History of Globalization

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Globalization is mainly a socio-economic term which is nowadays synonymous with the economic development of a country. In simple terms, it is a continuous process through which different societies, economies, traditions and culture integrate with each other on a global scale through the means of communication and interchange of ideas. By having an idea of the history of globalization, one will be able to properly understand the causes which led to such social and economic change.

Alexander the Great forges eastward link with Chandragupta Maurya for overland routes between the Mediterranean, Persia, India, and Central Asia. During the 1st century CE the trans-world trade makes its first major appearance in China under the Han dynasty and successfully established trade relations with Asian and European countries. The period from 650-850 AD records the expansion of Islam and trade relations with the west Mediterranean region with the Indian sub-continent. The Rise of Genghis Khan during 1100 AD gave rise to the integration of overland routes across Eurasia. The 1650s marks the expansion of the slave trade and it sustained the expansion of Atlantic Economy, giving birth to integrated economic and industrial systems across the Ocean. The period from 1776 to 1789 AD marks the US and French Revolutions and the creation of modern state as a fall-out of military and business interests. These integrated empires expand during the industrial revolution. The eighteenth century marks the merging of the modernity with globalization and it also marks the foundation for the creation of international trade law.

Early history of globalization

According to most scholars and researchers, it is the modern age which led to the origin of globalization. In this age, wide spread development took place in the field of infrastructure and connectivity. This led to more interaction between the nations and sharing of ideas, culture and tradition took place. All these put a direct impact on the process of globalization. In the economic scenario, more trade links started taking place between countries on a global scale which influenced global as well as domestic economies to a great extent.

However, there are some scholars who point out that the origins of the history of globalization can be traced back to the ancient civilizations. Scholars who advocate this theory say that the example of the earliest forms of globalization is the trade links between the Sumerian civilization and the Indus Valley Civilization in third millennium B.C. In fact, after this age, there are numerous instances where trade links were established between various countries like India, Egypt, Greece, and Roman Empire and so on. There were regular business links between the Parthian Empire, Roman Empire and Han Dynasty. The popularity of the trade relations led to the development of various trade routes like Silk Road and so on.

Globalization in the medieval age

The Islamic period in the medieval era is an important epoch in the history of globalization. This was when the Jewish and the Muslim traders started going to various parts of the world to sell various items. This led to a blend of ideas, traditions and customs.

In China, the first postal service was introduced and paper was invented. This led to better knowledge sharing. As more and more people started traveling to various countries across the world, it led to more communication between people and intermingling of languages. Explorers like Columbus and Vasco Da Gama sailed through the oceans in search of new countries and establish trade links with them or to make other countries their colonies. All these factors were a major cause for the development of the pre-globalization era.

The medieval period was the age of discovery. It was in this period that Africa and Eurasia engaged in cultural and economic exchange between them. Gradually, this led to the growth of colonies in various parts of Africa, Asia and Latin America. As a result, there was constant blend of the ideas, languages, rituals and customs between the natives and the foreign inhabitants. In fact, this system of colonization put a deep impact on agriculture, trade, ecology and culture on a global scale.

Globalization between the pre modern periods to modern period

The industrial revolution in the 19th century was one of the major periods in the history of globalization. Due to the industrial revolution, there was a significant increase in the quantity and quality of the products. This led to higher exports and better trade and business relations. Due to better products and colonization, lots of countries across the world became the consumers of the European market.

The phase of pre globalization perhaps came to an end after the First World War was fought. The war put a significant adverse effect on the economic scenario and it led to the Great Depression and gold standard crisis in the later part of the 1920s and early 1930s.

Globalization in the modern era

Globalization, in the modern sense of the term, came into existence after the Second World War. One of the main factors for this was the plan by the world leaders to break down the borders for fostering trade relations between nations. It was also in this period that major countries like India, Sri Lanka, Indonesia and some countries in South America gained independence. As a result, these countries too started having their own economic systems and made established trade relations with the rest of the world. The establishment of the United Nations Organization (UNO) was also a major step in this regard.

Gradually, the economic scenario of the world strengthened and it led to better trade relations and communication. Some other factors which have put a positive impact on globalization are:

  • Promotion of free commerce and trade
  • Abolition of various double taxes, tariffs, and capital controls
  • Reduction of transport cost and development of infrastructure
  • Creation of global corporations
  • Blend of culture and tradition across the countries
Another milestone in the history of globalization is the creation of the World Trade Organization which led to the growth of a uniform platform to settle trade and commercial disputes. According to economic surveys, the world exports improved significantly from 8.5% to around 16.2% due to globalization.

India and globalization

The wake of globalization was first felt in the 1990s in India when the then finance minister, Dr Manmohan Singh initiated the economic liberalization plan. Since then, India has gradually become one of the economic giants in the world. Today, it has become one of the fastest growing economies in the world with an average growth rate of around 6-7 %. There has also been a significant rise in the per capita income and the standard of living. Poverty has also reduced by around 10 %.

The service industry has a share of around 54% of the annual Gross Domestic Product while the industrial and agricultural sectors share around 29% and 17% respectively. Due to the process of globalization, the exports have also improved significantly.

Globalization has really out a positive impact on today's economy and it is expected to develop in the years to come.

Corporate Globalization | Foreign Trade

Last Updated on 5/18/2011