History of Globalization Overview

History of Globalization

• Globalization is a long-term, cyclical process.
• Early forms: Silk Roads (1st century BC – 5th century AD and 13th–14th centuries AD), connecting China and Eurasia (Rome) using silk
• Spice Routes (7th–15th centuries): Primarily sea-based trade focused on spices by Islamic traders, connected to the Silk Road.
• Age of Discovery (15th–18th centuries): European explorers connected East and West, accidentally discovering the Americas. Potatoes, tomatoes, coffee, and chocolate were introduced to Europe.
• First Wave of Globalization (19th century - 1914): Great Britain dominated geographically and technologically, steam engine and the reefer ship (1870s) impacted Argentina and Uruguay.
• Negative aspects of the First Wave: Most European nations colonized Africa, and by the early 20th century, only Ethiopia remained independent; large countries like India, China, Mexico, or Japan had difficulty adapting to industrial and global trends.
• Second and Third Waves of Globalization: End of World War 2 marked a new beginning for the global economy. The USA leadership and technologies of the second industrial revolution, led to global trade resurgence.
• Iron Curtain (divided the world into spheres of influence): 1989 - Fall of the Iron Curtain, globalization became truly global.
• Soviet Union collapse and WTO promoted free trade agreements for nations worldwide.
• Globalization 4.0: The digital economy is enabled by AI but threatened by cyberattacks. The global cyber world is now a frontier.

Theories on the Origins of Globalization

• Hardwired: According to Nayan Chanda, globalization is driven by basic human needs.
• Cycles: Globalization is a long-term, cyclical process.
• Epoch: Globalization of religion (4th to 7th centuries), European colonial conquests (late 15th century), Intra-European wars (late 18th to early 19th centuries), Heyday of European Imperialism (mid-19th century to 1918), Post-World War II period, Post-Cold War period.
• Events: Specific events are also considered parts of globalization. (e.g., Roman conquests, Christopher Columbus, internet founding)

Broader, More Recent Changes

• Emergence of the USA as a global power (post-World War II).
• Emergence of multinational corporations (MNCs).
• Demise of the Soviet Union, end of the Cold War.

Structure of Globalization

• The Global Economy:
  • Economic Globalization: Increasing interdependence of global economies.
  • Global Economy: Economies of nations are becoming more interconnected.
• International Monetary Fund (IMF): International organization of 183 member countries that are involved in financial institutions operating on an international level.
• Transnational Corporations: Enterprises that engage in multiple countries.
• G8 and G20: Groups of nations serving as advisory organizations to discuss global economic and political challenges.
• Global Civil Society: Protest and seek alternatives.

Factors Pushing for Economic Globalization

• International Economic Organizations (e.g., IMF, World Bank, OECD): Crucial for developing and promoting neoliberal policies between countries
• Multinational Companies (MNCS): Main drivers of economic globalization (McDonald's, Toyota, Ford)

Examples of How Economic Globalization Works

• Multinational corporations operate globally with satellite offices and branches, staying open 24/7 to serve customers around the world.
• Some automobiles import parts from countries to be assembled, for example in United States, thus engaging in global trade.

The Global Interstate System:

• A system of unequal, competing states where no single state can control all others.
• States interact through shifting alliances and wars.
• Changes in relative power of states upset alliances and restructure the global balance of power.

Advantages and Disadvantages of Globalization

• Advantages: world becomes more interconnected through politics, local and national policies consider global realities.
• Disadvantages: local social and environmental well-being can be sacrificed in favor of globalization (examples: converting farmlands to factories).

Who Governs Globalization?

• United Nations: Facilitates global governance, 192 member countries.
• Regional Commissions (examples: Economic Commission for Africa, Economic Commission for Europe): Groups of officials from different countries responsible for making laws and standards related to economic and social development.
• World Bank: Provides loans to middle-income countries and private sectors in developing countries to improve economies and create markets.
• IMF: Monitors global economy, lends to countries, and offers advisory services.
• WTO: Regulates international trade, provides forums for trade agreements among countries and regions.
• OECD: Promotes economic progress through comparing policy experiences and finding good practices in economic policies among its member countries.
• Others: WHO (focus on medicines and vaccines), ILO (labour standards), and UNESCO (peace by promoting education, scientific, and cultural programs).