amazon highlights: From Silk To Silicon / Jeffrey E. Garten / 2017

Asia is pivotal to the future of the globe, and could have as much influence on the course of globalization as what happens in the United States and Europe. 

Globalization can reinforce and multiply positive trends, but it can just as easily accelerate the spread of highly damaging developments too. 

Globalization is about a growing connection among people of different nationalities. Globalization is about transmission of ideas across borders.  

It is about common vulnerability, be it climate change, public health emergencies, or recession. It is, in short, about goods, services, ideas, peaceful movements, and aggressive and destructive forces all coursing through the channels that have been opening and growing for centuries. Globalization is also a mind-set, focused on confidence that open societies that let in foreign influences are good, or, alternatively, reflecting convictions that national go-it-alone policies are a better way. The McKinsey Global Institute has said that the transformation of society is “happening ten times as fast and at 300 times the scale, or roughly 3,000 times the impact” of the Industrial Revolution. In the end, though, the world has always moved in the direction of more integration. History shows that the deep-seated problems that we confront today are not only challenges but opportunities.

INTRODUCTION

Every day we experience the ups and downs, the benefits and threats of a more interconnected world. In From Silk to Silicon I selected nine men and one woman who met several criteria. First, they had to be transformational leaders. I also identified people who could be characterized as “first movers,” those who initiated or were in on the ground floor of a powerful, fundamental trend or movement that had an outsize impact on the world. My subjects also had to be “doers” and not just thinkers, people who rolled up their sleeves and made something of global significance happen. None of my characters are saints, to be sure, and several in particular had dark sides and created considerable suffering in their wake.

1.      GENGHIS KHAN The Accidental Empire Builder 1162–1227

The Silk Road was also a transmission belt for the extensive interchange of culture and religion. The threat to this prospering global crossroads was political: centrifugal forces were breaking apart the power centers of Europe, the Islamic world, and China. The Mongols revolutionized warfare, which made their conquests possible, but the empire lasted so long because of the expansion of trade, transportation, and communication; the intermixing of people, ideas, and culture; and the unification of administrative procedures.

They did not impose political ideology or cultural or religious ideas on others but rather created an environment of extreme tolerance, so long as the basic governing regime wasn’t fundamentally challenged and so long as the booty flowed smoothly from the far-flung territories to the Mongolian center. Indifferent to controlling matters of religion or culture, the Mongols focused on building commerce and the physical, administrative, and legal infrastructure to help it flow freely.

Although the Mongols never occupied eastern Europe and the Mediterranean countries, they stimulated a revolution in productivity in these regions by exposing the West to specialized tools, new blast furnace technology, new crops that required less work to plant, and to new concepts such as paper money, primacy of state over church, and freedom of religion.

Asia is again ascending. It now accounts for nearly 50 percent of the global GDP. Its share of production of resources, trade, and investment has also reached levels critical to the global economy. It has the bulk of the world’s population. We are coming full circle. And it is a good bet that a new Silk Road, stretching from the Pacific to the Atlantic Ocean in both spirit and modern physical form, will continue to unfold throughout this century, increasing global interdependence by huge orders of magnitude.

2.      PRINCE HENRY The Explorer Who Made a Science of Discovery 1394–1460

Henry had led the way in turning a nation of peasant farmers and coastal fishermen into an empire built on oceanic discovery and overseas settlements. He had transformed Lisbon into a cosmopolitan hub for the increasingly international culture of seafaring business.

In the century after Prince Henry, continuous trade among all key regions of the earth was established for the first time, and the world was becoming a single network. An ever-expanding array of commodities and finished products were being interchanged—sugar, pepper, nutmeg, cloves, cinnamon, grain, wine, timber, gold, silver, silks, textiles, porcelain, horses, to name but a few. At the same time these vessels carried parasites and insects that would transplant malaria and smallpox from Eurasia to the Americas, and syphilis from the Western Hemisphere to Eurasia.

3.      ROBERT CLIVE The Rogue Who Captured India for the British Empire 1725–1774

The Company was becoming the embodiment of European mercantilism, a doctrine that justified the use of any measures, commercial or military, necessary to dominate global economic competition. Sometime around 1600, Sir Walter Raleigh encapsulated the mercantile view that would drive European leaders when he said, “Whosoever commands the trade of the world, commands the riches of the world and consequently the world itself.”

Clive laid the foundation for the East India Company to become an industrial powerhouse and for the Company to be the instrument with which Britain conquered India. As Oxford professor John Darwin writes, the British Empire was a global system connected by extensive links on all continents fostered by the British navy, which controlled the seas and was available to protect Britain’s colonies; by extensive diplomatic ties among the same participants; by deep cultural and educational exchanges; and, of course, by commercial and financial interdependencies—all intersecting in the government corridors in London.

This world system was strongly supported by a complex network of mail services, telegraph wires, undersea cables, passenger steamers, and eventually imperial air routes. The Company had advanced globalization in a number of ways. It responded to the massive increase in consumer demand in England by importing goods such as pepper, silk, tea, and opium from all over the world. It also exported goods from England.

The Company invested heavily in boats, ports, warehouses, and roads in dozens of its colonies, and in new trade and financial arrangements, such as insurance, that allowed trade to flourish among its territorial possessions. In this regard it not only facilitated trade to and from England but it made deals between other countries, as well—between China and India, for example. Furthermore, the East India Company showed how government and commercial enterprises of the same nation can make common cause in expanding commerce and culture across borders.

4.      MAYER AMSCHEL ROTHSCHILD The Godfather of Global Banking 1744–1812

What the Rothschilds did at a minimum was to serve their highly placed clients—extremely wealthy individuals, influential government officials, industrial titans, almost all operating across borders—by offering them the latest financial products, tailored for them, in large amounts, and in the most discreet or confidential manner that the client preferred.

The Rothschilds were among the first banks to allow people to deposit money in their home country, which could be withdrawn by a client or representative in a second country, in local currency. The House of Rothschild constituted a clearinghouse for international finance that began with three money centers—London, Frankfurt, and Paris—and was eventually extended to Vienna and Naples in the 1820s, with one of the five brothers residing in each city. The Rothschilds used this clearinghouse to pioneer advances in the international bond market, with significant financial, political, and social implications.

One reason the Rothschilds were able to make this system work was the resources that the family had amassed, but another was the level of trust they had built up by cultivating personal ties to public officials across the Continent. That’s how finance works. The close links among the brothers and the five branches allowed them to capture more information quicker than their competitors could, and therefore to obtain the best interest rates and the best currency values throughout Europe.

The Rothschilds led the development of a sophisticated international bond market not because no one had thought about doing it before but because no one had the capacity—the internal coordination, the logistical capability, the relationships, and the trust among all partners—to make it work in such volumes and with such reliability. Gathering news became a Rothschild obsession, and it drew the father and brothers closer to the inner circles of power; the closer they got, the better their insights became. By the early 1800s, the House of Rothschild was constantly upgrading its internal courier service to make it faster and more secure. They built redundancy into the system, using pigeons and stagecoaches to deliver copies of the same message on different routes.

The titans of banking shape the political and social structure because they decide who gets money and at what price. The global financial system allows the world to grow faster because it channels savings—excess money—into places where the money is needed, to facilitate trade, for example, or to build roads, ports, bridges, or new companies. Global finance is also precarious because problems in one part of the world can spread like a contagious disease.

5.      CYRUS FIELD The Tycoon Who Wired the Atlantic 1819–1892

The telegraph not only linked the world in real time but became a bridge to subsequent international communications breakthroughs—the radio in the 1920s, the telephone in the 1950s, the Internet in the 1990s.

The transatlantic cable would eventually have been built without Field, but it is hard to imagine how it could have been done as early as it was, when the technology was so underdeveloped, without someone like him to lead, inspire, and organize the financing, the technology, the wide array of talent, and, of course, the design and execution of the entire project.

Since communication is perhaps the most powerful force accelerating globalization, Field’s accomplishment was critical to furthering all that Genghis Khan, Prince Henry, and Mayer Amschel Rothschild began. Field’s transatlantic cable, and the cables that quickly followed it in other parts of the world, shrank time and space, making the world smaller and the spread of international influences of all kinds infinitely faster.

6.      JOHN D. ROCKEFELLER The Titan Who Built the Energy Industry and Also Launched Global Philanthropy 1839–1937

And beyond that, he used his astounding wealth to establish another industry—global philanthropy, a business that filled the vacuum between the international activities of governments and those of multinational corporations, and focused on challenges such as health and education around the world. Without oil wealth he would not have had the wherewithal to transform global health and education. Without his far-reaching philanthropic achievements he would not have been a role model for many millionaires and billionaires after him who made an impact on the world well beyond the commercial enterprises they ran. He lent money to his son at commercial rates of interest and often demanded the loan be repaid ahead of time, thereby compelling John to develop the habit of maintaining protective reserves.

Rockefeller consolidated his control over refining, storing, shipping, sales, and eventually the extraction of oil in the United States and abroad. He combined ruthlessly aggressive tactics with innovative organizational moves to enhance and streamline the management of Standard Oil, the corporate name under which all his oil-related interests operated. The rise of Standard Oil is attributable not only to Rockefeller’s aggressive tactics but also to his management acumen. His company was better managed than the others. He practiced extreme cost control. He pushed his company to innovate,

For his entire career, Rockefeller understood the value of surrounding himself with exceptional talent, which he did by identifying and acquiring experienced managers with every new takeover. It is also hard to exaggerate how hands-on he was. He kept the broader picture, the long-term vision and strategy, in clear view at the same time.

Rockefeller was also a great delegator. He would often implore his colleagues that neither he nor they should do anything that someone else could do. He deeply understood internal communications, coordination, and motivation.

His language was “we,” not “I.” He ruled, yes, but as the center of a circle of powerful colleagues. He strove to make decisions by consensus, and he would postpone most decisions until there was near-unanimous agreement. He believed in treating workers exceptionally well. He paid high wages, encouraged shorter hours, and showed great consideration for his staff. He favored a nation run by big industrial monopolies. He looked favorably on new ways for companies in distinct industries to “cooperate”—pools, consortiums, monopolies, and other arrangements that created a more stable and predictable environment.

As a preeminent American company, Standard Oil received extensive assistance from US embassies and consulates abroad. These new companies became the embodiment of modern multinational corporations, straddling continents with their global transportation and communications systems. They negotiated with, and often dominated, governments. They created highly sophisticated management systems to rebuild what Rockefeller had envisioned: vertical integration from exploration, to refining, to sales at the corner retail station; systems to mobilize finance on a massive scale; systems to oversee a multinational and multiethnic workforce.

Rockefeller wasn’t alone in this kind of endeavor; in fact, Andrew Carnegie’s investment in libraries around the world preceded Rockefeller’s first major gifts. But looking at the entire picture—the scope, the philosophy, the strategy, the organization—the oil baron became the father of modern global philanthropy.

Dispensing Rockefeller’s escalating fortune in an organized way required some clear principles. Among them: Surround yourself with the most impressive experts in the field and carefully identify the avenues of research that would add most to existing knowledge. Focus on the roots of the problem, aiming for prevention rather than just mitigating the symptoms. Standard Oil and the companies that grew out of it epitomize the influence that multinational companies have had on globalization. But few men in history have done more to power the world’s growth and development, to address some of its most pressing social problems, and to make the world more economically integrated.

7.      JEAN MONNET The Diplomat Who Reinvented Europe 1888–1979

He could not only envision big things but execute them. In June 1947, worried about the potential for a Communist takeover in war-weakened Europe, Washington announced a financial rescue operation in the form of the Marshall Plan, named for US secretary of state George Marshall. The plan asked Europe to come together to list its needs for recovery and reconstruction. At a conference of European governments the next month it was clear that, thanks to Monnet, France was better organized than other countries to apply aid effectively, and that its internally coordinated modernization plans should serve as a model for Europe. France received the lion’s share of American aid, fully funding Monnet’s plan for French modernization.

The United States also wanted a united Europe to share the burdens of global diplomacy and defense and to become a prosperous market for American exports. Monnet became the personification of the High Authority, a leader who saw the world through European eyes, not French eyes, or German eyes, or Italian eyes. He recruited a staff from throughout Europe that became the first cadre of “Eurocrats.” Monnet’s strength was his vision, not managerial detail.

Dwight Morrow: “There are two kinds of people—those who want to be someone and those who want to do something.”

8.      MARGARET THATCHER The Iron Lady Who Revived Free Markets 1925–2013

Margaret Roberts would one day become Margaret Thatcher, the first woman ever to become prime minister of Great Britain or leader of any major industrial democracy. She would go on to exceed this distinction by becoming the world’s most important advocate for freeing trade and investment from government control, selling off state-owned companies to the private sector, weakening labor unions, and, in general, allowing markets to link with one another to cross borders and build a web of connections that became—and remains—the motor force of globalization.

 “Thatcherism” resulted in the decimation of many communities, the impoverishment of many people, sharply rising inequality in an already class-ridden nation, and a society that favored the rich, the educated, and the connected over the rest.

some quotes from Abraham Lincoln: You cannot strengthen the weak by weakening the strong. You cannot bring about prosperity by discouraging thrift. You cannot help the wage-earner by pulling down the wage payer.

 “Don’t Tell Me What to Do, Because I Know That. Just Tell Me How.”

She hated the very notion of consensus, calling it “the process of abandoning all beliefs, principles, values and policies in search of something in which no one believes, but to which no one objects.” In relying so heavily on market forces to generate growth, Thatcher opened the floodgates to a version of winner-take-all globalization in which those lacking advantages in education, skills, or social connections suffer greatly.

Thatcher was not an originator of ideas; her gift was an ability to grasp important concepts and, above all, to simplify them in language that could mobilize an entire society to try radical reform. The future of globalization belongs to a judicious balance between the private and the public, between competition and collaboration, between the market and the state, between what nations can do on their own and what they must do together—in other words, between Thatcher and Monnet.

9.      ANDREW GROVE The Man behind the Third Industrial Revolution 1936–2016

If Noyce and Moore led the way toward a nonhierarchical management culture in Silicon Valley—the opposite of the corporate environment of the East Coast and a major factor in the creativity of the US technology industry—that alone would not have been enough. What was also required was decisive and highly disciplined management. Andy Grove’s great and distinctive contribution was to achieve both. Grove was inventing the management process that would make Moore’s law work in the real world.

Grove underlined the idea of an “inflection point”—a moment, or a period of time, when a set of forces are so overwhelming that they compel a fundamental change in the rules of the game for a company or an industry. This happened in banking, he writes, when cash machines replaced human tellers.  “Allow chaos,” he advised, “then rein it in.” The concept of inflection points is one of Grove’s most profound contributions to the theory of management in the unpredictable environment wrought by technology and globalization.

He was not just a visionary CEO, he was a leader who created an organization set up to anticipate change and respond quickly to inflection points. He thus captured the essence of what it takes for a high-technology company—or perhaps any ambitious company—to succeed in our era of extraordinary change and volatility. He showed the world what speed was, what precision was, what risk taking was, what take-no-prisoners competition was, how you should use recessions to your advantage by accelerating investments, how to learn from your mistakes and bounce back even stronger, how to rapidly scale up, and how to spread your presence to the corners of the earth. He gave us a vivid picture of how to survive and thrive in business when the only constant is mind-bending change.

Like the other leaders in this book, Grove did not create the forces that shaped his era, but he did exploit them with exceptional effectiveness. He is thus a pioneer of the modern communications age.

10.  DENG XIAOPING The Pragmatist Who Relaunched China 1904–1997

In joining China to the world and vice versa, Deng made globalization larger and deeper than ever, and he unleashed new forces that will move the center of global commerce and political influence from the West toward the East. Perfecting the Socialist ideal—a society without profits and greed—would come only gradually, in his view, and change would come through effective organization and management.

 “It doesn’t matter if the cat is black or white, so long as it catches the mouse it is a good cat,” Deng told the party.

Deng put economic development at the heart of all his efforts, with an emphasis on achieving a high rate of growth.  “When you open the windows for fresh air,” he once said, “some flies get in.” Deng was obsessed with science, technology, and education.

The dichotomy between his openness to experimenting with capitalism and his determination to maintain disciplined rule under an all-powerful Communist Party was perhaps the single most important feature of his philosophy and his manner of ruling. Deng led China out of the wilderness. He rescued it from being an isolated, backward nation in a world moving quickly toward advanced technological modernization and unprecedented prosperity, and he gave it the opportunity to become a central and vibrant part of a globalized society.

He wasn’t the only official in China who wanted to break with Mao and change direction, but he was the leader who commanded the influence, respect, experience, relationships, and political skills to do it. Deng initiated reforms that led to thirty years of growth averaging more than 9 percent annually—twice the average of other developing countries, and three times the average of developed nations.

Under Deng, China had accomplished in two decades what took other nations a century or more to do.