Industrialisation and Globalisation | History Optional for UPSC (Notes) PDF Download

Globalization

• Globalization is the process of integrating nations worldwide through the exchange of views, products, ideas, and various cultural elements.
• Improvements in transportation and communication, especially with the advent of the telegraph and later the Internet, have significantly contributed to globalization by fostering greater economic and cultural interdependence.
• The term "globalization" gained prominence in the mid-1980s and became more widely used in the mid-1990s. It comes from the verb "globalize," meaning to make something worldwide in scope.

In 2000, the International Monetary Fund (IMF) outlined four key aspects of globalization:

• Trade and transactions
• Capital and investment movements
• Migration and movement of people
• Dissemination of knowledge

Globalization is also linked to environmental issues like climate change, cross-border pollution, and ocean overfishing.

• Globalizing processes influence and are influenced by various factors, including business organization, economics, socio-cultural resources, and the natural environment.
• While some scholars believe globalization started in modern times, others trace its roots back even before the European explorations and discoveries.
• Significant globalization began in the 19th century, with a rapid increase in global economic and cultural interconnectedness during the late 19th and early 20th centuries.

Economic Globalization

• Economic globalization refers to the growing interdependence of national economies worldwide, driven by a surge in cross-border movement of goods, services, technology, and capital.
• It encompasses the globalization of production, markets, competition, technology, and corporations.
• While the globalization of business focuses on reducing international trade regulations, tariffs, and other barriers to trade, economic globalization emphasizes the increasing integration of economies, leading to the development of a global marketplace or a unified world market.

Industrial Revolution and Modern Globalization

• The 19th century marked a significant turning point in the history of globalization, bringing it closer to its contemporary form. The Industrial Revolution is often regarded as the most profound transformation in human life throughout history.
• In the following centuries, the world economy began to emerge as a unified entity, where advanced regions were interconnected with their colonies through a specific division of economic activities. These interactions can be described as a system of economic flows, encompassing trade, international payments, migration, and capital transfer.

Integration and Dependence:

• From the time of the Industrial Revolution onwards, the world economy became more integrated, and regions grew increasingly dependent on one another. This trend laid the groundwork for what we now refer to as "globalization."

Industrial Revolution vs. Other Processes:

• While other processes such as migration from Europe, trade development, and colonization contributed to globalization, none had the same impact as the Industrial Revolution. The world had previously experienced significant population movements and colonization efforts, but these did not produce the same outcomes as those resulting from European migration or colonization during the industrial era.
• For instance, the migration of Central Asian nomadic peoples to the West or the colonization policies of ancient Greeks and Romans did not lead to the same level of globalization as seen later. Colonization and population movements became important factors in globalization, but their significance was greatly amplified by the unprecedented effects of industrialization.
• Without industrialization, European population migration would likely have had outcomes similar to earlier population movements in history.

Link Between Industrialization and Globalization

Throughout history, the process of globalization has been underway for at least the last four centuries, as evidenced by the review of industrialization. In earlier times, great civilizations, empires, and economies were confined to specific regions. For instance:

• The Mesopotamian Civilization was centered around the Tigris and Euphrates rivers.
• The Roman Empire controlled territories around the Mediterranean Sea.
• Trade along the Silk Road was limited to regions connecting China, India, and parts of Central Asia to the Mediterranean and Black Seas.

Unlike today, these ancient structures could not connect all parts of the world.

Factors Behind Globalization

Various arguments attempt to explain the roots of globalization, including:

• Fundamental social and political changes during the Reformation era.
• Migration of Europeans to the New World.
• Colonization of non-European territories.
• Industrial Revolution, which spurred the emergence of a world capitalist economy.
• Technological advancements.

These factors are seen as steps leading to the current phenomenon of globalization, with a particular emphasis on industrialization.

Impact of Industrialization on Globalization

• The origins of the Industrial Revolution can be traced back to significant social and political changes in 15th and 16th century Europe. The Reformation and Enlightenment periods transformed European societies, paving the way for a global market through innovations, new ways of thinking, advancements in physical sciences, and unprecedented human endeavors.
• It can be argued that the most prominent driving force behind globalization is the capitalist world economy, which was ignited by the Industrial Revolution. This revolution established structures worldwide based on the capitalist mode of production, characterized by production, consumption, international trade, competition, and conflicts among states.
• While the capitalist world economy drives globalization, its effects are felt in various fields, including culture, politics, society, environment, arts, and lifestyle. However, the focus here is on the close relationship between industrialization and globalization.

Overseas Trade and Navigation Development

The beginning of overseas trade fostered the development of navigation, leading to competition among European states.

Domestic Market Creation:

• Internal conflicts in the 17th and 18th centuries shifted to overseas rivalries.
• Spain, Portugal, France, the Netherlands, and England emerged as major powers in this struggle.
• European states developed their domestic markets and established trade links between colonies and homelands.

The creation of home markets resulted from:

• Abolition of feudal privileges held by landlords and the church.
• Confiscation of church lands.
• Liberation of vassals from land obligations.
• Undermining of the guild system.

These changes brought idle lands and labor forces to the market, breaking the dependency link between labor and land. Consequently, individuals had to work harder for basic subsistence, leading to increased demand for primary products like food and clothing.

Textile Industry and Industrial Revolution:

• In England, low wages resulted in lower production costs for textile products.
• English textiles were exported first across Europe and then globally.

The textile industry marked the initial phase of the Industrial Revolution.

Colonial Impact:

• Colonies were initially used to obtain raw materials, especially cotton.
• As production increased during the Industrial Revolution, colonies became crucial markets for exporting textile products.

Production Techniques and Competition:

• New production techniques spurred competition and were quickly adopted by other European nations.
• Domestic production aims soon transcended national borders, with the entire globe becoming a target for capitalists.

Innovation and Free Trade:

• Innovations and inventions accelerated to reduce production costs and achieve competitive prices.
• Free trade, advocated by figures like Adam Smith, argued for optimal resource use through international free trade.

This concept promoted a division of labor among countries, where each country produced goods at advantageous prices.

Impact of Industrial Revolution on Capitalism:

• The Industrial Revolution was a pivotal moment in the emergence of a world economy.
• It strengthened capitalism and gave it a global character.
• Industrialization created new social and market relations, providing a conducive environment for the growth of the world capitalist economy on a global scale.

Globalized Market Dynamics:

• The globalized market triggered dynamics related to nationalism, culture, religion, identity, and locality worldwide.
• The rise of capitalism and the formation of nation-states in Europe were closely intertwined, shaping the nature of globalization.

Trade and Scientific Outlook:

• Trade development in 17th and 18th century Europe occurred alongside a scientific outlook, state building, and wars.
• Central rulers used gunpowder to eliminate local lords, while the Reformation diminished loyalty beyond national borders.

Role of Rulers:

• To finance their wars, rulers encouraged taxable activities, primarily trade and production of primary agricultural products.
• Both capitalism and state building in Europe mutually reinforced each other during this period.

Formation of Nation-States and Capitalism:

• Nation-states emerged, and capitalism began to flourish.
• Capital gained a national character, with states protecting their capitalists by imposing high tariff barriers in newly industrializing countries.
• In contrast, industrialized countries like Britain pressured former colonies to eliminate trade barriers.

Colonial Policies and Capitalist Expansion:

• In its early formation, European states pursued colonial foreign policies to facilitate the activities of their businessmen overseas.
• However, by the late 19th century, centralized governments backed by standing armies and strong bureaucracies evolved into absolutist regimes.

Global Capitalist Expansion:

• As capitalist investments expanded and production increased, the ambitions of capitalists extended beyond national markets.
• World War I can be viewed as a result of conflicting imperial policies among European countries, while World War II was partly influenced by the nature of national capitalism.

Acceleration of Globalization:

• Once national capitalism was established within secure borders, it accelerated globalization through activities abroad.
• This process eventually led to the creation of an interdependent world capitalist economy.

Free Trade and Globalization:

• Free trade formulations also contributed to globalization.
• Adam Smith’s ideas on free trade, which advocated for optimal resource utilization through international trade, played a significant role in shaping globalization.