Chapter One: Economic Globalization

I. Introduction

This chapter will chart the history of trade and the broader economy to which it gave birth, first as an aspect of the life of early human social groups, and later as the advance-guard of economic nationalism. It will show how, after a relatively short period during which nation states attempted with scant success to take over or directly supervize trading mechanisms, the market is now reasserting itself through the process of economic globalization, in the process creating multiple opportunities for individuals to invest and trade with far greater freedom than previously.

The term 'globalization' in the early 21st century carries with it a sense that separate, national polities are somehow being homogenized into a standard 'global' brand. In terms of economic life at any rate it would be more accurate to say that it amounts to the removal of national barriers imposed on a previously unimpeded global market-place.

It's likely that many people think of trade as being one of the 'highest' achievements of humans. That it is a force for good is beyond doubt: it adds to the material wealth of the parties who trade, it spreads knowledge about cultural artefacts and even the cultures which produce them, and it diminishes the chance of aggression between trading partners. But far from being a result of the civilizing process, evolutionary, anthropological and paleological work is making it more and more likely that trade was a main cause of that process. An extreme view would be that it was a necessary precursor of settled human life in the tribal group. At the minimum it is hard to imagine the successful development of inter-group relationships in the early stages of human civilisation without the benign and informing influence of trade.

Matt Ridley 1 says that trade, specialization, the division of labour and sophisticated systems of barter exchange were already part of a hunter-gathering life, and that they had probably been so for many hundreds of thousands or even millions of years: 'It is possible that homo erectus was mining stone tools at specialized quarries, presumably for export, 1.4 million years ago.'

Kropotkin 2 sets out the case for the groupish origins of trading and markets, with special relevance to German and Eastern European models, suggesting that the merchant guild was initially entrusted with commerce on behalf of the whole community, and only gradually became a group of merchants trading on their own account.

Regardless of the origins of trade, for most economists, trade, and especially free trade, is associated with economic growth; and the globalization (freeing) of trade which has been taking place in the last 50 years has had highly beneficial effects on the populations of the countries that have participated in it. Jagdish Bhagwati 3 states unequivocally that freer trade is associated with higher growth and that higher growth is associated with reduced poverty.

It's a very noticeable fact that many successful international bodies of law have to do with trade. The WTO, the International Chamber of Commerce, international maritime treaties, Free Trade Agreements (EFTA and then the EU, at least until it began to fiddle obsessively with society), NAFTA, and many other organizations and treaties are essentially commercial in their origins and effects, and by and large they are welcomed by all nations, who more or less willingly submit to their jurisdiction. Attempts at political, ecological and social international co-operation have often been bitterly disputacious and slower to come into effect, although later chapters will show that even in those fields globalization is marching forwards.

From a groupish perspective, this situation can be summed up quite neatly: groups are xenophobic except when it comes to exchange, when they become cooperative.


1 Ridley, M (1996) The Origins of Virtue, Viking, New York

2 Kropotkin, P (1902) Mutual Aid, Heinemann, London

3 Bhagwati, J (2004) In Defense of Globalization, Oxford University Press