Globalization in Historical Perspective

Abstract

It is by and large perceived that a phenomenon known as "globalization" is quickly modifying lives in each and every edge of the planet. However, it is somewhat difficult to characterize globalization and when it started. Social researchers and various historians have proposed a wide range of theories to define the beginning stages for the historical backdrop of globalization. An attempt has been made to identify the various stages that led to the present process of global convergence: the consolidation of Asian and Indian Ocean networks beginning about a millennium ago, the new sea routes opened by European expansion about five centuries ago, and the Industrial Revolution of two centuries ago. The time when societies came closer together can be distinguished from the rest of human history which was dominated by divergent forces that divided human communities from each other. After World War 2 and till mid 70s most less developed countries (LDCs) and newly industrializing countries (NICs) implemented a closed economy, import-substitute industrialization model with excessive interventionism and protectionism. The outcomes were slow growth due to balance of payments crises and worsening income distribution due to inflation. This required empowering private ventures and direct private investments (DPIs), flexible exchange regime, freer foreign trade, and implementation of privatization. Although 1997-98 global financial crisis slowed the flow of funds and DPIs, yet globalization proceeded generally.