Monday, March 22, 2010

Book: Origins of Globalization

Karl Moore (faculty of management at McGill University in Montreal) and David Lewis (faculty of history at California State University, Long Beach) recently published, The Origins of Globalization. In it they combine archeology, history, religion and economics with the theory and practice of the modern multinational corporation in order to argue advance the claim that:
quite a few of today's business forms and business cultures existed in ancient times. Globalization, multinational enterprises, commercial partnerships, foreign joint ventures, and embryonic forms of mass production all had their precursors or prototypes in the very remote past.
My reaction to the content is quite schizophrenic. On the one hand, the book brings together a wealth of information on business practices in the ancient world (i.e., the 3000 years before Christ). Here, as summarized by a review in the Globe and Mail, is the book's discussion of the collapse of Ur:
By 2000 BC, the Mesopotamian city of Ur (referenced in the Old Testament as Ur of the Chaldees) was the largest city-state in the world (population: 65,000), a metropolis of extraordinary prosperity in the fertile land between the Tigris and the Euphrates rivers in modern-day Syria and Iraq.

As it happened, the most ancient of crashes followed the collapse of the world’s first mutual fund, a distinctly capitalistic financial innovation that had enabled ordinary people (among them, shopkeepers, farmers and labourers) to invest in enterprises previously limited to the rich and the powerful. In this historic meltdown, the investment that went wrong was in copper. For the first time, investors in a publicly traded pool had experienced the excessive optimism that former Federal Reserve chairman Alan Greenspan would famously describe as “irrational exuberance.”

Share prices soared. Investors spent anticipated profits before they earned them. Ur never recovered from the credit freeze that followed the calamity of history’s first public offering.

This is just one of many fascinating stories in the book. More importantly, at least from the perspective of ecological sociology, the book calls "for today's globalizers to 'make the world safe for diversity.'" In other words, it argues against an interpretation of globalization as homogenization. There are obvious parallels between this position and the biologist's claim that complex and diverse ecosystems are more resilient than simple, homogeneous ones.

On the down side, the book interprets ancient economic practice in terms of modern management theory, specifically the Dunning's eclectic paradigm. As such, it suffers from a serious case of presentism -- that is interpreting the past in terms of concepts from the present. For example, it is impossible to have 'multinational corporations' without having nations. But, as conventionally understood by historians, nations didn't exist until the 17th century. Thus, it is hard to understand how multinational corporations in anything approaching the modern sense existed in ancient times. While full of wonderful stories and significant insights, the books larger argument suffers from an inattention to historical perspective. Moore and Lewis take an objectivist position, claiming they can identify the similarity between various economic actions based on the characteristics of the action itself. This is the equivalent of saying Priestley discovered oxygen, because that is what we call the substance he isolated. But, neither Priestly nor historians of science make that claim. They know he discovered pholgiston. Ever since Weber, sociologists have recognized it is not just the action/object itself, it is the conceptual understanding and meaning given to the action/object by the actor that is important. In short, while Moore and Lewis do an excellent job of opening our eyes to the diversity of economic activity in the ancient world, the attempt to draw explicit parallels between past and present economic behaviours seriously misrepresents things.

1 comment:

  1. I believe it is a better more subtle than that.