“Globalization is the process of interaction and integration among people, companies, and governments worldwide”.
Globalization is a complex and multifaceted phenomenon – some consider it a form of capitalist expansion, that integrates local and national economies into the global economy. There are various reasons why globalization happened.
The important ones are the development of technology, transport, and communication. Globalization made a severe effect on the course of history. There were rapid changes in the political, and social structure and rapid economic growth. Due to its tremendous importance, the study of the evolution of globalization is of prime importance.
HISTORY OF GLOBALIZATION
Global Trade in the Ancient World
Humankind started trading ever since civilization existed. The first foreign trade occurred between the Indus valley civilization and the Mesopotamian civilization. In the 1st Century BC, luxury products from China began to appear in Rome. They got there after being hauled for thousands of miles along the Silk road. Trade had become global.
Global trade assumed a tiny percentage of the world economy at that stage. Spice routes flourished from the 7th to 15th centuries. They were mainly carried on by the Islamic merchants. They dominated the Mediterranean and Indian Ocean trade. Spices and silk were the chief commodities of trade.
‘Age of Discovery’
Global trade kicked off in the ‘Age of Discovery’ (15th – 18th centuries). Scientific Revolution happened simultaneously. European explorers forcefully integrated the economies of newly discovered lands into their home economies. Global trade was still a small portion of GDP.
The global trade was dominated by European countries with their colonies often by exploitation such as the slave trade. Imperialists created a mercantilist and a colonial economy, not a truly globalized one.
THE FIRST PHASE OF GLOBALIZATION
According to the World Bank, the first wave of globalization is said to be materialized between the years 1870-1914. This period saw the development of railways, maritime affairs, telegram, and telephone, the emergence of markets in Canada, Argentina, Australia, New Zealand, Russia, and China, and consequently the very rapid development and enhancement of the world economy.
The main dynamics of globalization of the time were ‘change’ and ‘expansion’. Traditional Society was converting into a modern industrial society. West was ahead of the East. The first phase of globalization stopped with the advent of the first world war in 1914. In the interwar periods, the global economy stagnated. The Great Depression occurred in 1929 and the global economy stagnated.
SECOND PHASE OF GLOBALIZATION
Second World War started in 1939. The War caused an increase in economic activities and globalization continued. Second World War ended in 1945. Due to the war, the production capacity of Europe was ravaged, and the USA became the world’s leading economic and social force. An effort to develop international cooperation intensified and international organizations were established.
In the second phase of globalization, the role of international organizations such as the IMF, World Bank, GATT, and OECD was important. IMF and World Bank were established to provide opportunities for international trade and investments in an environment where the circulation of private capital was restricted.
Restrictions on capital circulation were eliminated in the course of time. International capital increased in the 1980s and the 1990s. The collapse of the Soviet Union (1991) made the process of globalization to be truly global. The economic power of Japan and the rise of oil prices were witnessed during this period.
THIRD PHASE OF GLOBALIZATION
The third phase of globalization took place after the 1980s. This was a period much different from others, complex and multi-dimensional. The fast developments undergone are on a wide scale ranging from technology to communications, human life to the environment. The third phase of globalization is also known as the information age.
The communication revolution started with the inventions such as optical cables, communication satellites, the internet, etc. The Internet played a very important role in the realization of globalization. The role of multinational companies increased substantially.
Eastern Bloc countries became liberalized. The collapse of the Soviet Union changed the world from a bi-polar to a unipolar one dominated by western countries once again.
FOURTH WAVE OF GLOBALIZATION
The fourth wave of globalization is upon us. The world is dominated by USA and China. The digital economy, which was in its infancy in the third phase of globalization is now becoming very important in economic activities. e-Commerce, digital services, cyber-attacks, and artificial intelligence are becoming common. At the same time, negative globalization is expanding too, in the form of global warming and climate change.
POLITICAL DIMENSION OF GLOBALIZATION
The first phase of globalization was purely focused on empire-building and exploiting colonies. The second phase started with the new world order. The world order has undergone transformation by two traits rooted in the globalization process; firstly globalization has eliminated distances and made it cease to be a political force.
Arguing by complex communication opportunities, the new world order is no longer regional. They turn into relations directly between individuals, arguing by the international flow which cant be controlled by the state and exceeding boundaries.
Individuals, international organizations, civil society, and formations such as multinational companies are potential international actors. Public interest is no longer a sovereign interest: meeting the needs in a global order hints at a global context instead of national mobilization.
CULTURAL DIMENSION OF GLOBALIZATION
The cultural aspect of globalization can be explained by the constant increase in societies’ communication and mutual exchange. The overall identity structures such as the citizen identity are being replaced by different ethical, religious, social, and political identities.
Globalization is a phenomenon that connects the world together, economically, socially, and politically. Globalization took place through various phases. Globalization has different dimensions such as economic, political, etc. Science and technology were the main driving forces of globalization along with empire-building.
- Kivilcim, F. (2014), The evolution of globalization process and its implications – Springer.
- https://www.weforum.org/agenda/2019/01/how-globalization-4-0-fits-into-the-history-of-globalization/ (World Economic Forum webpage).
What is the main feature of globalization that struck you the most? Type in the comments below.
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