Desk 23 - Definitions and history of globalisation Flashcards
What is the silk roads? History of globalisation
Global trade was established as early as the 1st century BC when luxury goods from China began appearing in Rome. Mainly, the transactions that took place during this time consisted of extremely expensive items like silk and some spices. These trade routes involved many parties, from those that created the items, to those that transported them, and finally the buyers.
Eventually, the silk roads ceased operating when the respective empires fell. However, they re-emerged in the late medieval time as the Mongols took control of the area and re-established the
trade routes.
What is Spice Routes (7th – 15th Centuries)? History of globalisation
From the 7th to 15th centuries, spices made their way across Europe, Asia, and Northeast Africa.
Primarily, the goods traded during this time were spices, like cloves, nutmeg, and mace which originated in the Maluku islands of Indonesia.
Like silk, spices were luxury items, and trade volume remained low. However, the spice trade was conducted via ship — adding a new aspect to international trade. With the advent of spice routes,
the connection between the East and West was strengthened as new sea routes were established.
What is the Age of Discovery (15th – 18th centuries)? History of globalisation
Global trade began in earnest during the “Age of Discovery” when European merchants began seeking
out new avenues for trade. The Americas were “discovered” during this time, and they opened the
door for additional trade. Previously unavailable goods like potatoes, tomatoes, coffee, and chocolate were making their way to Europe during this time.
With the expansion of trade routes, previously exclusive goods like spices became more readily
available with fewer middlemen to drive up prices. In addition, the scientific discoveries of the time furthered a trade in knowledge as well as goods. During the so-called “Scientific Revolution” major strides were made in the fields of mechanics, astronomy, and shipping, and this information followed trade routes to spread throughout the world.
What is the First Wave of Globalization (19th century – WW1)? History of globalisation
During the 19th century, the industrial revolution was in full force – popularising inventions like the steam engine. These new methods of transportation could move goods more quickly and
inexpensively over long distances. In addition, other inventions like the cotton gin, harvesting
equipment, assembly lines, and widespread access to electricity made the production of goods
easier and less costly. Together, mass produced goods and superior modes of transportation fuelled international trade.
As costs fell, imported goods became available to the masses and the volume of trade increased.
With increased trade, financial systems also became increasingly interconnected. The rich could invest in foreign endeavours like railways, canals, and mines. These investment opportunities spurred globalization from merely an exchange of goods to the beginnings of a global economy.
Globalisation During the World War 2
Until the world wars, globalization moved forward quickly. Then, when World War I began, countries were forced to use their resources for war rather than trade. The effects of the war were catastrophic, and many countries once again closed their borders. These factors slowed the spread of globalization.
During World War II, countries once again closed their borders to trade and turned their resources to war. However, after the war globalization efforts made a comeback.
Globalisation in the Modern Era
After WWII, the General Agreement on Tariffs and Trade [GATT] was established. This agreement held from 1948 to 1994 when it was replaced with the World Trade Organization [WTO]. Along with setting rules and mitigating disputes, GATT helped to lower tariffs across the globe. With lower costs, and a governing body to oversee trade, globalization once again thrived.
Free trade institutions like the European union further eroded nationalist trade agendas. After the Soviet Union collapsed and the wall dividing East and West Germany fell, global trade entered these
areas. In 2001, China joined the WTO and became the world’s primary manufacturer.
The rise of the internet around the turn of the century helped to streamline global trade networks.
With this new technology, businesses could conduct research in one country, source raw materials in another area of the world, manufacture their products in yet another country, and then distribute them across the globe. Once the internet became mainstream, the truest form of globalization was born.
The end of globalisation?
The COVID-19 pandemic dealt another blow to globalization efforts. The lockdowns resulting from the pandemic had a significant impact on both manufacturing and transportation of goods. Supply chains were severely impacted, and some of these difficulties have lingered for more than two years.
Both the rise of protectionism and the weaknesses exposed by the COVID-19 pandemic have threatened the future of globalization.
What is globalisation? EDEXCEL
Globalisation is the increasing interdependence between countries through flows of capital, trade, goods and services as well as culture and ideas.
Definition of globalisation - according to the IMF
‘The growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, freer international capital flows, and more rapid and widespread diffusion of technology’
Definition of globalisation - according to Collins Dictionary
‘Globalisation is a process enabling financial and investment markets to operate internationally, largely as a result of deregulation and improved communications’
Definitions of globalisation - according to Google
‘The process by which business or other organisations develop international influence or start operating on an international scale’
Definitions of globalisation - according to the Financial Times Lexicon
‘This is the integration of economies, industries, markets, cultures and policy-making around the world. Globalisation describes a process by which national and regional economies, societies, and
cultures have become integrated through the global network of trade, communication, immigration
and transportation’
Definitions of globalisation - according to UNESCO
‘Globalisation is the ongoing process that is linking people, neighbourhoods, cities, regions and countries much more closely together than they have ever been before. This has resulted in our lives being intertwined with people in all parts of the world via the food we eat, the clothing we wear, the music we listen to, the information we get and the ideas we hold’
Why does the definition of globalisation differ between different organisations?
Depends on the attitudes and purpose of the organisations. Economic players such as the IMF and Financial Times will be more focussed on economic globalisation whereas UNSECO will be more focused on cultural globalisation.
How has capital (money) contributed to globalisation?
Money flows are routed on a global scale through the world’s stock markets.
Pension funds and investment banks buy and sell money in different currencies to make profits.
