While T. Friedman in The Earth is Flat (2005), claimed a new era of globalization started in 2000, but did it? Or was US Presidential candidate Ross Perot the sound of the planet shrinking in the early 1990s? Or did globalization get underway thousands of years ago, as world-system historians like the late Andre Gunder Frank maintain? Was Adam Smith correct to see 1492 as globalization's great leap forward? Or do we believe Kevin O'Rourke and Jeffery Williamson's claim that the 19th century contained a very big globalization bang. (Kevin O'Rourke, & Jeffrey Williamson in “When Did Globalization Begin?”, National Bureau Of Economic Research Working Paper No. 7632, April 2000,currently reworked into a upcoming book).

I sincerely believe these and other questions have been answered in this p.1 and 2 of our History of Globalization Research results.  As has also been made apparent in there, among others, the years from 1955 to 1965 were indeed one of the crucibles for globalization. After all, this decade saw Sputnik and Gagarin's orbit, and the US develop its domino theory of Cold War intervention. Over 60 countries were added to the family of nations, enhancing identity and giving globalizers a target free from imperial trammels. The decade saw the early burgeoning of US multinational corporations. The world's population grew at its faster ever rate, and the number of people traveling on international holidays grew by ten per cent each and every year, closely matched by interna­tional refugees.

The teenager arrived as a cultural force (until the 1930’s most teenagers were sent to work at an early age), empowered by pocket radio, rock'n'roll and TV. The dollar took its place as the global reserve currency, but oil was steadily seeping into the global economy. In the early 1960s, according to the Worldwide Fund for Nature's Living Planet Index, American and European consumers began to outstrip the capacity of the environment to provide food, energy, materials and building land and act as a sink for pollution. The modern environmental movement was born. This period also saw the rise of globalizing institutions, ran­ging from McDonald's to the Eurovision Song Contest.

Plus of course since the publication of “The Da Vinci Code” it has become tempting to bundle Leonardo da Vinci's Mona Lisa into another one of these crucibles. But the painting started life, ostensibly at least, as a portrait of a Florentine businessman's wife, and was in any case painted just outside the key decade (from 1503-07). The painting's universal fame as a symbol of feminine mystique only really began after Walter Benjamin became obsessed with her in the 1860s. Similarly, the Sputnik Decade misses out on the crucial year 1971, when Nixon cut the dollar loose from gold and campaigning NGOs were founded.

Where has this series of contractions got us to? Both market fundamentalists and anti-capitalists have reasons to exagge­rate the extent to which the world is globalized. But the facts and figures are dramatic enough. Three-quarters of the world's capital market is international. Over half of the world's top 150 economies are multinational corporations. Half of inter­national trade is between world regions. A fifth of all people old enough to use a keyboard are using the internet. One in ten people is a migrant, slave, international traveler or works for a foreign company.

Global goods and muscle are the longest established; ideas and culture followed. Relative to the other areas, global finance is the area that has globalized fastest. 'Among the three most important types of markets - those for capital, products, and labor - the global capital market is the farthest along the road to true global integration,' says Diana Farrell, director of the McKinsey Global Institute. Farrell leaves out the world of ideas. Ideas and culture move as easily as money ­it's just that we don't know how to count them.

Plus how much further can globalization go? It can't go all the way. There are logistical, commercial and environmental limits to globaliza­tion. From global warming to hyper-mobility to consumer saturation to mutual incomprehension, exchanges will grind to a halt well short of a fully globalized world.

As we have seen in our “H.Grail” section, global grind may already be starting, as large corpora­tions concentrate on key markets, travelers revert to safe and familiar destinations, local cultures gain new resilience, em­powered migrant workers return home and immigration restrictions prevent others from taking their place. Complex global supply-chains are proving very difficult to 'clean up' in terms of labor standards. Local food production is fighting back against global sourcing.

On the other hand, there is no shortage of people with global intent. Global warming and economic competition will throw people into motion and see vast transfers of resources from one region to another. On the basis of past contractions, there looks to be at least one more global contraction to come. Some of the pieces are already in place. But history has its limits. There is no template as to where the next galvanizing event will come from, and what form it will take.

Neo-liberal historians currently command the heights of eco­nomic history. According to this school of thought, globaliza­tion is a long-established and basically progressive process. Where the British Empire was the prime mover of globaliza­tion from 1870 to 1913, today it is US and European corporate capitalism and its democratic vision that makes goods avail­able for all, improves labor standards, increases wealth and shares cultural riches. A more recent account has the USA and Europe not as the drivers but as the intended victims of the new round of globalization. This time it's the vast 'armies' of educated entrepreneurs in China and India that will call the shots. If you think your job can't be outsourced halfway round the world - it probably already has been. Both accounts are self-centred claptrap.

As we have seen, there have always been many losers from globalization. Downsized blue- and white-collar workers in the West deserve sympathy and support - it could be me next. But the modern counterparts of the brutalized Spice Islanders and desperate Indian farmers killing themselves because they see their livelihoods collapse, Eastern European women sold into sexual servitude, Africans orphaned because providing affordable retroviral treatments undermines a business model, Andean villagers robbed of their resources.

One thousand years ago, almost every person on the planet - all 268 million of them - was eking out an existence on around US$1.20 a day. In the year 2000, the average person was living on US$15.50 a day. But over one billion people - one in six of the world's population and four times more than had been alive in the year 1000 - was living on an income even lower than that of their ancestors 50 generations previously. Income inequality between regions has never been higher, and it is growing. The scourge of AIDS has seen life expectancy - one of the great success stories of the twentieth century - actually falling for the first time in Africa. Obesity will do the same in rich nations.

The world's nations set themselves the target of halving this obscenely persistent world poverty by 2015. Note the realism of halving - not eradicating - poverty. In September 2005, they met to review progress towards the Millennium Devel­opment Goals. Their conclusion? The 'dollar a day' target would not be met, despite the phenomenal growth in China and India. China and India will inevitably take their proportionate place at the global table. This will impoverish some Western workers. But globalization has served rich countries well and they own nine-tenths of the world's capital assets. Brazil, Venezuela and Malaysia are steering paths towards globaliza­tion on their own terms. The real losers could be middling countries like Mexico, Argentina, Poland and Kenya, strug­gling to find a new role in world markets that favor either intellectual capital or cheap labor and raw materials.

David Dollar and Aart Kraay, from the World Bank, are perhaps the leading experts on the impacts of globalization on poverty levels. What do they think? Dollar and Kraay concede the global trend towards rising inequality over the past two centuries or more. But, they claim, this peaked around 1975 and 'since then, it has stabilized and possibly even reversed. The chief reason for the change has been the accelerated growth of two large and initially poor countries: China and India.' They divide the developing world into two camps: a 'globalizing' group of countries that have welcomed trade and foreign investment over the last 20 years - and grown by five per cent a year as a result. The 'nonglobalizing' camp trades less than it did 20 years ago, and grew at just one per cent a year. (See the article by Geoffrey Garrett, in Foreign Affairs, November/December 2004.)

The message seems pretty clear, growth may cause domestic income inequality, but globalization is good news because, it will bring absolute poverty down. Dollar and Kraay adopt a narrow definition of globalization: openness to foreign trade and investment, low tariffs, few capital controls. They don't factor in debt burdens, bank crises, irresponsible corporations and punitive commodity prices - effects as we have seen which come with the globalization package whether poor countries want them or not. Even so, their findings have been picked up and publicized as a global rule. The problem is, the global results are totally skewed by the huge populations and abnormal globalizing paths to globalization taken by India and China.

Per the beginning of 2006, elsewhere in the developing world the picture looked less rosy. GDP is static or falling in many African countries; and income growth in Latin America is patchy and susceptible to sudden setbacks. 'Something is clearly wrong', says former World Bank economist Branko Milanovic, now senior associate at Carnegie's Global Policy Program. 'Maintaining that globali­zation as we know it is the way to go and that, if the Washington Consensus policies have not borne fruit so far, they will surely do so in the future, is to replace empiricism with ideology. This has been done before, but unfortunately the consequences were less tan positive. (See: www.worldbank.orgltransitionnewsletterljanfebmar03Ipg512-15.htm).

When the Pew Global Attitudes Project, chaired by Made­leine Albright, asked people from 44 countries around the world how they felt 'about the world becoming more con­nected through greater economic trade and faster communica­tion', the answers were almost unanimously positive. When the researchers asked whether 'growing trade and business ties between our country and other countries is good for you and your family', one in five people in many countries said they disagreed, didn't know or didn't like to say. I started writing this book with a nagging feeling that there was already too much written, too much said, about globalization. If one in five people can't decide if globalization is a good thing or not, there hasn't been nearly enough debate. Perhaps the history of globalization - beauty marks, warts and all - can help people make up their minds.

Pro-globalizers wheel out Myanmar and North Korea in evidence of the risks whenever someone challenges 'globaliza­tion as usual'. But the nations in most serious trouble are in sub-Saharan Africa. These countries have not 'failed to em­brace globalization' - far from it. They have massive interna­tional debts, are dependent on exports of primary commodities to world markets, and have adopted European languages in preference to local ones. However, they are small, landlocked, and have a high prevalence of HIV/AIDS.

As David Dollar and Aart Kraay admit, Our research shows that countries that grow faster or trade more are as likely to see inequality decrease as increase. Robust global data on the trends that affect the lives of billions of people ­inter-regional exchanges in trade, people, finance and culture ­should be a properly resourced undertaking. This was a job that earlier globalizers, for all their other faults, took seriously. Today we rely on government whim and under-resourced UN statisticians. Dollar and Kraay concede that the data of house­hold income that have been used as evidence of the benefits of globalization are full of flaws, but 'they are the best we have, and so we use them. If Wal-Mart headquarters in Benton­ville can know within seconds when a customer buys a tin of beans in Beijing, how is it that we still don't know what the impacts of global trade and investment are on poor people?

As China and India grow, world production and consump­tion will have to expand proportionately, other countries will have to forego growth, or the West will have to surrender existing income. Global trade and finance growth rates in the mid-2000’s are an order of magnitude faster than anything that has been seen before. We are in uncharted territory and a GPS wristwatch or some dodgy multiple regression analysis are no guide to the future.

100 years ago, Italian-born Frenchman Maurice Garin retired from professional cycling after he was disqualified from the second Tour de France. Garin, the winner of the first tour, had broken the rules by taking the train for a part of the second. There is a 'bicycle theory of globalization' - in fact like everything else to do with this contentious topic, there are two conflicting versions of the bicycle theory. To pro-globa­lizers, it means that you have to keep moving forward reason­ably fast or you'll fall off. To global sceptics, by contrast, the bicycle theory says you should get off every once in a while to get your breath back and admire the view.

'The nation-state is just about through as an economic unit,' claimed Charles Kindelberger in 1969. Numerous commenta­tors since then have made the same diagnosis. Japan, Brazil, India and Germany don't agree. They have lobbied hard to get into an expanded UN Security Council. Mexico and Indonesia want to join them, but there is no agreed basis for membership of the group or who should have a veto. Meanwhile, China and other large economies must soon be invited to join the outdated G8 group of 'advanced economies'. Whether the emerging group is a G20 or a G96 is an open question.

Nation-states are resurgent, empowered by global contractions and keen to find tipping points to help them manage global exchanges. Countries are prepared to regulate, engage in trade wars, raise taxes if need be. What is remarkable is that, unlike other periods in history, recent advances in information technology have not yet been applied to global governance and decision-making processes. Real time multinational voting by phone, text and email is perfectly feasible - just check the Eurovision Song Contest. So why is it so hard to imagine a global referendum about global warming in the near future?

Citizens are also empowered by globalization. From local food to fair trade to exerting pressure on the G8, there are a whole range of tools that were simply not available to activists in the 1890s or 1960s. 1995-96 was The Year of the Sweat­shop. Why did US and European citizens become so obsessed with labour standards at this precise time - far more wide­spread than the Boycott South Africa movement of the early 1980s, or when rubber-tapper Chico Mendes was murdered (1989), or during the Congo and Putumayo scandals of the early 1900s? 1995 saw a concatenation of hitherto discon­nected events: terrible industrial accidents like the 1993 Kader toy factory fire in Bangkok; the murder of Ken Saro-Wiwa; campaigning CEOs and companies like Anita Roddick and the Body Shop breaking ranks with the rest of their industries; the blatant untransparency of corporate environmental and social reports; the growing financial, technical and networking resources of NGOs; and the mainstream media's sudden interest in exposing sweatshop stories about wholesome companies.

History shows that tipping points can be maddening elusive. Despite all sorts of judicious levering, in all the obvious places, slave trading still persists, 200 years after the most powerful nation in the world decided to ban it. Global warming is happening, and the most powerful nation in the world refuses to accept it. Working conditions in the global supply-chain remain, as often as not, terrible. But the history of globalization also shows how global intent can persevere against the odds. People still have power to choose when, how, even whether they enter global exchanges.

 

World History of Globalization Project, P.1

World History of Globalization Project, P.2

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