When Did Globalization Start?

Investopedia Updated Feb 2, 2020

There is a fierce debate among scholars about when globalization began.

The debate stems partly from the lack of a precise definition of the word.
Some argue that globalization as a phenomenon began with the earliest
human migratory routes, or with Genghis Khan's invasions, or travel across
the Silk Road.1​ Conquering empires throughout history resulted in the
sharing of ideas, mixing of cultures and people, and trade across those
conquered lands.

Some lay importance to the Age of Exploration, when Europeans in the

1400s set sail across the Atlantic, looking for shorter spice routes to China
and India. Many mark the voyages of Christopher Columbus and other sea-
faring captains for opening up commercial trade routes across the world as
the beginning of globalization.2​ Other scholars view globalization as a far
more contemporary occurrence. Many see it in its current form as a modern
phenomenon, beginning no earlier than World War II.3​ The term itself has
been in common use since the 1980s.4​

Confusion also stems from the word's use as both a description of a practice
and a political ideology – the latter is frequently used in a critical sense.
Globalization is also frequently used as a synonym for the solidification and
continual creep of American dominance throughout the world.5​ Regardless
of the differing definitions, at its core, globalization is the exchange of ideas,
capital, and goods across the world, driven by technology.4​ Whether that
technology be ships or the Internet.

The Gold Standard

Many historians claim the first wave of globalization began with the gold
standard in the 1800s.6​ Even though there was mass trade across the
Atlantic, chartered trading companies, and the slave industry, there was still
no global price convergence at the time.

Gold had been used as currency for thousands of years from when man
started making gold coins. The value of those gold coins was worth the
value of the gold that made up the coin. In wasn't until the 1800s that
England started fixing the value of its currency to specified amounts of gold.
Eventually, many countries followed suit or pegged their currencies to
countries that followed the gold standard. Gold, therefore, became the
international standard currency and could be bought or sold at a fixed
price.7​

The 20th Century

One view states that globalization cannot be backdated before the late
1940s – the post-war era when the United States established itself as the
most powerful country in the world. This definition of globalization argues
that it is largely the work of powerful multinational corporations that have
created a far-ranging set of consequences, both positive and negative, as
they spread across the world. The unprecedented ease of travel around the
globe and the development of modern communications are used to support
this view of globalization.3​

Furthermore, after World War II, many nations looked to break down barriers
of trade between nations, promote free trade, and set up global
organizations. The Bretton Woods Conference in 1944 created the World
Bank and the International Monetary Fund.8​

The Bottom Line

Many scholars argue that parts of the world have always influenced other
parts and that the current state of affairs is a natural progression from earlier
stages. The exchange of ideas and trade has, in one form or another, existed
as long as humanity has existed. There are different marking points
determining true globalization, from ancient trade routes to modern global
integration of financial markets, all of which have been made possible by the
creation and development of technology.