Why history’s the business

Karl Moore and David Lewis are at the cutting edge of interpreting current trends in business for the often - confused managers taking the Oxford executive programme at Templeton College where they teach.  In this book, they attempt to demonstrate that many of the underlying determinants behind the challenges of globalisation were also present in the ancient world. 

Taking their cue from King Solomon, that “there is nothing new under the sun” the authors show that from ancient Assyria to ancient Rome, under conditions of increasing market integration and economic development, some of the principal institutional forms that developed to organise and manage international trade bore remarkable similarities to those of today.

The book’s extraordinary feature is its focus on ancient history. There are many studies of nascent international business from the early chartered trading companies of the 17th and 18th centuries, to the classic multinational enterprises emerging at the end of the 19th century. There are occasional studies of earlier trading networks that use the conventional international business analytical framework; the Fuggers of Augsburg as multinational bankers, for example. But, as far as I am aware, there has never been any study of business development in any of the Sumerian, Assyrian, Phoenician, Greek, and Roman civilisations surveyed here.

Moore and Lewis summarise the findings of specialist ancient historians and archaeologists. Many of the surviving artefacts relate to commercial matters, so plotting the scope of international trade during these two and a half millennia before Christ has been a relatively fruitful activity.

The authors explain that until the high point of Athenian civilisation, international trade was mostly controlled by the state. In a world of tenuous property rights, this is not surprising. Athens, however, c. 500 BC appears to have developed something close to a free market economy, with individual property rights, a financial infrastructure and a consumer culture. This florescence of “modernity” was all too brief. After the disastrous Peloponnesian war, the feudal state once more dominated international trade.

For management students, scholars of international business and managers this is breathless stuff. The narrative is pacy  although unfortunately marred by the occasional unclear expression and misplaced or missing words. It reads as if it was written in a hurry. And while the authors’ ambitions are laudable, one is left wishing that there had been more conceptual clarification at the outset.

Moore and Lewis use John Dunning’s eclectic paradigm as their framework to explain ancient foreign direct investment. This is entirely sensible, but the existence of trading relations is often assumed to be foreign direct investment and so akin to the activity of modern multinationals. While some of the institutional arrangements were close approximations to these (the Roman publicani , for example, appear to have been remarkably similar to the dominant British form of multinational enterprise from 1850 to 1914, the Free Standing Company), many were not.

The distinction is important because it goes to the heart of why multinationals are analytically interesting. Multinationals are now seen almost universally , among economists, as institutions that are able to overcome market failure. When a market exists and two or more parties conduct international trade, foreign direct investment has not taken place. This is important because many of the international relations documented by Moore and Lewis were actually trading activities not investments, although this is obscured because so much was organised either within the confines of the state (and so non-market activity) or within family firms (today classified as immigrant entrepreneurship rather than foreign direct investment).

The authors have rushed in where others would fear to tread and they have provided a service to the business history community in tackling such a remarkably broad subject. 

Andrew Godley teaches business history and international management at the University of Reading and Nuffield College, Oxford.