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GLOBALIZATION: HISTORY AND PROBLEMS

We must create a kind of globalization that works

for everyone... and not just for a few.

Néstor Kirchner

The term globalization was apparently first published in a 1962 article in Spectator magazine, but it began to enter everyday English usage after the 1962 publication of Marshall McLuhan’s Gutenberg Galaxy. "Globalism" is an even more recent term and appeared for the first time in the 1986 second edition of the Oxford English Dictionary.

Globalization has both technical and political meanings. As such, different groups will have different histories of "globalization." In general use within the field of economics and political economy, globalization is a history of increasing trade between nations based on stable institutions that allow individuals and organizations in different nations to exchange goods with minimal friction.

The term "liberalization" came to mean the combination of laissez-faire economic theory with the removal of barriers to the movement of goods. This led to the increasing specialization of nations in exports, and the pressure to end protective tariffs and other barriers to trade.

There were several eras of intense cross-cultural encounters in pre-modern times (pre-1500 C.E.). The first important era to mention here is the time of the Roman and Han empires. This is the era of the ancient silk-road, roughly 200 B.C.E. to 400 C.E. The consolidation of large imperial states pacified enough of Eurasia that trading networks could safely link the extreme ends of the landmass. Nomadic peoples played an especially prominent role in the economy of the silk roads, since they both consumed the finished products of settled lands and transported them to other customers. So long as the silk roads remained active, they facilitated not only the exchange of trade goods but also the communication of cultural and religious traditions throughout much of the Eastern Hemisphere. This era came to an end with the collapse of the Roman and Han empires, which had anchored and sustained much of the interregional commerce in goods and ideas, and with the outbreak of devastating epidemic diseases that disrupted societies and economies throughout Eurasia.

Beginning about the sixth century, however, a revival of long-distance trade underwrote a second round of intense cross-cultural encounters. The revival of cross-cultural dealings depended again on the foundation of large imperial states, such as the Tang, Abbasid, and Carolingian empires, which pacified vast stretches of Eurasia and gained the cooperation of nomadic peoples who provided transportation links between settled regions. But, long-distance trade in the sixth century benefited also from much more frequent use of sea lanes across the Indian Ocean. Merchants once again linked the Eurasian landmass, while impressive numbers of missionaries and pilgrims traveled in their company. In an era often labeled a dark age – quite inappropriately – literacy and religions of salvation (particularly Buddhism, Islam, and early forms of Christianity) extended their influence to most parts of Eurasia.

The development of a consciousness of the world as a whole first came with the conquest of most of Eurasia, the biggest and long the most populous and culturally and technologically advanced continent, by the Mongols in the thirteenth century. Economist Ronald Findlay (2002) argues that:

For the first and only time in history, a single regime presided over the entire length of the overland trade routes linking China and the Near East. This made it possible for merchants and goods to move safely over these vast distances, facilitating the transmissions of ideas and techniques. Since China was substantially ahead of both Islam and the West in the general level of its technology, this flow chiefly benefited the lands at the western ends of the trade routes and beyond.

The first era of globalization, according to Findlay, began with “the unification of the central Eurasian land mass by the Mongol conquests and the reactions this aroused in the sedentary civilizations that they were launched against.” Among other things, it brought awareness to the Europeans of the civilizations of East Asia and a stronger desire to reach them by going around the Islamic world that had for so long stood in between. That, in turn, brought forth the effort to improve naval technology which enabled the European voyages of discovery of the fifteenth and sixteenth centuries. So, instead of being the first, this can rightfully be called the second (and decisive) state on the way to globalization – first Eurasia, then the world.

The unraveling of the Mongol state in China coincided with a phenomenon of much larger impact: the spread of bubonic plague, known in the West as the Black Death, throughout Eurasia. The pacified vast regions that facilitated overland travel throughout the empire made it possible for humans and their animal stock to transport microorganisms across long distances much more efficiently than ever before (Bently 1993). Long-distance trade probably did not disappear completely, but its volume certainly declined precipitously during the late fourteenth century.

The period of the gold standard and liberalization of the nineteenth century is often called "The Second Era of Globalization." Based on the Pax Britannica and the exchange of goods in currencies pegged to specie, this era grew along with industrialization. The theoretical basis was Ricardo's work on comparative advantage and Say's Law of General Equilibrium. In essence, it was argued that nations would trade effectively, and that any temporary disruptions in supply or demand would correct themselves automatically. The institution of the gold standard came in steps in major industrialized nations between approximately 1850 and 1880, though exactly when various nations were truly on the gold standard is a matter of a great deal of contentious debate.

This "Second Era of Globalization" is said to have broken down in stages beginning with the first World War, and then collapsing with the crisis of the gold standard in the late 1920s and early 1930s.

Globalization in the era since World War II has been driven by multilateral Trade Negotiation Rounds, originally under the auspices of GATT and the WTO, which led to a series of agreements to remove restrictions on "free trade." The Uruguay round led to a treaty that created the World Trade Organization, to mediate trade disputes. Other bilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement, have also been signed in pursuit of the goal of reducing tariffs and barriers to trade and investment.

Signs of globalization. Although globalization has touched almost every person and locale in today’s world, the trend has spread unevenly. It is most concentrated among propertied and professional classes, in the North (industrialized nations), in towns (urban areas), and among younger generations.

Globalization has not displaced deeper social structures in relation to production, governance, community, and knowledge. But, globalization has prompted important changes to certain attributes of capital, the state, the nation, and modern rationality.

Contemporary globalization has had some important positive consequences with respect to cultural regeneration, communications, decentralization of power, economic efficiency, and the range of available products.

But state government policies (pro-market) toward globalization have had many negative consequences in regard to increased ecological degradation, persistent poverty, worsened working conditions, cultural violence, widened arbitrary inequalities, and deepened democratic deficits.

As such, globalization has become identified with a number of trends, most of which may have developed since World War II. These include greater international movement of commodities, money, information, and people; and the development of technology, organizations, legal systems, and infrastructures to allow this movement. The actual existence of some of these trends is debated.

Word study

Task 15

What is the meaning of the underlined words? Translate the following sentences.

1. The term "liberalization" came to mean the combination of laissez-faire economic theory with the removal of barriers to the movement of goods.

2. For the first and only time in history, a single regime presided over the entire length of the overland trade routes linking China and the Near East.

3. In essence, it was argued that nations would trade effectively, and that any temporary disruptions in supply or demand would correct themselves automatically.

4. The institution of the gold standard came in steps in major industrialized nations between approximately 1850 and 1880, though exactly when various nations were truly on the gold standard is a matter of a great deal of contentious debate.

5. So long as the silk roads remained active, they facilitated not only the exchange of trade goods but also the communication of cultural and religious traditions throughout much of the Eastern Hemisphere.

Speaking and writing:

Task 16

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