Trade

The politics of globalisation circa 1773

 

Newness in politics has a long and eventful history. Globalisation and the battle for and against are no exception, as the events of the late 18th century show.

 

There has been a “revolution in commerce, in the power of nations, in the customs, the industry and the government of all peoples.” The industrious peoples of the north “circulate unceasingly around the globe.” Continents are connected as though by “flying bridges of communication.” These are the observations not of 2001, but of the Abbé Raynal, one of the most popular political commentators of the 18th century, writing in 1770.

 

It was because of commerce, Raynal wrote, that countries had lost their “national and individual independence.” They had also lost their ability to tax the revenue from capital. “The proprietor of stock is properly a citizen of the world, and is not necessarily attached to any particular country,” Adam Smith wrote in 1776. The proprietor of financial capital, in Condorcet’s description of the same year, is someone “who, by a banking operation, within an instant becomes English, Dutch or Russian.” The modern political system was dominated by the “principle of commerce,” Edmund Burke wrote in 1769, and it was “wholly new in the world.” It was pervaded by an extensive and intricate trading interest, “always qualifying, and often controlling, every general idea of constitution and government.” It was associated, above all, with the rise of the great financial and trading companies.

 

The East India Company, for example, collected more than £3.5 million in taxes from its subjects in India, at a time when the total expenditure of the British government was about £7 million. Government gave up power in its relations with the companies, in Burke’s description, and gained credit in exchange. It gave up a part of its sovereignty: “in such a case, to talk of the rights of sovereignty is quite idle.” Globalisation is often depicted as a condition of the present and the future, a phenomenon without a past. But the exchange of information, commodities, investments, tastes and ideas between distant societies that constitutes globalisation has been a characteristic of many earlier epochs, in Asia as well as in Europe and America. The idea of a global economy is itself a cause of globalisation. The idea of distant influence, of instant communication, of exhilarating or insidious worldwide empire has from time to time exercised a profound effect on the political imagination and on political philosophy.

 

The 1850s and 1860s, for example, were a period of sometimes euphoric activity in inventing the political institutions of economic integration, including the completion of German unification, the English-French treaty of (partially) free trade of 1860, the promotion of international commercial codes and uniform weights and measures and coins. But the phase of innovation came to an end, as Luca Einaudi has shown in a recent study (see references), in bitter domestic and international disputes over the mechanisms of a proposed European monetary unification, and over a new currency, of which prototypes were minted in 1867, and which was to be called the “Europe.”

 

Old foes

 

The end of globalisation in the 1920s and 1930s was far more catastrophic, as Harold James has shown in a recent book. The backlash against globalisation which began in the late 19th century brought political mobilisation and protectionist restrictions against consumer goods, against immigration, and against capital movements.

 

After the First World War, the ideology of “internationalism” itself became the object of vitriolic political attack, in a destructive sequence of economic crises, failure of the institutions of international co-operation, and nationalist enthusiasm.

 

The politics of globalisation in the 18th century commercial revolution has been the subject of less recent attention. But the 18th century disputes are in some respects of particular interest to the choices of the early 21st century. One reason is that companies and corporations were at the centre of the global discussions over sovereignty and commerce, to an extent that was far less familiar in the 19th century age of formal empire. Another is that the politics of global information, in a period of expansion in long-distance shipping and in large-scale printing and publishing, was at the heart of political and philosophical dispute. “The eye of the world is upon her,” one orator said of British policy, in a parliamentary debate about the East India Company in 1772; “The eyes of the world have been blinded by publications,” said another.

 

19th century drawing of Boston Tea Party; © Mary Evans Picture Library

Boston Tea Party: Americans throwing cargoes of the tea ships into the river, at Boston, 1773

 

The global politics of credit, too, was much discussed. The financial crisis of 1763 “spread terror to every commercial city on the continent,” in a contemporary description. The credit crisis of 1772 began with the failure of a London bank with Glasgow connections, and led to the failure of Dutch banks with speculative holdings in East India Company stock, the bankruptcy of the chairman of the English East India Company, and bankruptcies and suicides in Virginia. “One link gave way – the charm was instantly dissolved, leaving behind it consternation in the place of confidence, and imaginary affluence changed to real want and distress,” a Hamburg linen merchant said in the House of Commons in 1774.

 

The politics of global influence was itself a subject of public, popular and even violent protest. The most striking illustration has to do with the American Revolution, and with the global politics of a fashionable beverage. Tea that was shipped from China to England by the East India Company, and from England to North America, was the subject in 1773 of new legislation, designed to extend the Company’s worldwide market, and to reduce the price of English tea in America. It was the East India Company’s tea which arrived off the shores of Massachusetts in November 1773, and which a group of tradesmen, disguised as American “Indians,” threw overboard in Boston harbour. This was the Boston Tea Party.

 

“That worst of plagues, the detested tea, shipped for this port by the East India company, has now arrived,” the Massachusetts patriots announced. The East India company, Thomas Jefferson wrote, “send hither manyship loads of that obnoxious commodity,” and “We view it with Horror.” […]

 

Tea was a symbol of foreign luxury. It also came to represent the political corruption of the new global empire, and the powerlessness of individuals in distant provinces.[…]

 

The political ideas of the late 18th century in Europe and North America, including ideas of the universal rights of all individuals, and of universal freedom of commerce, are at the heart of the modern ideology of “global market democracy.” These ideas have been associated, at times, with new institutions of international or oceanic political co-operation. English projects of an Atlantic parliament, in which the American colonies would be either “virtually” represented, or would send their own members on the long and perilous journey to Westminster, for example, were discarded in the new ideas of national sovereignty which followed American independence. French projects of a peaceful European federation were discarded in the new national enmities of the Revolutionary and Napoleonic Wars.

 

But the old ideal of the late Enlightenment, in which the respect for individual rights can be combined with ever more dispersed and ever more universal conceptions of political co-operation, is of importance, still, to the new global world of the 21st century. The experience of the reactions against globalisation, in the 1870s and in the 1930s, provides a sobering insight into how swiftly the politics of protest against global infl uence can deteriorate into economic as well as political destruction. It is time, once more, to imagine new political institutions for our own new world of global commerce.

 

*This article is a slightly shortened version of an article that first appeared in OECD Observer No 228 September 2001; Emma Rothschild was then Director of the Centre for History and Economics, Cambridge University, and is currently Professor of History, Harvard University. See full article at http://oe.cd/1zt

 

References

 

Einaudi, L. (2001), Money and Politics: European Monetary Unification and the International Gold Standard, Oxford University Press

 

James, H. (2001), The End of Globalization: Lessons from the Great Depression, Harvard University Press

 

Rothschild, E. (2001), Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment, Harvard University Press

 

Rothschild, E. (2001), “La mondialisation en perspective historique: l’Amérique hyperpuissance,” in Qu’est-ce que la culture ? ed. Yves Michaud, Université de tous les savoirs/Odile Jacob, pp. 57-68

 

OECD Forum 2017 issues

©OECD Yearbook 2017. See www.oecd.org/forum/oecdyearbook

‌‌‌Emma Rothschild*

© OECD Yearbook
2017

 

 

 

 

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