and act in the present with no concept of the past or future. Their daily actions are organized to support a moment in time. When they are hungry, they forage and gather or hunt and fish, consuming immediately all that is taken from the environment around them. If such activities are not per- formed, they simply do not eat. As such they do not horde, stockpile, or keep supplies. Everything that is made is used up at that moment. Their skills and abilities are for their immediate self-consumption only. If baskets are needed for the collection of edible substances, they make them as needed and dispose of them thereafter. Their homes are seasonably moved and the old ones discarded. They wear the same clothing from day to day and possess no ceremonial or special occasion garments. Accumulation of material wealth is not represented in their culture. The only remnants that are kept from day to day are basic tools, metal cooking pots, a knife-like sharpened instrument, and bows and arrows to allow for a daily subsistence living. They view things, the personal possessions of others, as not related to them in any significant way. Commitments for the future do not exist—couples unite; and by simply choosing to live with one another, or not is how their marriages are formed and dissolved. No promises of any kind are offered or given and no remedial form of obligation or its modern concept of a contract is in their nature. There are no written laws and even when a tribal member commits a bad thing against another it is normally accepted and forgotten. If a really bad thing is done that could hurt the entire tribe, the offending member is ostracized from the group—the supreme punishment. There is no common supernatural entity, nature or entity that has influence over their lives, although each tribal member does relate to an inner spirit they mystically see in their minds, which exercises some influence over internalized actions but not in their relations with others. No chief or leader emerges in the communal group and no shamans or so-called Western witch doctors live in the community except for the theatrically gifted native who entertains the community from time to time, although the natives refer to him in the spiritual characters he mimics in the spirit show, as opposed to his real name.
The Piraha do not record anything, as this could not be used as a reliable reference or the process would involve the later acceptance of a historic event or past transaction they actually had not experienced. Remember, they live only in the present. Stories cannot be handed down once the original party to an event dies. So, technically, they as a people have no history, everything is in real time. Symbols may be used to designate a concept or idea at that moment but not a remembrance of a past deed or thought. Knowledge for the Piraha requires eyewitness testimony. Transmission of thoughts and ideas is not subject to peer review. The test of knowledge is not that it is universally accepted as truth by everyone but that it has value for singular individuals in their daily lives. They have no counting system, no exacting words for all or part of a thing, as they live in a numberless environment. As no common measurement system exists, they do not bother to record a thing’s worth or value. In the quasi-exchange transactions they enter into with foreign traders on a periodic basis for the same goods, the transaction always results in differing values, to the disadvantage of the Indian tribe.
They simply do not think in terms of value maintenance. They have no regard for, nor concept of, personal property. They do not exchange items among themselves: There is no barter value system. Instead, they just ask each other to share when something is immediately needed. Repayment is only offered if the other party requests their aid, but this is not viewed as a thing in return but part of their social responsibility. Therefore, there is no medium of exchange and no intermediary article of value has emerged in the tribe. When dealing with foreigners, they have adopted the practice of barter but without the collateral process of bargaining or value haggling, thus failing to assimilate the concept of a product’s value that others have into their lives. They do not borrow or incorporate this culturally induced concept into their daily exchanges with each other. The repetitive contact with foreign people and their material goods is always considered as a new, singular event. Hence, anything learned does not make its way in the lives of the Piraha. They never truly assimilate themselves, resulting in their failure to alter or change their ways. New things introduced to them are used and discarded; and if it never shows up again, there is no loss of value or benefit. It is almost like their tribe has Alzheimer’s disease permeating their people. Any contact, therefore, with the modern world has little or no effect on them. The Piraha therefore do not venture out of their territory in search of resources or even utilize the special skill sets of those not in the tribe. They do even acquire new abilities from outsiders but only rely on homegrown historic skill sets. The author relates a firsthand event that demonstrates this point. The natives see a canoe they call “Brazilian” and are intrigued by its design and worthiness, but do nothing. The author who lives with them arranges for one to be built in their presence, trusting that they will learn from the experience. They participate in erecting this new water conveyance, watching and helping. But when it is finished and given to them as a gift, they simply use it; they do not attempt to build another and offer no value in return. It is just accepted as a new thing in their lives, which, when it loses its utility, will eventually be discarded.
There is no discernable division of labor in the tribe and all perform the same activities, although the women forage in the forest and the men hunt and fish. This is the extent of the recognition of differing skill sets—it is more of a social gender order. While some members are admired for their superior abilities in such activities, as in “he is a good fisherman,” jobs are not separated, which would allow people to do what they do best and hence trade with others for what they do best, thus developing a mutual reward system. They do not exhibit the principle of competitive advantage, a key element in the exchange imperative. The Piraha have not emerged from their primitive existence. Their cloistered existence has not changed and their civilization has not developed. While their belief or value system is certainly a prime motivator to this phenomenon, their negative desire to develop an exchange-based society, the precursor of the trading imperative, whether within their own culture or in a continuing rule-based system with others outside their community, is a most interesting observation. It is evident that to sustain the hypothesis of commercial dealings, the eventual economic system emerging from the process of reaching out and touching others in a simplistic exchange procedure is a major contributor to the growth and development of civilization. Without the cultural imperative to trade, nothing moves forward and human progress is stymied.