The term ‘global village’ is a jargon apt for usage in the global era that we live in. Coined by Marshall McLuhan (1962), it notes the integration of people all over the world through the speedy passing of information, via the medium of electronic technology. This module will look at the many definitions of globalisation in the coming paragraphs. However, its main focus will be on the history of globalisation, specifically economic globalisation, given its place in the globalisation discourse.
Globalization is a term that has been used to explain the integration of the world, in multiple ways – economic, political, cultural, technological and geographic. Though globalisation cannot and must not be limited to mean economic integration of the world, the term globalisation has been, over the years, seen to be synonymous with economic globalisation. Additionally, as we shall see, globalisation must not be seen as the monopoly of Europe and the West, since in the past centuries, influences from the East have also made their way Westwards. Today, the revolution in electronic and communication technology, has greatly expanded the reach of globalization. Lets try to understand Globalization concept its meaning,history and concepts.
What is Globalization?
The term globalization has been a subject of discussion in the international political, economic, social and development contexts. Though advocates of neoliberalism and open markets support globalisation as the means to economic prosperity for the masses, and its opponents blame it and the force that spread it across the globe
Before we go into the history of this term, it is important to understand the meaning of the term globalisation. Globalization in its simplest present-day definition, is the movement of people, capital and goods.
Meaning and Concept
It is also seen as a process that has increased the integration and inter-connectedness of countries and people around the world. Some academics consider globalization to be as old as primitive man. For, it is the migration of the primitive man across continents that established human settlements in different parts of the world. There is obviously a significant difference between the migration of primitive man, as a characteristic of globalisation, and the internationally recognised aspect of macro-economic policy changes, that have made the world a more interconnected place and brought about multiple forms of integration.
The next type of globalisation is based on religion because, according to Ritzer (2009), most religions of the world seek to have a global presence and following. Today, religion knows no boundaries. For instance, one can be a practicing Buddhist not just in Tibet or India, but in Europe or North America as well, as a result of the global influence of the sayings of the Dalai Lama. Ritzer (Ibid.) calls science a global enterprise’ because much scientific knowledge that comes out today is based on information sourced from around the world.
Though scientific knowledge began to be disseminated throughout the world since the early twentieth century, this has become even truer today, with the advent of the Internet. This is true also for health and medicine, which is the other basis of globalisation; since there are diseases which are common the world over, medicine which is the cure for them has a global reach/
History of Globalization
Frank and Gills (1992) suggests that the history of the world system – they denote the term without the hyphen, unlike Wallerstein’s denotation of the term - dates back to five thousand years and that the rise of Europe and the West are but recent and ‘passing’ phenomena in the history of the world-system. Moreover, they argue that some of the characteristics which were typical of the modern world system, actually existed much before its officially recognised period of emergence, as given by Emmanuel Wallerstein (1974). For example, unlike Wallerstein, Samir Amin (1975) and the dependency theorists, for Frank and Gills, capital accumulation, which is characteristic of the modern world system, has existed for many thousand years before the world-systems analysis’s attribution of the Middle Ages as its origin.
Wallerstein calls previous systems as ‘world empires’ and Amin calls them ‘tributaries’ where ‘political and ideological’ rather than economic unity – which is characteristic of the world-system - was predominant. Moreover, the dependency theorists’ emphasis on the coreperiphery angle in the modern world system, in which surplus is transferred from the periphery regions to the core regions, is something that Frank and Gills note could have existed in world systems before the rise of the modern world system.
According to Frank and Gills, while Wallerstein and others consider the modern world system to be cyclical, in that core-periphery relationships keep changing and so do world system hegemonies and rivalries, they believe that such cycles existed long before the academically recognised origin of the modern world system.
Sen (2002) notes that globalisation need not necessarily be seen as ‘global westernisation’. Rather, if one were to look at the causes of globalisation, then one needs to go back to the beginning of 1000 AD. Around this time, more than Western influences, it was advancements in the East - in China, India and the Arabic world - that found their way to and became an integral part of Western culture. Around 1000 AD, China had already made advancements in simple technology.
For instance, the Chinese had already invented ‘paper, the printing press, the crossbow, gunpowder, the iron-chain suspension bridge, the kite, the magnetic compass, the wheelbarrow, and the rotary fan’ (Ibid.).
These innovations in technology were not known in other parts of the world, and according to Sen, it is globalisation that spread them to Europe. Similarly, the decimal system was originally invented in India and subsequently used by Arab mathematicians. Later, it found its way to Europe. In this way, Sen tries to make the point that in this integration of Asia and Europe, one sees the opposite of what is happening today, a movement of ideas, technology and innovation, from the East to the West. So, Sen notes that globalisation should not be considered the monopoly of the West or inherently a Western phenomenon.
Though Wallerstein’s description of the origin of globalisation through his explanation of the modern world-system is considered Eurocentric and is not without its criticisms, it is acknowledged in academic circles as a good source to understand the origins of modern-day globalisation, as we know it. Wallerstein (1974) compares the emergence of the modern world-system to previous watersheds in ‘world social science’ such as the emergence of the Neolithic Man and the transformation from the Middle Ages to the Modern World. He calls these systems structures and sees changes in them as being qualitative in nature and resulting in a world vastly different from the one in the past.
According to Wallerstein, there are there are four periods that any history of globalisation should concern itself with. These are: 14501640 when the modern world-system first originated and was still confined to Europe; 16401815, when the modern world-system was strengthened by the activities of the system; 18151917, when industrial revolution and modern technology converted the ‘world-economy into
a global enterprise’ and 1917 -1970s, when the capitalist world-economy was strengthened and the world began to witness the revolutionary urges to overthrow the capitalist worldsystem.
Wallerstein sought to distinguish the modern world-system from previous systems. According to him, the modern world-system is a world-economy, i.e. it is an economic unit with multiple political centres. Previous world-systems were, according to Wallerstein, political units such as ‘empires, city-states and nation-states’. The modern world-system is a world-system because it is bigger in size than a political unit and it is a world-economy because of the existence of economic interdependence, which got a boost through cultural and political ties between the parts of the system. This world-economy consolidated itself as a result of the advantages it had due to scientific and technological advances.
How did the modern world-system emerge? It was the consequence of a series of events which occurred between the twelfth and the fifteenth centuries in Northern Europe, when feudalism as the mode of social organisation was on its way out. There were various reasons for the collapse of feudalism but the predominant ones were (i) natural causes such as drastic climatic changes which made traditional crop cultivation difficult and an outbreak of bubonic plague that killed several thousands and (ii) a crisis of the economic base of feudalism, which exposed the internal contradictions in its superstructure and finally led to its collapse. The economic base of the feudal system was based on the unjust principle of landlords monopolising the land and the judicial system and to whom the peasants had to sell their surplus. As far as the superstructure was concerned, the clergy and the feudal aristocracy were in conflict with each other in regard to the question of who held more power.
These problems were compounded by the rapid increase in population whose demands could not be met by the limited technological advancement of the time; at the same time the peasants had to sell additional surplus to the landlords given that Europe was embroiled in wars, and the army had to be maintained. Consequently, the expenditure of the feudal aristocracy increased in an unsustainable manner. Many peasants migrated from the villages to the towns where they engaged in the urban local crafts economy. In this relatively new set up, local trade began to expand and grow, and along with it came more urbanisation and population growth. However, as a result of the wars being fought in Europe, the economy could not flourish as most of the surplus went in the upkeep of the army.
Taxing the peasants for the maintenance of the army was an extra economic burden on the peasants over and above their traditional feudal obligation of selling their surplus to the landlords. This resulted in peasant revolts against the feudal nobility. As mentioned earlier, the superstructure was already weak, with the Church and the rulers in conflict with each other and struggling to hold on to power. The weakening of the base and superstructure of the feudal system ultimately resulted in its demise. With the feudal system cracking at the base, new modes of production came into place gradually. Chief amongst these were (i) the transformation from traditional, including subsistence patterns of agriculture, to commercial, cash crop agriculture, (ii) the growth of commerce and most significantly, (iii) the expansion of the European economy outside the borders of Europe to other parts of the world for business and for conquest.
The expansion of the European economy the world over was significant because it created the modern world-system, in which several different parts of the world have converged, or have been brought together, on the basis of economic linkages. It is in this process that we see the origins of globalisation as we know it today.
Globalisation is perceived to be a relatively new term with an old history. Academic thinking on globalisation stretches from pre-modern times, to the Middle Ages, Modern Age and finally the contemporary period. In the coming paragraphs, we shall see the history of globalisation beginning from the Middle Ages. While economic self-reliance and capital accumulation have been motivating factors which resulted in globalisation as we know it today, these factors have also been the motor force behind what is today seen to be the political, cultural, technological and even military ‘superiority’ of the most advanced nations of the world. To understand this better, let us see how globalisation in its present form originated.
Modern World Phase-2
How did the expansion of the European economy affect the rest of the world? Wallerstein (1974) notes that the main impact was the formation of an international division of labour in which the kind of labour one performed and the kind of economic activity one performed depended on which part of the world-system one belonged to.
According to Wallerstein, the world was divided into three main regions, the core, the periphery and the semi-periphery, based on an unequal division of labour. In this unequal economic division of the worldsystem, we see the roots of (economic) globalisation, i.e. the process by which capitalism was spread across the world. According to Wallerstein, the modern world-system emerged in the early sixteenth century and consolidated itself by the middle of the seventeenth century.
When it first emerged, the core region, which was the area that benefited most from capitalist economic growth and the capitalist world-system, comprised of North Western Europe, primarily England, France and the Netherlands.
The core region was marked by centralised governments or monarchs, a centralised administration and a strong army. In rural areas, the core region was characterised by the rise of independent farmers, who, with the end of feudalism, paid rents to work on the land. Additionally, many landless labourers were provided cheap wages for working on the land.
Those who could not find any jobs in the villages moved to the towns where they provided cheap, temporary labour for the urban local economy. With the rapid increase in technology, agriculture also expanded. As far as the urban bourgeoisie was concerned, they controlled much of the world trade and obtained the surpluses in the world-system.
The periphery region was controlled by the core region. Its economy depended on trade ties with the core region. The periphery lacked a strong state and bureaucracy and was often conquered and plundered by the core region states.
Examples of peripheral areas when the world-system emerged were parts of Eastern Europe and Latin America. The labour in these areas was characterised by forced or bonded labour, debt peonage and slaves.
Latin America which was conquered by Spain and Portugal had to contend with the weak administrative and political structures brought to the region by the Spanish and the Portuguese. The main function of the peripheral region was to export surplus, cheap labour, precious metals such as gold and silver, and raw material to the core region. What they produced was not generally for their own consumption but for the world-economy.
The semi-periphery lay between the core and the periphery. This region was characterised by core areas which had declined in economic growth or peripheral areas which were trying to better their economic status. Examples of semi-peripheral areas included South Western Europe, Spain and Portugal, Southern France, Germany and Italy.
The governments in this region were weak, while the landlord class was strong. This region had better access to international commerce and high quality manufactured products in the world-economy though it was not to the extent that the core region had. In the rural areas, this region was characterised by sharecropping
. The semi-periphery region tended to extract surpluses from its peripheral colonies. For instance, Spain and Portugal treated the regions of Latin America that they had conquered as the source of precious metals like gold and silver, which they used to pay for the manufactured goods they bought through their trade with the core regions.
There was one other region that Wallerstein described and that was the external area, which lay outside the international world-economy. Examples of external areas included Russia
interior Africa, South Asia and the Ottoman Empire. From this division of the world into core, periphery and semi-periphery, we can conclude that core was economically strong with a strong state and bourgeoisie, wage labourers and self-employment, the semi-periphery was economically weak and characterised by sharecroppers and landless labourers and the periphery was economically weakest, and characterised by forced labour and feudal system.
In the capitalist world-system the international division of labour was structured in such a way that the surplus could be extracted from the semi-peripheral and peripheral regions for the benefit of the core region. Had this international division of labour not existed, the capitalist world-system would not have been able to consolidate itself. Moreover, the type of labour and mode of production that a region was characterised by was also a reflection of the strength of the governments in that region and of the domestic bourgeoisie. So, in the core region, where manufacturing and wage labour thrived, the state was strong, had a bureaucracy for centralised control and an army to protect against invasions, so that the bourgeoisie could concentrate their energies on commerce and growth. Likewise, in the peripheral region, characterised by feudalism and coerced labour such as slavery, the state was weak, there was no domestic bourgeoisie, and this region produced for the international market rather than for the domestic one.
How did all these changes in the economy in North Western Europe, i.e. how did the transition from a feudal system to a nascent capitalist one – affect European society? What impact did it have for the future of globalisation and the spread of capitalism? The changes in the economic base resulted in accompanying changes in the superstructure. How else could the new structure have thrived? In what manner can this new structure which emphasised capitalist accumulation and private property gain the support of the aristocracy, the clergy and the masses, other than with a parallel change in the existing political, religious and belief systems?
Between the middle of the fifteenth and seventeenth centuries (1450-1670), politically, with the fall of feudalism, feudal lords and princes began to lose their prominence and government began to be centralised.
The bourgeoisie preferred supporting a centralised government structure, like a monarch who would be assisted by a bureaucracy, to overcome the threat of the feudal system. In return for bourgeois support, the monarch agreed to support their economic pursuits, by maintaining law and order, allowing monopolies in trade – an example being the East India Company, which had the monopoly of trade in India, as granted by the British monarch - and maintaining ports and securing them through strong navies so that the bourgeois class may expand trade outside European borders.
The bourgeois class also helped to maintain the army to protect the state from external aggression. During this time, the Church lost its prominence, with the powers of taxation being transferred to the monarch. With the rise of the absolutist state, there was also an increased religious homogeneity and an identification of one’s religion with that of the monarch’s.
Accompanying the shift from feudal aristocracy to absolute monarchy were some important changes in belief systems. One was the struggle by the monarch to vest power with him/her through control over the state and its administrative, judicial and executive machinery.
Once this occurred, the balance of power shifted from the Church to the monarch who became the most powerful person, though his/her power was limited as a result of the existence of interest groups such as the bourgeoisie and the clergy.
The second major change was a shift from Catholicism to Protestantism through the elaborate process known as the Protestant Reformation. While corruption in the church was one issue, the bourgeois interest group saw the clergy as opposed to its interests and as supportive of the earlier feudal system. Additionally, with the Protestant Reformation, power was transferred from the Church to the monarch.
Moreover, as has been shown by Max Weber’s famous work, Protestant Ethic and the Spirit of Capitalism, Protestantism and the capitalist ideology were compatible.
Modern World-System: Phase-2
Between the seventeenth and nineteenth centuries (1640-1815), North Western Europe witnessed more changes. One of the most significant of these was the Industrial Revolution, when North Western European countries transformed from a predominantly agricultural to a predominantly industrial mode of production.
As far as its economic relations with the rest of the world was concerned, Europe began to move from an initial focus on trade, towards conquering new areas to create markets and establish colonies. During this time, countries in Asia and Africa, which were new colonies of European states, entered the world-economy as peripheral areas.
With industrial capitalism as the predominant mode of production (base), came more changes in the superstructure.
Technology became more advanced, the nation-state became the single most important unit of political and administrative power – no longer the monarch - and even the everyday life of people underwent a change as a result of increasing urbanisation, migration to urban areas, break up of large families and entry of more people into the working class category.
The core regions of the world were industrially more advanced than those of the periphery and semi-periphery. The main characteristic of industrialisation, when it first emerged, was that the mode of production had shifted from the use of human power to the use of fossil fuels like coal and natural gas. Typical of industrial societies was the existence of large factories. The pioneer in Industrial Revolution was England.
The main features of the Industrial Revolution in England were the mechanisation of production, technological advancement and most importantly, the shift from labour system to factory system.
One of the main reasons why the Industrial Revolution began in England was because of the huge supplies existing there of a natural resource like coal, which was converted into steam – for use in the steam engine, for example.
The use of coal helped England achieve advances in technology, innovation and industrialisation unlike any seen before. Not only was coal used for industries like paper manufacturing and arms and armaments, it was also used for domestic consumption.
Homes required coal for heating. Various studies related to industrialisation in England in the eighteenth century have shown that the industrial consumption of coal outpaced that of domestic consumption. With the help of coal, the rail,
steel and iron industries got a boost. These industries, also known as capital goods industries, surged forward in economic output in England in the nineteenth century.
Moreover, England had already in existence during its transformation into an industrial power, an established cotton industry, which benefited from technological inventions such as the power looms and spinning jennies. Cloth could thus be manufactured more quickly and then sold to a market, which included all of its colonies. Cheap cotton could also be sold within the domestic mass market. In fact, Eric Hobsbawm (1968) sees the advancement in the cotton industry as the first phase of the Industrial Revolution in England. In the first phase, mechanisation and innovation were not as advanced nor was labour skilled, unlike the second phase, when capital goods began to play a significant role in the industrialisation process.
After England, Germany, France and Belgium too became industrialised, with help from the state, which encouraged and promoted mechanisation and industrialisation. In Germany, for example, the increased mechanisation, better use of coal for industries and the establishment of a strong railway system for smooth transportation of people and commodities, led to a later industrial revolution.
Some of the characteristics of the core areas where the Industrial Revolution took place included the existence of private property rights through which profits could be made and invested, wage labour and the state’s support for economic growth and bourgeois interests. In all these countries, the vast profits made from industrialisation were at the expense of the poor peasants and proletariats and the exploitation of colonies and slaves.
To ensure a constant supply of surplus from the peripheral region, the core region imposed economic policies on it which were a drain on the natural wealth of these colonies. By the turn of the twentieth century, the colonial powers realised that boosting the growth of industries in the semiperipheral and peripheral regions would be a sound economic policy to extract more money from them for the sale of machines to them at a high price.
In addition to the core European states, Japan and the United States of America were other countries that had caught up in the degree of industrialisation achieved. Whereas until World War II, England had the lead as far as industrialisation and economic advancement were concerned, by the end of World War II, the United States had overtaken her in political and economic strength. For the core regions of the world, industrialisation was not just a precursor to great economic power and subsequently political muscle in the international arena, but to employment and stability in their own countries as well.
During this time, the North West European countries like the UK, Germany and France, and the United States and Japan dominated the core region, Southern and Eastern European countries, Scandinavia and parts of Spain were partly industrialised and therefore in the semi-periphery, and countries of Asia (excluding Japan), Africa and Latin America, which were the market for the finished goods from the core areas and which were not industrialised or whose industries performed poorly, were relegated to the periphery.
Some of the accompanying changes included, as mentioned earlier, an increase in the urbanisation process, with more people migrating from the villages to towns and cities in the hope of landing jobs in the factories.
Subsequently, there were changes in the family structure and residence patterns; with increased migration to the towns, families and communities broke into smaller units, and nuclear family units became the norm. Advances in the field of medicine and increased employment as a result of industrialisation, resulted in a population explosion in Europe in the latter half of the eighteenth century.
The present-day form of globalisation can be seen to be the result of policy decisions made by the Western powers around the end of World War II. The impact of these policies continues to be felt by many countries. These policy decisions are the fallout of what is famously known the Bretton Woods Conference held in New Hampshire, United States in July 1944. Following this, neoliberal and open market policies which could be spread further through economic globalisation, were endorsed by the West and its Allies.