Race, “Civilization,” and International Business: Why We Need a History of Trading With “The Other” More Than Ever

21 11 2016

We don’t normally associate economic policy (tariffs, trade deals, monetary policy) with identity politics (think of Black Lives Matter, the politics of religious minority, migration and the Clash of Civilizations thesis). Trump’s election illustrates the connections between these issues and should inspire a range of scholars in Business History, International Business, Economics, and other fields to get to do more research on the microfoundations and consequences of these linkages.

The linkages between identity politics and international trade are real and are increasingly recognized by the policywonks who are normally more comfortable talking about the Basel Accords, GATT, or Richard Baldwin’s Great Unbundling. Consider Adam Posen, who is a respected American economist. Posen is President of the Peterson Institute for International Economics, a thinktank in Washington DC. He has served as a member of the Monetary Policy Committee of the Bank of England and in many other prestigious roles.  On 15 November, he was speaking about the likely impact of Trump’s election on US trade policy at a conference run by UBS, the Swiss bank. Under Obama, the US had negotiated a variety of trade agreements, including the Trans-Pacific Partnership and a free trade deal with the EU. Carolin Roth of CNBC reported that Posen made this following remark about which of trade deals might survive a Trump presidency:

adam-posen-trump-trade-with-white-people-twitter-search

Adam Posen: “Donald Trump may actually keep TTIP alive if he decides he likes to trade with white people”

Posen’s throw-away line contains an important truth– the politics of international trade is very much influence by identity politics, be they ethno-racial, religious, or whichever other division is most salient to actors at the moment. The academic literature in many disciplines mentions this phenomena, although the literature hasn’t been developed as much as I would like. In his controversial book, The Clash of Civilizations, Samuel Huntington remarked that “Americans react far more negatively to Japanese investment than” European investment.

To my knowledge, the IR and International Political Economy literature hasn’t really developed this idea. Mainstream scholars in International Business have not dealt with this issue either (I stand to be corrected– this isn’t my home field). These gaps or silences in the literature are extremely unfortunate in light of current developments, which include a well-documented rise of ethnic nationalism across the world as manifested by Donald Trump’s adviser Steve Bannon, who declared that there were too many Asians in Silicon Valley. When an interviewer pointed out to Mr. Bannon that measures to reduce the role of Asians in this sector might damage the economy, Bannon replied “A country is more than an economy. We’re a civic society.” (For coverage of the reaction in India to Bannon’s remarks, see here).

We have something similar in the UK– at least one part of the coalition currently pushing for the UK to leave the EU is inspired by the idea of the Anglosphere, an identity that links Britain to its overseas offshoots and which would prefer a customs union with Britain’s alleged “kith and kin” overseas than to the continental Europeans on the other side of the Channel. As the FT’s Martin Wolf has noted, the idea of a special free trade agreement linking the US to other so-called “White Anglo-Saxon nations” is supported by elements within Trump’s base of support, particularly those who has what Wolf refers to as “retrogressive” views on the internal politics of ethnicity.

 

It seems to me that business historians are uniquely well positioned to develop our understanding how the increasing salience of ethnic, racial, and religious identities might influence international business. We could do so by looking at previous episodes in the history of globalization when the salience of such divisions was increased by cultural shifts that increased the extent to which different cultures were Othered.  In the humanities and the social sciences, there is a vast literature on Othering and it is widely understood that the salience of ethno-racial and religious identities is not constant but has fluctuated. Historians have written about how such identities have been created and how the salience of ethno-racial identities was intensified by such phenomena as the late 19th century rise in pseudo-scientific racism. We know that such identities had a significant impact on the diplomatic history of the period (e.g., the growing popularity of the concept of the Anglo-Saxon race promoted Anglo-American rapprochement) see here and here.

Unfortunately, relatively little has been written by economic historians how such identities affected commercial ties across the imagined boundaries separating ethnic, racial, and religious groups. Even less has been written using corporate archival data and firm-level studies, the preferred methodology of most business historians.  One work that does address this question is “Empire and Globalisation: Networks of People, Goods and Capital in the British World, C.1850-1914” by Gary Magee and Andrew Thompson. This study, which blends cultural and economic history, considers how the identities of Anglo-Celtic economic actors influenced trade and investment in the British World, a territory that included the British Isles, Australasia, Canada, and, more ambiguously, the United States. This book is based on aggregate date (e.g., trade flows) rather than firm-level data, but based on these data, the authors argue that a shared sense of Britishness distorted commercial decisions and promoted trade between these countries. This conclusion implies that these growing salience of these identities also impeded economic exchange between the predominantly English-speaking countries and those who were deemed non-Anglo-Saxon, and thus inferior. Magee and Thompson suggest that the ideologies of Anglo-Saxonism and Britishness promoted trade between the Anglosphere nations. I’m more interested, actually, in the international trade that didn’t happen or which was made more difficult by these ideologies. Moreover, how were firm strategies affected by such ideologies? Did the growing salience of such identities influence levels of trust and the willingness to lend capital to individuals who were deemed to be “Other”? What do firm records say?

It seems to me that business historians can make a useful contribution here to our general stock of knowledge. Anyone who would be interested in collaborating with me on a grant application or some other project related to the investigation of this theme should contact me. I’ve recently been kicking some ideas around with other business historians I respect. If you are interested in being part of this conversation, let me know.

 

 

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