As a result of the recent economic success of English-speaking countries, English has emerged as a main language of international business and cultural spheres. It’s also arguably intertwined national economies into a global market system in line with the economic views of many English-speaking countries. But the whole story of globalization is longer and more complex.
Cross-pollination of cultures and spreads of “dominant” cultures have been taking place since the dawn of civilization – but globalization as we know it really began to emerge in earnest during the European Age of Exploration, which began in the 15th century. The establishment of overseas European empires by the Portuguese, Spanish, Dutch, French, and British in territories in Africa, the Americas, and Asia during this time opened up lucrative markets for international trade in goods and ideas. In the “Columbian Exchange,” named after the pioneering voyages of Christopher Columbus, goods from the Americas, such as cocoa, tobacco, and corn were traded for European horses, cows, and sheep. As these trading links deepened, the world entered a period of “proto-globalization,” lasting roughly from 1600 to 1800. Proof that the world had entered an era of globalized markets came with the enormous Chinese demand for precious metals mined from European overseas empires. Under the Ming Dynasty, Chinese rulers had done away with paper money and gone to a silver-based currency. They quickly ran out of silver mined in China though, and by the late-16th century were importing 50 tons of silver a year, much of it from Spanish and Portuguese mines in the Americas. European merchants traded silver for Chinese silks, porcelain, and other fine wares. Individuals were soon able to earn returns on the multinational companies formed during this time. 1602 marked the formation of the Dutch East India Company, the first multinational corporation that sold stock.
European empires and a former colony of the British Empire, the United States, launched new periods of territorial, economic, and cultural expansion in the 19th century, beginning modern globalization. In Europe and America, the Industrial Revolution fueled this change, catalyzed by the steam engine. First patented by Thomas Savery in 1698, the invention was substantially improved by James Watt in the latter half of the 18th century, and eventually took the form of the high-pressure steam engine in the early part of the 19th century. The effects of powerful steam engines in factories were revolutionary, allowing for standardized, mass production of household goods. Steam-powered travel by train and boat quickened the pace and extended the reach of international trade.
European governments used this era of globalization to expand their overseas empires, particularly in Africa and Asia. This hegemonic expansion oftentimes put local populations in horrible conditions using their labor to extract raw materials that were transformed into value-added goods by European factories. With European imperialism came the massive spread of international banking, railroads, factories, and mechanized weapons.
The wealth and connections generated by these trends proved a double-edged sword in globalization’s development. Through them, Europeans imprinted their culture on African, Asian, and Middle-Eastern colonies, but eventually those colonies used the advances of globalization to throw off the European yoke.
The steam-powered trains and ships of the 19th century accelerated globalization by reducing the cost and time of overseas and inland transportation. And the invention of containerized shipping in 1956 allowed for economical multinational supply chains, further increasing global interconnectedness. Commercial air travel, thanks to the development of accessible airports and jumbo jets, became a largely affordable and economical means of long-distance travel in the 1970s.
The transition to a cashless economy through globalized technology began when American Express introduced the first general-purpose credit card in 1958, followed by Visa and MasterCard’s versions a decade later. By the 1970s, debit cards had also arrived on the scene, and with usage of both credit and debit cards skyrocketing, by the 1990s much of the world was conducting personal-consumer transactions with virtual money. While for some in the rich world this has meant unnecessary spending and debt, in developing nations, access to money via their smartphones allows for better trade and increases in quality of living.
Money – specifically the U.S. dollar – has played a decisive role in globalization. In the years after the Second World War, the globalized, international monetary system as we know it came into existence. The Bretton Woods Conference of 1944, headed by representatives of the Allies who had defeated Nazi Germany and imperialist Japan, were designed to foster open markets and increasing economic interconnectedness. It also led to the creation of what would become the World Bank and the International Monetary Fund (IMF).
Participation in the globalized system of commerce and its attendant technological innovations probably saved the economies of South Korea, Singapore, Taiwan, and Hong Kong from devastating debt crises and even allowed them to unleash a newfound period of prosperity, birthing the name “Asian Tigers.” From the 1960s through much of the 1990s, the four Asian Tigers carried out self-sufficient industrialization programs and exported their way to prosperity – while largely free of external debt. South Korea had appreciable levels of debt, but nullified the potential disadvantage through robust exportation of manufactured goods.
With the end of the Cold War in 1991, globalization was soaring to new heights – and also new depths. The General Agreement on Tariffs and Trade (or GATT), inked in 1947 and subsequently expanded, had ushered in a period of trade liberalization around the world. GATT eventually morphed into the World Trade Organization (WTO) in 1995, and by 2001 exports represented 16.2 percent of gross world product – nearly double the figure of 8.5 percent in 1970.
Russia was considered a developing country in the 1990s, but like China it has since used globalization strategically: Russia acceded to the WTO in 2012, and though the WTO currently has 164 members including the U.S., Russia and China arguably cooperate as closely now against the U.S. as they did during the Cold War, partly because of renewed American economic hostility towards both countries.
Time, space, and access to large amounts of information have been compressed enormously through the modern era of globalization. ARPANET, the U.S. Department of Defense funded precursor to the Internet, took shape in 1969. In 1981, IBM released the first personal computer and introduced the term “PC” into mass usage. Apple followed suit in 1984 with the Macintosh, which came with its own screen and mouse. Between 1989 and 1991, Oxford-trained physicist Tim Berners-Lee, with help from others, developed web pages, HyperText Transfer Protocol (HTTP) and Universal Resource Locators (URLs) – components of what became known as the Internet. Increasing connectivity online proceeded alongside increasing connectivity on the phone. Dr. Martin Cooper of Motorola came out with the first modern cell phone in 1973; Tokyo introduced the first commercial cell-phone network in 1979; and by 1982, commercial cellular phone service was available in the US.
Personal computers and fast Internet connections have made globalization itself faster, deeper, and potentially more dangerous, as well as more beneficial. Together, they’ve given rise to the phenomenon of social media and multinational social-media corporations that have become profit-making machines for their shareholders, coming full circle to the rise of stock-issuing multinational corporations that began in the 1600s. By December 2013, LinkedIn, Facebook, and Twitter had all become publicly-traded companies through initial public offerings. Citizens of almost any country with access to the Internet can find answers to just about anything using Internet search engines like Google although some governments, like China, heavily censor the Internet and restrict access to information. Individuals can communicate and grow their personal networks through cell phones, email, LinkedIn, and Facebook; they can reach audiences and amass followings quickly through Twitter; and they can order items from the comfort of their homes on Amazon, which previously would have required trips to brick-and-mortar stores. The Internet has even expanded the realm of movies and TV, with scripted productions being broadcast over Internet-connected Over-the-Top (or OTT) networks including Netflix and Hulu. But this high-speed connectivity also allows large-scale investors to pour large volumes of money into banks and stock markets just as quickly as they can pull it out. The Internet has expanded the power of these high-frequency traders, and they’re arguably responsible for an increased risk of bubbles forming in stock markets. The closer linkages to international markets and fast, virtual money which the Internet provided, were definitely among the causes of the financial crisis in East Asia in the 1990s.
Like any disruptive change, globalization has brought positive and negative consequences in its wake. Economies of sovereign countries can catapult into spectacular growth – or be ruined overnight. Through cell phones, personal computers, and the Internet, we’re connected more than ever before. Money flows easier and quicker, and we can make purchases online – but our appreciation of real value can suffer in the process.
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