globalization is the word used to describe the growing interdependence of the world’s economies, cultures, and

populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people,
and information. Countries have built economic partnerships to facilitate these movements over many centuries. But the
term gained popularity after the Cold War in the early 1990s, as these cooperative arrangements shaped modern
everyday life. This guide uses the term more narrowly to refer to international trade and some of the investment flows
among advanced economies, mostly focusing on the United States.

The wide-ranging effects of globalization are complex and politically charged. As with major technological advances,
globalization benefits society as a whole, while harming certain groups. Understanding the relative costs and benefits can
pave the way for alleviating problems while sustaining the wider payoffs.

Today, Americans rely on the global economy for many of the things they buy and sell, expanding businesses, and making
investments. Many products and services have become affordable to the average American through the coordination of
production across countries.

THE HISTORY OF GLOBALIZATION IS DRIVEN BY TECHNOLOGY, TRANSPORTATION, AND INTERNATIONAL COOPERATION

Since ancient times, humans have sought distant places to settle, produce, and exchange goods enabled by
improvements in technology and transportation. But not until the 19th century did global integration take off. Following
centuries of European colonization and trade activity, that first “wave” of globalization was propelled by steamships,
railroads, the telegraph, and other breakthroughs, and also by increasing economic cooperation among countries. The
globalization trend eventually waned and crashed in the catastrophe of World War I, followed by postwar protectionism,
the Great Depression, and World War II. After World War II in the mid-1940s, the United States led efforts to revive
international trade and investment under negotiated ground rules, starting a second wave of globalization, which
remains ongoing, though buffeted by periodic downturns and mounting political scrutiny.

“GLOBALISATION” has become the buzzword of the last two decades. The sudden increase in the exchange of
knowledge, trade and capital around the world, driven by technological innovation, from the internet to shipping
containers, thrust the term into the limelight.

Some see globalisation as a good thing. According to Amartya Sen, a Nobel-Prize winning economist, globalisation “has
enriched the world scientifically and culturally, and benefited many people economically as well”. The United Nations has
even predicted that the forces of globalisation may have the power to eradicate poverty in the 21st century.

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Others disagree. Globalisation has been attacked by critics of free market economics, like the economists Joseph Stiglitz
and Ha-Joon Chang, for perpetuating inequality in the world rather than reducing it. Some agree that they may have a
point. The International Monetary Fund admitted in 2007 that inequality levels may have been increased by the
introduction of new technology and the investment of foreign capital in developing countries. Others, in developed
nations, distrust globalisation as well. They fear that it often allows employers to move jobs away to cheaper places. In
France, “globalisation” and “délocalisation” have become derogatory terms for free market policies. An April 2012 survey
by IFOP, a pollster, found that only 22% of French people thought globalisation a “good thing” for their country.

However, economic historians reckon the question of whether the benefits of globalisation outweigh the downsides is
more complicated than this. For them, the answer depends on when you say the process of globalisation started. But
why does it matter whether globalisation started 20, 200, or even 2,000 years ago? Their answer is that it is impossible to
say how much of a “good thing” a process is in history without first defining for how long it has been going on.

Early economists would certainly have been familiar with the general concept that markets and people around the world
were becoming more integrated over time. Although Adam Smith himself never used the word, globalisation is a key
theme in the Wealth of Nations. His description of economic development has as its underlying principle the integration
of markets over time. As the division of labour enables output to expand, the search for specialisation expands trade,
and gradually, brings communities from disparate parts of the world together. The trend is nearly as old as civilisation.
Primitive divisions of labour, between “hunters” and “shepherds”, grew as villages and trading networks expanded to
include wider specialisations. Eventually armourers to craft bows and arrows, carpenters to build houses, and seamstress
to make clothing all appeared as specialist artisans, trading their wares for food produced by the hunters and shepherds.
As villages, towns, countries and continents started trading goods that they were efficient at making for ones they were
not, markets became more integrated, as specialisation and trade increased. This process that Smith describes starts to
sound rather like “globalisation”, even if it was more limited in geographical area than what most people think of the
term today.

Smith had a particular example in mind when he talked about market integration between continents: Europe and
America. The discovery of Native Americans by European traders enabled a new division of labour between the two
continents. He mentions as an example, that the native Americans, who specialised in hunting, traded animal skins for
“blankets, fire-arms, and brandy” made thousands of miles away in the old world.

Some modern economic historians dispute Smith’s argument that the discovery of the Americas, by Christopher
Columbus in 1492, accelerated the process of globalisation. Kevin O’Rourke and Jeffrey Williamson argued in a 2002
paper that globalisation only really began in the nineteenth century when a sudden drop in transport costs allowed the
prices of commodities in Europe and Asia to converge. Columbus' discovery of America and Vasco Da Gama’s discovery of
the route to Asia around the Cape of Good Hope had very little impact on commodity prices, they argue.

But there is one important market that Mssrs O’Rourke and Williamson ignore in their analysis: that for silver. As
European currencies were generally based on the value of silver, any change in its value would have had big effects on
the European price level. Smith himself argued this was one of the greatest economic changes that resulted from the
discovery of the Americas:

The discovery of the abundant mines of America, reduced, in the sixteenth century, the value of gold and silver in Europe
to about a third of what it had been before. As it cost less labour to bring those metals from the mine to the market, so,
when they were brought thither, they could purchase or command less labour; and this revolution in their value, though
perhaps the greatest, is by no means the only one of which history gives some account.

The influx of about 150,000 tonnes of silver from Mexico and Bolivia by the Spanish and Portuguese Empires after 1500
reversed the downwards price trends of the medieval period. Instead, prices rose dramatically in Europe by a factor of six
or seven times over the next 150 years as more silver chased the same amount of goods in Europe (see chart).

The impact of what historians have called the resulting “price revolution” dramatically changed the face of Europe.
Historians attribute everything from the dominance of the Spanish Empire in Europe to the sudden increase in witch
hunts around the sixteenth century to the destabilising effects of inflation on European society. And if it were not for the
sudden increase of silver imports from Europe to China and India during this period, European inflation would have been
much worse than it was. Price rises only stopped in about 1650 when the price of silver coinage in Europe fell to such a
low level that it was no longer profitable to import it from the Americas.

The rapid convergence of the silver market in early modern period is only one example of “globalisation”, some historians
argue. The German historical economist, Andre Gunder Frank, has argued that the start of globalisation can be traced
back to the growth of trade and market integration between the Sumer and Indus civilisations of the third millennium
BC. Trade links between China and Europe first grew during the Hellenistic Age, with further increases in global market
convergence occuring when transport costs dropped in the sixteenth century and more rapidly in the modern era of
globalisation, which Mssrs O’Rourke and Williamson describe as after 1750. Global historians such as Tony Hopkins and
Christopher Bayly have also stressed the importance of the exchange of not only trade but also ideas and knowledge
during periods of pre-modern globalisation.

Globalisation has not always been a one-way process. There is evidence that there was also market disintegration (or
deglobalisation) in periods as varied as the Dark Ages, the seventeenth century, and the interwar period in the twentieth.
And there is some evidence that globalisation has retreated in the current crisis since 2007. But it is clear that
globalisation is not simply a process that started in the last two decades or even the last two centuries. It has a history
that stretches thousands of years, starting with Smith’s primitive hunter-gatherers trading with the next village, and
eventually developing into the globally interconnected societies of today. Whether you think globalisation is a “good
thing” or not, it appears to be an essential element of the economic history of mankind.

The term globalization is derived from the word globalize, which refers to the emergence of an international network of
economic systems. One of the earliest known usages of the term as a noun was in a 1930 publication entitled Towards
New Education, where it denoted a holistic view of human experience in education.A related term, corporate giants, was
coined by Charles Taze Russell (of the Watch Tower Bible and Tract Society) in 1897 to refer to the largely national trusts
and other large enterprises of the time. By the 1960s, both terms began to be used as synonyms by economists and
other social scientists. Economist Theodore Levitt is widely credited with coining the term in an article entitled
"Globalization of Markets", which appeared in the May–June 1983 issue of Harvard Business Review. However, the term
'globalization' was in use well before this (at least as early as 1944) and had been used by other scholars as early as
1981.Levitt can be credited with popularizing the term and bringing it into the mainstream business audience in the later
half of the 1980s. Since its inception, the concept of globalization has inspired competing definitions and interpretations,
with antecedents dating back to the great movements of trade and empire across Asia and the Indian Ocean from the
15th century onwards. Due to the complexity of the concept, research projects, articles, and discussions often remain
focused on a single aspect of globalization.

What Is Globalization?

Globalization is a process of interaction and integration among the people, companies, and governments of different
nations, a process driven by international trade and investment and aided by information technology. This process has
effects on the environment, on culture, on political systems, on economic development and prosperity, and on human
physical well-beingin societies around the world.

Globalization is not new, though. For thousands of years, people—and, later, corporations—have been buying from and
selling to each other in lands at great distances, such as through the famed Silk Road across Central Asia that connected
China and Europe during the Middle Ages. Likewise, for centuries, people and corporations have invested in enterprises
in other countries. In fact, many of the features of the current wave of globalization are similar to those prevailing before
the outbreak of the First World War in 1914.

But policy and technological developments of the past few decades have spurred increases in cross-border trade,
investment, and migration so large that many observers believe the world has entered a qualitatively new phase in its
economic development. Since 1950, for example, the volume of world trade has increased by 20 times, and from just
1997 to 1999 flows of foreign investment nearly doubled, from $468 billion to $827 billion. Distinguishing this current
wave of globalization from earlier ones, author Thomas Friedman has said that today globalization is “farther, faster,
cheaper, and deeper.”

This current wave of globalization has been driven by policies that have opened economies domestically and
internationally. In the years since the Second World War, and especially during the past two decades, many governments
have adopted free-market economic systems, vastly increasing their own productive potential and creating myriad new
opportunities for international trade and investment. Governments also have negotiated dramatic reductions in barriers
to commerce and have established international agreements to promote trade in goods, services, and investment. Taking
advantage of new opportunities in foreign markets, corporations have built foreign factories and established production
and marketing arrangements with foreign partners. A defining feature of globalization, therefore, is an international
industrial and financial business structure.

Technology has been the other principal driver of globalization. Advances in information technology, in particular, have
dramatically transformed economic life. Information technologies have given all sorts of individual economic actors—
consumers, investors, businesses—valuable new tools for identifying and pursuing economic opportunities, including
faster and more informed analyses of economic trends around the world, easy transfers of assets, and collaboration with
far-flung partners.

Globalization is deeply controversial, however. Proponents of globalization argue that it allows poor countries and their
citizens to develop economically and raise their standards of living, while opponents of globalization claim that the
creation of an unfettered international free market has benefited multinational corporations in the Western world at the
expense of local enterprises, local cultures, and common people. Resistance to globalization has therefore taken shape
both at a popular and at a governmental level as people and governments try to manage the flow of capital, labor, goods,
and ideas that constitute the current wave of globalization.

To find the right balance between benefits and costs associated with globalization, citizens of all nations need to
understand how globalization works and the policy choices facing them and their societies. Globalization101.org tries to
provide an accurate analysis of the issues and controversies regarding globalization, without the slogans or ideological
biases generally found in discussions of the topics. We welcome you to our website.

Theodore Levitt, a former professor at the Harvard Business School credited with coining
the term "globalization" and with championing the undervalued role of marketing in
defining what businesses should make and sell, died June 28 at his home in Belmont,
Mass. He was 81.

The cause was prostate cancer, according to his son, Peter.

Mr. Levitt, known as Ted, gained widespread attention for his marketing insights in 1960,
the year after he joined the Harvard faculty. He published an article called "Marketing
Myopia" in The Harvard Business Review that criticized business executives for too
narrowly defining what their companies did. He argued, for instance, that the railroad
industry had lost customers to the airlines, trucking and auto industries in part because its
top executives thought they were in the business of running trains instead of providing
transportation.

More than 1,000 companies ordered 35,000 reprints in the weeks after publication, a total
that has since risen to 850,000 reprints, according to The Harvard Business Review.

His concept that business was becoming globalized, which Mr. Levitt defined as the
changes in technology and social behaviors that allow multinational companies like Coca-
Cola and McDonald's to sell the same products worldwide, first appeared in a 1983
Harvard Business Review article "The Globalization of Markets." In his sweeping style, he
said, "Gone are accustomed differences in national or regional preferences."

Although unapologetic about exaggerating, Mr. Levitt would readily concede that
companies actually had to balance persistent national cultural patterns with the general
trend toward the embrace of global brands. Thus, he approved tactics like McDonald's
supplementing its standard menus with local fare like vegan meals in India.
Continue reading the main story

Mr. Levitt's zest for intellectual combat reflected his view of writing as an extension of his
Harvard classroom, which he prowled as he lectured, occasionally tossing chalk for
emphasis. "His technique in class was to be provocative to get you to think," said Michael
Berolzheimer, a former student, who credited a strategy session with Mr. Levitt as the roots

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In addition to writing eight marketing books and frequently consulting, Mr. Levitt was also
editor of The Harvard Business Review from 1985 to 1990. Under his direction, the review
began running shorter articles and cartoons in addition to its longer analytical articles and
"how to" reviews of management practices.

Theodore Levitt was born March 1, 1925, in Vollmerz, Germany. His father, Boris, a
cobbler, and his wife, Rachel, moved the family to Dayton, Ohio, a decade later. Mr. Levitt
and Erma Fiste, who became the syndicated humor columnist Erma Bombeck, founded a
newspaper together as fifth graders. Mr. Levitt was drafted into the Army before
graduating and served in Europe during World War II.

After the war, he worked as a sports writer for The Dayton Journal Herald, completed high
school through a correspondence course, then enrolled at Antioch College, graduating in
1949. He earned his Ph.D. in economics from Ohio State University in 1951. He taught at
the University of North Dakota and worked as an oil industry consultant in Chicago before
moving to Harvard in 1959.

Mr. Levitt is survived by his wife of 58 years, the former Joan Levy; two sons, Peter, of
Boston, and John, of Sarasota, Fla.; two daughters, Kathryn Wells, of Lexington, Mass.,
and Laura Levitt Beaudry, of Belmont, Mass.; six grandchildren; and two sisters, Ann
Brenner, of Winston-Salem, N.C., and Dorothy Engelhardt, of Dayton, Ohio. A daughter,
Frances Levitt Byington, and a brother, Albert, died before him.

Correction: July 11, 2006

An obituary and headline on Friday about Theodore Levitt, a marketing scholar at the Harvard
Business School, referred incorrectly to the origin of the word globalization. While Mr. Levitt’s
work was closely associated with the idea of globalization in economics, and while he published
a respected paper in 1983 popularizing the term, he did not coin the word. (It was in use at least
as early as 1944 in other senses and was used by others in discussing economics at least as
early as 1981.)

A version of this article appears in print on , on Page B7 of the New York edition with the headline:
Theodore Levitt, 81; Coined the Term 'Globalization'. Order Reprints| Today's Paper|Subscribe