Global Trade Has a Long History

In today’s (23 September, 2005) Daily Times, Pakistan (‘your right to know – a new voice for a new Pakistan’), Dr Johann-Volker Peter, attorney-at-law in Frankfurt/Main, Germany, writes in an article “Globalisation: investment in a world of scarcity and complexity”:

“Anti-globalisation activists protest against international economic institutions, international groups, global trade agreements, international investments, and the alleged negative consequences for the poor. They are wrong. Globalisation is not just ‘international agreements and institutions’ but also a complex historical process. It is rooted in the worldwide division of labour and production. It is consequence of the scarcity of goods and the complexity of life.

Already in 1776 Adam Smith (1723-1790) had explained in his Wealth of Nations, “A country that has no mines of its own must undoubtedly draw its gold and silver from foreign countries in the same manner as one that has no vineyards of its own must draw its wines.” Thus he pointed out in the 18th century a principle that holds in the 21st century: a scarcity of goods and factors of production leads necessarily to a globalised economy. International investments are required to cope with the scarcity of goods, factors of production, and complexity of the world economy.”

Comment:

Globalisation has become one of those buzz words signifying what is presented as a new discovery: international markets and supply chains, as if these are something new. Some people even talk of the ‘first era of globalisation’, which apparently ended in the 1914-45 European wars, followed now in the 21st century with the ‘second era of globalisation’ (with the implied threat it too will end in global wars). Such talk is non-historical; suited for pressing the case of ‘imminent new threats’ and mobilising excitable demonstrators, but of no significance for understanding, nor of much value as a prediction.

Global trading has a long history – several millennia – and is not just a late modern invention. Evidence of trade in the earliest surviving remnants of human settlements (including Neanderthals, as well as Homo sapiens) show that trade was conducted over quite vast distances (modern Germany to modern Spain). The Roman Empire was a commercial society, not just an agricultural society, and when it fell to barbarian invasions, an almost trade-less society endured for near-on a thousand years (500 – 1500 in the Common Era), until gradually restored, and on which Adam Smith famously cast his gaze inn the mid-18th century.Even in the depths of European barbarism – around the first millennium of the Common Era – traded goods travelled from as far as Cathay (China) (silk) and across Northern Europe from the Baltic, from southern Europe and from Aquitaine (south-west France).

The history of the world since the first millennium (CE) is a history of the expansion of international trade, first in commodities, which only the families of ‘Princes’ consumed, until today where the families of the entire spectrum of society are joined in international divisions of labour and their concomitant necessity, international markets.