Foreign Policy: Globalization and the Return of History

Foreign Policy
Summer 1999

Globalization and the Return of History
By Emma Rothschild _*

This abstract is adapted from an article appearing in the Summer 1999 issue of Foreign Policy.

The idea of a history of globalization is at first sight a contradiction in terms. Globalization has been depicted, for much of the last 20 years, as a condition of the present and the future—a phenomenon without a past. But there is indeed a history of globalization, which is of some consequence for present politics.

There have been several periods of increased international trade, investment, communication and influence over the past 250 years: The export and investment booms of the 1860s and the early twentieth century are just two of the more dramatic examples. Indeed, the politics of European monetary unification date back to the nineteenth century. Luca Einaudi, in his Ph.D. thesis at the University of Cambridge, described detailed plans for a future European central bank from the period 1865-1871 as well as a draft of a new European currency, for which the proposed name was the “Europe.”

The history of globalization is a history of ideas well as of economic life. For example, the half century that began around 1770 and ended with the French Revolution and the Napoleanic Wars was a period of extraordinary turmoil in politics and political thought, including thought about democracy. It was also a period—more than the economic expansions of the nineteenth century—when private corporations, particularly the Dutch, English, French, and Swedish East India Companies, played a decisive role in internationalization.

Adam Smith wrote in 1776 in the Wealth of Nations about a world in which capital “may wander about from place to place, according as it can either buy cheap or sell dear.” Smith said of the politics of capital taxation: “The proprietor of stock is properly a citizen of the world, and is not necessarily attached to any particular country. He would be apt to abandon the country in which he was exposed to a vexatious inquisition, in order to be assessed to a burdensome tax, and would remove his stock to some other country.”

Two years earlier, the German philosopher Johann Gottfried von Herder had described the much-vaunted “System of Commerce,” with heavy irony, as a structure in which “three continents are devastated and policed by us.” “... When a storm shakes two twigs in Europe, how the entire world trembles and bleeds,” he wrote. “When has the entire earth ever been so closely joined together, by so few threads? Who has ever had more power and more machines, such that with a single impulse, with a single movement of a finger, entire nations are shaken?”

Concern about the relationships between distant peoples was intense in the eighteenth century. Inspired by new possibilities of communication, transport, or influence, the French mathematician and economist Marie Jean Antoine Nicolas Condorcet observed that “the owner of money ... by a banking operation, within an instant becomes English, Dutch or Russian” Condorcet’s and others’ writings turn on the circumstance that people in Berlin or Edinburgh or London or Paris, toward the end of the eighteenth century, had vastly more knowledge about events in distant countries and vastly more influence on these events. Adam Smith was concerned, like many of his contemporaries, with detailed projects of international or intercontinental government. He was sharply critical, for example, of the multiple “oppressions” of the English East India Company in Bengal. By contrast, he was optimistic about the prospects for a parliamentary union of North America and Britain. In the diverse and international society of the end of the eighteenth century, political relationships were to be founded on universal political discussion and universal political reflection—on what one of Smith’s critics described as “that unrestrained and universal commerce, which propagates opinions as well as commodities.”

In emphasizing the lasting philosophical concern with political relationships between people who are “by nature” different from one another—men and women, citizens and foreigners, the rich and the poor—it is important not to minimize the importance of new technologies of international and global connection at the end of the twentieth century. The politics of distance—in the sense that the framers of the American constitution thought of distance as a factor that would calm political passions—is undoubtedly different in an age of instant policymaking. But the sense of inevitability—of total technological novelty—which sometimes accompanies discussions of globalization is itself, often, a source of passivity.

The challenge of thinking about and constructing political relationships with strangers is of continuing importance to modern democracies. It is important within democratic societies, including Sweden, the United Kingdom, and the United States. It is of urgent importance within the European Union. It is important, above all, to the prospects for future international societies, especially in the period of renationalization, or at least of slowing internationalization, which may now lie ahead. For, as the historian Mona Ozouf has written, summarizing the debates over universal public instruction during the French Revolution, equality is “not a condition, but a process of becoming.”

References

Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations, R.H. Campbell and A.S. Skinner, eds., (Indianapolis: Liberty Classics, 1981)

François-René de Chateaubriand’s Mémoires d’outre-tombe (Paris: Le Livre de Poche, 1973)

A working paper based on Luca Einaudi’s unpublished Ph.D. dissertation, called “From the Franc to the ‘Europe’: Great Britain, Germany and the attempted transformation of the Latin Monetary Union into a European Monetary Union (1865–1873),” is available from the Centre for History and Economics, King’s College, Cambridge.

Fritz Stern’s Gold and Iron: Bismarck, Bleichröder, and the Building of the German Empire (New York: Alfred A. Knopf, 1977)

For several recent contributions on globalization, see articles by Dani Rodrik, Maurice Obstfeld, Robert Feenstra, and Jeffrey Williamson in the symposium on “Globalization in Perspective” (Journal of Economic Perspectives, Fall 1998).

Endnotes

*: Emma Rothschild is director of the Centre for History and Economics at King’s College, Cambridge and a distinguished fellow at the Harvard Center for Population and Development Studies. Back.