Roman Empire MNEs

1. Roman Empire MNEs Professor Karl Moore McGill University Associate Fellow Green Templeton College, Oxford University

2. Military Led Capitalism or Economy • A considerable amount of Roman international business developed thanks to firms supplying the voracious appetites of the conquering Roman armies for food,helmets, swords and other supplies • Rome emerged from its victory over Carthage in the Punic Wars as the supreme power in the Western world • In the century that followed the Punic Wars, between 150 and 50 BCE, the legions invaded Africa, Spain, Greece, Anatolia, Syria, Mesopotamia, Palestine, Egypt, Gaul, Germany, and Britain • As they marched they extended the market for Roman industry, trade, and investment

3. Publicani • A whole new Roman business class would rise along with the Roman imperium • Roman law discouraged patricians and especially senators from taking part in business, but no such prohibition affected the knights, or equites, who were rich enough to own a horse and ride it into battle • Many Roman knights, their families, including their slaves, and their partners, who were often related, became managers of large companies known as publicani • The publicani rose to the fore during the Punic Wars, making togas, shields, helmets, and other weapons and provisions for the legions. There was rival bids from competing firms in an open market. Also bid for monopolies in collecting taxes and importing slaves to Italy

4. Out Sourced • Roman mega firms were lean and mean in adapting to different markets with little permanent staff • Had flexible part-time staffs were often highly skilled miners, taxmen, smiths, and shipmakers who were hired and fired on a contractual basis • First recorded limited liability corporations. Until a contract signed by the manceps (manager) expired, the company had a legal existence of its own

5. Key Roman Industry Clusters • The pottery, brickmaking, tile, container, tableware, lamp, glassware, metalware, stoneware and clay industries became very important, and many of these even pioneered in an early form of mass production • These industries employed both managers and agents. At Aveyron in Gaul there was over 200 different potters. They hired a joint manager to close deals, hire staff, and sell the produce. Satellite workshops were set up elsewhere in Gaul • The lamp industry was dominated by a few major firms. Managers in the brick industry often ran several dozen yards at a time. Decius Alpinus operated branches in Vienna and Gaul (Aubert,1994; Ward-Perkins,1980) • This was … a commerce which can conveniently be summarized in modern technology: nationalization; mass production and stockpiling; a considerable element of standardization and prefabrication; the establishment of agencies overseas to handle specific marbles; and in some cases the availability of specialized craftsmen skilled in the handling of a particular type of marble (Ward-Perkins,1980, 327)

6. A Primitive European Union • It had its own common currency, the silverdenarius • The Caesars taxed the rich provinces in Spain, Egypt and the Near East, and used the revenue to pay the legions in Gaul, Britain and along the Danube • Other forces encouraged a degree of economic integration: • Roman civil and business law and • an infrastructure of ports and roads. • The Roman Principate did not pursue a conscious strategy of economic integration, but it did seem to pursue an unconscious one Octavian Augustus27 BC - 14 AD

7. Roman “Known World Globalization” or Hemispherization • Rome’s economic expansion went beyond the Mediterranean, all the way to India • Through Indian middlemen, Roman managers reached markets in Southeast Asia and China • The Roman ships were very large with sturdy hulls were fastened by thousands of joints • Returning to Egypt late in the year via the northeast monsoon, they brought Rome huge shipments of Indian spices and Chinese silk • Shipping such bulk cargoes once a year could only be afforded by large Roman firms able to raise the money and hire the overseas agents

8. By the winds of the Monsoon With perhaps 300 ships a year from Egypt to India, perhaps 300,000 tons of goods passed between the Roman Empire and India. The Northeast Monsoon brought the same vessels back crammed with Indian spices, wood, ivory and Chinese silk.

9. Roman East India Companies ? • Eventually, Roman firms opened offices in Indian ports, creating what were Europe’s first East India companies. The empire and the various Indian princes exchanged ambassadors. • Embassies were exchanged between Rome and India as spices, silks, jewels and the luxuries of the east flooded into the empire.

10. Anti-globalization Comments • The effect of this 'proto-globalization' on the Roman economy was noted even by the Emperor Tiberius himself, who worried that Rome's ladies were transferring her wealth to foreigners • The elder Pliny claimed imports from Arabia, China, and India were costing Rome a huge annual trade deficit – 550 Million sesterces, perhaps $ 5 Billion a year • Exaggerated most likely, these remarks show the existence of the first known-world economy stretching from Spain to Africa to India to Vietnam to China

11. Rome • What we found: Hierarchical organization, foreign employees, value-adding activities in multiple regions, common stock ownership, resource and market seeking behaviour, were present in these ancient firms • Considerable business empires in multiple foreign locations from their corporate headquarters in the capital of Rome • Were there early MNEs or “proto-MNEs” earlier than the Roman or Assyrian empire?