KeyText: Two Eras of Globalization and the Gap between

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Two Eras of Globalization and the Gap between

Thomas Friedman draws a link between the processes of globalization between the mid-1800s through the 1920s and the most recent phase of globalization beginning with the fall of the Berlin Wall in 1989.

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Journalist Thomas L. Friedman, in The Lexus and the Olive Tree, defines “globalization’ as:

…the inexorable integration of markets, nation-states and technologies to a degree never witnessed before—in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporations, and nation-states farther, faster, deeper, cheaper than ever before.

He says, however, that the current process of globalization might better be called Globalization II since, in many ways, the process of globalization began in the mid-1800s and lasted till the 1920s. The first phase of globalization was largely halted by the “successive hammer blows” of the two World Wars and the fall of the Iron Curtain.

Why had the process of globalization, begun over a century before, stalled? According to Friedman, the first phase of globalization (the industrial revolution) gave rise to the ideologies that dominated most of the twentieth century: communism, socialism and fascism. During the first phase of globalization many people began to realize that while modern capitalism was unmatched in its ability to produce wealth, it had some frightening limitations in its ability to distribute wealth. The “answer” forwarded by many of the dominant ideologies of the early twentieth century was to create a State that could control and direct the economy thereby ameliorating the inequities created by capitalism.

So, the period between the end of World War II and the fall of the Berlin Wall in 1989 could be characterized by the conflict between the processes begun during Globalization I and planned economy ideologies. In short, this was the period of the Cold War.

Characteristics of the Cold War Era Versus Gobalization II

The fall of the Berlin Wall marked, says Friedman, not just the end of the Cold War, but the beginning of a sea change in ways of thinking and acting. How does the Cold War era differ from the current era of globalization? Friedman differentiates between the international systems of the Cold War era and the Globalization II era according to a set of “defining” characteristics.

Table 1. Comparison of Cold War and Globalization II Characteristics

Defining Characteristic	Cold War Era	Globalization II Era
Overarching feature	“Frozen” world order	Integration; the world as an increasingly interrelated place, dynamic process
Defining Word(s)	“detente,” “nonalignment,” and “perestroika”	The “Web”
Driving Idea	The clash between Communism and Capitalism	Free-market capitalism
Set of Economic Rules	Rules varied by type of society: Less developed: focus on national industries Developing: export-led growth Communist countries: autarky Western countries: regulated trade	Opening, deregulating, and privatizing the economy
Dominant Culture	No globally dominant culture	Spread of “Americanization”
Defining Technologies	Nuclear weapons and Second Industrial Revolution	Computerization, miniaturization, digitization, satellite communications, fiber optics and the Internet
Defining Measurements	The “throw weight” of nuclear missles	Speed
FAQ	“Who’s side are you on?”	“How fast is your modem?”
Defining Document	The Treaty	The Deal
Defining Anxiety	Nuclear annihilation	Fear of rapid, dramatic change brought on by anonymous, uncontrolled forces
Demographic Pattern	Movement from East to West frozen while movement from south to north more steady	Rapid movement from rural agrarian contexts to urban, globally integrated contexts
Defining Structure of Power	Balance between the U.S. and USSR	Balance between States-and-States, States-and-“Supermarkets” (millions of investors moving money around the globe with the click of a button), States-and-“Super-empowered Individuals” (individuals able to act on a world stage unmediated by the State

The Cold War may have slowed down the processes begun in Globalization I, but, Friedman’s use of the term “inexorable” in his definition of ‘globalism’ is not mere rhetoric. While the speed with which the process of globalization may change over time and may proceed at different paces in different parts of the world, the process itself shows no sign of stopping. Indeed, argues Friedman, the last ten years demonstrate a dramatic increase in the reach and integration of this new/old process of globalization.

Data and Methods:

Data Source:

Based in large measure on interviews conducted as part of the author's work as a journalist.

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Reference

Friedman, Thomas L. 2000. The Lexus and the Olive Tree. New York: Anchor Books. Ch. 4, pp. 44-72.

Authors

Thomas L. Friedman