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1 month ago
Globalization seems to be a new concept but its roots go deep when explorers and traders opened up routes between Asia and the Middle East and Europe. In those early days, regional agricultural products and natural resources were the main trade. Geographically every region was suited for a particular type or set of agricultural production which created an abundant supply of it without a proportionate market for it. This was solved by the traders who took it to far off country to trade off against the products that were climatically suited for production there. Both were at a benefit as both tool advantage of the specialty of respective areas. It was basically interplay of market, technology and the state. It was a mutually beneficial way of distributing the surpluses of one region and make up the deficiency of that region.
However the pre modern era was all about localization. Migration took place only by way of conquest or natural calamity or some local demographic pressure. Most people spend their whole life in their birth place unless forced by the above mentioned reasons. Voluntary movement beyond the local limit would be limited to pilgrimages to certain places. Even conquests were hardly intercontinental and state power was mostly a coalition of local monarchs with limited centralized control. Trading was limited to neighborhood villages and only the elites had some regional trades, mostly in precious and semi precious commodities. Demand was limited due to the almost near universal poverty of common masses.
There were four distinct globalization phase after the pre modern era.
The first phase started in the 16th century when there was improvement in the sea navigation and maritime technology. This led to opening up of new areas to be exploited by merchants. The power was now centralized in absolute monarchy and the state controlled everything. The European and the American renaissance changed the outlook of people and opened up avenues which were previously thought impossible. This phase made a series of sea and land explorers who went around the world and also served the monarchy by establishing trade and commerce. The focus started shifting from physical conquest to economic conquest.
The second phase started with the industrial revolution in the late Eighteenth century. The transport system changed from animal driven to mechanical driven and the wide scale use of machines led to increased productivity and demand. Now time for intercontinental travel was reduced and this led to increased sourcing of raw material from far off places. This led to more cross border integration and bulk trade. The colonial investment flow and plunder meant the flag followed where the trade was lucrative. The Asian and African countries became the primary target of colonialism as the natural resources and human resources were abundant here. This increased the economic gap between the Europeans and Americans, and the rest of the world.
The two world wars put a brake to it and international trade came to a halt almost and the people of Africa and Asia revolted against the colonial imperialism.
The third phase started after the world wars and now most countries got their independence. The thrust of the second phase was to export mass produced goods to the colonies. Now after the liberation of the countries, these countries took up the export dynamism of the erstwhile colonialists, as the raw material was abundantly available with them. They only required the machinery and the technology to mass produce finished goods and export them to the erstwhile colonialists. This led to a huge growth in the GDP and international trade of these countries.
The fourth phase started in the second half of the twentieth century, with developing countries becoming equal partner in trade and investment. New power centers like China and India are starting to dominate the market. The focus has now shifted to regions which have the most consumers rather than from more producers. Now the focus has shifted from merchandise trade to trade of services led by information technology and capital flow. The focus is increasingly shifting from state owned enterprises to private owned enterprises with the state playing the role of facilitator. Now the world is more inclined towards solving the energy-security and food security through foreign policy rather than physical conquest. Now diplomacy uses macroeconomic fiscal and monetary policies of manage external shock.
Now it is to be seen whether this universal globalization, civilization and cultural entropy will abate a clash of civilizations.