Economic Globalization – A Basic Overview

The history of globalization is packed with interweaving militarism, resource management, transcontinental business and outright imperialism. While economics, history and business are traditionally taught as separate subjects, they are all in fact inseparable. Individual rights are not always respected as a country struggles for survival by obsessively seeking resources and ways to cut corners through economic globalization. For places like New Delhi, India, the benefits of foreign investment have been immense. For the superpowers, staying at the top is difficult and sometimes unsustainable.

“New globalization” as we know it resulted from the Great Depression, which drew international attention to the dangers of an increasingly interdependent world. For the first time, people fully understood the dangers of having an economic system that relied so heavily on remote parts of the world and saw firsthand how instability in one region could spread, in a domino effect, to other regions. Also, capitalists began to suffer from the downturn of “supply and demand,” as most consumers no longer had the means to demand, causing an oversupply and massive layoffs. They knew they had to expand to untouched regions to assert their influence, free up demand and save a few bucks on labor. Suddenly, more than ever, economic globalization meant stabilizing assets in other countries, spreading Democratic principles around the world and creating a sustainable environment of supply-and-demand, free trade and wide-scale participation.

“Since trade ignores national boundaries and the manufacturer insists on having the world as a market, the flag of his nation must follow him, and the doors of the nations which are closed against him must be battered down,” ex-President Woodrow Wilson said in 1919. The world had changed irreversibly: economic globalization propelled Europeans, Americans, Asians and Indians full steam ahead.

Historically, from the Ottoman Empire to the Romans, trade strategy was always an important motivation for waging war and as a mode of acquiring wealth. Much of what propelled America forward during the Industrial Age was the manufacturing and exportation of automobiles, as well as the harnessing of raw materials and energy resources. Aggressive free market societies enjoy the largest benefits of economic globalization, which is why military might often follows business globalization like a bedraggled puppy dog. To have is not enough, when forces like Communism or international Terrorism are threatening one’s trade strategy and assets, as we have seen in the Persian Gulf War and the War in Iraq.

The 1980s Reagan-Thatcher era saw economic globalization expanded into every corner of the globe, wedging itself into previously pristine territory. Under the guise of fighting socialism and communism, privatization was encouraged and widely accepted as a safeguard against WWII-type catastrophes. However, when the Cold War concluded and the Soviet Union dissipated, we began to think more objectively about the role that economic globalization played on the world stage.