GLOBALIZATION

● a process of interaction and integration among the people, companies, and governments
of different nations
● synonymous to the speedup of movements and exchanges of the following:
○ Goods & Services
○ Assets & Resources
○ Technological Innovations
○ Forms of politics
○ Economic systems
○ Cultural practices & beliefs

TIMELINE
1. Silk roads (1st century BC - 5th century AD, and 13th - 14th centuries AD)

During the 1st Century BC, luxury goods from China started to ship on the other edge of
the Eurasian continent – in Rome. The products were shipped there for thousands of miles
along the Silk Road.

The Silk Road was a trade route that went from China to Eastern Europe. It went along
the northern borders of China, India, and Persia and ended up in Eastern Europe near today's
Turkey and the Mediterranean Sea.

Map of the Silk Road - Route in red (later ocean routes in blue)
Source: NASA

Globalization has truly started at this time but it has not started in earnest. Silk from
China was the primary product being exported to Rome. Along with silk are products such as
teas, salt, sugar, porcelain, and spices. Most of what was traded were expensive luxury goods.
This was because it was a long trip and merchants didn't have a lot of room for goods. The
value of the goods was tiny though since there were many middlemen involved in the transport
and trading. But through this, global trade links were now established. The Silk Road was
prosperous since two major empires were involved.
 The Silk Road eventually closed, as it did after several centuries, the fall of the empires
had everything to do with it. But because of the Silk Road, Trade had stopped being a local or
regional affair and started to become global.

2. Spice routes (7th - 15th centuries)

The spice routes, also known as Maritime Silk roads, is the name given to the network of
sea routes that link the East with the West. The spice routes were made because of the Islamic
merchants. Islam spread throughout from its Arabian heartland in the 7th century, the trades did
too. Muhammad, the founder of Islam, and his wife, Khadija, were merchants. The new religion
then had trade with its followers. By the early ninth century, Muslim dealers overwhelmed
Mediterranean and Indian Ocean exchange; thereafter, they could be found as far east as
Indonesia, which after some time turned into a Muslim-greater part nation, and as far west as
Moorish Spain.

The main product that the Islams were trading in those middle ages were spices. The
product was mainly transported and traded mainly by the sea since ancient times. But this was
really the time when international trading took off. Globalization still didn’t take off, but the
original Belt (sea route) and Road (Silk Road) of trade between East and West did now exist.

3. Age of Discovery (15th - 18th Centuries)

 From the end of the 15th century and onwards, global trade flourished. With the help of
machinery and discoveries of the “Scientific Revolution,” European explorers uncovered places
in both the East and the West. Some notable discoveries include Christopher Colombus’
well-known discovery of America and Ferdinand Magellan’s circumnavigation. It was Magellan’s
expedition, in particular, that made an impact in Europe as more spices were brought in and
products like potatoes, tomatoes, coffee, and chocolate were introduced.

Modern economists do not consider this era as one of true globalization as it was
characterized by exploitation. This is evident in the existence of slave trades, control and
authority over other nations (colonialism), and trading conditions in which exports of the mother
country exceed imports in order to accumulate wealth (mercantilism). Nevertheless, it was this
era that made trading more intercontinental and aided in making progress towards globalization.

4. The first wave of globalization (19th century - 1914)

Globalization in the world faced major waves of change around the 19th century up to
1914. Great Britain had advanced in terms of expanding their territory and also in making a
technological breakthrough with the innovation of the steam engine, and many more. This was
around the end 18th century, which was also the era of the First Industrial Revolution.
 This Industrial Revolution led to great improvements in global trade, especially with the
steamships and trains that aided in the transportation of goods within Britain and also with other
countries as well. Additionally, products that were high in demand such as manufactured goods,
textiles, and iron were made more efficiently thanks to their advanced industrial machinery and
technology.

As a result, there was evident growth in globalization. Trade increased on average 3%

per year for around a century. Exports went from a share of 6% of global GDP in the early 19th
century to 14% on the eve of World War I

Aside from trade, foreign direct investment was also becoming global. An example of this
was the Suez Canal constructed by the French Compagnie de Suez. It connected the
Mediterranean with the Indian Ocean and opened a path for trade between countries. Railways
were built in India. Some managed mines in some areas of Africas. Globalization of investment
also helped in the globalization of trade.

Many countries gained benefits from this globalization. Britain benefited most as it had
the most capital and technology. With the invention of the refrigerated cargo ship (“reefer ship”)
in the 1870s, Argentina and Uruguay were able to mass export meat from cattle grown on their
respective lands.

However, there were also downsides that came with the first wave of globalization and
industrialization. By 1900, Ethiopia was the only independent country left on the continent of
Africa. This was because the globalized and industrialized European nations that wanted parts
of the continent. India, China, Mexico, and Japan, large countries that were powers to reckon
with, were not able to or not allowed to adapt to the global trends. This could be because
Western powers restrained their development or because of the lack of access to capital or
technology. Lastly, many workers in the industrialized nations also did not benefit from
globalization, their work commoditized by industrial machinery, or their output undercut by
foreign imports. (last sentence not paraphrased)

5. The world wars (1914 - 1945)

The world wars were destined to end in an impactful crisis. During 1914, the start of
WW1 ended the top class society the West had gotten used to, including globalization. The
destruction was absolute. Millions of soldiers lost their lives in the war, millions of civilians died
as unnecessary collateral damage, battling replaced trading, obliteration destroyed construction,
and countries closed off their borders for safety and security.

Between the years of the world wars, the financial markets, which were still connected in
a global web, caused more breakdown of the global economy and its connections. During the
1930s, The Great Depression in the US-led to the severe economic strike in South America,
and affected banks in other parts of the world. Then another world war happened, which was
WW2 in 1939-1945. When the second war was over, trade as a percentage of world GDP had
fallen to 5% - a percentage not seen in a hundred years.
The Great Depression (1929-1933)

6. The second and third wave of globalization

The end of World War II marked a new beginning for the global economy. Global trade
started to rise once again when the USA, aided by the technologies of the Second Industrial
Revolution, like the car and the plane. At first, this happened in two separate tracks, as the Iron
Curtain divided the world into two spheres of influence. But as of 1989, when the Iron Curtain
fell, globalization became a truly global phenomenon.

In the early decades after World War II, institutions like the European Union, and other
free trade vehicles championed by the US were responsible for much of the increase in
international trade. In the Soviet Union, there was a similar increase in trade, albeit through
centralized planning rather than the free market. The effect was profound. Worldwide, trade
once again rose to 1914 levels: in 1989, export once again counted for 14% of global GDP. It
was paired with a steep rise in middle-class incomes in the West.

Then, when the wall dividing East and West fell in Germany, and the Soviet Union
collapsed, globalization became an all-conquering force. The newly created World Trade
Organization (WTO) encouraged nations all over the world to enter into free-trade agreements,
and most of them did, including many newly independent ones. In 2001, even China, which for
the better part of the 20th century had been a secluded, agrarian economy, became a member
of the WTO and started to manufacture for the world. In this “new” world, the US set the tone
and led the way, but many others benefited in their slipstream.

At the same time, a new technology from the Third Industrial Revolution, the internet,
connected people all over the world in an even more direct way. The orders Keynes could place
by phone in 1914 could now be placed over the internet. Instead of having them delivered in a
few weeks, they would arrive at one’s doorstep in a few days. What was more, the internet also
allowed for further global integration of value chains? You could do R&D in one country,
sourcing in others, production in yet another, and distribution all over the world.

The result has been a boom in globalization. In the 2000s, global exports reached a
milestone, as they rose to about a quarter of global GDP. Trade, the sum of imports and exports,
consequentially grew to about half of world GDP. In some countries, like Singapore, Belgium, or
others, trade is worth much more than 100% of GDP. A majority of the global population has
benefited from this: more people than ever before belong to the global middle class, and
hundreds of millions achieved that status by participating in the global economy.

7. Globalization 4.0

Globalization 4.0 is the modern-day globalization. A new wave of globalization is now

upon us in a world increasingly dominated by two global powers, the US and China. The new
frontier of globalization is the cyber world. The digital economy, which was still in its starting
phase during the third wave of globalization, is now booming with the means of e-commerce,
digital services, 3D printing. It is further enhanced by AI, artificial intelligence, but is in danger of
cyberattacks and cross-border hacking.
 But with the positives brought by modernity comes negative globalization that is
expanding through the global effect of climate change. Pollution in the world leads to disastrous
weather events. The cutting of forests around the world creates more devastating effects on the
world's biodiversity and it also creates hazardous greenhouse gas emissions.

But as this new wave of globalization is spreading out, many people are not satisfied
with it. Mostly in the West, a lot of middle-class workers are tired of the political and economic
system that resulted in economic inequality, social instability, and in some countries - mass
immigration, even if it also led to economic growth and cheaper products. Protectionism, trade
wars, and immigration stops are once again the order of the day in many countries.

According to the percentage of GDP, global exports have slowed down and have gone in
reverse slightly. As a political ideology, “globalism”, or the idea that one should take a global
perspective, is on the wane. And internationally, the power that propelled the world to its highest
level of globalization ever, the United States, is backing away from its role as policeman and
trade champion of the world.

Technological progress, like globalization, is something you can’t run away from, it seems. But it
is ever-changing.

REFERENCES
https://www.globalization101.org/what-is-globalization/
https://plato.stanford.edu/entries/globalization/
https://www.weforum.org/agenda/2019/01/how-globalization-4-0-fits-into-the-history-of-globalizat
ion/
https://www.ducksters.com/history/china/silk_road.php
https://www.britannica.com/topic/European-exploration/The-Age-of-Discovery
https://www.britannica.com/science/Scientific-Revolution
https://www.britannica.com/topic/mercantilism
https://www.britannica.com/event/Industrial-Revolution