BEER THE BUSINESS Tracing the Roots of International Business Collection EXPERT PRESS Globalization and Business S. Tamer Cavusgil • Michael R. Czinkota • Gary Knight DIGITAL LIBRARIES Principles Editors EBOOKS FOR BUSINESS STUDENTS Second Edition Curriculum-oriented, born- Lawrence A. Beer digital books for advanced The various heritages of all ethnic creeds on earth have business students, written participated in and been influenced by the trading process. by academic thought Commercial activities in antiquity have impacted global leaders who translate real- history and have therefore also set the stage for the modern world business experience era of globalization. The differences between the ancient AND BUSINESS PRINCIPLES OF GLOBALIZATION THE ROOTS TRACING Tracing the into course readings and economy and the modern are not of kind but of scale. Today’s reference materials for global managers and business students need to view the world students expecting to tackle on a wider horizon, understanding and appreciating that Roots of management and leadership their commercial ancestors’ invented and practiced the same challenges during their business principles used in the contemporary environment. professional careers. The commercial pathways originally carved out by their merchant predecessors, who first ventured out into foreign Globalization POLICIES BUILT territories to bring the world closer together, are the founda- BY LIBRARIANS tions upon which the present-day business world operates. • Unlimited simultaneous The book begins with a historical perspective of recorded and Business usage trade. It then offers a deeper insight into the first global • Unrestricted downloading products, the infrastructures created to support the trade and printing initiative and the development of financial instruments to • Perpetual access for a further its growth. The cross collateral influences of religion Principles one-time fee and government on the global commercial landscape follows. • No platform or Lawrence A. Beer, JD, is a retired senior lecturer after maintenance fees 12 years at the W.P. Carey School of Business, Arizona State • Free MARC records Second Edition University, teaching MBAs and undergraduates on various • No license to execute international business subjects. Professionally, he is an The Digital Libraries are a attorney and accountant with senior executive tenure as comprehensive, cost-effective president of international operations and house counsel way to deliver practical to global corporations as well as managing director of his treatments of important own international consulting firm. His other books include Lawrence A. Beer business issues to every A Strategic and Tactical Approach to Global Business Ethics, 2nd student and faculty member. Ed. and Essential Concepts of Cross-Cultural Management: Building on What We All Share (Business Expert Press). He is an article reviewer for the Journal of International Business Studies, a member of the Academy of International Business and Institute For further information, a free of Behavioral and Applied Management serving as conference paper submission reviewer as well as an editorial consultant trial, or to order, contact: and contributor to various business textbook publishers. [email protected] International Business Collection www.businessexpertpress.com/librarians S. Tamer Cavusgil • Michael R. Czinkota • Gary Knight Editors ISBN: 978-1-63157-230-2 Tracing the Roots of Globalization and Business Principles Tracing the Roots of Globalization and Business Principles Second Edition Lawrence A. Beer Tracing the Roots of Globalization and Business Principles, Second Edition Copyright © Business Expert Press, LLC, 2015. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopy, recording, or any other except for brief quotations, not to exceed 400 words, without the prior permission of the publisher. First published in 2011 by Business Expert Press, LLC 222 East 46th Street, New York, NY 10017 www.businessexpertpress.com ISBN-13: 978-1-63157-230-2 (paperback) ISBN-13: 978-1-63157-231-9 (e-book) Business Expert Press International Business Collection Collection ISSN: 1948-2752 (print) Collection ISSN: 1948-2760 (electronic) Cover and interior design by Exeter Premedia Services Private Ltd., Chennai, India First edition: 2011 Second edition: 2015 10 9 8 7 6 5 4 3 2 1 Printed in the United States of America. Abstract The term globalization is too often defined by the results it produces, both positive and negative, as opposed to being defined as a socially engineered device naturally occurring as civilization progressed. It is a mechanism to manage the affairs of human beings as they provided for their mutual, but not always equal, attainment of satisfaction. It is therefore a universal instrument that emerged out of the ordered exchange process and is to be found in all cultures. Its growth and maturity were fueled by com- mon denominators of value that are shared across and between social groups around the world and act as a trade agent, bridging and bonding alien territories. As such it began in ancient times and continues into the present, where its prevalence has resulted in a more borderless world with increasing interdependence of nations. The historic commercial activities used in the past form the platform of principles still evident in its modern-day structure. Keywords ancient commodities, business principles, competition, cost, economics, globalization, government, international business, market, mediums of exchange, proprietary rights, religion, secular laws, technology, world trade Contents Prologue ................................................................................................ix Acknowledgments .................................................................................xix Introduction ........................................................................................xxi Part I Exchange: The Natural Social Imperative ��������������������� 1 Chapter 1 Globalization Takes Root ..................................................5 Chapter 2 Tracing the Roots of Globalization..................................27 Part II Trade: A Historical Perspective ����������������������������������� 65 Chapter 3 The Beginning of Recorded Trade ...................................67 Chapter 4 The Age of Exploration .................................................137 Part III Building Blocks of Globalization ����������������������������� 167 Chapter 5 The First Global Products .............................................169 Chapter 6 Ancient Societal Infrastructures Originating in and Supporting Commercialism ..........................................197 Chapter 7 Mediums of Exchange and Financial Instruments .........231 Part IV Collateral Influences on Global Commercialization ��������������������������������������������������� 245 Chapter 8 Religion and the Exchange Process................................247 Chapter 9 The Influence of Government on Global Trade and Ancient Secular, Commercial, and Legal Regulations ����277 Notes..................................................................................................305 References ...........................................................................................313 Index ................................................................................................323 Prologue When I began teaching global management business courses I was struck by the reality that the vast majority of my students had a minimal introduction if not noticeably absent knowledge as to the history of commerce. They also lacked an appreciation of the impact of the commercial imperative on the development of civilization. As most of them were born in the era of modern globalization, with product choices and common brand names for everyday goods coming from a broad spectrum of foreign sources, the assumption that the world marketplace was created in their time was a commonly held conviction. The notion that globalization is a recent occurrence with a decidedly prejudicial depiction as a United States, no less European-inspired event, permeates the presentations of many educators, books and articles, authors, and the public. The idea that such a system evolved over time and that today’s business management principles were birthed in antiquity were concepts my students never considered. I decided that I would open every class with a presentation on the roots of globalization, the emergence of the exchange imperative, and trade as a prime initiator propelling and contributing to societal growth and development. All cultures through- out history at one time or another engaged in cross border trade—what we today call globalization. It is an economic system with overtones of social and political ramifications that links all of us together. Many years later my continuously updated lecture notes for such sessions, coupled with a private research fascination on the contribution of the commercial imperative to civilization, have resulted in this book. Beyond the impetus provided by my students to investigate the subject matter, I remembered vividly my global executive experiences when an understanding of the history of global commerce would have well served my world manage- rial responsibilities if only such an introduction was given to me during my academic years. Doing business