Globalization. It's a word we hear thrown around a lot these days, usually in conjunction with words such as "protest," "evil" and "corporations." But what is it, really? What are the WTO and NAFTA, and why exactly does their existence cause street battles between activists and police?
Simply put, globalization is the future and its approach is stepping on a lot of sensitive toes.
It could be said that globalization began as far back as the 1700s, when economic theorists such as Adam Smith banished the colonial concepts of mercantilism to the dustbin of history in favor of the idea that fair trade is good for everybody.
The next big step was the development of transportation and communication technology in the 19th century. Steamships, railroads and telegraph networks made it possible to move goods and information more quickly than ever before.
In this first period of globalization there was little of what we know today as barriers to trade. There were no passports, no limits on immigration. People and their money could cross borders easily and expand their businesses quickly.
The result?
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The accumulated wealth of Europe began spreading to the rest of the world. By 1914, half of British investments were overseas. Twenty percent of the world's Gross Domestic Product was in foreign assets, a number that was not reached again until 1985.
In this context, the history of the mid 20th century can be seen as a backlash against global business. With the outbreak of the First WWI, borders were fortified. Countries became nations, suspicious of outsiders at best. Communism reared its head in Russia, and the world plunged into a bleak postwar depression.
After the unimaginable devastation of World War II and with the onset of the Cold War and the possibility of nuclear holocaust, the world began to rethink its future. The nations of Western Europe decided that they would never again battle one another and began the long process of peaceful unification now known as the European Union.
Through the latter half of that nightmarish century, the world was divided into three camps: the democracies of the West, the Marxist despotisms, and the impoverished Third World. In the waning years of that deadlock and with its end only twelve years ago, the economic forces that had been pent up since 1914 were set loose again.
Taking advantage of a world nominally at peace, businesses began expanding almost immediately into countries they had never dreamed would be free. The European Union has leapt from dream to reality in only a decade, and already is considering doubling its members.
Other areas of the world began considering economic trade agreements to help tear down the walls between countries. NAFTA, Mercosur, ASEAN and many others sprang into being. The General Agreement on Tariffs and Trade was formed to help guide peaceful world commerce. Today the World Trade Organization, a voluntary grouping of nations that acts as an international mediator of trade disputes, has replaced it.
This rapid transition from a world on the brink of apocalypse to a chaotic mix of competing businesses has many opponents. Hard-line conservatives still cling to nationalism, preferring the safety of walled borders. Anti-globalists see the power vacuum left by the demise of nation-states and fear that evil mega-corporations will take over.
What they both fail to accept is that the era of big governments and big armies is ending. Government as the principal organizer and motivator of society has failed to bring us prosperity or peace. Humanity has experimented with institutionalized authority and central planning, and all it brought us was the most devastating century in history.
The future is global. Although there are still many decades before the last remnants of national xenophobia disappear, the bitter lessons of the 20th century will prevent them from taking hold again.
Globalization, for all it is vilified, is nothing more or less than the beginning of an age without borders, barriers, or foreigners. It is the beginning of a world in which disputes will be resolved through negotiation and agreement rather than war. It may have its problems, but it's a lot better than anything else we've tried so far.
by Craig A. Butler
Daily Lobo Columnist
