CHAPTER 2

Tracing the Roots of Globalization

From the dawn of civilization, man has always reached out and touched others to sustain their needs and to improve their lives. International trade, both in ancient times as well as in the modern era, allows one to take resources from places of abundance to insufficient areas. The mutual benefit derived from the exchange process has enabled societies to both survive and prosper. Cross-territorial movement and the engagement of those apart from us have resulted in both the destruction and building of civilization, both intertwined like the yin and yang of human interaction as well as all things. It is because of the trading imperative canvas that the historic development of the world has taken place with the semifinished picture today titled globalization. This social harmony ­phenomenon as depicted in the cartoon (Figure 2.1) is the prelude to modern globalization. A universal societal system called economics is the prime propelling agent of change and the prime ingredient in the ­development, sustainment, and growth of civilization.

Figure 2.1 What is economics?

Source: Reprinted with permission of John L. Hart FLP. © 2011.

Economics

The Greek Land-Management View

Economics, like many of our modern-day words, is based on a combination of two Greek activities prevalent in their lives. The ­development of the term evolved over time to describe a field of study, the science of ­production, distribution, and consumption of goods and services ­leading to the ­material welfare of society. The eco in economics is taken from the Greek word oikos, which refers to one’s environmental ­habitat, ­household, or family estate—the physical space that provides ­subsistence. This ­beginning root is paired with the Greek word for managing, caring, or stewardship roles over such property called nomos. When used ­collectively, they describe methods or a series of valuable lessons, a ­colloquial rule of thumb for the wise maintenance of one’s physical surroundings to enable one to live. The two root words appeared in unison to form the title of a thesis by the Greek author Xenophon called Oikonomia, which is ­perhaps best translated as “The Household Manager,” a guide to ­managing one’s estate. It was an early reference to the Farmers’ Almanac, itself an annual periodical first used on the plains of the Midwest to aid farmers in their seasonal and daily chores as well as offer homespun advice on their lives. The word usage was further expanded when it was referenced by the great philosopher Aristotle to describe the inspection of the public ­management of resources, a process or science he called oikonomika. In the Greek way of organizing their lives, they tended to extract from ­small-scale, ­domestic administrations and extrapolate the hierarchy of magnitude from the ordinary household organization to learn how to control larger and more extensive factors of production for the ­common good or ­welfare of the state.1 It is not surprising, therefore, that the term economics ­continues to describe the extended commercial ventures of men as they organized their activities to encompass wider horizons, from ­managing their estates to the exchange of goods across ­territories. It was inevitable that ­localized household-based activities would emerge into larger enterprises as the ­marshalling of trained labor began to specialize and new skills were acquired, the technology imperative. Add to this transition the discovery and use of expanded extracted raw materials and the addition of more capital assets, all spread across domestic regions and then across borders; and the growth of economics was fueled and globalization began.

The Greek influence on commercial activities is evidenced not only by their trading expeditions and administrative or organizational ­structures to carry out such ventures but also by their contribution to modern ­terminology and business strategy. As noted earlier, the word economics is based on Greek roots with the concept of commercial management ­originating in prescriptions for the maintenance of the household or family estate. Writing in Economics, Aristotle sets out basic principles in regard to business investments and their manageable sustained return. Although the language of the day is organized around property (real estate as the asset) and the manager is portrayed as the head of a household, any chief executive officer (CEO) running a company today would be wise to follow the tenets expressed as quality objectives or strategy:

There are four attributes which the head of a household must have to deal with his property. First, the ability to acquire. Second, the ability to preserve what is acquired: if he doesn’t have that, there is no not benefit in acquiring. It’s as good as balling bilge-water with a colander, or the proverbial wine-jar that sports a hole. Third, he must know how to improve his property. Fourth, how to make use of it. After all, those latter two attributes are why we want the ability to acquire and preserve.2

While early Greek philosophers were mindful of the need to create ­economic-based patterns in their lives, their sentiments also questioned the true values in life. Many writings were constructed around themes advising one to be mindful of a life filled only with measurable material values; a basic principle tenant found in almost every religious doctrine. Such an idea is well summarized by the playwright Euripides (480-406 BC) BCE): “The company of just and righteous men is better than wealth and a rich estate.”3 Long before the religion-based ­pronouncement ­linking hard work with God’s work on earth, as exemplified in the Protestant work ethic (see Chapter 8), the concept was rooted in Greek philosophy.

As translated and recounted by researchers, Hesiod (circa 700 BCE), a Greek poet, admonishes his brother to embrace work and eschew idleness to please the gods and fellow man. He writes,

Gods and men are angry with the man who lives idly,

Let it be dear to you to set in order tasks that will be well arranged,

So that your barns be loaded with seasonal production.

Out of labors men become rich in sheep and wealth,

and engaged in labors they are much dearer to the immortal gods.

Work is no cause for blame, but idleness is blameworthy.

And if you work, soon an idle person will envy you as you grow

Rich, for virtue and glory wait on wealth.4

A shortened version aimed at extolling men to associate growth and improvement of their society with commercial effort was written by ­Epictetus (55–135 BCE) in Discourses. A stoic philosopher with roots in slavery, he said “Never look for your work in one place and your ­progress in another.”5 Even in the ancient world, the art of commerce not only was delivered by a series of admonishments aimed at the overseer or ­manager of operations but also was treated as a science that could be ­codified into economic ideology. Take, for example, the basic rule of ­supply and demand, the quintessential element in the pricing of goods, especially commodities and the future market. Note the principle as applied to the grain industry and customers in ancient Greece (from Xenophon’s The Household Manager):

You are saying … that our father was a lover of agriculture … no less than merchants are grain lovers. Because of an intense love for grain, wherever they hear there is the most grain merchants will sail after it … then acquiring as much as they are able, they ­transport it through the sea … they do not offload it at random wherever they turn out to be, but wherever they hear that grain has the highest price and people are valuing it the highest, ­conveying it to these people they put it on market.6

Plato, in The Republic, summarized such an exemplified lesson rather succinctly with his observation that an excessive increase of anything causes a reaction in the opposite direction.7

So important was the commercial imperative to society and the ­sustained development of the Greek civilization that the philosophers, poets, theatrical writers, and commentators of those days devoted many of their morally induced writings to the process of exchange—commerce. Using the activities of merchants as base examples, codes of acceptable behavior were introduced, and much later such axioms of living made their way into religious teachings as well as secular laws.

When one acknowledges the Greeks as suppliers of the root words for the term economics and the initial development of its principles, it must be remembered that it was devised from the management of the family estate. Many of the intellectual thinkers of those their days looked at the political economy through this narrowly extended lens of the prime wealth-producing entity of the day, the self-sustaining farm as an ­economic model for the whole society. But such a platform of inspection acted as an insulting mechanism from the concept of spontaneous market order, resulting in a philosophical disconnect from commercial activities in the mercantile real world and the assent of the collateral craft business taking place around them. It earned the commercial process the scorn of the intellectual elite. The result was that philosophers strongly believed in systematic administrative coercion, the ability of the state to impose a social utopia by the exertion of their power. That anything related to the general society could only be achieved through the artificial and deliberate actions of its organizer, the government.

The most eminent and distinguished philosophers of ancient Greece as represented by the SPA gang (Socrates, Plato, and Aristotle), as listed by their appearance in history and linked influential thinking, did not grasp the growth of the free-market process around them nor the ­relationships of men occasioned by such self-regulating activities. They ­underestimated the importance of a spontaneous but disciplined market system ­coming out of the daily efforts of the general population as such economic ­direction contrasted with their cloistered estate-based ­agricultural ­pursuit: the proper way for a Greek to earn a living and ­contribute to ­society. ­Socrates was always looking for virtue in one’s life and had an inbuilt ­disdain for the constant accumulation of more ­material wealth, ­specifically through entrepreneurial profit. In essence, he was anticapitalist with little use for trade and he did not completely appreciate the relatively ­influential strength of the self-sustaining market order in determining public exchange values. While Plato was a champion of private ­property rights, the protective driving force behind capitalism, he condemned usury, not appreciating its use as a capital acquisition tool, and did not appreciate the effect of the cost of money on consumers, savers, and the investment initiative. Aristotle saw the process of commercial exchange as a behavior based on proportional reciprocity as opposed to market pricing. He was therefore critical of entrepreneurial profit and dismissive of merchant traders. In agreement with Plato, he felt interest (tokos) as an unjustified generation of making money on money as opposed to its more equitable use to merely determine commonly accepted exchange value for things and services.

These famous ancient Greek philosophers did not see the commercial exchange process in a favorable light. Their philosophy is perhaps best rooted in the oral poems of Hesiod, who deduced that because of the ­scarcity that time, labor and production of goods need to be ­efficiently allocated and that the state therefore should publicly administrate or organize economic activity. Due to his depiction of the plight of the independent small farmer in his verse “Work and Days,” he is sometimes regarded as the first economist, although the poem is based on a dispute between him and his brother over their inheritance. In contrast to the SPA elitists were the Sophists, professional teachers who took a fee for instruction as opposed to public philosophers. They were best known for teaching the skill of persuasive argument (i.e., advocacy of either side of a dispute), which led many to criticize them as proponents of deceptive rhetoric. It is interesting to note that the first lawyers were thought to come from this assembly of educators. Sophists felt that one did not have to be of aristocratic birth to teach arête, or the application of excellence in the management of one’s affairs and especially in the administration of a society; rather, such an ability was not an inborn qualification but the result of training. This group felt that if an action is advantageous to the individual, then it is good and that the interaction of such pursuits by numerous parties formed a positive societal environment and sustained a working sociopolitical economic system, essentially a market-based ­society. They therefore sympathized with the concept of commercial trade; the profit motive and the entrepreneurial spirit as such were in line with their basic outlook, a distrust of government to direct economic affairs and in favor of individualism as the cornerstone of a good society.

While the Greek Olympic festivals were held to honor Zeus every four years, featuring athletic competitions, the games, which were ­protected by military truce, attracted an audience composed mainly of the ­aristocracy, the landed gentry, and controllers of wealth. Such an ­international event (various Greek states along with bordered foreign entrees) allowed for the convergence of common interests, both political and economic, a sort of ancient networking. Today the games are global, reaching more ­households and potential customers than ever before. They are ­underwritten by the vast advertising revenues supplied by the large multinational corporations to televise the event while the trademarked names and logos of globally marked products adorn venue sites and the athletes themselves. The commercial interests visited on the games of antiquity now dominate the event in the modern era. The same principle that overshadowed their original premise, the exchange imperative, today has evolved into international trade through globalization.

The Indian Social Approach

While in the West Greeks began to explore a system of economic management of their resources, a similar if not wider social approach emerged in the East. Somewhere between the second and fourth centuries CE, the Arthashastra by Kautilya was constructed. This massive treatise ­guiding secular social behavior in India, and not originating from a religious inspiration nor proclaimed as a specific code of laws, was composed of 15 books combining strategic policies for rulers of the domain. Often referred to as the Rajarshi (symbolic of a wise and virtuous king), the writings also set out relationship obligations of the masses.

Many scholars have attempted to translate the word arthasastra in order to define its expansive doctrine on ordered civilization. It has been referred to as “science of politics … material gain … political economy.”8 In academic and business circles, it is synonymous with economics, with Kautilya (aka Chanakya) being considered the world’s first management guru. Many of its underlying principles still form the basis for the policies of governments and commercial institutions in India today.

Portions of his writings have been compared to the strategic positioning and tactical actions proposed by Sun Tzu in the Art of War ­(Chinese), Miyamoto Musashi’s The Five Rings (Japanese), and ­Machiavelli’s ­classic The Prince (Italian); all of these have been converted into lessons for ­managers.9 Arthashastra is often referred to as the science of wealth and it contains a number of propositions on economic theory as well as ­commerce. The text recognized that international trade or ­globalization could increase total wealth using the concept of comparative ­advantage by explaining that a country could benefit from exporting some goods as well as importing others. It commented on the process of wage ­determination, noting that their value should be proportional to time spent, the ­specialized skill set involved, and the amount and price of the output produced. The idea of a progressive tax system was even ­proposed for both a sales tax and personal income tax. Those products being ­considered luxury and those individuals earning a higher income should be assessed assed at a higher tax rate.

Radhakrishnan Pillai, director of ATMA DARSHAN, a management services firm, refers to the teaching of the Arthashastra (alternate ­spelling) in his promotional literature, calling it the “7 Pillars of a Business,” using it to profile and explain the use of CEO leaders (king), executive ­managers (ministers), the market (the country), head office (fortified city), the financial division (the treasury), one’s labor team (army), and consultants (allies).10 Such a modern application of a commercial ­organizational structure is based on institutional management of a society to form an economically based model to foster the exchange imperative.

While the Arthashastra is not a legal code per se, it sets down principles of expected behavior by a nation’s citizens. In Book IV, The Removal of Thorns, a number of chapters are devoted to the treatment and ­obligations of those in commercial ventures as Kautilya believed in the building of a society on sound economic policy.11 Chapter 1 is translated as “The ­Protection of Artisans” and features specific references to numerous segments of specialized labor such as weavers, washermen, goldsmiths, scavengers (miners), physicians, and even bands of musicians. The ­recognition of these groups as prime contributors to the nation’s welfare and its ­economic growth is evident while the reference to them is a forerunner of the establishment of the craft guilds of 16th-century Florence. ­Chapter 2 is referred to as “Protection of Merchants” and includes ­portions related to their dealings as well as explicit reference to traders dealing in both local commodities and foreign produce differentiating the profit percentages attributable to such varying territorial activities. Book III has chapters devoted to recovery of debts as well as rules regarding slaves and laborers.12 This ancient text on the construction of a society is laced with commercial attributions noting its importance in the ­civilization process along with basic principles that supported early legal regulations to define the obligation and responsibilities of those ­participating in trade transactions. It is virtually a blueprint for the creation of society with strong references to the value of those parties engaged in the exchange process as necessary contributors to its positive development.

An Early Chinese View

A passage quoted from the Chinese historian Sima Qian (also called Ssu-ma Ch’ien), as referenced in the book China’s Economic ­Transformation,13 relates a profile of the sociopolitical and economic times of the Han dynasty that followed the Qian reign around 206 BCE and shows that a functioning market economy existed.

There must be farmers to produce food, men to extract the wealth of mountain sand marshes, artisans to produce these things, and merchants to circulate them. There is no need to wait for ­government orders: each man will play his part, doing his best to get what he desires. So cheap goods will go where they will fetch more, while expensive goods will make men search for cheaper ones. When all work willingly at their trade, just as water flows ceaselessly downhill day and night, things will appear unsought and people will produce them without being asked. For clearly this accords with the Way and is in keeping with nature.

The paragraph depicts an intended capitalistic society that works ­without governmental decree controlling the division of labor and ­allocation of resources but one that relies on the law of demand and ­supply to create ordered employment based on need satisfaction. It ­essentially is a blueprint for civilization based on the way, the natural order of man to maximize self-interest within a value-induced system of exchange ­without guided interference. The concept seems to be an early depiction of the invisible hand mechanism driving the marketplace. As Gregory Chow comments, the passage “provides a clearer and simpler description of a market economy” than the theory introduced centuries later by Adam Smith in his An Inquiry into the Nature and Causes of the Wealth of Nations (popularly known as The Wealth of Nations).14

Chow in referencing Qian relates his commentary to the original teachings of Guang Zhong, offering the following proposition:

Each man has only to be left to utilize his own abilities and exert his strength to obtain what he wishes When each person works away at his own occupation and delights in his own business, then like water flowing downward, goods will naturally flow ceaselessly day and night with being summoned, and the people will produce commodities without having been asked.15

Sima Qian was a free-market advocate commenting on entrepreneurship and the rise of the private sector in long-distance trade, previously in the domain of the imperial court, as the process of looking for and taking advantage of opportunities, which he saw as a good thing. In his book Guanzi, Zhong, who lived from 725 to 645 BCE, introduced his theory of light and heavy to explain the changing value of things in the ­marketplace. He describes the self-regulating process as follows: when a good is ­abundant, it becomes light, and its price falls. When a good is heavy—not ­easily movable and therefore locked or kept away from the marketplace—its price rises. His example, while not using the exact ­terminology, is the precursor of the pressures of supply and demand on economics. Zhong, in essence, not only appreciated the constant movement of the market to determine the relative value of things but also applied his theory to money. He proposed that when money, the acceptable medium of exchange in a society, is light, its value would fall and the prices of goods they bought would therefore rise—that is, there would be ­inflation. In today’s modern jargon, it is referred to as the ­quantity theory of money. Mixing philosophical motivation with its effects on societal economics, Zhong felt that one’s quest for profit, material gain, or wealth ­accumulation would drive one to make the right choices without the need for any outside guidance or intervention by administrative forces—the government. He believed that the ­principles of light and heavy, ­coupled with the profit incentive, would create ­free-market efficiencies—a theme later seen in the writing of Adam Smith 2,400 years thereafter. During the same era as classical Greek thought was born, ­spanning the period from the sixth to fourth century BCE, comments on economic ­philosophy ­continued to emerge. Chuang Tzu, who generally opposed strong ­governmental administration of society, was said to have felt that good order in a kingdom results spontaneously when things are left alone. He adhered to the conclusions of Lao Tzu, a central figure in Taoism, that government inaction is ­interference in life and is appropriate because it limits the ability of individuals to flourish in the pursuit of their desire for ­contentment. The defense of individual liberty leading to a laissez-faire, free-market approach to ­economics tends to be in contrast to the ­traditional Greek desire for governmental structuring of the commerce.

Early Muslim Thinking

The Arab-Muslim region was greatly influenced by Islamic religious ­teachings, given that all life is controlled by reverence to its determinations. Abu Hamid al-Ghazal (1058 to 1111), a theologian of Sunni thought and philosopher, offered commentary on the role of economics in society. While deeply supporting the Islamic doctrine, he held that mathematics and science could be applied with dual rationales to life’s spiritual choices. Such a consideration allowed him to acquire a deep understanding of how markets act in a coordinated rhythm to create economic activity as well as how specialization and division of labor affected the commercial landscape. He recognized the role of voluntary, impersonal market forces, a veiled reference to the way in ancient Chinese economic literature and later referred to as the invisible hand by Adam Smith. The following statement provides the essence of al-Ghazali’s position: “Man’s inability to fulfill all his needs alone persuades him to live in a civilized society with cooperation; but tendencies like jealousy, greed, competition, and selfishness, can create conflicts. Therefore, some ­collective arrangement becomes necessary to check those tendencies.”16 His use of the term ­“collective arrangement” refers to a system organized by market forces.

In al-Ghazali’s work called Ihya, in a chapter titled “Ethics of Business/Trade/Work Practices,” he discusses a prime tenet of the Islamic approach to commercial transactions, an equitable exchange of value with no fraud in the pricing of goods. While he recognizes use value as the basic ­determinant of fair and proper criteria, he also mentions ­market-determined prevailing prices as a collateral condition to be taken into consideration.17 While expressing some disdain, although not ­condemnation, for profit seeking, he recognizes the motivations for the sources of profits as well. Profits are viewed as the return to risk and ­uncertainty, as traders and businesses bear a lot of trouble in seeking ­profits, endangering their own lives and those of others during the ­perilous voyages taken in the pursuit of such ­activities.18 However, al-Ghazali is critical of excessive profits. His ­comment on the use of money reaffirms the concept of usefulness again as the prime value ­consideration, as he feels that dirhams and dinars, the coined ­currency of this period, are not needed for themselves. They are created to change hands and to establish rules for exchange with justice and for buying goods that are useful.19 Incidentally, al-Ghazali also talks of prevailing wages, similar to the position of St. Thomas Aquinas and his idea of just wages. Both philosophical commentators viewed the meaning of their alternating terminologies (prevailing and just price) as reflecting a joint concern for distributive and commutative justice. They combined a market-accepted value assigned to products and compensation for services along with a moral component. Their writings underscore the ­establishment of a price that benefits both buyer and seller, one that meets their mutual needs. If such value is achieved, then no ethical issues emerge and the parties have treated each other with equitable respect.

It is interesting to note that all the early philosophers, in both the Eastern and Western cradles of civilization, knew of and discussed the concept of the free market as a way of establishing value in the process of exchange: that demand and supply are evident factors in the systematic workings of societal economies. The principle of a spontaneous free ­market to set exchange values and the influence of capitalism via trade on the process were equally developed around the world. Today, the ­integrated system to manage the activities of men first required in antiquity is now played out on a worldwide stage, morphing the original term into the two broad categories: microeconomics and macroeconomics. These two areas of inspection and research are merged with or expanded to include their cross-effect on social conditioning and culture, as well as political structure, and eventually, the development of civilization.

Birth of Exchange

People have always woven a web of connections and interactive interwoven exchanges leading to modification or replacement of existing ­activities through adoption or outright transfer of the new ones. ­Regardless of what period of time in human history is examined, this economic ­phenomenon has existed. One of the elements of economics is finance, which itself is in fact the foundation of human progress, the essential backstory behind history.20 The constant development of civilization was propelled by the locomate channelization between societies, which served as the birth ­process of what we today call globalization. It is therefore not a new event. Its roots are older than recorded history. All that is practiced today can be traced to yesterday. Although the study of history is imperfect, always told through the eyes of distant observers, it is nonetheless a valuable tool to help unravel and reveal how things came to be. Sometimes they also assist to understand how ideas, in response to need, evolved so that their modern use can be appreciated.

It is important for today’s students and parishioners of global ­management to more fully recognize that they literally walk the pathways first encountered by their commercial ancestors. The Anglo-Saxon root word trada, from which the term trade emerged, means to walk in the footsteps of another. Much like their ancient relatives, the ­businessmen of today impact the world around them, even in the modern age when the world is deeply interconnected via technological advancements in communication and transport, shrinking the globe to reach out and touch society. The main force behind such integration is commercial ­cross-territorial trade and its collateral element: increased direct foreign investment from the preliminary outsourced supplier stage to the more embedded project contract level and on to the solidified greenfield or brownfield (acquisition models) presence in an alien territory. At all ­graduated phases of international expansion, the impact on the home and host-country civilizations are felt. The issues faced by antiquated traders and their influence on the social, political, and economic environments of their times are mirrored in today’s world as mankind continues to exchange one thing for another and build on the past to shape the future. The past events presented in this book are by no means revolutionary. Readers may, like combative business historians, arrive at varying and perhaps opposite conclusions. The perceptions as to the development of civilization and its intertwined relationship with the commercial imperative as a contributing driver to the process may not be acceptable to other historical commentators as empirical evidence drawn from ­antiquity is not exacting. Archeologists, anthropologists, and sociologists all have ­different opinions on how mankind developed. If the dual thesis of this text has any merit, it will be in the hopeful generation whose further ­interest in the subject is to create a greater appreciation of the trading initiative and its influence on world society and its historic advancement of the commercial principles still in use today. Not all events are ­presented in chronological order as certain aspects of them, being reflected in later periods, are linked together to illustrate their effect on the development of ­civilization and the ­commercial imperative shared by many societies at varying times. Therefore, the hypothesis of this manuscript is to illustrate two basic ­propositions that managerial practitioners and students should be introduced in the study of global business: (a) the commercial imperative contributed to and influenced the development of civilization, and hence the history of the world; and (b) many of the basic tenets of modern business can be traced to ancient trading practices, which, despite being used in a more efficient scale and exercising a wider degree of ­influence today, remain the same. It is difficult to determine the exact moment in time when the first organized business actually ventured beyond its ­recognized border to solicit opportunities with citizens of a true alien land. The ­simple act of barter brought man out of his cave ­existence, providing an enhanced reward system for life’s activities.

While bands of people bound by a common tribal heritage certainly traded goods with other clans, venturing out to people separated by land masses and water obstacles whose specialized resources or talents bestowed on them unique and different entitlements was indeed a most remarkable journey.

Anthropologists working alongside archeologists comparing the dig sites of prehistoric men, Neanderthal and Cro-Magnon, have ­concluded that cross-tribal trade may have begun with the latter group on the ­evolution scale of mankind thousands of years ago. While the ­Neanderthal relics were made from local resources, those of the ­Cro-Magnon contained artifacts bearing raw materials from territories hundreds and perhaps thousands of miles away from their native habitats. The simple conclusion is that prehistoric men practiced the trading imperative as part of the natural order of mankind as they progressed.

Because no records of actual exchange transactions across and between territories were maintained in the caveman era, the artifacts found in ­different locations, some across vast distances, are relied on to prove such movement of goods. Perhaps, the first extensive trade ­networks that extended beyond local neighbors were constructed via waterways. ­Navigation of the Nile, the Tigris, and Euphrates, as well as the Yellow River in China, provided a natural highway to move goods. The ­domestication of camels around 1000 BCE gave rise to the use of commercial caravans to transverse extensive land routes. Historians believe that what might qualify as the first documented cross-continental or global trade occurred between Mesopotamia and the Indus Valley in Pakistan around 3000 BCE. In the third millennium BCE, Sumerian craftsmen in Mesopotamia created farm implements and other objects made of glass and bronze from raw materials not found in their region. Researchers believe that clearly a widespread network of contacts abroad is in the background, above all with the Levant and Syria huge distances away, but also with Iran and Bahrein, down the Persian Gulf. Before 2000 BCE, Mesopotamia was obtaining goods—though possibly indirectly—from the Indus Valley. Together with evidence of documentation (which reveals contacts with India before 2000 BCE), it makes an impression of a dimly emerging international trading system.21

This practice has been recorded throughout history. When alien groups met for the first time, the ceremonial exchange of goods was part of their mutual greeting, and trade became the initiator of socialization between them. Hence, anthropologists define globalization as a ­connectivity of individuals and institutions across the globe, as opposed to ­economists, who view such activity in a more limited ­financial framework: a global market where institutions engage in the flow of goods, services, and assets across national borders.22 The former ­characterization more closely ­identifies globalization with the development of civilization and ­recognizes its unique contribution to the socialization of man on earth. The simple act of buying and reselling with the inherent value in the ongoing ­commercial exchange, as opposed to pure singular localized barter, had its base in the ancient world. These original seeds of ­modern-day ­globalization were planted long ago and provided the rails on which ­societies first engaged cross-cultural diversity as they learned about their differences. Such antiquated trade routes were the communication ­high-ways for the transfer of newinventions, varying religious beliefs, differences in artistic styles, languages and social customs as well as the ­physical manifistations of peoples styles, the raw materials they used and the goods they bought and sold. All were transmitted and ­redistributed by people moving from one place to another to conduct business.

In The Shape of Ancient Thought: Comparative Studies in Greek and Indian Philosophies,23 the author argues that Eastern and Western ­civilizations have not always held separate, autonomous, and metaphysical schemes but have in fact mutually influenced each other as evident in their key mutual philosophical paradigms. He attributes this ­phenomenon to the ancient trading imperative and on examination states.

The records of caravan (cross territorial trading convoys) routes are like the philosophical stemmata of history, the trails of oral discourses moving through communities, of texts copied from texts … What they (commercial exchange documents) reveal is not a structure of parallel straight lines—one labeled “Greece,” another “Persia,” another “India”—but a tangled web in which an element in one culture often leads to elements in others.24

While this book is primarily devoted to the crossbreeding of philosophical outlooks, other aspects of culturally shared characteristics due to the transversal of territories by such ancient traders are noted in examples of traditions and customs that were carried in the minds, actions, and practices and left in the footprints of such commercial ventures.

Trade across cultures is “perhaps the most important external ­stimuli to change,” notwithstanding military conquest, that the world has and will ever see.25 Trading centers were the impetus for creation of ­nation-states around which countries were born: “Trade ­communities of merchants ­living amongst aliens in associated networks are to be found in every ­continent and back through time to the very beginning of urban life. They are the most widespread of human institutions.”26 These ­ambassadors from other tribal lands, the first conveyors of cultural ­diversity, were ­tolerated because they provided a useful service but they may have also acted to allay fear and prejudice of the unknown. They may have been pioneers of cross-cultural understanding and the ­unforeseen initial promoters of world exploration. As merchants stopped to rest in trade route towns, they not only traded goods but also shared stories and customs from their homelands, contributing to the spread of knowledge and exchange of ideas across societies. Professor Charles Standish, director of the Cotsen Institute of Archaeology, has been excavating the shoreline of Lake Titicaca on the shared border of Bolivia and Peru for years, locating evidence of trade between ancient people in the area. He feels that interregional trade is one of the key factors in the development of civilization, as we know it.27 This University of California, Los Angeles UCLA archaeologist also offers two additional factors affecting the development of people into civilized groups. He lists war and specialized labor along with the cross-territorial exchange process as the three most influential predecessor drivers to the advancement of a society anywhere on earth.

The Exchange Imperative Grows Up

As previously noted, one of the prime characteristics that separate Homo sapiens from all other species on earth is the exchange or ­trading ­imperative, beginning in one’s own clan and then conducted with ­strangers from alien lands. This exclusive activity practiced by human beings to exchange natural materials hunted or collected, as well those with added merit due to specialized labor activities conducted on them, is as old a practice as ­mankind itself. Adam Smith, the father of global economics, in The Wealth of Nations (1776), recognized the gains of ­mankind from exchange and the division of labor. He felt that the prime propensity to truck (an old English term meaning to transact), barter, and exchange one thing for another is common to all men and is to be found in no other race of ­animals on earth. Such an inbred characteristic sparked the ancient trading imperative, and created the desire to venture into foreign lands in search of new resources and items of unique specialized skills applied to them. Laurence Bergreen, writing on the travels of Marco Polo, comments on the endorsement by this famed explorer that those he encountered “do great trade” and such activity “virtually defines their humanity.”28 The attributed observation suggests that even if man is ­savage in his practiced customs and traditional beliefs, as Polo used his European environment as a criterion for acceptable civilized behavior, the fact that they exchange goods with others is their common linkage to humankind. This natural ingrained practice to trade by humans evolved over history, resulting in the current integrated world economy. Even when a later intermediary medium of exchange value was used, like gold, silver, precious stones, or salt, the process continued. With the advent of specie (coins), paper currency, and documents, the trading process flourished. The use of money, trust inscribed on metal or paper, allowed for a unit of accounting, a ­storable and portable value.29 The process of a mutually acceptable exchange assessment made the trading ­process a more workable system and thereby contributed to the commercial imperative, which influenced, propelled, and shaped the development of ­civilization around the world. Modern globalization is merely another act on an ­ever-evolving ­progressive stage that began with the inherent natural desire of man to trade with others across territories and find methods to make the process more universally efficient. In its current configuration, globalization is but a period branch.

The term globalization is often banded to a language of ­inflation, ­suffused with prejudicial grammar that tends to mask and often ­obliterate rather than illuminate its heritage. The result is a paralyzing debate. Today it is maligned and portrayed as the demonized imperative of ­inequality around the globe and a beacon for groups sighting environmental ­destruction, the loss of national sovereignty, and cultural imperialism. It has also been praised as the process that has and will create jobs for ­millions of workers in developing nations, allowing opportunities they never would have had and both fostering economic growth for such depressed areas and contributing to more democratic reforms in ­repressive countries as free-market factors and open borders emerge.

However, is globalization new or is it merely a natural extension of man’s unique primeval trait to trade with others and therefore act as a prime catalyst in the creation of civilization and world development? ­Globalization is not an event whose happenstance was engineered with plus and minus agendas but rather progressed in a normative fashion over a vast time scale. The road to today’s interlinked and therefore ­“borderless world,” a phrase first used in the title of a book by Kenichi Ohmae in 1990,30 was constructed on the ancient paths first traveled by peoples of all territories. Examining commercial history reveals the great ­influence it has had and will continue to have on mankind. Such ­investigation is the crucial element to understanding it, before commenting on its ­constructive or destructive tendencies.

Theories of the Development of Civilization

Some researchers consider the interior of Africa, using the Darwinian theory of evolution to explain the emergence of Homo sapiens and the beginning of societies. Other research suggests that the appearance of human beings on earth was initiated in four cradles of civilization across the globe. Support for this consideration is based on the fact that these culturally grouped societies monopolized the power and resources of the ancient world as evidenced by the archeological remnants that have and are still being recovered. This research suggests that the process began in four regions of the globe: (a) the Nile River basin (Egypt, Mesopotamian planes of Asia region); (b) Babylon, (c) the Indus region of India; and (d) and further to the east on the banks of the Yellow River in China. Researchers cannot always agree on which of these harbors of civilization first appeared or if a singular one in Africa may have begotten the others.

Although the exact geographical point of the first humans on earth may continue to be a debated mystery, the question of how ­civilizations evolved around the world has produced a number of theoretical ­conjecturing. The following three conceptual ideas are often circulated to explain the human evolutionary cycle and the creation of civilizations across the globe.

Spread Theory

The development of civilization on earth, by many anthropologist accounts, began in 7 million BCE on the African continent and spread northward into the Middle East and further to the east across Persia, India, and China in about 1 million BCE. It then branched out into the northern Mediterranean and the European zone in 500,000 BCE, snaking its way to the Western Hemisphere around 11,000 BCE via Asian land bridges (see Figure 2.2). Given such a time line for the spread of humans around the world, pockets of civilization emerged. But could they have been, in turn, linked by ancient trade routes as the points of connective contact among them? Was the motivational impetus for the emergence of individual societal development based on mankind’s desire to reach out and explore alien territories for new resources to improve his lot in life?

Figure 2.2 Spread of mankind across the globe

Remnants still exist of the first true land routes across the Middle East. Ancient paths like Egypt’s King’s Highway or the ­Persian-constructed Royal Road have been uncovered across modern-day Jordan and into Damascus, Syria, Iran, and Turkey and from there to numerous points in east. As mankind discovered boats, travel on the Nile River and later ­navigation of the Mediterranean seacoast became a natural path for ­movement of goods across territories. Later on, as larger and more seaworthy vessels came into use and knowledge of monsoon wind ­patterns emerged, crossings from East African costal ports to India and Asia progressed. With advances in cartography, astronomy, and navigational instruments like the magnetic compass (discovered by the Chinese), all points on the global compass were finally synchronized even in ancient times. While mankind moved around the earth initially seeking more ­fertile resources for survival as hunters and gatherers, the joining of ­societies into a primitive systematic economic existence was attributable to the exchange process. To state it simply, man learned that he did not have to physically move to another location to obtain the bounty of varying environments and enjoy the skills of other inhabitants in them, but he could trade with them and remain in one place. The concept of globalization, albeit in its infancy, was born. We are the inheritors of this principle today but on a greater scale and to a higher degree of ­cross-territorial integration. Along the positioning axis depicting the spread of humans around the world were the pockets of civilization that were perhaps ­initiated. A basic ­consideration worthy of inquiry and inspection may be insinuated from Figure 2.2. As ­mankind branched out from a central core, the interior of Africa, he probably did so with the prime ­imperative to locate new sources to ­sustain life. He did leave remnants of his society in the old territory while establishing ­colonies of new habitation and continuing to join the ­original ­settlements with the explored virgin areas. This connective impetus was the process of exchange, the trading ­principle, the umbilical cord that held regions together. As each new region grew, it in turn matured and perhaps eclipsed the original civilization. Mankind also ventured out to other lands, ­creating, perhaps, the multiple pocket theory.

Multi-pocket Theory

Some believe that civilization developed in selected areas independently of others and not from a common core or ancestry in Africa. Many ­researchers subscribe to the multi-pocket theory—composed of four regions as found in Egypt, Mesopotamia, India, and China. Some ­anthropologists feel that the initial cradles of civilization should also include Crete, Mesoamerica, and the Andes as simultaneously emerging with the first four generally accepted areas of first human ­development (see Figure 2.3). The theory is based on the human condition ­prompting ­people, wherever they were, to exhibit like characteristics and shared instincts to create similar methods to cope with life. Initially, contact with others outside of their territories was severely limited and ­adaptation was a factor of the local environment and the intuitive nature of ­mankind to work in his given environment. The world grew up in pockets, which were first composed of clans and tribes that locally banded together to survive the physical situation and also the attacks of each other. Each ­separate society along varying time lines ­initially developed independently, with ­interaction and exchange restricted to their internal boundaries. In essence, each civilization ­developed from a whole cloth with the threads of others originally having no impact in them. Eventually, however, even these separate civilizations began to move beyond their seemingly ­independent domestic regions with the same impetus employed in the spread theory, a desire to seek out alien lands and to use both natural and man-made resources through the social connecting process known as trade.

Figure 2.3 Pocket theory of civilization development (four cradles of civilization and others)

1. Mesopotamia (Sumerian) civilization (ca. 3500–1500 BCE); later the Akkadian, Babylonian, Assyrian, Chaldian, Persian, Hittite, Anatolian, Canaanite, Phoenician, and Israelite.

2. Egyptian civilization (ca. 3000 BCE); later the Nubian, Kushitic, and Ethiopic.

3. Indus Valley civilization (ca. 2500 BCE); later Indian (Aryan, Mauryan, and Grupta).

4. Wei and Shang civilizations (ca. 1500 BCE); later the Chinese dynasties (Chou, Chin, and Han).

5. Crete/Minoan civilization (ca. 2500 BCE); later Mycemeam, Hellenic, and Hellenist (Greek).

6. Mesoamerica (Olmec) civilization (ca. 1200 BC); later Toltec, Mayan, and Aztec.

7. Mesoamerica (Chavin) civilization (ca. 900 BCE); later Andean, Chimu, and Inca.

 

Whether people subscribed to the spread theory (the geographical systematic movement of earth’s population across land masses) over time or the multi-pocket theory (autonomous conclaves emerging in various areas around the world), they shared the same umbilical cord—the desire and need to trade for each other’s resources. The process of commercial exchange is the midwife that allowed civilization to grow. It was the ­catalyst in ancient times, as well as in the modern era, for globalization.

Mythical Master Theory

Other propositions about the development of civilization consider the emergence of a prime civilization that subsequently was the ­engineer of other civilizations. Such a theory defers from the spread theory in that one nucleus of civilization created all others as opposed to ­borrowing and learning from other regions and suspends consideration of the ­multiple pocket theory as only one superior society is responsible for the ­creation of multiple civilizations. A cult of antediluvian writers ­considers the mythical kingdom and/or lost continent of Atlantis as the master ­civilization, consisting of half-god and half-human citizens. Such ­theoretical reasoning is based on the dialogues of the Greek philosopher Plato, “Timaeus,” written about 360 BCE and the supposed tale of ­Critias relating a ­9,000-year-old story recorded on inscriptions on columns in the ancient city of Sais (Egypt). While most of the debate on Atlantis has been relegated to finding its exact location, no less its actual existence, it is interesting to note that all provocateurs of this unique historic account have a number of common links in their descriptions of the legendary civilization.

Common to all believers in the Atlantis story is that they all conclude that this Bronze Age Kingdom attained its wealth and status from trading outside its shores. They built a colonial-type empire using their superior technology to construct a mighty fleet that sailed the world harvesting the natural resources of foreign lands. In doing so, they set up outposts around the globe that became the foundation for the independent societies that emerged after the demise of the home kingdom, which was destroyed by some natural disaster. The prime contribution therefore of this mythical society was the construction of additional civilizations ­originally built on their expanded commercial trading ventures.

Even in the world of historical fiction, the importance of the exchange imperative across territories provides the impetus for human progress on earth. It should be noted that many critics of the Atlantis theory, while not abridging the idea of a great trading empire, feel that the legend is based on a Western prejudicial theory or the Europeans’ biased view of the world. Investigators of classical literature, like James Romm, a ­professor at Bard College, have proposed that Plato created this fictional kingdom as a literal symbol to illustrate his ideas about the divine verses, human nature, ideal societies, and the gradual corruption of human society if it fails to follow his numerous dialogues on proper behaviors. Such ­conceptual developments are all found in many of his works. Atlantis was a fictional vehicle to get at some of his favorite themes by setting them out in an entertaining format.

Within the mystical mantra of a singular, superior entity giving birth to all others is also the notion that beings from another planet, solar system, or somewhere in the vast universe brought their advanced ­knowledge to earth, sharing with us numerous geographically isolated societies. The theory was popularized in 1968 with the first printing (4 million sense) of Chariots of the Gods? Unsolved Mysteries of the Past by Erich von ­Daniken.31 It presented the hypothesis that technologies and religions of many ancient civilizations were bestowed on them by space travelers who were welcomed as astronaut gods. These ideas have been largely rejected by historians and scientists but even under this fiction of civilized development it would seem that differing prizes were bestowed on separate groups and that through the process of exchange these gifts were more evenly distributed across societies. Hence, even in the mystical sense, the process of international trade allowed for commercialized exchange, with the process acting as a key contributor to the development of civilization on earth.

No Man Is an Island: The Philosophical Interloper

Inherent in all the previous theories of the development of civilization on earth is the observation that “no man is an island, entire of itself,” written by John Donne in Devotions Emergent Occasions.32 This often-quoted passage was directed at advising man that he is not alone and that his theological soul requires others to inhabit his life. The quote, however, is apropos as its expanded connotation beyond the inner spiritually directed self-examination expresses well the idea that people are not to be isolated from one another but rather that mankind is interconnected and interdependent. We are naturally social creatures and have the need to interact with our environment, which includes our fellow men. Through the ages, mankind has instinctively banded together for survival against both the forces of nature, beasts, and earthly climatic changes and attacks from other human beings. Safety in numbers is a proven hypothesis. Being part of a larger physical group, which is the tribal instinct, an individual is proportionally less likely to be the victim; thus one’s continued existence is inherently interlinked with others. This principle produced the first prehistoric clans, then settlements, and later evolved into the creation of towns in the cradles of civilization. However, the concept that one could produce absolutely everything that was needed or desired (a ­self-sufficiency mind-set) began to be challenged. Early farmers began to realize that they could barter their agricultural surplus for other foods as well as tools and pottery as local seasonal markets developed.

The citizens of larger cities began to also appreciate that they could acquire the goods they did not produce locally from other regions and specialists called merchant middlemen willing to make long-distance journeys were introduced.

Man learned that different environments yielded varying resources and that the skills and abilities of men to adapt and flourish in the world around them are not always equal. The division of labor was recognized. While such dual consideration has been the basis for armed conflicts, it has also produced a positive, more peaceful side: the process of exchange or barter in the ancient world. In the end, man either trades or makes war to survive and grow—the yin and yang philosophy of the social animal: human beings.

The development of civilizations or the history of the human race is in direct correlation with the natural urge in all societies. No ­matter where they first originated to exchange the fruits of their resources as enhanced by their intellectual applied labor, man has always reached out and touched others to sustain their needs and improve their lives. The ­capacity to trade with others is therefore intertwined with the ­development of civilization. Mankind learned from others, especially those societies closer to one another, and developed faster due to the exchange not only of raw ­materials and things made from them but also of ideas and shared ­knowledge. The platform for such valued exchanges was the trading imperative. It provided the system for improving the lives of all who engaged in the practice.

Darwin and the Exchange Imperative

The concept of exchange being a natural progression and hence a ­mechanism that drives the evolution of mankind and the construction of civilization may be considered a restatement of the economic abstract of Charles Darwin’s concepts as related in his famous 1859 treatise The Origin of Species by Means of Natural Selection.33 The progress of ­species on earth from plants to animals to mankind is a process of adaptation. Those that pass on their survival traits will evolve into stronger ­versions by acquiring those characteristics that allow them to continue to ­better ­themselves. The mechanism in man, his survival transformation, is embedded in the exchange process—seeking out new resources and ­others with added skills and trading with them to improve his lot. Those who are successful in creating a system of exchange will progress, and those who fail will not survive.

In Darwin’s later years, after his voyage on the Beagle, which took him to faraway lands and sparked his insightful discoveries on which he based his initial theories, he solicited the opinions of animal and plant breeders all over the world. He learned from such inquiries that ­successful breeders selected those variants having characteristics of commercial value while less exchange-worthy varieties were denied the opportunity to breed and hence began to disappear. Artificial selection of this type, a system based on marketable or profitable results, produced cows giving greater ­quantities of milk, horses of greater running ability, and so on. An ­economic justification is introduced in the natural selection process but at the heart of the formula is mankind’s desire to improve and progress—itself a natural motivation.

Herbert Spencer (1820–1903) was reflecting on the ideas of social evolution and progress prior to Darwin’s publication but his ­thought-provoking concepts lacked a label. With the coinage of terms like ­adaptation and survival of the fittest applied to social thought, the term social ­Darwinism emerged. The concept can best be described as the benefits of cooperation and community for human evolution. Mankind learned in his ­earliest years that banding together with others promoted survival. Whether group tasks were undertaken for protection from predators (other men or beasts) or foraging and hunting for sustenance, ­advancement of men’s skills later evolved into divisions of labor, in short, collaboration among men and the need for a systematic society based on the mutually ­beneficial exchange of services or jobs. Political economists have described human evolution as tribe members who first performed identical ­activities for themselves and then progressed to a system whose members severally engage in different and varied actions toward each other. The individual producer of any one thing is ­therefore ­transformed into one of many parts of a separate working unit that ­benefits all under the exchange umbrella. From such primeval and natural recognition developed the trading imperative as tribes or clans bartered among themselves and then ­ventured out to extend the process to those in other ­territories (the roots of globalization).

The idea of social Darwinism evolving into the classic trading ­system of mutual beneficial exchange, which was later identified with David Ricardo, the early 19th-century economist who analytically studied the concept of competitive advantage, has its base in ancient tribal activities. Assume that tribe A is capable of both hunting and fishing but its prowess or time efficiency is best devoted to hunting. Tribe B is not as proficient as tribe A in either activity but is better at fishing. Ricardo concluded that both tribes would benefit (eat better) if tribe A transferred (sold) game to tribe B in exchange for fish.

Both groups would win in the barter process; and perhaps even more so for tribe B, which has less efficient skills. Ricardo’s theory lies at the heart of the strong support on behalf of those modern economists who prize the benefits of globalization, which itself has a conceptual base in the early history of mankind.

The theories of Darwin and Spencer on the evolution of mankind define a process that continues to influence our lives today. Their ideas have matured into and form the basis for a modern social framework we call globalization. Fueled by evolving technological advancements, it is causing the world to contract and become one at a pace and to a degree never before experienced.

Two books on the development of the world—Globalization and ­Culture by Jan Nederveen Pieterse in 200334 and Creative Destruction: How Globalization Is Changing the World’s Cultures by Tyler Cowen in 200235—comment on the integration effect of globalization and culture, the two queens of civilization, with the trading imperative being the influential and necessary handmaiden.

It is not the intent of this observation to judge the positive or negative effects of globalization. Some argue that cross-territorial trade destroys authentic local culture and diversity, making the world too universal, whereas others consider it the molder of civilizations, as ­trading ­initiative ideas were exchanged, allowing the world to grow up and have more choices. No attempt is made to evaluate the process in all its ­manifestations as such inquiry and resulting conclusions are best left to historians.

The focus is to examine the simple premise that globalized trade is a natural and evolving inbred human trait, our socially induced DNA, which has been with us from the beginning of recorded history and ­perhaps before. The intent of the material presented is to conduct an examination of the historical trading stages on which globalization emerged so that proponents and opponents of the phenomenon might find common rooted ground on which to launch a more meaningful and less emotional discussion of the issues facing all of us in the future.

Trade and the Theory of Collective Intelligence

While pure physical survival caused groups of people to band together, the collective nature of humans also produced another phenomenon that drove the creation and progression of civilization: the notion of collective intelligence. This concept is defined as the sharing of group intelligence that emerges from the collaboration and competition of many separate individuals. The process enables humans acting in unison to progress to a higher order of complexity, and possibly harmony, by using the dual mechanism of integrated differentiation and collaborative competition, which results in the development of civilization. It is a form of networking. Matt Ridley’s article “Humans: Why They Triumphed” argues that “the answer lies in a new idea, borrowed from economics, known as ­collective intelligence, the notion that what determines the inventiveness and rate of cultural change of a population is the amount of interaction between individuals.”36 He also added that trade and the urbanization that came about due to the exchange activities of intermediary merchants in ancient times being centralized in commercial centers (and later ­centralized institutions) were and still are “the grand stimuli to inventions, far more important than governments, money or individual genius.”37 He points out that even agriculture, the oldest form of human collective labors (hunting and gathering were individual ventures), was invented where people were already living in dense trading societies. Ridely concludes that “trade is to culture as sex is to biology” and that “exchange makes cultural change (its progressive advancement) collective and cumulative,” thereby allowing civilization to take root and grow.38 W. Brian Arthur makes the case that almost all new technologies evolve from combination of other technologies with such new ideas emerging from swapping or exchanging one thing for another—the trading imperative.39

In antiquity, the commercial process was the chief agent of crosscultural exchange. The trading initiative was the original rails on which ­collective intelligence first traveled. And as collective intelligence was itself a prime contributor to the development and progression of ­civilization, it ­naturally follows that trade was its midwife.

According to Don Tapscott and Anthony Williams, in order for ­collective intelligence to take shape, and thereby drive civilization, a mass collaboration system containing four principles needs to exist.40 The first two require an openness and a sharing initiative to be in place—a desire to form collaborative associations in order to produce significant gain improvements. While in ancient times people were more reluctant to engage in such freedom, they more closely guarded their knowledge or know-how and raw materials, modern commercial enterprises, especially multinational corporations (MNCs), have embraced this key characteristic. They are driven to find the most knowledgeable venues and engage in partnerships via strategic alliances with those parties ­processing such advanced intelligence resources. The third principle, peering, ­leverages varying divergent organizational skills to improve a product or service and/or gain cost efficiencies. The process called outsourcing or ­third-party contracting is used by today’s MNCs. The last principle, acting globally, constantly searches for connections around the world to gain access to new markets and to take advantage of the extreme global value chain, the ­placing of their value-producing activities in the best available ­geographical locations to gain a competitive advantage over rivals has become a more common practice. While ancient merchants practiced these concepts as they expanded their geographical territories for new and exotic products, the modern age of globalization has ushered in these principles at a pace and to a degree never seen before in the history of mankind. As in the past, and still today, the global trading initiative fostered and embraced the idea of collective intelligence, itself an influential contributor to the development and growth of civilization. On the early trade routes, middlemen merchants erected varying ideas, inventions, ­customs, and beliefs, which were exchanged between distant regions. While the ­modern communication era, dominated by the ­Internet, has replaced such historic avenues, business still acts as an ambassador of knowledge and ­information flow.

Globalization, the Human Social Phenomenon

Robbie Robertson constructs what is the best explanation of the social imperative called globalization that has always touched mankind with no definitive time frame nor relative incident or episode in history to mark its beginning:

If we simply focus on globalization as a modern strategy for power, we miss historical and social depths. Indeed the origins of ­globalization lie in interconnections that have slowly ­enveloped humans since the earliest of times as they globalized themselves. In this sense, globalization as a human dynamic has always been with us, even if we have been unaware of its embrace until recently. Instead we have viewed the world more narrowly through the spectacles of religion, civilization, nation or race. Today these old constraints continue to frustrate the development of a global ­consciousness of human interconnections and their dynamism.41

The inherent desire to engage others in trade, and the natural ­extension across foreign territories, is at the nucleus of globalization. Human beings possess a unique trait, the capacity to exchange that is ingrained in our DNA. The process of trade has been characterized as an intrinsic human impulse in parallel with the basic need for food, ­shelter, sexual ­intimacy, and companionship.42 As Adam Smith observed, no other class of ­living organisms trades one thing for another, no less developed an artificial common intermediary value to replace the actual physical things exchanged. While many animal and plant species may create a surplus storage of collected or hunted food, such harbored extras are not swapped for other materials. The fundamental exchange consideration, the forerunner of the commercial trading initiative, is one of the cornerstones of the development of human civilization. Out of such vestiges of dealing with others across territories, the world grew up and societies were formed, laws were constructed to guide associations between people, and the process of cross-pollination of ideas furthered civilization. The contemporary phenomenon is merely the maturation of activities on a greater scale and to a wider degree but nonetheless a continuance of an ingrained human desire.

The world grew up on the paths first traversed by merchants and it continues to do so. Many of the practices, principles, and techniques used in business today were initially birthed in the exchange process and through time the ancient commercial trading initiative produced many of the progressive business policies and laws used today.

Modern business orientations—the current guidelines used to enter new markets and sustain activities around the world—were constructed centuries ago. An inspection of the process that produced such practices allows one to reflect on his or her usage and application, producing a better result in the modern age of globalization as they are continuously applied. These suppositions do not suggest that a new paradigm be developed to research ancient trade. The literature certainly exists. What it does aim to invoke is a greater understanding of its effect on cultivating civilization and hence its impact on mankind. Seen from the perspective of the economic theory of the firm, the business firm is conceived of as a “nexus of contracts.”43 But when placed within the science of human relationship development the same theory is applicable. We are always making ­agreements, assuming cross-obligations with others. Human interaction is a series of social contracts and the actionable result is the exchange process.

Trade: The Determiner of Societal Growth or Demise

In the Pulitzer-Prize-winning novel by Jared Diamond, the author relates a meeting with a man on a beach in New Guinea, who asks a question concerning the development of civilizations around the world. The text that follows attempts to answer the riddle of how the fates of human societies brought the world to its current state. However, what is on the mind of the inquiring young man, asking with a ­“penetrating glance of his flashing eyes,” is a very specific question: “Why is it that you white people developed so much cargo and brought it to New Guinea, but we black people had little cargo of our own?”44 Within the context of the story the term “cargo” seems to be a code word for the ­development of the human intelligence factor as measured by mankind’s handling of the world around them. It is the key cipher in determining the ­advancement of some societies over others. It is against this backdrop of inquiry that Diamond summarizes his book in one sentence. He states, “History ­followed different courses for different people because of ­differences among people’s environment, not because of biological differences among peoples themselves.”45 The adjustment and reaction to varying ­geographies ­influenced numerous societies around the world to develop differently with the products of their own culture. The author’s metaphor for ­products, guns, germs, and steel became the title for the book, and through their development he proceeds to show how they affected the fate of all earth’s civilizations. The scope of Diamond’s text tracing the history of mankind should be a mandatory reading for all university students no matter what their major or the disciplinary skill they wish to acquire, as the insights provided into the development of mankind touch all accumulation and use of knowledge across varying cultural environments. In the context of my early global executive career, coupled with my later instructional responsibilities and research activities as a college professor of international business, I have read and reread the first Diamond book, Guns, Germs and Steel, as well as his second, Collapse: How Societies Choose to Fail or Succeed, in order to understand and appreciate the world around me. In both books, it is through the prism of mankind’s management of his environment and relationships with others based on the exchange of such resources that world history is examined, events explained, and conclusions drawn.

For years I have endeavored to give my students studying global ­business a historic prospective of the development of civilization, ­applying my own inspectional filter: the process of exchange—that is, the forerunner of the commercial trading imperative. Using this inspectional tool, I have found myself taking liberty with the applied definition of the word cargo as used in the inquiry of the young man from New Guinea. I define cargo as denoting the freight of a ship—the commercial designation of goods for trade in transit. This alternative application of the term may be one of the keys to unraveling the mystery of how the world grew up, why certain civilizations advanced, and why others melted away or simply were absorbed by stronger ones.

All cultures, no matter when or where they geographically emerged, had a common designation; they participated to varying degrees in the exchange process. The intertwined transfer of tangible property (things) and intangible assets (ideas or proprietary knowledge) was the key to ­sustaining and improving life. It was this motivating human desire to acquire the new and different that propelled civilizations forward or held them back, eventually leading them to grow or die off.

Some societies were limited to an interchange in their own clans or between groups within their known tribal territories while others ventured out of their geographical comfort zones, commuting with alien ­cultures. This key motivational inspiration provided the impetus for some societies to sustain, expand, and grow while for others their isolation stunted their ability to acquire new resources and skills; hence, failing to reach their full potential. Those who used peaceful contacts with others, in a positive manner, enhanced their own civilizations and benefited from ­cross-territorial commuting.

Mankind throughout history, and as Diamond’s books have shown, has learned that different environments yield varying resources and that the skills and abilities of men to deal with such external factors for the maintenance of their lives are not always equal. Such recognition has laid the basis for conflict and war between groups as man reached out to acquire that which his environment did not allow him to accumulate using his own devices. But the desire also resulted in a more productive side, the process of transfer and the bartering of what one environment and its people could produce (whether resources or acquired intellectual skill of others). In modern times, we call the second of this interrelated philosophy, war being the first, the trading imperative, and its ­resulting modern phenomenon—globalization. Diamond acknowledges this concept in both his books. First, within his discussion of an influencing factor, he calls the diffusion the immigration of people among the continents.46 Simply stated, the movement of people with their things and ideas—the transfer of tangible and intangible assets across regions—is in fact the prime definition of globalization. To illustrate the importance of commercial trade to foster the development of civilization Diamond asks the question of why China, the most advanced society on earth, lost its lead of thousands of years to late-starting Europe. His answer to this question was that the development and support of a merchant class, which allows some of the market-driven characteristics of capitalism to take root, and a form of patent protection for new processes were factors the Chinese left out of their society.47 They failed to encourage privatization of commerce, supported some open-market provisions, and provided fundamental regulatory protection of invented assets that could be turned into wealth creators. While trade has been shown as a prime ingredient in promoting the development of civilization, its loss or demise according to Diamond’s second book is a significant contributor to why ­civilizations disintegrate. As Diamond constructed his five-point framework, ­explaining how societies chose to fail or succeed, his exemplified research ­concluded that a decreased support of one’s friendly neighbors allowing for the imports of essential trade goods is one of the contributing factors. A good trading partner reduces the risks of a weak society from collapsing and disappearing while the disruption of the trading process between social groups by dual hostilities or raiders can destroy civilizations.48

Did the Market Economy have Ancient Roots? No!

Did people meet or gather in some sort of a marketplace for the ancient purpose of bartering or exchanging goods and therefore socially create a market economy? Does history support such contention? Not all economic historians believe that such a classification was evident throughout civilization. Instead of an economy being ruled by social relations, some feel that the economy ruled social relations and resulted in a different structured system in ancient times than is still evident today.49

A market economy is one in which the allocation of resources and the division of labor applied to them in turn construct the prices and wages (their assigned value), which are influenced and further determined by supply and demand. A market economy is not planned or controlled by a central administrative authority. It is free of imperial or governmental influence, a monopoly, or collusion among commercial institutions as well as other external interferences. Freedom for the value of things to fluctuate, move up or down, is based on open-market conditions.

Karl Polanyi, an anthropological economist, feels that the role of markets and their freedom to self-regulate by influencing financial outcomes was marginalized in ancient economies because they were simply too far apart from each other. Essentially, the markets themselves were localized and insulated; so the ability to affect conditions across areas was severely limited. He feels that the prime commercial motivator, the profit incentive, did not play a significant role in economic systems of ancient civilizations.

Early societies were driven more by the establishment and maintenance of social relationships than by wealth accumulation via ­self-interested individuals. Polanyi in his researched observations concludes that the transactions of early humans, the primeval urge to trade, were conducted to enhance their social standing, social assets, and social claims as opposed to personal gain.50 He based his hypothesis on his examination of tribal or clan societies, where everything is shared collectively, and hence the maintenance of social ties is paramount. Against this societal structure all obligations in the community are reciprocal and hence personal gain does not come into the value equation. The exchange of equal worth between members of the society is the chief responsibility, with the failure to reciprocate resulting in a loss of status and possibly extrication from the group with little prospect of survival in the environment by oneself. The idea of acting in a way where a personal value advantage was achieved in the exchange process would be detrimental to one’s social obligations. All were expected to behave in the best interests of the community as a whole. Polanyi deduced that the principal activities of early humans as hunters or gatherers were for the mutual benefit of the whole group in which they lived and not for individual or immediate family enrichment. As they were dependent on the tribe for survival, the safety in numbers theory, they would do nothing to upset this conditional necessity. Implied trust and confidence with strict allegiance to the continued existence of the group would forbid them from acting independently, to have more than their rightful share of the collective environmental bounty—all was to be shared. Redistribution in tribal societies was determined by the chief or headman. Hence, wealth in the ancient world was explicitly controlled. It was not subject to free-market conditions—supply and demand.

This is an interesting concept, as the idea of globalization as rooted in the commercialized exchange for profit incentive may not have been ­produced by the connectivity of individuals and institutions across the globe that we see today, and the phenomenon is in fact truly a ­modern ­principle. Perhaps, the rationalized connection linking ancient ­cross-territorial trade to the wider form of capitalism is a mistaken ­presumption. If societies in ancient times were truly collective with the socially accepted premises to share the traded fruits of their labors with such ­dispersal ­delegated to an authority as Polanyi suggests then the notion of globalization as rooted in ancient trade is a wrong ­conclusion. ­However, if “capitalism is a better instrument for the creation of wealth than it is for the equitable ­distribution of its benefits,”51 and if the prime goal of the ancient exchange system was a fair and even-handed ­distribution of the trading exercise among a group, the emergence of the commercial private ­merchant and the cross-territorial trading initiative would never have evolved. We see, however, from historic records that early trade did in fact produce such players and that although they often plied their trade under the authority granted by regional overlords (i.e., the designation of the Kings Highway or Royal Road from Tanis in Egypt across the Sinai through Jordan to Damascus, Syria, and onto the Euphrates as well as other points in the East) who either taxed or participated in their profit endeavors, they were not economically equal—the crevasse between the poor and the rich has always existed. The great pharaohs of Egypt, the early emperors of China, the historic kings of Europe, and the numerous territorial lords of the old world knew they had to placate their citizens by providing for their economic means of survival, a quasi-collective ­imperative, to retain their wealth, social power, and control. The idea that civilizations developed in antiquity were motivated to share for the common equal good does not seem to be sustainable, as social status and prosperity are intertwined. Notwithstanding cross-territorial war as an agent of wealth ­accumulation, cross-territorial trade was the next best campaign to attain riches and social affluence in both the old and modern worlds.