The Evolution of Economic Globalization

1. Silk roads (1st century BC-5th century AD, and 13th-14th centuries AD)

People have been exchanging commodities for almost as long as they have existed. Silk, like the
spices that were introduced to the intercontinental trade between Asia and Europe, was primarily
a luxury item. The value of these exports as a proportion of the overall economy was
insignificant, and many intermediaries were involved in getting the goods to their final
destination.

However, global trade ties were created, and it was a goldmine for those involved. The various
ranged from the selling price to the final sales price in the thousands. Since two great empires
ruled much of the Silk Road, it was able to thrive. If trade was disrupted, it was usually due to
blockades by Rome or China's local enemies. If the Silk Road did finally close, as it did after
many centuries, it was due entirely to the collapse of empires. The emergence of a new
hegemonic empire, the Mongols, caused it to reopen in Marco Polo's late mediaeval period.

2. Spice routes (7th-15th centuries)

In the 7th century, trade expanded in all directions as the new religion spread from its Arabian
heartland. The prophet Mohammed, as well as his wife Khadija, were both well-known
merchants. Muslim traders dominated Mediterranean and Indian Ocean trade by the early ninth
century; later, they could be found as far east as Indonesia, which eventually became a Muslim-
majority country, and as far west as Moorish Spain.

3. Age of Discovery (15th-18th centuries)

In the Age of Discovery, true global trade began. European explorers linked East and West
during this time, from the end of the 15th century onwards, and accidentally discovered the
Americas. With the help of observations made during the so-called "Scientific Revolution," in
the fields of astronomy, mechanics, physics and shipping, the Portuguese, Spanish, later the
Dutch and the English first “discovered”, then subjugated, and finally integrated new lands in
their economies.

4. First wave of globalization (19th century-1914)

By the end of the 18th century, Great Britain had begun to dominate the world both
geographically and technologically, thanks to inventions such as the steam engine and the
industrial weaving machine, among others. The First Industrial Revolution was in full swing at
the time.

The “British” Industrial Revolution was a brilliant global exchange twin engine. Steamships and
trains, on the one hand, could move goods over thousands of miles, both within and across
countries. However, Britain's industrialization allowed it to produce products that were in high
demand around the world, such as iron, textiles, and manufactured goods.
The figures revealed the globalization that resulted. For nearly a century, trade expanded at a rate
of 3% per year on average. Exports increased from 6% of global GDP in the early 1800s to 14%
on the eve of World War I, thanks to this rate of growth.

Those with the financial resources to invest in internationally active joint stock companies could
do so in New York, Paris, London, or Berlin. One of them, the French Compagnie de Suez, built
the Suez Canal, which connected the Mediterranean and the Indian Ocean and opened up yet
another trade artery. Others worked on railways in India or in African colonies, managing mines.
Foreign direct investment was also becoming more global.

5. The world wars

When World War I broke out in 1914, it put an end to almost all that the West's burgeoning high
society had become accustomed to, including globalization. The devastation was complete.
Millions of soldiers died in combat, millions of civilians died because of collateral damage, trade
was replaced by devastation, and countries closed their borders once more.

The financial markets, which were still linked in a global network in the years between the world
wars, caused the global economy and its ties to break down even further. The Great Depression
in the United States brought the South American boom to an end, as well as a bank run in many
other parts of the world. In 1939-1945, another world war erupted. By the end of World War II,
trade as a percentage of global GDP had dropped to 5%, the lowest amount in over a century.

6. Second and third wave of globalization

The end of World War II signaled the start of a new era for the global economy. Global trade
began to grow again under the rule of a new hegemon, the United States of America, and assisted
by inventions from the Second Industrial Revolution, such as the automobile and the plane. As
the Iron Curtain split the world into two spheres of power, this occurred in two different tracks at
first. When the Iron Curtain fell in 1989, however, globalization became a genuinely global
phenomenon.

Institutions like the European Union and other free trade vehicles promoted by the US were
responsible for much of the rise in foreign trade in the early decades after WWII. A similar rise
in trade occurred in the Soviet Union, but by centralized planning rather than the free market.
The impact was enormous. Global trade soared to 1914 levels once more in 1989, with export
accounting for 14% of global GDP. It was accompanied by a significant increase in middle-class
incomes in the West.

Globalization became an all-conquering power after the Berlin Wall fell in Germany and the
Soviet Union fell apart. The newly formed World Trade Organization (WTO) urged countries all
over the world to sign free-trade agreements, which most did, including several newly
independent countries. Even China, which had been a secluded, agrarian economy for the better
part of the twentieth century, joined the WTO in 2001 and began to produce for the rest of the
world. The United States set the stage and led the way in this "new" world, but many others
benefited from their slipstream.
As a result, globalization has gone into overdrive. Global exports peaked in the 2000s,
accounting for roughly a quarter of global GDP. As a result, trade, which includes both imports
and exports, has increased to around half of global GDP. Trade accounts for far more than 100
percent of GDP in some countries, such as Singapore, Belgium, and others. The bulk of the
world's population has gained from this: there are now more people in the global middle class
than ever before, and hundreds of millions of people have reached this position by participating
in the global economy.

7. Globalization 4.0

That takes us to the present day, when a new wave of globalization is upon us. In a world
increasingly dominated by two global forces, the United States and China, the cyber world is the
latest frontier of globalization. Through e-commerce, digital utilities, and 3D printing, the digital
economy, which was in its infancy during the third wave of globalization, is now becoming a
force to be reckoned with. Artificial intelligence aids it more, but it is vulnerable to cross-border
hacking and cyberattacks.

At the same time, due to the global impact of climate change, a negative globalization is
growing. Extreme weather conditions in one part of the world are caused by pollution in another.
Cutting trees in the worlds few remaining "green lungs," such as the Amazon rainforest, has a
further detrimental impact on not only the world's biodiversity, but also its ability to cope with
harmful greenhouse gas emissions.
References
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1998014
https://www.ceeol.com/search/article-detail?id=48899
https://core.ac.uk/download/pdf/25793419.pdf
https://www.weforum.org/agenda/2019/01/how-globalization-4-0-fits-into-the-history-of-
globalization/