HISTORY OF GLOBALISATION

History

The term "globalization" has been used by economists since the 1980s although it was used in social sciences in the 1960s; however, its concepts did not become popular until the latter half of the 1980s and 1990s. The earliest written theoretical concepts of globalization were penned by an American entrepreneur-turned-minister Charles Taze Russell who coined the term 'corporate giants' in 1897.^[6] Globalization is viewed as a centuries long process, tracking the expansion of human population and the growth of civilization, that has accelerated dramatically in the past 50 years. Early forms of globalization existed during the Roman Empire, the Parthian empire, and the Han Dynasty, when the Silk Road started in China, reached the boundaries of the Parthian empire, and continued onwards towards Rome. The Islamic Golden Age is also an example, when Muslim traders and explorers established an early global economy across the Old World resulting in a globalization of crops, trade, knowledge and technology; and later during the Mongol Empire, when there was greater integration along the Silk Road. Globalization in a wider context began shortly before the turn of the 16th century, with two Kingdoms of the Iberian Peninsula - the Kingdom of Portugal and the Kingdom of Castile.Portugal's global explorations in the 16th century, especially, linked continents, economies and cultures to a massive extent. Portugal's exploration and trade with most of the coast ofAfrica, Eastern South America, and Southern and Eastern Asia, was the first major trade based form of globalization. A wave of global trade, colonization, and enculturation reached all corners of the world. Global integration continued through the expansion of European trade in the 16th and 17th centuries, when the Portuguese and Spanish Empires colonized the Americas, followed eventually by France and Britain. Globalization has had a tremendous impact on cultures, particularly indigenous cultures, around the world. In the 15th century, Portugal's Company of Guinea was one of the first chartered commercial companies established by Europeans in other continent during the Age of Discovery, whose task was to deal with the spices and to fix the prices of the goods. In the 17th century, globalization became a business phenomenon when the British East India Company (founded in 1600), which is often described as the first multinational corporation, was established, as well as the Dutch East India Company (founded in 1602) and the Portuguese East India Company (founded in 1628). Because of the high risks involved with international trade, the British East India Company became the first company in the world to share risk and enable joint ownership of companies through the issuance of shares of stock: an important driver for globalization. Globalization was achieved by the British Empire (the largest empire in history) due to its sheer size and power. British ideals and culture were imposed on other nations during this period.

The 19th century is sometimes called "The First Era of Globalization." It was a period characterized by rapid growth in international trade and investment between the European imperial powers, their colonies, and, later, the United States. It was in this period that areas of sub-saharan Africa and the Island Pacific were incorporated into the world system. The "First Era of Globalization" began to break down at the beginning of the 20th century with the first World War. Said John Maynard Keynes^[7],

“

The inhabitant of London could order by telephone, sipping his morning tea, the various products of the whole earth, and reasonably expect their early delivery upon his doorstep. Militarism and imperialism of racial and cultural rivalries were little more than the amusements of his daily newspaper. What an extraordinary episode in the economic progress of man was that age which came to an end in August 1914.

”

The "First Era of Globalization" later collapsed during the gold standard crisis in the late 1920s and early 1930s.

[edit]Modern globalization

Globalization, since World War II, is largely the result of planning by politicians to breakdown borders hampering trade to increase prosperity and interdependance thereby decreasing the chance of future war. Their work led to the Bretton Woods conference, an agreement by the world's leading politicians to lay down the framework for international commerce and finance, and the founding of several international institutions intended to oversee the processes of globalization.

These institutions include the International Bank for Reconstruction and Development (the World Bank), and the International Monetary Fund. Globalization has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of the General Agreement on Tariffs and Trade (GATT), which led to a series of agreements to remove restrictions on free trade.

Since World War II, barriers to international trade have been considerably lowered through international agreements - GATT. Particular initiatives carried out as a result of GATT and theWorld Trade Organization (WTO), for which GATT is the foundation, have included:

• Promotion of free trade:
  • Reduction or elimination of tariffs; creation of free trade zones with small or no tariffs
  • Reduced transportation costs, especially resulting from development of containerization for ocean shipping.
  • Reduction or elimination of capital controls
  • Reduction, elimination, or harmonization of subsidies for local businesses
  • Creation of subsidies for global corporations
  • Harmonization of intellectual property laws across the majority of states, with more restrictions.
  • Supranational recognition of intellectual property restrictions (e.g. patents granted by China would be recognized in the United States)

Cultural globalization, driven by communication technology and the worldwide marketing of Western cultural industries, was understood at first as a process of homogenization, as the global domination of American culture at the expense of traditional diversity. However, a contrasting trend soon became evident in the emergence of movements protesting against globalization and giving new momentum to the defense of local uniqueness, individuality, and identity, but largely without success. ^[8]

The Uruguay Round (1986 to 1994)^[9] led to a treaty to create the WTO to mediate trade disputes and set up a uniform platform of trading. Other bilateral and multilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have also been signed in pursuit of the goal of reducing tariffs and barriers to trade.

Global conflicts, such as the 9/11 terrorist attacks on the United States of America, is interrelated with globalization because it was primary source of the "war on terror", which had started the steady increase of the prices of oil and gas, due to the fact that most OPEC member countries were in the Arabian Peninsula.^[10]

World exports rose from 8.5% of gross world product in 1970 to 16.1% of gross world product in 2001. [6]

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