Diaspora Entrepreneurial Networks: Four Centuries of History

Published by EH.NET (July 2005)

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Ina Baghdiantz McCabe, Gelina Harlaftis and Ioanna Pepelasis Minoglou, editors, Diaspora Entrepreneurial Networks: Four Centuries of History. New York: Berg, 2005. xxii + 440 pp. $28.95 (paperback), ISBN: 1-85973-880-x; $84.95 (hardback), ISBN: 1-85973-875-3.

Reviewed for EH.NET by Sakis Gekas, Economic History Department, London School of Economics.

Historians have studied commercial networks for some time now, especially for the early modern period. The geographical focus, however, has been the Mediterranean and more often the Atlantic economy, with few bright exceptions.[1] Diaspora Entrepreneurial Networks is concerned not simply with commercial networks but with ‘diaspora’ networks, and not simply with merchants but ‘entrepreneurs’ operating in ‘Eurasian’ markets and in inland as well as maritime networks. These merchants or entrepreneurs were organized in communities that shared the same cultural characteristics (same origin, religion and ethnicity) and this collection of essays demonstrates the business strategies employed over four centuries.

In some respects this is a global economic history book even if its editors do not make any such claims. The statement in the introduction, however, that contrary to traditional belief ‘the so-called globalization of modern economic life does not owe its present character solely to the actions (and omissions) of the colonialism and imperialism of prominent Western or Eastern powers’ (p. xix), places the book at the forefront of current debates in global economic history. Central in these debates is the contention that Asian economies (and in particular the ones in India and China) did not develop as a result of ‘Western’ or European penetration but followed their distinct trajectory, especially during the critical (for divergence in labor productivities, real wages and standards of living between East and West) early modern period. Studying trade diasporas is a particularly pertinent way of addressing these large ‘metanarratives.’ When it comes to global history methodology, adopting a comparative perspective is becoming the sine qua non of economic history of this kind. As a result, the book comes as a significant contribution to a number of studies that aim to analyze commercial networks in this comparative framework.

The editors have divided the book in three parts. Part I, ‘Diasporas in Early Modern Eurasian Trade,’ includes papers on Jews, Armenians, and Greeks — the ‘three classical diasporas’ as the editors call them — but also on the Maltese and Japanese diasporas. Part II, ‘Diasporas in Modern Eurasian Trade,’ follows the ‘same’ diaspora people, Greeks and Jews, but also Indian and Chinese merchants, spreading from British India to Shanghai (Baghdadi Jews) and to Indonesia (Chinese), while Part III, ‘Perspectives on Diaspora,’ deals with issues such as the trading diasporas in the age of empires (Chatziioannou on late eighteenth century Greek merchants) and the diaspora maritime networks in Asia. Reid introduces this part and returns to the issue of divergence in the economic history of parts of Asia by looking at entrepreneurial diasporas. The section complements some articles in the second part of the book, aiming to construct typologies of trade diasporas and advance our understanding of the characteristics that rendered them extremely successful across time and space.

Chronologically, thus, the book follows the pattern of most works on commercial networks and merchant diasporas, starting from the early modern period. This is partly because this was the era of mercantilism, when commercial empires were built. The history of these networks, though, in a later era of nation-states and industrial capitalism has not received due attention partly because of the belief that the personal relations of trust, upon which practically all networks were built, were not sustained after the emergence of managerial capitalism, the rise of the firm and multinational corporations. Many of the authors in this book, however, think otherwise and aim to correct the above orthodoxy. They demonstrate the value of looking at continuing or ‘surviving’ networks based on kinship, family, religion, even in today’s globalized economy.

The book consists of a plethora of case studies that the editors Baghdiantz McCabe (Tufts University), Harlaftis (Ionian University) and Pepelasis Minoglou (Athens University of Economics) have skillfully selected. As it happens, some of the articles are intellectually more ambitious and address problems of definition, such as what is a diaspora and what is an entrepreneur, while being equally valuable as examples of commercial networks. Some important discussions must have taken place in a pre-conference meeting that took place in Corfu, in September 2001 and in Session X of the Thirteenth Economic History Congress in Buenos Aires in 2002, which led to the current publication. In terms of definitions, some authors (like Fusaro on Greek merchants between Venice and England in the sixteenth century), follow Casson’s definition of the entrepreneur as ‘someone who specializes in taking judgmental decisions about the coordination of scarce resources’ (p. 97), although in fact most people in pre-modern times had to make very hard decisions under conditions of scarce resources without necessarily being entrepreneurs. Other authors, such as Clarence-Smith, identify entrepreneurs with ‘dynamic immigrants,’ while at the same time distinguishing them from merchants, since ‘commerce was often how immigrants began their careers’ (p. 219), apparently as entrepreneurs. From very humble origins, starting as peddlers and hawkers, as well as shopkeepers and merchants, the protagonists of the book managed to accumulate resources (capital included, of course), and to begin their journeys to every bazaar, emporium and entrepot they could. They took advantage of opportunities (as well as coordinated scarce resources), political changes, crises and fluctuations, some of them flourishing in economic niches, while others, no doubt, were consumed by the same crises.

The merchants who were either recorded by administrative authorities or whose records survived across economies and continents were probably the most prominent ones, and history leaves no or little trace of the majority of smaller traders, and other immigrants, who were less successful and less influential. As one of the editors, Harlaftis, lucidly notes in her own contribution on the Greek maritime diaspora, ‘it is obvious that the focus [is] the ‘elite’ of the Greek diaspora, not the Greek ‘proletarian’ diaspora’ (p. 147), emigrating in their thousands from the late nineteenth onwards, until about the 1970s. In this respect, the book is not concerned with the ‘communities’ of merchants and other occupations of the same ethno-religious group. The differences are clearly set out in the other methodological article by Pepelasis Minoglou (one of the editors), who attempts to construct a ‘typology of Greek-diaspora entrepreneurship,’ complementing Harlaftis’ task to ‘map’ the Greek maritime diaspora. Inevitably, reference is made to the historiography on Greek merchant communities, an abundant literature that has almost become a genre, still alive, if not flourishing (the latest book published in 2005, by Prontzas on the Greek community of Marseilles).

Contrary to the historiography emanating from the world systems school that became popular in the 1970s, the book does not consider the merchants-protagonists of the book as compradors or commercial bourgeoisie at the service and disposal of western imperialists, but as historical actors with considerable agency who ‘excelled at being on good terms with everybody’ (p. xix). It should be noted, of course, that the economic agency of diaspora merchants and dependency on imperial powers are not necessary mutually exclusive; in fact, across time and space the two seem to have co-existed harmoniously, resulting to a blend of economic power with local hegemony under the auspices of an imperial power.

One common theme that emerges in almost all papers is that the cooperation of these, essentially, elite groups of traders with imperial powers was particularly successful during British colonial expansion in Asia. It is argued that a number of ethnic groups (Parsee, Indian Muslim and Sephardic merchants, operating from the Indian Ocean to Hong Kong and South East Asia) constructed their hybrid identities through a process of Anglicization without losing their own identity, resulting to ‘multi-local identities’ (Pluss, p. 248). The Parsees case is particularly striking; excluded from Indian society, they allied themselves with Europeans from very early on and are credited as the first to have established trade with China, furthering their own economic wellbeing. As usual, shipbuilding, finance and trade, went hand in hand, diversifying risk and creating opportunities. At the same time they maintained their own identity (or aspects of it) evident in their links with Parsee communities in India for ‘recruiting’ spouses.

Comparisons with other groups operating in Hong Kong lead to similar conclusions: merchants from minority ethnic groups rarely, if at all, tried to hide their origins, beliefs, and identity, in general. Were the period in question and the places discussed some sort of havens of tolerance, so unlike our own frequently xenophobic and exclusive societies? No cases of anti-Semitism, for instance, or of anti-diaspora sentiments are discussed, thus creating the impression that it must have been the distinguished and influential economic activities of the members of these ethnic groups that spared them persecution. Comparison shows that certain elements were borrowed from the indigenous culture, in order for the diaspora entrepreneurs to rise. The persisting importance of the Baghdadi Jews in nineteenth-century China confirms the above point. Betta argues that the Jewish trade diaspora flourished rather than disappeared in the increasingly Western-dominated international Asian commerce, contrary to what Curtin had argued in his seminal work, Cross-Cultural Trade in World History. It was the British Empire, again, that provided the opportunities for relocating from the ‘tutelage of the declining Ottoman Empire to fresh opportunities’ (p. 272). Particularly lucrative an opportunity was to be found in the opium trade, which non-Europeans dominated by the late nineteenth century. When the drug trade lost its political coverage in Britain, some families began in the 1930s smuggling narcotics from India to California.

No collective and comparative work on diaspora entrepreneurial networks could ignore Chinese networks and the business culture in which networks of personal trust are based on ‘social norms rather than contracts backed by a legal system,’ and the ‘socio-historical origin of the network-based capitalism created in China’ (Chung, p. 288) — but also in Hong Kong, Singapore, Korea and Taiwan, one could add. The argument, once more, is for the persistence of these networks and their vitality for the overseas Chinese economy until today. Other papers are also concerned with very recent economic history. Everyone knows of the Asian ‘tiger’ economies’ crisis in 1997-98, but who was actually responsible? The paper (Brown) on Chinese financial capitalism, the gigantism of Chinese banks in Indonesia and their contribution to the collapse of the Indonesian economy, is a reminder of how just a few families with enormous stakes in the financial sector of the whole South-East Asia region could have a devastating impact. The argument is for the ‘indigenisation’ of diasporas that can be corrupt in a country that favors corruption and play by the rules in a country with stable economic and political institutions.

There is even a critique of the concept of diaspora and its proliferation especially in U.S. academia that has resulted to the emergence of ‘Diaspora Studies.’ Gourgouris finds the phenomenon puzzling and the aim of study very difficult to achieve (‘how does one do diaspora studies?’). He argues against the unhelpful confusion of diaspora with migration and attributes the merging of the former into the latter to the changing nature of global capitalism and its much more complex entrepreneurial networks. The chapter is a healthy critique of the concept and the ‘sub-discipline’ of Diaspora Studies and quite rightly comes at the end. The volume contains also an epilogue in memoriam to Frank Broeze, one of the founders of the Maritime Economic History Association, whose work was inspirational to the authors and to whom the book is dedicated. With a number of very helpful maps, an extremely clear periodization, geographical and conceptual focus, with even an ‘artistic’ cover photo of a broken pomegranate with its seeds dispersed on snow, the book is an extremely interesting collection of essays that is bound to inform but also inspire new research in the history of diaspora trading networks.

Note:

1. Denys Lombard and Jean Aubin, editors, Asian Merchants and Businessmen in the Indian Ocean and the China Sea (New Delhi: Oxford University Press, 2000).

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Sakis Gekas is a Teaching Fellow in the Economic History Department at LSE. His publications include “The Merchants of the Ionian Islands between East and West: Forming Local and International Networks,” in M.S. Beerbuhl and J. Vogele, editors, Spinning the Commercial Web: International Trade, Merchants, and Commercial Cities, c. 1640-1939, Peter Lang, Frankfurt (2004) and “The Port Jews of Corfu and the ‘Blood Libel’ of 1891: A Tale of Many Centuries and of One Event,” in Jewish Culture and History 7, 1-2 (2005), D. Cesarani and G. Rommain, editors, special issue on Jews, Seaports and International Commerce, 1550-1950 (forthcoming).

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