Globalization, Anglo-American style

THOMAS W. ZEILER

Globalization, a term popularized after the Cold War, has a history, or perhaps a pre-history, stretching back to the beginning of human settlement. States and empires deepened societal interaction, achieving larger, denser, faster, and more intimate levels of communication, migration, trade, and exchange of ideas.

The nineteenth century brought something new and different: a genuine globalization that included not only growing integration of localities and regions everywhere, but also linkages that enrolled, for better and for worse, people, states, and institutions on every continent in ways that changed their conduct and outlook, and arguably narrowed the differences among them. Change brought by truly global interconnections, whether those of finance, trade, war, or what have you, added a distinctive feature to the history of the world after 1800, and helped make what is conventionally called the modern world modern.

Different people (and firms and governments too) experienced globaliza­tion differently, and propelled it forward, or held it back, with different power.

Modern globalization took place at a time when first Great Britain and then the United States enjoyed unusual power - economic, political, and naval or military - in the international system, and wielded cultural influence to match; modern globalization has therefore had an Anglo-American style. To some extent globalization fed their power, but even more so their power fed globalization. Thus the modern globalizing process came to feature free trade as an economic ideal and frequent practice; parliamentary or presiden­tial democracy as a political ideal and increasingly frequent practice; soccer as the world's sport; English as the global language; rock and its descendants as the world's most popular music; and baseball caps as the near-global (male) fashion accoutrement. Had Britain and the United States not been so power­ful, all these features would have been different. This is not to say all these features were purely British or American - rock music has West African roots for example - but they all became primarily British or American before becoming part of the globalizing process. Accordingly, this chapter, while recognizing that globalization emanated from many places, focuses on its Anglo-American dimensions.

More than any other power, the British Empire predominated over the beginnings of this transformation in the nineteenth century, but power spread to other industrial behemoths such as Germany and ultimately, the United States. With a common system of laws, shared values, and dynamic capitalist histories, Great Britain and the United States together engaged in late-nineteenth century globalization - a wave that in some respects stalled in the killing fields of the First World War in Europe, but resumed later. After 1945, the United States, more than any other power, led globalization, expanding global capitalism through trade and investment, circulating money and goods under a Pax Americana that further tightened the bonds of culture, business, and ideologies.

By the latter stages of the Cold War, globalization became a buzzword, as the United States - in a politically conservative era shaped by the policies of Ronald Reagan - privileged free enterprise, open markets, and high technol­ogy as the ideal principles and forces in the world economy. Theodore Levitt, a marketing professor at Harvard Business School, popularized the word in a 1983 article, “Globalization of Markets,” in the Harvard Business Review. By the early 1990s, globalization also became a subject of debate in the United States and elsewhere between those free-marketeers who saw globalization as America's or the world's salvation, and dissenters who perceived dark sides to the phenomenon. The argument hinged in part on how one defined globalization. Thus, before tracing the history of modern-day globalization, it is helpful to investigate the term itself, and especially its conceptualization by thinkers, business elites, and policymakers.

Conceptualizing globalization

It is useful to distinguish between globalization's consequences and the process, or, better, the processes, of globalization itself. The consequences were and remain controversial, often lauded and often decried. For its supporters, globalization promised to perfect market capitalism, boost pros­perity and access to modern life, and help in making politics transparent and democratic for billions of people. But detractors blame it for the homogeni­zation of economic and cultural practices, the disintegration of indigenous cultures, concentrations of power and losses of sovereignty, the destabiliza­tion of several capitalist economies through currency crises from the 1990s onward, harm to the environment, dangers to public safety and health, a “race to the bottom” in the conditions of labor, and a loss of accountability and transparency in government.

A complex and controversial process, globalization combined improve­ments in technology (especially in communications and transportation) with the ideas and practice of the deregulation of markets and open borders to expand, on a massive scale, flows of people, money, goods, services, and information, along with cultural ties.

The form and character of globalization today has its roots in the processes of globalization of the last 200 years. Britain and the United States played the largest role in setting globalization on its historical course. Principles of the free market, technology, and economic practices (and the legal structures of rules and standards to support them) were building blocks of modern globalization. The transatlantic economy was the most dynamic, and

eventually prolific, part of the British imperial system. Theoretically com­mitted to free trade, but also locked in inter-dependence with its dominions and colonial possessions, Great Britain created networks of trade and invest­ment that globalized the world economy. The United States plugged into this regime as it rose to world power and eventually supplanted Britain, particu­larly once World War I had eroded European economic strength.

British dominance to 1914

Nineteenth-century globalization was not as extensive as that of the post­Cold War years in terms of reaching the masses. Yet after the American Civil War, Anglo-American elites drove international production to new heights. Improvements in technology and an expansion of global economic connections gathered steam. New business networks sprang up, even if US (especially) and British policymakers remained burdened with protectionist political pressures and failed to recognize the global changes underway. Still, change there was.

These leaders and men of science imagined their tasks to be such things as nation-building, social improvement, and so forth, but among the conse­quences of their actions were several steps towards a more global world. Nineteenth-century globalization involved substantial transborder flows of capital, commodities, and people that simultaneously served liberal state­building projects and national interests. British investment (and migrants) helped build the infrastructure and economy of the USA, Argentina, and several other states. Foreign investors' efforts, for instance, helped solidify national states, which in turn (usually) protected the property of these investors in a largely symbiotic relationship. (In the late twentieth century, it has been much more difficult for political leaders to bend transborder flows to specifically national projects.)

At the same time, the USA began to rival Britain as an economic power, surpassing it in GDP by about 1870, and joined it in propelling processes of globalization. Private enterprise was significant as well, led by firms whose desires to turn a profit sometimes outweighed their loyalties to their govern­ments, or by multinational firms that were not linked to any single national interest. Such multinational or transnational businesses were helped by policies that facilitated access to foreign markets, inventions, immigration, and a partial standardization of relevant legal norms and practices promoted by both diplomats and private citizens, many of them British or American.

Migration - a key element of globalization - was also prevalent. The world from c. 1830-1914 witnessed vast migrations of peoples, the majority of them driven to move by the Atlantic world's industrial growth and inviting labor markets. North and South America attracted great migration inflows from Europe. Simultaneously, development of plantations, mines, and railroads drove large-scale movements of Chinese and Indians to Southeast Asia, the Pacific islands, the Caribbean, and SouthAmerica. Cheaper transportation costs made year-round employment feasible for harvest laborers shuttling with the seasons between northern and southern hemispheres. The British Empire itself witnessed substantial intercolonial movement of the work force (some of it barely concealed forced labor) for plantations, as well as for mineral extractive industries, rubber, and forestry in the Caribbean and in Asia.

Migration had its limits of course. Many people were too poor to move, or were deeply attached to their homes. Many did not know enough of distant places to consider moving. And by the 1870s exclusionary laws, for instance those enacted in the USA and Canada against East Asians, began to dampen some of the flows. Nonetheless, the fact remains that in the late nineteenth century tens of millions of people crossed the oceans, responding to informa­tion from afar and adjusting their plans in life, thanks to a more global awareness.

Technology was critical to globalization and the roles of both Britain and the United States in it. European empires were responsible for building and maintaining dense commercial, communication, and transportation connec­tions. The Suez and Panama Canals both sped up commerce around the world - and certainly between Europe and Asia - as ever-faster steamships transferred goods from ocean to ocean. As scholars have noted, the Suez Canal (built by France, but later taken over by Britain before coming under Egyptian control in the mid twentieth century) actually created new travel patterns and greatly reduced travel time from Europe and the US east coast to South, Southeast and East Asia. France, and other countries as well, estab­lished additional shipping companies and routes. Europeans and Americans were not alone: TheJapanese made a major push in shipping after 1900 and undertook railway and telegraph expansion, as did the Russians, and a net­work of ports and rail hubs joined modern communications to connect East and South Asian regions which, in turn, linked across the Pacific and to Europe. Great powers and rising powers sought to ensure their interests by building transport links, but in the process also built a more globally con­nected world.

New communications technology helped US businesses to sell other US technologies around the world. American investors benefited from undersea telegraph cables into Latin America, and connected to Asia through British cable networks. The upshot was quicker communica­tions, and thus more timely and effective marketing of products abroad. Baldwin Locomotive Works of Philadelphia, for instance, man­ufactured powerful and speedy train locomotives, exporting on average one a day beginning in 1900, with customers on every continent. The locomotives climbed Pike's Peak, and also crossed Siberia and the Argentine Pampas. American agricultural machinery provided another case of globalization underway. Expositions in Chicago, Omaha, Buffalo, and St. Louis - and later fairs on the US west coast - from 1893 to 1904 displayed U.S. technological prowess but just as impor­tantly, exposed people to the notion that expansion overseas had shrunk the world into a global marketplace.

Cultural affinities followed the economic connections that were promoted by new industrial age technology. The Olympic Games, for example, which began in the 1890s, were based on competitions between athletes represent­ing their nations, but also fostered international understanding and the transcending of national differences. Athletes were transnationals who uni­versalized sporting values even as they carried with them their national banners. British residents brought soccer to Argentina where it gradually became the national game. Students and teachers transported baseball from the United States to Japan, where it acquired its own cultural meaning, and from there was carried to Taiwan and Korea. International tourism, enter­tainment (such as Buffalo Bill’s Wild West Show or baseball world tours by American and Japanese clubs), and even international marriages resulted from the ease of exchange that technology brought.

Philanthropy and social activism also acquired a globalizing dimension. For example, Andrew Carnegie and John D. Rockefeller both turned to overseas giving to counter their reputations as cold, cutthroat industrialists, and to cure social ills they identified as critical. Carnegie libraries, eventually numbering more than 2,500, combated illiteracy in the Anglophone world, while Rockefeller and his son personally donated over $1 billion dollars toward scientific and medical research, as well as public health causes, in such diverse places as China, the US South, and Latin America. Rockefeller’s foundations financed numerous international conferences and scientific exchanges, prompting a flow of transnational figures around the world. Other famous bankers funded human rights causes; among these was Jacob Schiff, who made efforts to alleviate the persecution of Jews at home and abroad. In related moves, politicians, civic associations, and jurists created the first international arbitration structures and legal norms to alleviate misery. Merchant banking, mining, and export firms, as well as wealthy individuals, poured money into saving victims of natural disasters (such as the 1906 Valparaiso earthquake), responding to social needs they perceived needed addressing, and shaping policies. Christian missionaries, temperance activists, and promoters of women’s rights all sought to do the same thing, albeit with less ready money than Carnegie or Rockefeller, reaching beyond their borders and using the new technologies of communication and transport in an effort to change the world. This ambition was not novel, and its success was limited, but the ease with which such measures might be undertaken brought forth more effort, more activists, and more sponsorship than ever before.

At the same time as private philanthropists were extending their reach, states began to take up human rights causes in new ways. While popes and caliphs had for centuries often sought to protect Christians and Muslims in faraway lands, nineteenth-century states, or coalitions of states, sometimes responding to pressure groups at home, found it congenial to intervene abroad on behalf of religious brethren. Orthodox and Armenian Christians in the Ottoman Empire, for example, aroused the sympathy of Christians (and their governments) in Britain, America, and Russia, inspiring diplomatic initiatives and occasionally heavy pressure.

War, peace, and disrupted globalization to 1950

While some integrative and expansionist elements of globalization persisted from World War I through the Great Depression and World War II to the Korean War of 1950, this was actually a period of deglobalization. World War I splintered the international economy and divided the international system, and in its aftermath communism and fascism in Russia, Italy, and then Germany took root as ideologies opposed to liberal democratic capitalism. Powerful policy currents in these countries, and in others less definitively communist or fascist, promoted autarky rather than international trade, and vehemently opposed emigration in the 1920s and 1930s. The economic collapse of 1929 provoked further trade restrictions, even in countries that had formerly been sympathetic to free trade, such as Britain. Then, after World War II, the world divided along ideological lines in the early Cold War.

In short, states prevailed in slowing the globalization process in the economy, although some cultural ties persisted, even in wartime, and prob­ably strengthened over the 1910s to 1940s as a whole. Today, many commen­tators believe that globalization is inevitable, but that is not necessarily true. Political and economic decisions and patterns can intervene to stymie that course. Such was the case during the volatile era that witnessed two world wars, the worst economic crisis to hit the capitalist world in modern history, and the advent of the divisive Cold War.

Clearly, World War I and the 1920s era of business expansion accelerated the American presence overseas, particularly as US financial institutions and firms replaced British ones in Latin American markets and began to seriously chal­lenge them in Asia. Americans acquired key sources of raw materials, such as rubber plantations in Sumatra, and enlarged their presence in sugar, tobacco, and meat-packing in Latin America. A host of mining operations - copper, iron, nitrate, and oil - saw US entrepreneurs and corporations setting down roots in China, the Dutch East Indies, and Mexico. But in the vast British and French empires, and the growing Japanese one, US investment remained marginal, while revolution in Mexico and Russia, and world war, on occasion interrupted, and certainly further slowed, US efforts at economic expansion.

The plans that Woodrow Wilson and others made during World War I to encourage internationalism, boost self-determination for colonies in the hopes of making them independent nations, and promote collective security to end militarism, were not realized because of political instability, ideologi­cal differences, and isolationism, including powerful isolationist sentiments in the United States itself. The USA set stringent restrictions on immigration in the early 1920s with quotas based on nation of origin, and the US Senate refused to approve joining the League of Nations. The rise of Soviet com­munism also countered the global expansion of capitalism with the idea, articulated by Joseph Stalin and later made state policy, of “socialism in one country,” which aimed to develop the USSR internally and cut it off from market forces. Meanwhile communism had its own globalizing impulse, flowing from Moscow, to spread Marxism-Leninism around the world.

Even though Wilsonianism did not reach its full fruition, transnational business leaders and some policymakers did embrace globalization, especially as the United States continued its rise to dominance over the world economy. Although it did not join the League of Nations, the US government involved itself to some degree in efforts to stabilize Europe's economy in the 1920s through efforts such as the Dawes Plan of 1924, and political leaders main­tained an interest in global disarmament. Pan American World Airways, founded in 1927 to counter a German-owned firm, gained the rights to transport mail and passengers from the United States to Latin America, and in the 1930s to Europe and Asia, launching the age of international air passenger travel.

As many Americans came to believe that peace and prosperity depended on global contacts, cultural ties grew stronger. Film came of age as a world­wide phenomenon, and American stars - such as Douglas Fairbanks and Mary Pickford - became household names the world over. International societies and organizations proliferated for museums, musicians, academics, and many others. The Institute of Pacific Relations, for example, founded in 1925, was a multinational association of journalists, scholars, and businessmen designed to promote greater knowledge of the issues facing the nations of the Pacific Rim. Foundations such as the Guggenheim and the Institute of International Education funded international research and the enrollment of foreign students in American universities. Asian, Latin American, and European youth continued to migrate to the United States, creating a transnational exchange of students who often returned home to propagate American values.

Despite the efforts of many business leaders, policymakers, and philan­thropists, ideology and political forces grounded globalization when the Depression hit. Domestic economies took precedence over the international system. Protectionism took hold, as the USA imposed high tariffs on foreign goods and the British Commonwealth instigated an imperial trade preference regime that reserved some Empire markets for member states and discrimi­nated against outsiders. The Soviet Union turned to building socialism in one country while Nazi Germany strove for autarky, as did Japan in its East Asian Co-Prosperity Sphere. World War I debts continued to plague the global financial system, and as the Great Depression ravaged economies, the lack of leadership in solving the war debt problem as well as protectionist measures meant not only distress for people but a curbing of globalization. Technological improvements in travel and mass communications, and cul­tural products with a global audience such as movies, kept alive the process of globalization on some levels. A few political and business leaders continued to speak up for integration and internationalism. US Secretary of State Cordell Hull, for example, pushed for liberalizing trade and lowering barriers, while Thomas J. Watson, head of International Business Machines and the International Chamber of Commerce, echoed Hull in claiming that an open and freer world economy would bring world peace as well. Dictators defied their desires, however, and the outbreak of World War II, in 1937 in Asia and two years later in Europe, further threatened globalization.

While the Axis powers of Germany, Italy, and Japan used military force to destroy internationalism and set up closed, autarchic regional economic systems, the Allied powers ostensibly fought for a new world of openness, stability, and growth. However, each had its own particular interests - the Soviets to expand into Eastern Europe, the British, French, and Dutch to protect their empires, Jiang Jeshi (Chiang Kai-shek) to consolidate China under his rule, and the United States to find new markets so as to avoid falling back into economic crisis when wartime stimulus ceased. In wartime even those Allied powers with traditions of free enterprise turned to compul­sion to coordinate industries and services and mobilize their armies. Regimentation became the norm, as market mechanisms gave way to government allocation, although such statism was a necessity to win the war.

During World War II globalization flew metaphorically under the radar, but radar can also serve as an example of one process of globalization that was stimulated rather than restricted by the war: the expansion of science and the development of new inventions. Medical advances such as mass- produced penicillin spread around the globe. Computers emerged in World War II, first to break enemy codes. Because vacuum tubes were bulky, these computers were too large for consumers, but research on silicon and germa­nium at Bell Telephone Laboratories during the war led to the invention of the transistor in 1947. This revolutionized electronics, and made possible smaller and cheaper radios, calculators, and eventually computers, which in turn gave rise to the globalized information age. Aviation developed during the war as well, as Britain and the United States turned to big bombers and then used the B-29 as a foundation for luxurious airliners. By 1954, the Boeing- 707 passenger jet was launched; its roots lay in the Second World Warjet tankers and experiments with jet engines. Douglas, Boeing, and Lockheed, all US companies, joined Pan Am in seizing the expanding world market for aviation in the postwar decades.

Other drivers of globalization were present as well during World War II. The presence of GIs in Europe and Asia helped spread the taste for certain American consumer items, such as Coca-cola. The war, and the redrawing of borders in its aftermath, generated huge flows of refugees, who carried ideas, skills, and labor around regions and around the world. Roughly a quarter million women, mainly from Europe, Australia, and the Philippines, married US and Canadian servicemen whom they met during (or just after) the war, creating international families. Canada sent special “war bride ships” to Europe, and in the USA the 1945 War Brides Act and its extensions offered free transport. The Act allowed most spouses, natural children, and adopted children of US military personnel to enter the USA without reference to immigration quotas, although Asians other than Filipinos were specifically excluded.^[752] In ways large and small, the world war nudged ordinary people toward more globalized lives.

The Cold War, like World War II, divided the world politically and thus undermined dreams of a more unified world. Yet even those states preparing to destroy one another found arenas where they could cooperate and make strides toward introducing rules and laws to oversee the international system. At the top was the United Nations, and a host of agencies followed. The International Civil Aviation Organization, founded in 1947, established rules to govern air transport and travel, including safety and efficient routes. Within two decades, its 116 members connected markets around the world by integrating navigation codes and resolving disputes. Organizations for world health, agriculture, labor, and other sectors harmonized policies - the essence of globalization - though not without conflict and divergences throughout the years.

Other organizations, though they failed to bridge the two emerging blocs, furthered integration within one or the other of them. The International Monetary Fund (IMF) and World Bank, both established at Bretton Woods, New Hampshire, in 1944, built a structure of international finance that stabilized exchange rates throughout the Western bloc and provided aid to deal with currency crises. (The Soviet Union originally agreed to join the Bretton Woods organizations, but then changed its mind.) Vigorous American aid to allies helped them recover from the war; the Marshall Plan and the American occupations of Germany and Japan instilled liberal ideals as they rebuilt cities and economies. The occupations linked “the two greatest industrial complexes of East [Japan] and West [Germany],” wrote State Department official (and father of the Cold War containment doctrine) George Kennan, so they could “both serve as regional bases of the anti­communist coalition.”^[753] Money flowed more easily around the capitalist world than it had in the interwar years. In 1947, a forum for trade liberalization and rules, the General Agreement on Tariffs and Trade (GATT), oversaw tariff negotiations among two dozen countries. Successive rounds over the next five decades, until the GATT was replaced in 1995 by a more comprehensive trade agency, the World Trade Organization, reduced barriers that freed up com­merce and tightened the bonds of the capitalist nations.

As part of its containment agenda the United States imposed a strategic trade embargo on the Soviet bloc, although its allies did not always comply. The sanctions did not so much hurt the communists as confirm the division of Europe, and with it, the separation of East and West - socialism and capitalism. Moscow engineered the creation of its own communist economic bloc, COMECON, that stretched from Berlin to Vladivostok, to counter the Western integration under the Marshall Plan and trade embargo regime. It certainly worked to integrate these economies in a socialist version of globalization and endured until 1991, eventually including China, Cuba, and Vietnam as observers, as well as Iraq, Nicaragua, Finland, and Mozambique as indirect participants. Thus, Cold War containment policies and responses to them stood in the way of unifying the globe, but also proved to be dynamic builders of processes of integration.

The economic segregation of the Cold War years in some ways prepared the ground for a later surge of globalization. The United States, determined to prosecute the Cold War by every means, geared up for a “superpower” conflict with the Soviet Union. US advantages were immense, including a technological edge in just about every sphere, a headstart in communications and transportation, plus a system of values, including individualism, democ­racy, free enterprise, and a lifestyle full of consumer goods, that were attractive to many people around the world who had some exposure to them. The Soviets could never appeal to the masses in the way the USA did, and US measures prepared the way for the dynamic era of post-Cold War globalization.

Undercurrents, 1951-1989

Throughout the Cold War, globalization germinated underneath the national security structures set up by the superpowers and their allies. For instance, the Korean War (1950-1953) stimulated producers in Japan, such as Toyota, and in Taiwan; industries in those countries, plus those in South Korea, would benefit still more from the huge surge of US purchases to fight the Vietnam War. Japanese steel products were also used to make military communications equipment. Once the Korean War ended, these producers crossed over into making consumer goods, particularly transistor radios and cameras. The consumer electronics industry in Japan, therefore, arose from the Cold War, and came to dominate the world economy in that sector. Research and development in the sciences and engineering grew from intelligence-gathering efforts, weaponry, and electronics used in the Cold War, and here the USA led the way. Contracts with the National Science Foundation, Department of Defense, and other government agencies in the 1960s expanded laboratories and projects at or near major research univer­sities, creating a synergistic relationship that spurred growth in higher educa­tion and readied the workforce for the modern, globalized marketplace. US firms, drawing on five times as many patents as those held by foreign corporations, stimulated research as well. IBM, for example, dominated the information processing market. All of this R&D, geared toward helping the Free World meet the challenges of the communist bloc, planted the seeds of the information age that followed the Cold War.

Transportation, another driver of globalization, more than survived the Cold War conflict - it flourished because of it. Technology derived from World War II and Cold War military planning, coupled with the economic and demographic expansion of the southwestern United States known as the “sun belt” that enlisted millions of Americans in the defense effort, spilled over into the blossoming of commercial air travel, which replaced sea voyages as the main way of transiting the globe. The rise in both domestic and international air travel rose dramatically; for the latter, the increase from 1945 to 1957 was tenfold, to 4.5 million passengers, and by 1970, had quad­rupled again. Boeing's gamble on developing long-range passenger jets in the late 1950s paid off, as flying time across the Atlantic dropped by half and civilians benefited from low-cost air travel in tourist class, introduced in 1973. The wide-body Boeing 747, launched in 1969, further expanded capacity and cheapened passenger tickets. Charter flights followed. Flights from NewYork to London (briefly) plummeted below $200, boosting tourism among college students in particular. They learned about foreign affairs, or at least certain aspects of life in other countries, as transnational travelers, and some became instilled with a culture of globalization. Jets could also accommodate freight and containers, and soon joined container ships in speeding and enlarging world commerce. Air cargo rose by 866 percent between 1957 and 1973, and by the 1980s, the impact of this tremendous transformation in shipping had worked its way through the marketplace. Engine improvements and weight reduction led to a Boeing airliner in 1989 that could carry 412 passengers for up to twenty hours.

Improvements in maritime shipping, especially containerization, com­plemented these developments in the air. The process of using truck­trailers with standard-sized containers that could be loaded on to or off of a ship raised the productivity of a longshoreman from 15 tons of cargo per hour in 1956 to 700 tons in 1973. The results were faster ship turnaround, efficient coordination, and lower transportation costs. Throughout the 1960s, containerization skyrocketed, aided by shipping needs associated with the Vietnam War (another Cold War conflict that spurred globaliza­tion). After the Yom Kippur War of 1973 raised the costs of petroleum, the international shipping industry then designed special ships for automobiles and liquefied natural gas.

Developments in communications during the Cold War era also boosted the globalization process. The number of transatlantic calls in 1927 had numbered about 10,000; thirty years later, they had soared to 250,000. The era of noisy and impractical radio telephones, which only elites could afford, ended in 1956 with American Telephone and Telegraph opening the first transatlantic telephone cable by using microwave amplification techniques. Soon big companies, such as Ford, laid their own telephone cables to coordinate business operations overseas. By the late 1980s, most parts of the world could take advantage of long-range telephone communications, as satellite coverage ended isolation and created a truly global village of contact. The next step, to the Internet and the information age in communications, was not far off.

In the general political economy, globalization also moved forward despite crises and regionalization. The establishment of the European Common Market in 1957 helped lure massive US investment, as well as turning Western Europe into a powerful and consolidated trade entity. By the 1980s, the Common Market had added several new members, and planned for a single currency to integrate the region further and compete with outsiders.

Such regionalization shaped the globalization process. It created certain regions that integrated more fully than others intramurally, even while they erected barriers (usually to trade) against interaction with other regions. In this respect, as in others, globalization was patchy. During the Cold War years, Europe's Common Market was perhaps the most integrated area outside of the close integration of the USA and Canada, but regional trade agreements, defense accords, and other forms of integration contributed to the mosaic.

As noted by the Canadian social theorist Marshall McLuhan, the culture of a global village emerged in the Cold War decades. This was not just a one-way street from the United States to points overseas. The Beatles, for example, epitomized cultural globalization. Capitalizing on the new era of communication and travel, they adapted African-American rock n' roll in Liverpool to launch Beatlemania around the globe by the early 1960s. Their hits swept through the English-speaking world, and then many non- English-speaking cultures. The Beatles took America by storm, gluing 60 percent of viewers to the Ed Sullivan show when they appeared on television in 1964. They were the first band to sell out sports stadiums worldwide and were so successful that they affected the British balance of trade, for which they were honored by the Queen in 1965. Youth across the planet went wild over them, and they took part in the first global satellite broadcast in a music special in 1967. The Beatles unified pop culture, at least for a moment, and they did so as a British export flowing across borders commercially and culturally.

From the late 1970s, Anglo-American globalization acquired a new momentum. As usual, new communications and transport technology played a role. But added to this came a wave of deregulation spearheaded in the USA and UK, one that in some respects merged with an East Asian wave of economic and political liberalization. For myriad reasons, most of them deriving from domestic politics, the regulatory structures put in place over decades by Labor governments in the UK and by the New Deal in the US began to wane. The regime of fixed exchange rates ended, and flexible rates gave greater power to transnational investors. Meanwhile, an era of “financialization” took root, in which financial instruments became increas­ingly important to the way that other goods and services were produced and consumed, allowing financiers to influence and profit from sectors in which they had not been deeply involved before. While most “financializa- tion” happened within countries, such as the US boom in student loans as a way to finance higher education and in home equity loans as a way to finance consumption amidst stagnant per hour earnings, capital markets were, in the last instance, trans-national. Thus even a local bank lending against the value of a house down the street was ultimately connected to global institutions, and “financialization” meant that more and more spheres of everyday activity could potentially influence, and be influenced by, credit conditions thousands of miles away. In the United States once stable industries such as automobiles, steel, and machine tools lost market shares to new entrants, at first often manufacturers from Japan. In other sectors, US firms took advantage of the decentralized markets that opened at home and abroad. The more open climate for international business of the 1980s created winners and losers alike, reshuffling the fortunes of various sectors in all those countries enmeshed in this decentralization trend. Like other surges in global integration, this one conferred advan­tages on those people best informed about the wider world, and upon those people and firms whose assets were most mobile, and who were best able to seek the highest returns wherever they might be had.

The world of ideas fomented this political push for market liberalism, providing intellectual support. Nationalism, though critical to foreign policy and domestic politics, gave way somewhat to a more global view of money, in some respects a return to laissez-faire doctrines formalized in the nine­teenth century, now championed by economists such as Milton Friedman. In the 1970s, the Trilateral Commission of business, political, legal, and aca­demic members from the United States, Western Europe, and Japan con­vened to facilitate cooperation outside the purview of government supervision. In Davos, Switzerland, business leaders met starting in 1982, and soon expanded their networks to bring together world leaders to discuss public policy issues in an annual World Economic Conference. In the United States, business lobbying accelerated against unions, taxes, and regulations and in favor of more free enterprise. What had once been a “Washington Consensus” of an activist and expansive role for government evolved into a consensus in favor of neoclassical economics, and an attack on Keynesianism. Entrepreneurship, competition, free trade, and labor competition were the cardinal features of the era. President Reagan extolled these principles and, when he could, enacted them by privatizing government services and liberal­izing trade.

American globalization, 1990 to now

As Reagan left office in 1989, he bequeathed to his successors major changes in the economy, politics, and culture that reflected the rising era of globaliza­tion. New institutions accompanied the freer exchanges of goods, capital, and culture that quickened and enlarged state and transnational contacts. Among these were the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) of the mid 1990s, both of which liberal­ized commerce, integrated business practices and methods, and stressed a rules-based economic system. The administration of President Bill Clinton even made globalization its foreign policy mantra, as it perceived the poten­tial of prosperity by harmonizing world economic behavior, customs, devel­opment, and democracy. America stood at the helm, in this view of the situation, guiding all who would embrace it to a new Washington Consensus of universalist and integrative market-based globalization. But while the benefits were many, and the process seemingly inevitable due to new technologies abetted by a free-market ideology, the costs were also signifi­cant and debates raged over the desirability of globalization. At the center of the argument in the USA was the issue of how far the government should go toward promoting market-based capitalism throughout the world. Business was generally in favor, but the labor movement, many academics, environ­mentalists, and several members of Clinton's own Democratic Party - who favored traditional big government policies - were not. A rebounding American economy in the mid 1990s persuaded people across the political spectrum that globalization had advantages, however, and with the advent of widespread use of the Internet - with 304 million users worldwide by 2000 - it even had a certain cachet.

The Anglo-American push towards economic liberalization and greater global engagement dovetailed with similar trends in East Asia. Taiwan, Singapore, South Korea, and Japan moved dynamically toward the world market model by liberalizing their economies and embracing more open competition at home and abroad. To some extent these liberalizations drew inspiration from the Anglo-American examples, but each had its own internal drivers as well. East Asian businesses found many opportunities in a rapidly globalizing world.

Among the beneficiaries of late-twentieth-century globalization were Japanese businesses. In the 1990s, children around the world were gripped by the Pokemon game fad, and the Japanese dominated other forms of media and electronic culture. Japan tended to play by its own variant of the rules of capitalism, through industrial planning and protectionism, rather than by market-driven, free-trade capitalism. Japanese producers also beat the United States at its own game of innovation, at least until the 1990s, when a housing bubble in Japan destroyed the stock market and hamstrung their economy for well over a decade. In the meantime, while Disneyland opened in Tokyo, Japanese investors invaded sanctums of American culture and business, as its auto companies seized a third of the US market and its investors bought up icons such as Universal Studios, MCA Entertainment, Rockefeller Center, and Columbia Pictures.

India served notice that it, too, would engage in the process of globaliza­tion. Although it experienced slower growth than China - and, indeed, had some of the poorest people on the planet - India experienced great growth once the government removed many of its myriad internal controls in the 1990s. The dynamism was led by information technology. Software designers and engineers - the brightest young minds of the information technology revolution - found homes in the southern city of Bangalore, the birthplace of IT giant Infosys in 1981. By 2008, Infosys had 100,000 employees worldwide, and revenues topping $4 billion. Call centers served international clients seeking assistance for phone use, household appliances, and computers, while research and development facilities cropped up where English was spoken and labor cheap, places such as Bangalore. Overseas business identi­fied India as a prime place to outsource engineering, research, and manufac­turing operations to cut costs. Deutsche Bank, Citigroup, Goldman Sachs, Barclays, and other foreign investment banks poured money into the coun­try. Consumption boomed; in the telecom sector, for instance, India added 7 million mobile phone subscribers every month in 2006, surpassing even the explosion in China. Bollywood began to globalize too, producing films and music videos that found audiences throughout the Indian diaspora and beyond. Familiarity with English among educated Indians made it easier for India to find rewarding niches in the global economy.

But China was in many ways the poster child for post-1990 globalization. China had been a bastion of hostility to market economics in the 1950s to the 1970s, but this began to change in 1978. In the course of the 1980s, China started to welcome foreign investment, which came mainly from nearby Asian economies, especially those with many ethnic Chinese in their popula­tions. As China cautiously opened its market to foreign participation, it in effect brought a large pool of underemployed labor together with the world's underemployed capital in a profitable mix. That fusion yielded a quarter century of rapid economic growth - and new linkages between China and the world. Through inducements such as tax breaks and guarantees of profit repatriation, Beijing encouraged foreign investment and joint ventures with the capitalist world by creating 124 special economic zones around the country, particularly in coastal cities. Wholly Foreign Owned Enterprises (limited-liability corporations organized and capitalized by for­eign investors), other types of foreign companies, and contractual ventures invested in market-oriented “micro climates” that quadrupled foreign invest­ment in the 1990s. Although bureaucratic, trade, and financial obstacles remained - and job-creation by rural Township and Village Enterprises (TVEs) far outpaced that in special economic zones - direct investment in export-oriented goods poured into coastal areas from overseas Chinese and multinational corporations.

Suzhou Industrial Park illustrates this penetration by global capitalism. Founded in 1994 by Singapore and China, the Park hosted 103 foreign- invested enterprises capitalized at over $16 billion by 2002. An efficient service-oriented staff attracted overseas investors by minimizing state inter­ference and pursuing a pro-business agenda. Companies flocked to do busi­ness there; the Dutch multinational Philips Semiconductor chose the Park as its site for a new factory. It was a model of transnational financial strategies and regional business networks: Singapore shipping and engineering behe­moth Keppel and United Industrial Suzhou, both controlled by the Salim group, Indonesia's largest transnational corporation, operated in alliances with state and private capital.

Globalization, rather than outright Americanization, quickened among the world's cosmopolitan elites, in business and finance, government, academia, media, and sports. Convergence was clear, as English increas­ingly became the language of international commerce. Leaders in govern­ment, business, and the media flew in the same airplanes, wore the same business suits, stayed in the same hotels, and read the Wall Street Journal and Financial Times.

The middle class and the poor joined the process of globalization as well. Increasingly, like elites, average educated people in the middle class around the world took part in the global revolution delivered by technology. They communicated by fax, cellphone, and email, then through such social media networks as Twitter and Facebook. By 2000, one million conversa­tions occurred simultaneously through satellite; by 2010, that technology allowed 4.6 billion of the world's nearly 7 billion people to talk and do business through cellphones. To be sure, not all of this communication was global, as Facebook friends oftentimes lived in the same neighborhood, but some of it was.

In transportation, ship tonnage rose six-fold from the mid 1950s, but air freight grew even faster (albeit from a much smaller base), and costs plum­meted. By 2000, two million people a day crossed a border somewhere in the world. Some 2.5 percent of the world's population lived outside of their country of birth in 2000, slightly exceeding the former high water mark of 2.3 percent in 1913. Immigrant numbers tripled in the United States between 1970 and 1998.

Some 7,000 transnational companies existed in 1970; thirty years later, there were 63,000 parent firms with nearly 700,000 foreign affiliates, with a substantial number of inter-company arrangements. The production of these transnationals exceeded that of many nations, and certainly increased faster than the gross domestic products of many countries. Branding worldwide led to a tremendous expansion in profits. Marlboro cigarettes, Nike shoes, and a host of other companies gained global market shares. Sports teams, such as the Chicago Bulls in basketball and soccer's Manchester United, appealed to world audiences, and American professional basketball, hockey, and baseball leagues actively recruited foreign players. This led to broadcasting in hun­dreds of countries, and further branding of these sports, especially for the National Basketball Association. In baseball, nearly one-quarter of the players in the Major Leagues of the USA came from outside the country, while the Seattle Mariners club was owned by Nintendo's president Hiroshi Yamauchi, and then by the Nintendo Corporation itself.

The integration of equity and bond markets, or financial globalization, was another hallmark of the post-1990 surge in globalization. The middle and upper classes invested savings overseas at ever greater rates, with US-based global mutual funds climbing from $16 billion in 1986 to $321 billion by 1997. The velocity of foreign exchange was staggering; in 1973, the average daily turnover in the global exchange market was $15 billion, but by 1998, some $1.5 trillion passed through the markets every day, and about $5 trillion in 2013. Thanks to electronic trading, billions of dollars could be invested into markets in a flash, and just as quickly removed. When home prices in the USA began to fall in 2006, a rash of home mortgage defaults, especially among borrowers with subprime loans ensued and triggered a massive number of foreclosures across the country. Loans and securities backed by subprime mortgages lost their value, straining the banking and insurance systems in the United States - and then worldwide. A global credit crunch followed. Major risk-taking players in investment markets - Bear Stearns, American International Group, Lehman Brothers, Merrill Lynch, and Citigroup - went out of business or were acquired by competitors for a fraction of their previous value. In the UK and Ireland, the state acquired large shares of formerly private banks to keep them solvent. As central banks scrambled to pump liquidity into frozen money markets, the International Monetary Fund warned that the housing slump in the USA, Spain, and elsewhere would not only hurt the North; developing nations would also suffer from slackening demand.

By March 2009, the economic news was bleak around the world. Some observers even foresaw a complete failure of capitalism, as the United States and the world descended into a prolonged depression. The process of globalization appeared to be a dangerous phenomenon. As American econ­omist and Nobel Prize winner Paul Krugman noted, the need for interna­tional cooperation was imperative “|b|ecause we have a globalized financial system in which a crisis that began with a bubble in Florida condos and California McMansions has caused monetary catastrophe in Iceland. We're all in this together, and need a shared solution.”^[754]

The world economy eventually stabilized, due to massive intervention by governments, but recovery was spotty, incomplete, and slow - providing fodder for a renewed round of critiques of globalization. Clearly, the rapidity and scope of economic integration had led to great volatility that prompted repeated crises in the world economy. Before the crash of 2008, international markets had been instrumental in a run on the Mexican peso in 1995, the Asian financial contagion in 1997-1998, and the dot.com bubble burst of 2001. Developing and poor countries played vocal parts in the new round of criticism, as the United States, multinational corporations, and private inves­tors had encouraged them to deregulate their capital markets and open their economies to foreign investment. This made them susceptible to outside pressures from institutions, nations, and world economic fluctuations. Changes in one country could affect entire regions, as in 1997 when the Thai baht plummeted in value, setting off a currency “flu” that sickened other nations. Those favoring the Washington Consensus of liberalization and globalization, however, blamed such crises on the host countries' corrupt practices, inefficiencies, and lack of oversight. Optimists argued that not only did globalization help these emerging countries, but it was an irrevocable phenomenon that could not be halted. And why should it, since it brought such great rewards?

Critics of globalization countered with additional concerns over labor, environment, and national sovereignty. The world's biggest retailer, Walmart, came under fire for low pay and insurance benefits, as did many other corporations. Globalization, critics contended, gave rise to sweatshop conditions around the world as capitalist firms competed to find the cheapest labor anywhere. In the environmental arena, globalization came under attack for promoting a “race to the bottom,” among countries seeking foreign investment, each trying to outdo the others in rolling back environmental protections in the competition to woo firms. To many critics, the interna­tional organizations and agreements dedicated to liberalizing trade, such as the WTO and NAFTA, elevated the principle of deregulation at the expense of adequate labor or environmental standards. A backlash against the power of bureaucrats in the WTO and IMF arose, as concerns about the role of government oversight called into question the power of a handful of une­lected individuals immune to democratic pressures. Opponents of globaliza­tion also pointed to the growing power of transnational corporations and financiers to destabilize nations and markets and undermine democratically achieved labor and environmental regulations.

The protest movement against globalization exploded at the turn of the millennium. Anti-globalization forces first took to the streets of the United States in 1999, when the WTO was meeting in Seattle to plan a new round of trade negotiations. Demonstrations followed over the next several years at gatherings of the United Nations, the IMF and World Bank, the Davos World Economic Forum, Summit of the Americas, and Group of Seven industrial powers' meetings. In the period from 2008 to 2010, economic depression, national protests under the banner of the Occupy Wall Street movement, and other protests in Spain, Greece, and elsewhere over austerity programs, fueled resentment against seemingly market-oriented, pro-globalization gov­ernments and regional organizations such as the European Union. Even the Arab Spring movement of 2010-2011, though a protest against local and national authorities, was shaped in part by a critique of a global capitalist system which was skewed against the masses but had been very lucrative for cooperative authoritarian leaders like the ones protestors were trying to oust.

New voices from the corridors of power soon harmonized with the chorus of popular protest against globalization. Government officials preoccupied with security issues worried about globalization's effects, noting that the 9/11 terrorists used Internet communications, easy entry requirements into the United States, and a relatively open financial system to plan and fund their horrendous mission. Chinese, Iranian, and other authorities worried about the Internet access of ordinary citizens, fearing what they regarded as con­tamination by foreign, excessively democratic, ideas. Authorities everywhere worried about the movement across borders of illicit drugs and food, disease, and criminals, which seemed easier than ever before. Moral critiques about fairness from people as prominent as popes and UN General Secretaries added to the assault on globalization.

Conclusions

Governments enabled globalization. But, in so doing, they also unleashed the power of transnational flows of individuals, ideas, and innovation that networked billions of people together around the world, thereby rendering the state more of an umpire than a gatekeeper to the global economy and culture. Some observers reveled in the thought that globalization meant the end of history, and the triumph of liberal democracy based on open-door capitalism. Others cringed at the loss of control to market factors and worried about the replacement of local music, art, literature, food, clothing, and everything else by a flattened and uniform global culture. Since the more modern era of globalization, beginning in the nineteenth century, the process has emerged, waned, and flourished, largely in response to the behavior of governments and the uneven march of technology. But the long-term trend is now clear: the world has become more unified, and people from prime ministers to peasants have learned to take into account global conditions when making their decisions. Globalization is now among the defining trends in world history, and will likely remain so in the future.

Further reading

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Beck, Ulrich. What Is Globalization? Cambridge: Polity, 2000.

Becker, William H. and Samuel F. Wells, Jr., eds. Economics and World Power: AnAssessment of American Diplomacy Since 1789. New York: Columbia University Press, 1984.

Bhagwati, Jagdish. In Defense of Globalization. Oxford University Press, 2007.

Chanda, Nayan. Bound Together: How Traders, Preachers, Adventurers, and Warriors Shaped Globalization. Yale University Press, 2007.

Eckes, Alfred E., Jr. Opening America's Market: U.S. Foreign Trade Policy Since 1776. Chapel Hill: University of North Carolina Press, 1995.

Eckes, Alfred E., Jr. and Thomas W. Zeiler. Globalization and the American Century. Cambridge University Press, 2003.

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Yergin, Daniel and Joseph Stanislaw. The Commanding Heights: The Battle Between Government and the Marketplace That is Remaking the Modern World. New York: Touchstone, 1998.

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Zeiler, Thomas W. “Opening doors in the world economy,” in Akira Iriye (ed.), Global Interdependence: The World After 1945. Cambridge, ma: Belknap Press, 2014