History of Globalization

Tolls, Tariffs and the Mercantilist State System

Winham (1992: 10) is surely wrong when he says ‘regulation and taxing of trade are almost as old as trade itself. Cuneiform tablets found at Tell el-Amarna certainly show that a commercial treaty between the kings of Egypt and Babylon involved duties on imports; Kautilya's Arthasastra, a manual of Indian statecraft written at least two millennia ago, contains a tariff schedule (Winham 1992: 14-16); Carthage had a trade treaty with Rome in 509 BC (the first extant document from Rome (Mann 1986: 251) and is believed to have had earlier treaties with the Etruscans (Law 1990: 124). Yet the movement of obsidian used in blades indicates trading from boats around the Mediterranean by 7000 BC (Curtin 1984: 71) and we assume from ethnographic work among pre-urban civilizations in places such as Africa that rich trading relationships go back millennia before tariff schedules were conceived.

As we saw in Chapter 7, the spread of the Law Merchant in the Middle Ages, modelled by diasporas of Venetian, Genoan, Jewish and other merchants across Europe and the Levant and into Asia, was critical to the growth in trade between cities. Bills of exchange, sale of goods rules and dispute resolution practices, along with standard forms of contract and ways of interpreting them in a partially globalized form, were taken from the Lex Mercatoria into national laws as states progressively nationalized law from the twelfth century. Unlike other areas of law, therefore, those derived from the Lex Mercatoria started existence as national laws in a partially harmonized shape.

The most important feature of the history of the past millennium, compared with previous millennia, has been the rise of the nation-state. One reason this form of human organization globalized from Western European origins is that the parts of the world that formed nation-states earliest flourished and dominated regions where the nation-state rose later. A major reason why the early nation-states flourished is that they created pacified spaces where trade could flow more freely. It became more possible to travel with goods from one town to another without fear of robbers. Equally importantly, tolls and entry restrictions on the flow of goods between cities were progressively dismantled. Technical standards became more standardized, avoiding many technical barriers to free intranational trade.