Aaron O'Neill
Research lead for society, economy, and politics: Europe & global
History of globalization - Statistics & facts
While the world has generally become more integrated and interdependent throughout history, the concept of globalization itself is a relatively new one, having first come to prominence in the 1980s. The term was originally used in a business context, but it now applies to a broad range of developments, including the movement of people; the blending of cultures, knowledge, and belief systems; the expansion of trade or political influence; or the growing role of communication and virtual technology. As we look at history, we can see how major events or trends have affected this process of globalization, and helped shape the world we live in today.
The discovery of precious metals in the Americas also granted Europeans entry into Chinese markets in the 16th century, which some view as the beginning of the “global economy” - European merchants used silver mined from the Americas to conduct trade in Asia. Control over intercontinental trade brought considerable wealth to European empires. The British and Dutch East India companies (EIC and VOC) are widely considered the first private, multinational companies to have ever existed, and the VOC may have been the most valuable company of all time at around eight trillion U.S. dollars when adjusted to modern values (although this was largely down to inflated stock prices and not assets).
Because of the near monopoly on global trade and the impact of colonization and settlement, European colonialism greatly changed the world we live in today. The movement of people from Europe and Africa transformed the balance of ethnicities across the Americas, and these influences on cultural development are still recognizable. European colonization is responsible for Christianity being the most popular religion in all continents except Asia, and, in terms of language, English, French, Portuguese, and Spanish have more native-speakers overseas than in the former metropoles. European political systems also form the basis for most parliamentary or presidential systems in use today.
The conflict and economic turmoil of the early 20th century then saw globalization decelerate. The Great Depression was a prime example of how globalized the world had become by the 1930s, where an economic crisis in the U.S. could ripple across the world. Additionally, the rise of fascism and communism were, in many ways, a rejection of what globalization had come to represent, and there were growing calls for independence in Europe’s colonial territories. During the Second World War, global trade and migration was largely driven by necessity, and international relations were reshaped by the outcome of the war. Yet, the decades that followed were among the most prosperous in history.
The easing of the geopolitical climate at end of the Cold War led to further connectivity across the globe, kicking off the most globalized period in human history. As Western countries have transitioned to service-based economies or high-tech manufacturing, China emerged as the world’s largest overall manufacturing economy and exporter, and is often referred to as the “world’s factory”. The spread of the internet has also added a new dimension to globalization – instantaneous communication and access to knowledge of cultures and beliefs from around the world are changing the way humans learn and interact. This has also helped people maintain or develop social relationships in ways that were not possible before, and is changing consumer behaviors.
Pre-modern globalization
Globalization ultimately began with the early migration of human populations across the world. As populations and settlements grew, language, culture, and social structures developed, which could then spread across larger regions. Agriculture in the neolithic era led to improved food collection, which created opportunities for long distance trade. Precursors to the Silk Road date back around four millennia and stretched from China to Egypt or Greece, while areas such as the Mediterranean, Red Sea, and South China Sea saw some of the earliest established maritime trade. Cultures and belief systems spread as empires expanded, yet, while trade or conquest may have shared knowledge or technologies between civilizations, they also proved to be an effective vector for the spread of disease.European colonialism
The Age of Exploration led to European contact with the Americas and East Asia via sea – through the Columbian Exchange, new crops (maize, potatoes, tobacco) were introduced to Europe, while Old World crops (wheat, coffee sugar) and domesticated animals were introduced to the Americas. Previously, many Old World crops were grown in Asia and were considered luxury goods in Europe – through colonization, these could be mass produced in the tropical climates of the Americas and exported to Europe, where they then became dietary staples. However, the Columbian exchange also brought Old World diseases to the indigenous populations, which decimated their numbers. In response, Europeans enslaved Africans and transported them to the Americas to collect raw materials, which were then transported to Europe for consumption or manufacturing, while manufactured goods were often used in the purchase of new slaves – this was known as the triangular trade system, which operated between Europe, Africa, and the Americas for almost four centuries.The discovery of precious metals in the Americas also granted Europeans entry into Chinese markets in the 16th century, which some view as the beginning of the “global economy” - European merchants used silver mined from the Americas to conduct trade in Asia. Control over intercontinental trade brought considerable wealth to European empires. The British and Dutch East India companies (EIC and VOC) are widely considered the first private, multinational companies to have ever existed, and the VOC may have been the most valuable company of all time at around eight trillion U.S. dollars when adjusted to modern values (although this was largely down to inflated stock prices and not assets).
Because of the near monopoly on global trade and the impact of colonization and settlement, European colonialism greatly changed the world we live in today. The movement of people from Europe and Africa transformed the balance of ethnicities across the Americas, and these influences on cultural development are still recognizable. European colonization is responsible for Christianity being the most popular religion in all continents except Asia, and, in terms of language, English, French, Portuguese, and Spanish have more native-speakers overseas than in the former metropoles. European political systems also form the basis for most parliamentary or presidential systems in use today.
Industrialization
The relative global peace of 1815-1914 allowed for an acceleration in globalization. The onset of industrialization saw manufacturing in Europe and North America grow exponentially, while the beginning of the demographic transition saw a population boom that helped fuel this growth. The production of goods during the colonial era was largely driven by supply, but changes in industrialized markets were increasingly driven by consumer demand. Advancements in steam engine technologies made rail or sea transport more efficient and cheaper, which improved trade and made migration more accessible for the lower classes. To meet manufacturing demands in the north, the newly independent economies of Latin America focused on the production of food, metal, and raw materials, while the European exploitation of Africa and Asia intensified during this time. Treaties of trade and diplomacy were created to protect these connections, and some, such as the Monroe Doctrine, continue to hold sway 200 years later.The conflict and economic turmoil of the early 20th century then saw globalization decelerate. The Great Depression was a prime example of how globalized the world had become by the 1930s, where an economic crisis in the U.S. could ripple across the world. Additionally, the rise of fascism and communism were, in many ways, a rejection of what globalization had come to represent, and there were growing calls for independence in Europe’s colonial territories. During the Second World War, global trade and migration was largely driven by necessity, and international relations were reshaped by the outcome of the war. Yet, the decades that followed were among the most prosperous in history.
Globalization since WWII
Much of the post-war boom was enabled by increased globalization and integration, despite the Cold War tensions between the U.S. and USSR. Organizations such as the IMF, EEC (EU), OECD, or Comecon promoted trade across various regions by removing tariffs and fostering cooperation. National economic growth led to increased individual wealth, which saw a rise in disposable income, consumerism, and tourism. Commercial aviation industries emerged to meet these demands, making travel across the globe easier yet again. Oil became the dominant fuel in manufacturing, and OPEC economies gained more prominence on the international stage. The United States would ultimately have the largest global reach during this time – Americanization spread through U.S. foreign investment, the adoption of American business practices, and the export of American brands, culture, and cuisine.The easing of the geopolitical climate at end of the Cold War led to further connectivity across the globe, kicking off the most globalized period in human history. As Western countries have transitioned to service-based economies or high-tech manufacturing, China emerged as the world’s largest overall manufacturing economy and exporter, and is often referred to as the “world’s factory”. The spread of the internet has also added a new dimension to globalization – instantaneous communication and access to knowledge of cultures and beliefs from around the world are changing the way humans learn and interact. This has also helped people maintain or develop social relationships in ways that were not possible before, and is changing consumer behaviors.
Challenges
The coronavirus pandemic is a prime example of how interconnected and interdependent the world has become - global travel saw the outbreak reach pandemic levels in almost every country within a few months, and the interruption to global trade and supply chains continues to cause problems. Setbacks in international relations also pose challenges to the advancement of globalization, these may be in the form of trade tariffs, restriction of movement or, more extremely, in the case of war. The rise of nationalist and populist movements are often in response to aspects of globalization such as migration, capitalism, and non-subsistent economies, which are viewed negatively by some groups in society. Yet, the largest existential threat, climate change, is undoubtedly a global problem. Globalization, particularly trade and travel, has played a large part in rising carbon emissions since the industrial revolution, leading to higher average temperatures - as climate change does not abide by international borders, a global response is required to limit or reverse its impact.
