Travelling ‘from camel commerce to e-commerce’, Bound Together reviews the drama of globalisation that is at least 50,000 years old with ‘traders, preachers, adventurers, and warriors’ playing the key roles. So who’s afraid of globalisation? It’s the West, suddenly worried that millions of Chinese, Indians, and Vietnamese want to join in the global trading system, says the author.

Though the word globalisation may be new, the process it describes ‘has worked silently for millennia without having been given a name,’ he explains. Looking ‘under the hood of our daily existence,’ Chanda finds that globalisation stems ‘from a basic human urge to seek a better and more fulfilling life’ and that the key actors behind the process have been ‘traders, preachers, adventurers, and warriors’.

The book opens in Africa, because “we now know that around sixty thousand years ago, a small group of people — as few as perhaps one hundred fifty to two thousand people from present-day East Africa — walked out.” The five billion inhabitants of today’s non-African Duniya are descendants of those villagers who walked out of Africa, argues the author, citing DNA studies by Allan Wilson, Rebecca Cann, Luigi Luca Cavalli-Sforza and Peter Underhill.

The global journey was almost entirely on foot, with occasional use of rafts or dugouts over waters, postulates Chanda. For, “the horse was not domesticated until 6,000 years ago, and the camel only 3,000 years ago.” About 30-40 million pastoralists continue their nomadic life, while the rest settled down.

“The forty or fifty thousand years that our human ancestors spent walking the length of the earth, experiencing the unimaginably harsh weather of the late Ice Age, have carved our bodies, altered our faces, and changed our pigmentation. The effect of the first globalisation — the dispersal of humans around the globe — has been the emergence of a superficially diverse human species.”

The author travels ‘from camel commerce to e-commerce’, explores the ‘preachers’ world’, inspects ‘slaves, gems and Trojan horses’, before asking ‘Who’s afraid of globalisation?’ Who? It’s the West, which is suddenly worried that millions of Chinese, Indians, and Vietnamese want to join in the global trading system, notes Chanda. But ‘the growing concern in the West is seen by many in the developing world as overblown fear about countries that are still desperately poor.’

These are days of high-speed globalisation, unlike as in the past, he warns. So, it is impossible, even dangerous, for the winners to ignore the losers as they could in the era of sailboats and camel caravans. Globalisation process cannot be reversed, Chanda declares. “It can be slowed down by raising barriers, but those barriers are only temporary hurdles to the march of global interconnection.”

There is no alternative to rising above our tribal interests, he exhorts. “Calls to shut down globalisation are pointless, because nobody is in charge, but together, we can attempt to nudge our rapidly integrating world toward a more harmonious course – because we are all connected.”

A well-told story.

In October 1990, Paul Romer, a 36-year-old University of Chicago economist, published a 32-page article, ‘Endogenous technological change’ in the Journal of Political Economy. Now, here is a whole book about that paper: Knowledge and the Wealth of Nations by David Warsh ( www.landmarkonthenet.com ).

The first paragraph of Romer’s paper had this sentence: “The distinguishing feature of… technology as an input is that it is neither a conventional good nor a public good; it is a non-rival, partially excludable good…” A sentence that initiated a far-reaching conceptual rearrangement in economics, writes Warsh.

For starters, governments usually supply ‘public’ goods, while the market participants provide ‘private’ goods. The rival-nonrival distinction is about “goods whose corporeality makes possible their absolute possession and limited sharing (an ice-cream cone, a house, a job, a Treasury bond), and goods whose essence can be written down and stored in a computer as a string of bits and shared equally by many persons at the same time practically without limit (a holy book, a language, the calculus, the principles of design of a bicycle).” Rival goods are objects, while the non-rival ones are ideas, existing as atoms and bits. Where you can control the access to goods, they become excludable.

To Warsh, the paper by Romer had won a race of sorts: “A race within the community of university-based research economists to make sense of the process of globalisation at the end of the twentieth century, and to say something practical and new about how to encourage economic development in places where it had failed to occur.”

As a consequence, we now have a new economics of knowledge, concludes Warsh. Governments have understood that it is in their interest ‘to subsidise the production and diffusion of knowledge, to support the useful arts, to extend education, to protect intellectual property, and to promote free trade’.

For instance, the German central bank decided to ‘sell much of its gold and invest the money in German universities’; the UK government ‘offered a large contract to the successful developer of a malaria vaccine, much as once it had offered a substantial prize for the invention of a reliable means of finding longitude at sea’; in Singapore, ‘higher education is practically a state religion’; and ‘in India and China university systems are training engineers and PhDs at a furious rate and thinking rigorously about how to improve their universities to a point at which they too can compete for international students’…

Exciting economics.

Family firm is alive

Author of The Wealth and Poverty of Nations, David Landes chronicles the ‘fortune and misfortune in the world’s great family businesses’ in Dynasties ( www.crosswordbookstores.com ). “Tales of money, power, and kinship inevitably entail drama and passion, especially with the passage of generations: as wealth grows, so do the opportunities for disagreement.”

Landes narrates with verve the tales of about a dozen dynasties including the Barings, the Rothschilds and the Morgans, in ‘banking’; Ford, Toyoda, Peugeot, Renault, Citroen, the Agnellis and Fiat, in ‘automobiles’; and the Rockfellers, the Guggenheims, Schlumberger and the Wendel under ‘treasures of the earth’.

Economists and government planners tend to see family firms as transitional and therefore obsolete, but the author wouldn’t subscribe to such a view. “Family firms continue to succeed,” he says, citing a BusinessWeek report that such concerns “averaged 15.6 per cent return, as against 11.2 per cent for non-family firms, with annual revenue growth at 23.4 per cent against 10.8 per cent.”

The vast majority of new businesses throughout the world remain family enterprises, notes Landes. There are many examples, closer home too. “The family firm is alive and well and continues often to pass the heritage down the generations,” he finds. Reason behind the success of family business, according to him, is that ‘it rests on human emotion and impulse that transcend and survive political and economic interruption and interference.’

Reassuring family read.

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