Readings for a Graduate Seminar in Business History:
Transnational Flows and Social Embeddedness

I imagine these readings as back-to-back weeks organized around Chaudhuri’s Trade and Civilization in the Indian Ocean and Curtin’s Cross-Cultural Trade respectively. The first week would emphasize the big picture view of long distance trade as an essentially pre-modern structure that stands in contrast to the operations of contemporary capitalism. The readings here are arranged roughly in chronological order but they could potentially be arranged on a continuum from externalist to internalist, or from macro-history to (relative) micro-history depending on ones pedagogical interests. The second week would be a consideration of Curtin’s idea of the intermediary or cross cultural broker which, again, provides a contrast between pre-modern trade and the workings of the modern corporation. For this week I’ve arranged the readings in such a way as to emphasize the shift from the bird’s eye view of global or regional trade to the close analysis of a single case or community. In both weeks I’ve tried to include articles in which methodological or disciplinary differences are relatively easy to detect but this was much easier to do for “Social Embeddedness” than for “Transnational Flows” – a difference which is worthy of discussion in itself.

Transnational Flows

Primary Reading: Chaudhuri Trade and Civilization in the Indian Ocean

Secondary Readings:

1) Kenneth G. Hirth “Interregional Trade and the Formation of Prehistoric Gateway Communities” American Antiquity, Vol. 43, No. 1. (Jan., 1978), pp. 35-45.

In this article Hirth analyzes the emergences of long distance trade networks in Mesoamerica in the second millennium BCE. The traditional model of prehistoric Mesoamerican economy is that it is organized around a politically dominant central place or community but using archeological evidence – the distribution and origin of trade goods – Hirth constructs a new model in which the central place economy is modified by long distance trade networks that run through gateway communities. Such communities become important because of their geographic location along trade routes and as they grow wealthier they also grow more complex and sophisticated. Hirth’s account is that of a hardened externalist not simply because of the fundamental importance of geography and climate in his analysis but because he argues sociopolitical and cultural developments follow from economic or material changes.

2) Constance Jones Mathers “Family Partnerships and International Trade in Early Modern Europe: Merchants from Burgos in England and France, 1450-1570” The Business History Review, Vol. 62, No. 3. (Autumn, 1988), pp. 367-397.

Mathers describes the rise and fall of three families of Spanish merchants from the wool center of Burgos in this article. The initial success of these merchants was the result of a combination of Spanish rule over the Netherlands and their use of family members as agents in distant ports. The subsequent decline of the families was the result in turn of the tendency for kinship relations to become more distant over time and the dispersal of capital through inheritance and investment in land. The final blow to the families however was more cataclysmic: in the 1560s the Dutch Revolt began an eighty year disruption of the wool trade. Mathers is not taking an explicit theoretical position of here so much as she is simply providing a detailed and well supported account of a single case that takes both culture and politics seriously as factors that shape economic behavior.

3) Olivier Pétré-Grenouille “Long-Distance Trade and Economic Development in Europe and Black Africa (Mid-Fifteenth Century): Some Pointers for Further Comparative Studies” African Economic History, No. 29. (2001), pp. 163-196.

Pétré-Grenouille is arguing in this article that historians need to revisit the question of why no middle class developed in Africa by comparing African and European trade. In a rather wide-ranging article he suggests that while technological differences in transportation and distribution were a critical difference social, political and cultural factors are crucial as well. In Europe there was a relatively autonomous merchant class that had its own group consciousness and such merchants experimented with ways to develop and expand trade rather than simply compete for control over existing resources as Africa merchants tended to do. In his view the European values shaped the long term rhythms of trade in such a way that change in economic behavior came easily to Europeans in Africa it only occurred after long periods of tension were relieved by “brutal explosions.” Pétré-Grenouille is not, I think, simply suggesting a simple Weberian reading of cultural values as a the switcher which transfers the economic engine of change from one track to another but he is taking cultural values that are external to the process of trade itself very seriously indeed.

4) Ann Carlos and Stephen Nicholas ““Giants of an Earlier Capitalism”: The Chartered Trading Companies as Modern Multinationals” The Business History Review, Vol. 62, No. 3. (Autumn, 1988), pp. 398-419.

Carlos and Nicholas have produced an almost purely internalist account of organizational structure in the big chartered trading companies over the seventeenth century. Using what they call the transactional cost approach Carlos and Nicholas show how companies like the East India Company, the Royal Africa Company and the Hudson’s Bay Company reorganized themselves to meet the demands of long distance trade. Trade between distant markets is hampered by slow and uncertain communication and the chartered companies solution was to employ salaried managers to gather and process information on tastes, commodities and prices and then collate the information, anticipate market demands and prices as best they can and respond accordingly. What Carlos and Nicholas call vertical integration replaced the market, or at least limited its influence, as system of international trade. They argue this attempt to manage and coordinate the flow of goods, services, and information over long distances is the analogue to the modern multinational. This analysis provides a sharp contrast with all the preceding articles because of its emphasis on the rational behavior of the merchants and their relative autonomy from social and cultural structures.

5) Sebouh Aslanian “Trade Diaspora versus Colonial State: Armenian Merchants, the English East India Company, and the High Court of Admiralty in London, 1748-1752” Diaspora: A Journal of Tran Vol. 13, No. 1. (2004) pp. 37-100.

Aslanian’s article is a close examination of a legal battle between the East India Company (in the ‘modern’ corner) and merchants of the Armenian diaspora (in the ‘pre-modern’ corner) over the Santa Catherina. In 1747 the Santa Catherina, a ship that had been leased by Armenian merchant’s to transport their freight from Calcutta to Basra and back was confiscated by the agents of the East India Company on the pretext that she was sailing under a French flag. Aslanian analyzes the legal conflict with explicit reference to Curtin’s notion of the trade diaspora and the longuée dureé. After a lengthy discussion of the history of the Armenian diaspora Aslanian shows how the far flung network it produced provided the organizational infrastructure for long distance trade. What the fight over the Santa Catherina represents for Aslanian is the larger conflict between a still powerful stateless trade diaspora and a more powerful alliance of British commercial and state interests. This article provides a segue from the big picture issues of long distance trade over lengthy periods of time to the role of specific communities and organizational modes in facilitating that trade in particular instances.

“The Significance of “Networks”/ “Social Embeddedness”

Primary Reading: Philip Curtin Cross-Cultural Trade

Secondary Readings:

1) Edna Bonacich “A Theory of Middleman Minorities” American Sociological Review, Vol. 38, No. 5. (Oct., 1973), pp. 583-594

This is a sociological piece which delivers virtually nothing about trans-national or trans-cultural trade. What it does offer is rigorous theoretical speculation of how “middleman minorities” are embedded in what Curtin would call their host societies. Bonacich’s central concern is not with commercial relations per se but local economic behavior, group identity and the roots of ethnic conflict.[1] Relying on a wide range of secondary sources that are primarily, but not exclusively, sociological studies of twentieth century groups (Japanese in the U.S., Chinese in Jamaica, Indians in East Africa etc.). Bonacich makes a distinction between “settlers” who are eventually assimilated into their host societies and “sojourners” who have an ideological commitment to a distant homeland. Such sojourner groups resist inter-marriage with their hosts or neighbors, practice residential self-segregation, maintain linguistic and educational differences, avoid local politics and decisively organize a separate but competing “pre-industrial” economy. Sojourner groups employ the “primordial” ties of ethnicity, family and religion to lower costs of labor, infra-group trade and to pool capital and resources. Bonacich provides a functional explanation that emphasizes the integrity and harmony of the host society and defines middleman groups as dysfunctional, marginalized and ultimately doomed. Her functionalist pessimism is reinforced both by the ahistoricity of her model and even more so the way it isolates the host society from other societies. Even while she defines the middleman as some one who not only comes from somewhere else but occupies an intermediary position between two societies or cultures she excludes the “homeland” and all its potential economic, cultural and political contributions from her sojourner/host model. What one ends up with is a parasitic subculture that cannot but expect local hostility rather than the broker who enables the transnational flows one finds in Curtin and Chaudhuri.

2) M.N. Pearson “Brokers in Western Indian Port Cities and Their Role in Servicing Foreign Merchants” Modern Asian Studies, Vol. 22, No. 3, Special Issue: Asian Studies in Honour of Professor Charles Boxer. (1988), pp. 455-472.

Pearson is explicitly engaging with both Chaudhuri and Curtin in this article. He argues that Curtin in particular tries too hard to fit too many traders into his trade diaspora model. Like Bonacich Pearson is interested in how such brokering groups function in their given locale rather then as nodes in a transnational network. He also argues that more consideration needs to be paid to what it was precisely that such cultural brokers actually did. Using a combination of longuée durée histories and traveler accounts Pearson tries to illuminate the role of such intermediaries in Calicut, Diu and Cambay during the first half of the sixteenth century. It is not in the end a highly successful attempt. Pearson’s limited evidence shows that in Calicut the brokers were foreign Muslims, in Diu they were primarily local employees of the local Prince and in Cambay they were local Hindus and Muslims. In a rather open ended and tentative – but not uninteresting – conclusion he suggests that role of local brokers was most prominent when backed by local power. Even if there is no devastating argument here the article is a good example of how a scholar is testing Curtin’s general theory with particular examples.

3) Walter P. Zenner “Middleman Minorities in the Syrian Mosaic: Trade, Conflict and Image Management” Sociological Perspectives, Vol. 30, No. 4, (Oct., 1987), pp. 400-421.

Zenner borrows from both Curtin and Bonacich in this article. Like Bonacich, Zenner is interested in tensions between dominant and subordinate groups but he is much more interested in the dynamics of social change than in Bonacich’s stripped down functionalism. He identifies the study of middleman minorities as the study of ties between ethnic groups and commerce in a wide variety of settings. Like Curtin he is particularly interested in how such middleman groups helped incorporate local economies into a “European-controlled world system.” In this article he looks at how Christians and Jews in Late Ottoman Syria competed for key positions in the government and in international trade and the way they mobilized traditional religious stereotypes in that conflict. Zenner argues that this ethnic conflict over a particular type of economic resource needs to be understood in the context of a shift from “cross cultural” trade to a post-Industrial Revolution global capitalism.

4) Brian L. Foster “Ethnicity and Commerce” American Ethnologist, Vol. 1, No. 3, (Aug., 1974), pp. 437-448

Foster uses neither Curtin nor and in some ways has produced the most interesting, certainly the most provocative, analysis of the lot. Foster analyzes the commercial activities of the Mon speaking people of mid-Twentieth century Thailand. As one might gather from the journal that published it Foster’s approach is anthropological – he interviews people. The group he is studying is yet one more example of how a small number of “outsiders” can come to dominate regional commerce. He argues that in this instance that domination cannot be explained historically or in terms of cultural content or traits. Rather there is a dialectic or circular process at work whereby the fact of ethnic difference makes it socially acceptable for the Mons to engage in the essentially anti-social behavior of the market. Both the Thai and the Mons consider commercial transaction to be essentially unfair transactions in which the trader attempts to cheat his customers. By excusing such deviant behavior on the grounds of ethnic difference the two groups are insulated from the social tensions it generates but this mobilization of the categories “same/different” in turn reinforces the sense of ethnic difference. The potential conflict of face-to-face marketplace interaction is sublimated into ethnic tension. Foster suggests that other techniques used to displace or soften the tensions inherent in commercial activity are ritual (for example among Trobriand Islanders), and the modern method of displacing conflict by freeing the trader from individual responsibility for his actions by referring to the “invisible hand” of the market, the demands of efficient management, the requirements of the state etc. What is fascinating to me here is the how the very definition of “marginal” is crucial to successful commercial action. I think this would be a good segue to readings on the entrepreneur.

[1] She also has an article called “Middleman Minorities in Advance Capitalism” Ethnic Groups Vol. 2, No. 3, (Jan., 1980) pp. 211-220. I haven’t had a look at it yet but here is the synopsis from CSA Illumina: Several theories contend that middlemen minorities should disappear with advanced capitalism; but they have not, a phenomenon that needs to be explained. Middleman firms are essentially petit bourgeois. Their viability lies in cheapness, especially in labor. Certain minorities have the cultural wherewithal to succeed in small business while they perform important services within the context of advanced capitalism: the pioneering of labor-intensive lines & the decentralization of industries that would otherwise come under tight government & labor union control. Pioneering refers to the ability of middleman minorities to enter sections of the economy that are still relatively backward; decentralization refers to the centripetal trend in modern capitalism to create smaller plants in order to avoid the problems of worker alienation. A minority group with a petit bourgeois specialty can still play a substantial role in an advanced capitalistic society.