Pre-MultinationalsBy: Ion

One would think that the globalization, internationalization and global commerce would be modern terms. Still the idea is almost as old as the human civilization itself. The first multinational companies were established in the Middle-East 3000 years ago. The need for increased revenue and opportunity made countries to grow and to expand. There is one state entity that did this mainly because of the need for profit and economic expansion – the Phoenicians.

The first known multinational enterprises arose in the city of Ashur between 2000 and 1700 BC. Their story may briefly be summarized as state-supported but family-owned and managed firms headquartered in the Old Assyrian capital of Ashur which opened subsidiary trading and manufacturing offices in Babylon, Syria, other parts of Northern Iraq, and, most importantly, the city of Kanesh in Cappadocia from which a number of smaller offices in Anatolia (modern Turkey) were managed. Similar multinational firms, on a smaller scale, were found in Babylonia under Hammurabi and, later, the Kassite kings who set up subsidiary trading offices on Bahrain in the Arabian Gulf.

The Middle Ages and Renaissance saw the development of the guilds which were associations of craftsmen, a particular trade. The earliest guilds were formed as confraternities of workers. They were organized in a manner something between a trade union, a cartel and a secret society. The guilds were not actually multinational companies but were more like city based. However from these guilds the Multinational

Corporations of the Middle Ages took shape.

The Hanseatic League was a company that monopolized much of the Baltic and North Sea’s commerce.

The Medici Bank was the chief bank for the Curia and it had branches in all the major cities of Italy, as well as in London, Lyons, Geneva, Bruges and Avignon. There were also several German international enterprises with locations in multiple cities across the Wholly Roman Empire, Austria and Hungary, Italy, France, Low Lands and England.The modern period saw a much more powerful international kind of enterprises that even minted their own coins. These “colonial” enterprises were, in terms of pure power, much more than contemporaneous companies. They had private armies, manufactures and hundreds of armed ships.

East Indianman and Fluyt are examples of ships that were well able to carry thousands of tons worth of goods from Amsterdam to the Philippines and New Guinea, had tens of large cannons and brigades of mercenaries on board. Which were fervently used in raids and extortions against ill defended ports and backward nations that were rich in resources and cheap labor. The East India Companies – be it Dutch, British or French had their own private armies. In fact 1 in 10 employees of VOC (Vereenigde

Oost-Indische Compagnie) was a soldier. Through these methods, large scale commerce and monopoles, these companies made frightening profits. They were organized much like the companies of present day with a chairman, shareholders, partners, managers, accountants, HR, subsidiaries, social capital, had their own policies and good practices, etc. Because of the endless colonial empires of the 19th century that these companies practically founded, one can speak for the first time – of the term Globalization.So in conclusion, nothing is really new. The power and prestige of modern day multinationals are based on the experience of the old colonial multinationals which in turn evolved from the Middle Ages trade associations.

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