Globalization involves the interplay of markets, technology and State, which are amongst the oldest and most distinctive human innovations. Exchange, the fundamental principle on which markets are organised, is known to exist in the most primitive human societies. Man is not the only living creature with the ability to store surpluses and live in complex societies controlled by chiefs — consider the industrious ants and bees — but he is unique in his ability to socially redistribute these surpluses through increasingly complex divisions of labour under the authority of the State.
The saga of globalisation is that of an unbound Prometheus, with surges in productivity and growth unparalleled in history as markets, technology and states are progressively freed from local demand and supply constraints. Although the term 'globalisation' has gained currency only recently, the forces driving this trend can be traced back to the end of the Middle Ages in Europe.
Pre-modern societies, however, were above all else defined by localism and decentralisation. Most people remained at their place of birth right through their lives. Migration was a one-way street to resettle in virgin territory in response to conquest, calamity or local demographic pressure. Religious experience was mostly limited to the local parish, with wider pilgrimages limited to a select few. Empires meant mostly march of armies over land, and were never transcontinental, with the notable exception of North Africa adjoining the Mediterranean. State power was a coalition of local power elites owing allegiance to a monarch who never had access to centralised administrative machinery.
With near universal poverty a structural constraint on demand, markets were neighbourhood-trading places, with long distance trade mostly limited to luxury goods for the small power elite. New ideas, information and technology spread slowly since transportation and communication were based on animal traction. Four distinct phases of globalisation can be discerned in modern history. The first phase began in the sixteenth century with the passing of pre-modern localism, improvements in maritime technology leading to the great age of maritime exploration, discovery and mercantilism, the European Renaissance, centralising tendencies associated with absolute monarchy and the emergence of modern nation states following the Peace of Westphalia of 1648, and the spread of the ideals of the American and French Revolutions from the eighteenth century.
The second phase from the late eighteenth century was marked by the spread of the Industrial Revolution and vast improvements in human technology, inanimate traction, productivity and demand, which led to mass production and conveyance of merchandise goods and people, cross-border integration through bulk long-distance trade, colonial plunder, investment flows and empire during a phase of European imperial expansion which saw the flag follow trade across the globe. The Industrial Revolution opened up a rapidly widening income gap between Europe and America on the one hand, and the rest of the world on the other.
Source-: economictimes.indiatimes.com
