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Running Head: HISTORICAL PHASES OF GLOBALIZATION 1 Historical Phases of Globalization Student’s Name Institution of Affiliation Date

HISTORICAL PHASES OF GLOBALIZATION 2 Introduction Globalization remains the driving force behind change and development across the globe. Hence, globalization is the increased interdependence among nations’ cultures, economies, and populations (Bishev, 2018). Similarly, this is contributed by technology, investment flows, information, people, and cross-border trade of goods and services. Therefore, states have built social, political, and economic partnerships to facilitate globalization over many centuries. Even more, globalization in the world took root in the early 1990s after the cold war. This is because it shaped everyday life in the contemporary world. Besides, the term has been in advanced economies to refer to the increased investment flows and international trade, especially in the United States. Globalization has a wide range of benefits which are politically charged and complex. Beck (2018) confirms that advanced technology has enhanced globalization among nations which benefits society while harming particular groups. Thus understanding these benefits and relative costs can create a way for reducing problems and while maintaining wider payoffs to the community. Humans have been on the constant move to produce, settle, and exchange goods and services due to improvements in transport and technology. Global integration took off in the 19 th century and occurred in stages following trade activities and European colonization which propelled railroads, telegraph, steamships, economic co-operation, and other breakthroughs. The second wave of globalization started after the World War II where the United States led other nations to set ground rules to revive investment and trade activities which marked a new face of globalization (Sanchez, 2016). This continues under political scrutiny, social integration, technology advancements, and periods of financial boom and recessions. This paper will explore the historical phases of globalization and its effects on the world economy.

HISTORICAL PHASES OF GLOBALIZATION 3 Literature Survey of Globalization Globalization is the increased degree of social, political, and economic interaction among countries. Even more, it is a process of physical shift of networks in production, consumption, wealth, and power. Besides, these close relations and interdependence of nation have been significantly contributed by the integration of technology, trade, investment, labor, and capital markets. According to Kolodko (2018), globalization involves opening up national economies into the global market and establishing a global village. Furthermore, it refers to the conversion of the world into a single commercial space and one macroeconomy by creating a united and unique culture and society. Often globalization is referred to as "one world" since it entails the interconnectedness of groups, individuals, companies, and countries brought about by changes in the social, technology economic, and political systems. Typically, globalization is reflected by the rising shares of world output contributed by international capital flows and trade activities among nations (Deese, 2017). Therefore, globalization focuses on addressing global issues by creating a united front among countries that will work together for better financial, social, and political operations across the globe. Globalization has helped optimal use of global resources, which include competitive sourcing of inputs which has helped achieve cost competitiveness in economies of scale, production, and efficient technology utilization. More so, globalization has strengthened social and political ties and promoted global peace through the creation of bodies that enhance unity. Globalization has uplifted developing nations by enhancing sustainable change and development by enabling smooth movement of capital and product flows across these nations (Leimgruber, 2018). Hence, there is free movement of investment, financial capital, trade services, technology, and labor that has fostered growth and development in these nations. Industrialization and

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HISTORICAL PHASES OF GLOBALIZATION 4 technology breakthrough has helped shaped globalization in different phases, given the events in these areas over the centuries. Thus globalization from its conception has a common goal of developing the world by taking advantage of the growth in technology, trade, and industries to open up the global economy and to promote social, political, and economic stability (Steger, 2017). At the core of globalization are driving factors that utilize these advancements to encourage progress across the globe. These drivers include market factors such as convergence tastes and lifestyles as well as creating of global consumers. The government and political factors play a significant role in promoting globalization by supporting an open economy from closed community systems in Eastern Europe. Some competitive drivers have developed globalization since the early years, which include the promotion of international trade and the growth of global networks that reinforce the interdependence of state in various industries. Globalization focuses on improving the world and making it a better place. In the modern world, developed nations such as the United States and China are continuously working with developing the African country such as Kenya to improve their well-being. Globalization aims to improve the economic, political, and social status of underdeveloped nations and strengthen international trade by giving these developing countries a platform to showcase their commodities in the market (Redner, 2017). This will foster better relations with nations and promote global progress. Indeed, globalization efforts across the globe have supported the creation of new job opportunities and address the unemployment crisis in developing countries. This will stimulate an increase in per capita income and promote financial stability and prosperity among nations. Globalization since the medieval ages seeks to create global consumers who are on the outlook for a variety of products and services in the international markets. This has promoted quality and affordable prices for goods across the globe. Therefore

HISTORICAL PHASES OF GLOBALIZATION 5 globalization has fostered creativity and innovation by encouraging the development of new products that encourage international trade and industrialization worldwide. Historical Phase of Globalization and Resulting Effect to the World Economy Phase 1 (1400-1815) The onset of globalization was in the late 15 th century when countries of northern Europe started imposing their activities on other nations across the globe. This was done through trade, conquest, and exploration of new areas (Pieterse, 2019). Before this period, people were separated across the world, and they rarely interacted with our communities. Similarly, this was the era of hunting and gathering and trade activities were minimal among societies. Even more, these dark ages were marked by periods of human evolution as people tried to better their lives, and this marked the age of discovery for many societies across the world. Besides, European adventurers took advantage of this period to exploit human resources and cultural material to produce wealth and influence. Consequently, Banchoff & Casanova (2016) affirm that Britain tapped into the available cheap labor and resources that resulted in an intensive operation that led to international mass industrialization, which was followed by globalization. Portugal Prince Henry, who was a navigator, sent part of his team to explore the world and make returns from this exploration. These people discovered useful resources and opportunities across the globe that would open to global growth and stability. On seen these profits from exploration, Europe followed and used armed forces to subdue and acquire large regions that would promote the industrialization of the nation. This exploitation of countries was disputed by a constant struggle at home since European nations such as France, Spain, Britain, Netherlands, and Portugal because of global hegemony. However, these conflicts in the acquisition of power and countries were the beginning

HISTORICAL PHASES OF GLOBALIZATION 6 of globalization. This fueled trade, military competition, and world production, which put pressure on technological advancements to support the activities of these nations. This phase saw the beginning of the industrial revolution, which was slowly shifting the world from consumption to production (Baylis, 2017). Therefore, this stimulated trade activities which supported globalization across the globe enhanced by the industrial revolution. During this period, Portuguese made discoveries in America such as the Christopher Columbus and Cape of Good of Hope in Africa. In the 16 th century, the slave trade became dominant, and countries set up trading stations where they could acquire cheap labor from Africa and Asia. They trade of slaves further facilitated the trade of local products from various regions. The commonly traded goods included spices, timber, and slaves, which initiated the international trade and business operations across the globe. Globalization started to take root from this period as it extended to European colonization to America and resulting in the Columbian Exchange. This continued the exchange of animals, foods, plants, human populations (slaves), culture, and transferable across the Western and Eastern hemispheres. This promoted global activities that fostered globalization and strengthened agriculture, ecology, and culture among nations to gain global dominance, power, and influence among nations (Deese, 2017). Therefore, the first period was marked by the social transition from consumption to production as well as gain of power, influence, and natural resources. However, this brought about competition as nations competed for wealth and power, which stimulated trade activities, military competition, and warfare: this promoted industrial revolution and mass production of goods that supported trade and push for technology advancements. Second Phase (1815-1905)

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HISTORICAL PHASES OF GLOBALIZATION 7 In this phase, globalization took a modern form and technology advanced, which promoted infrastructure across the globe. Therefore, industrialization developed, and there was cheap and massive production of household goods using economies of scale. The world population increased and created a sustainable demand for products among nations. Globalization in this phase was marked by imperialism where other countries ruled over other nations and controlled their activities. According to LaBinaca & Scham (2016) confirms that the first and second opium warfare opened up China to transnational trade and the completion of British defeat for India which created vast populations who were the ready consumer for European goods. Even more, these populations increased global trade activities and industrial processes that stimulated technological changes and growth across the globe. During this age, the Pacific Islands and Sub-Saharan African were integrated into the world system. European fight during this era intensified as they wanted to conquer Sub-Saharan Africa where they identified valuable economic resources such as diamonds, rubber, coal, and oil which created trade opportunities and investments across America and European Royal Colonies. The 19 th -century trade was a period where business was growing and was characterized by a financial crisis that slowed down globalization. This was experienced under the fixed exchange rates of the gold standard. Besides, Nadtochy (2016) believes that this resulted in improved economic and industrial integration by the establishment of international trade agreements and contracts. This created the General Agreement on Trade and Tariffs (GATT), European Union (EU), and North America Free Trade Area (NAFTA) which helped eradicate trade barriers and create the free movement of goods and services among member states. In 1890 up to the beginning of World War 1, trade activities declined where the warfare and conflicts among nations slowed down economic operations (Standaert & Ronsse, 2016). This is because of

HISTORICAL PHASES OF GLOBALIZATION 8 the rise of protectionism, and superpowers had to protect their products where they had to ensure that foreign goods don't suffocate their domestic commodities, which affected employment and caused social instability. Therefore, towards the beginning of the 20 th -century trade flows across the globe reduced as technological changes developed infrastructure and lowered transportation costs. This period experienced economic shocks, and bank panics and nations succumbed to the debt since there were no rescue packages that would help these nations out of debt. Information asymmetry in investment was a significant problem during this period as well as contract barriers, which made it difficult for companies to manage their activities in other parts of the world (Siddiqui & Tasim, 2019). There were macroeconomic issues such as unstable monetary policies and exchange risks that inhibited international trade and investment. Accounting standards in the United States were underdeveloped, and the British helped promote best accounting practices that improved the business in emerging and growing markets. The reduction in trade flows and investments in the global economy can be illustrated below: 1840 1860 1880 1900 0 1 2 3 4 5 6 7 Changes in Trade Flows, Investments, and Capital Productivuty Rate of Chage

HISTORICAL PHASES OF GLOBALIZATION 9 Third Phase (1905-1920) This age was marked by rapid technological advancement resulting from imperialism and increased warfare. This marked the development of automobiles and airplanes that were used to link economies. World War 1 was the highlight of this phase of globalization, where the warfare stimulated nationalist conflict and affected global trade and economies. This significantly affected and ruined trade activities across the globe. The war was triggered by the rise in global dominance among nations where they fought among themselves to acquire natural resources and promote their well-being (Papastergiadis, N. 2018). Racists’ beliefs, values, and norms extended to various areas as well as unequal practices in search of materials and resources. This resulted in direct colonial rule in the global regions, and the need to own global resources became imperative. The financial crisis and forces of globalization contributed to World War 1, which affected trade activities and investment across the globe. This is because nations increased their need to retain their products and gain global dominance and counter competition from other states. Even more, economic forces played a significant role in causing World War 1 as a nation sourced for financial resources (Sheth, 2017). For instance, Africa military potential was given precedence despite its economic potential. Therefore, countries used African soldiers to gain wealth and influence to conquer other nations. During this time, protectionism was high, and trade activities declined where nations retained their goods and failed to interact with other countries so that they could win colonies and control the world economy — similarly, these reduced world supply and production activities that slowed down globalization. Furthermore, technology innovations were still taking place, as seen in the development of new firearms, infrastructure, and communication systems.

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HISTORICAL PHASES OF GLOBALIZATION 10 This period of globalization declined to trade as seen in France case which suffered in its Agricultural activities due to reduced trade in machinery and fertilizer caused by the warfare. Therefore, nations suffered during this period due to economic recessions that slowed down trade flows and investment across the world (Sanchez, 2016). Apart from that, this period was marked by creativity and innovation seen in the development of transport and communication systems that enabled smooth movement from one place to another. There was the development of new firearms that were used in the warfare was enhanced by globalization and promoted a new way of doing things across the globe. Fourth Phase (1920-to date) This marked the final phase of globalization, which was after the World War 1 and 2. Leaders realized that having differences and conflicts reduced their productivity and trade. This period was characterized by political changes were world leaders came together to break trade barriers. Liu and Gao (2018) affirm that this resulted in the Bretton Woods conference, which was a forum where global leaders agreed to create a working basis for worldwide business and commerce. This resulted in the foundation of new international intentions intended to promote globalization. This period also saw the rise of multinationals, which drove global expansion and fostered globalization. These large companies were based in Europe and the United States and supported international exchange in modern developments in technology, science, and products with the most significant inventions originating from Europe. Mass media also became popular with the establishment of television, film, radio, and recording of music. The development of worldwide telecommunication and transport played a significant role in the growth and development of globalization in the modern era.

HISTORICAL PHASES OF GLOBALIZATION 11 The restoration of the International Monetary Fund (IMF) and World Bank supported globalization, which reduced trade barriers and costs as well as making it easier for trade negotiations and contracts (Leimgruber, 2018). After World War 2, international leaders focused on lowering the costs of trade and trade organizations such as the World Trade Organization (WTO) implemented policies and measures that promoted trade and investment. The creation of free trade was supported by elimination of capital controls, reduced tariffs, development of subsidies in a global corporation, and consolidation of intellectual property rights. Similarly, cultural globalization was stimulated by communication technology, which promoted international marketing of the Western industries. This saw the rise of America and global domination as it streamlined its trade transactions and investment opportunities. The Uruguay round of 1986 to 1994 created a treaty in WHO to solve trade disputes and set up a united front in trading activities. According to Kolodko (2018), this further led to multilateral and bilateral trade agreements, including the NAFTA treaty and Maastricht treaty, which aimed at elimination of trade barriers in the new century. World exports increased to 16.5% in 2001 from 8.5% in 1970. This has continued developing economic, social, and political integration that has fostered trade, technology, and investments advancements in the new century. This can be illustrated by the growth of exports and capital inflows, as shown below:

HISTORICAL PHASES OF GLOBALIZATION 12 1990 2000 2005 2009 0 1 2 3 4 5 6 7 Growth in Exports and Investments Rate of Change Conclusion Globalization is the integration of economy, cultures, and political environment that seeks to make the world a better place. It is the interconnectedness of people, groups, companies, institutions, government to create a united world. Besides, globalization aims to promote trade and investment by supporting and uplifting developing countries (Capello & Perucca, 2015). This will increase economic integration and increase world exports from rising economies through the creation of international markets. Even more, technology has been driven by technology advancements and the development of infrastructure that has fostered smooth movement of people and goods and services. The paper has explored these issues in-depth and supported that globalization has improved the world by the creation of trade and investment opportunities. Globalization occurred in four stages in different centuries. The first stage was the age of discovery and shift from consumption to production where European nations started the trade, military competition, and production that promoted industrial revolution and marked the beginning of globalization (Baylis, 2017). The second phase was marked by intensified trade of

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HISTORICAL PHASES OF GLOBALIZATION 13 slaves, coal, and rubber, which opened up to more development of communication and transport systems to promote trade activities. The third phase was marked with a period of imperialism as nations focused on acquiring colonies which were believed to have raw materials and natural resources. They used these nations to gain military power and fight fellow superpowers. The final phase was marked by the onset of conflict resolution and the end of political rivalry. It was characterized by new developments in technology, science, transport, and communication. This promoted trade and investment opportunities as nations reduced trade barriers through trade agreements and contracts. Above all, globalization is essential in the modern world, and it is the driving force towards better prospects for nations and lead them the world to growth and stability.

HISTORICAL PHASES OF GLOBALIZATION 14 References Banchoff, T. F., & Casanova, J. (Eds.). (2016). The Jesuits and globalization: Historical legacies and contemporary challenges . Georgetown University Press. Baylis, J., Smith, S., & Owens, P. (Eds.). (2017). The globalization of world politics: An introduction to international relations . Oxford University Press. Beck, U. (2018). What is globalization? . John Wiley & Sons. Bishev, G., & Boskov, T. (2016). Financial impact strategy on SMEs in the business world. International Journal of Current Research , 8 (9), 39226-39229. Capello, R., & Perucca, G. (2015). Openness to globalization and regional growth patterns in CEE countries: from the EU accession to the economic crisis. JCMS: Journal of Common Market Studies , 53 (2), 218-236. Deese, D. A. (2017). Globalization: causes and effects . Routledge. Kolodko, G. W. (2018). Emerging market economies: Globalization and development . Routledge. LaBianca, O. S., & Scham, S. A. (2016). Connectivity in antiquity: Globalization as a long-term historical process . Routledge. Leimgruber, W. (2018). Between global and local: marginality and marginal regions in the context of globalization and deregulation . Routledge. Liu, W., Dunford, M., & Gao, B. (2018). Discursive construction of the Belt and Road Initiative: From neo-liberal to inclusive globalization. Journal of Geographical Sciences , 28 (9), 1199-1214. Nadtochy, Y. V., Klochko, E. N., Danilina, M. V., Gurieva, L. K., Bazhenov, R. I., & Bakharev, V. V. (2016). Economic factors and conditions for the transformation of the education

HISTORICAL PHASES OF GLOBALIZATION 15 services market in the context of globalization. International Review of Management and Marketing , 6 (1S), 33-39. Ordóñez, S., & Sánchez, C. (2016). Knowledge Capitalism, Globalization, and Hegemony: Toward a Socio-Spatial Approach. World Review of Political Economy , 7 (1), 4-28. Papastergiadis, N. (2018). The turbulence of migration: Globalization, deterritorialization, and hybridity . John Wiley & Sons. Pieterse, J. N. (2019). Globalization and culture: Global mélange . Rowman & Littlefield Publishers. Redner, H. (2017). Totalitarianism, Globalization, Colonialism: The Destruction of Civilization Since 1914 . Routledge. Sheth, D. L. (2017). Globalization and new politics of micro-movements. In Social Movements (pp. 112-151). Routledge India. Siddiqui, S., Tasnim, N., Afzal, M. N. I., & Dutta, S. (2019). Aspects of Globalization: Spotlight on Latin America. In Globalization and Development (pp. 411-420). Springer, Cham. Standaert, S., Ronsse, S., & Vandermarliere, B. (2016). Historical trade integration: globalization and the distance puzzle in the long twentieth century. Cliometrica , 10 (2), 225-250. Stearns, P. N. (2016). Globalization in world history . Routledge. Steger, M. B. (2017). Globalization: A concise introduction (Vol. 86). Oxford University Press.

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