Global Networks Assignment

Assignment

For this assignment, you will create a slideshow based on some of the ideas contained in a video that you will watch.

Step 1

Watch the video, Globalization I - Crash Course History, below. Notice when narrator John Green draws your attention to a t-shirt, which happens to be merchandise for the Crash Course History series. You will have to understand that he does not merely include the t-shirt for promotional purposes. Instead, it operates as a symbol of globalization itself.

https://youtu.be/5SnR-e0S6Ic

Step 2

Your slideshow will answer this question: In what way does the t-shirt in this video represent and explain globalization?

Your exploration of this topic will include the following:

?    Globalization includes winners and losers and it always has.

?    Textiles have a long history within global trade.

?    Understanding globalization requires understanding global supply chains and having access to shipping channels.

?    The story of globalization is also the story of industrialization, technology and their developments

Step 3

Create  your slideshow using this format.

1.    Title slide with presentation title, your name and the date. This slide could include an image.

2.    Introductory slide in which you introduce the entire topic

3.    Main body of 5-7 slides in which you cover the points above  in the best order for maximum impact. Each slide must have at least one image  that helps to explain your exploration of the topic. You must make  direct reference to what is said in the video and may reference the course materials in this section.

4.    Concluding slide in which you summarize and wrap up your topic.

This will be marked according to the rubric below.

 Course  Readings

So, when did international trade start and how did it lead to globalization?

In this section, you will learn that international trade began at least 2000 years  ago. This is when the ?rst goods from China begin to show  up in Europe. At this point in history, international trade was minuscule in comparison to local trade,  yet it was signi?cant as it was the beginning of a trend  that would increase for centuries.

By the Age of Exploration, when large wooden sailing ships began to plow the seas, taking one set of goods with the trade winds to Asia, and another set  back as the winds became favourable back to Europe, international trade became big business, allowing some families, and some nations, to increase their wealth  in a way that the world had never seen before. Most of the

world's increasing population at this point, however, still lived lives that were unaffected by these goings on.

It was really after  the Industrial Revolution in the 19th century  when the ?rst wave of true globalization appeared. What marks the turning of events here was global communication systems as well as technology which allowed  for the shipping of everyday items such  as fruits and meat to be shipped from South  America to North America and Europe. Once Costa Rican bananas and pineapples were showing up in New Brunswick  and companies in South  Africa could speak with buyers  in France and Germany, a new world had come into being.

Soon enough,  multinational companies dominated world markets. Computers and the creation of the internet didn't create these global networks but sped them  up exponentially.

Silk Roads

People have been  trading  goods for almost as long as they’ve been  around. But as of the 1st century  BC, a remarkable phenomenon occurred. For the ?rst time in history, luxury products from China started to appear on the other edge  of the Eurasian continent – in Rome. They got there  after  being hauled  for thousands of miles along the Silk Road. Trade had stopped being a local or regional  affair and started to become global.

That is not to say globalization had started in earnest. Silk was mostly  a luxury good, and so were the spices that were added to the intercontinental trade between Asia and Europe. As a percentage of the total economy, the value of these exports was tiny, and many middlemen were involved to get the goods to their destination. But global trade links were established, and for those involved, it was a goldmine. From purchase price to ?nal sales price, the multiple went in

the dozens. The Silk Road could prosper in part because two great  empires dominated much  of the route.  If trade was interrupted, it was most often  because of blockades by local enemies of Rome or China. If the Silk Road eventually  closed, as it did after  several centuries, the fall of the empires had everything  to do with it. And when it reopened in Marco Polo’s late medieval time, it was because the rise of a new hegemonic empire:  the Mongols. It is a pattern we’ll see throughout the history of trade:  it thrives when nations protect it, it falls when they don’t.

Spice Routes (7th-15th  Centuries)

The next chapter in trade happened thanks to Islamic  merchants. As the new religion spread in

all directions from its Arabian heartland in the 7th century, so did trade. The founder of Islam, the prophet Muhammad, was famously a merchant, as was his wife Khadija. Trade was thus  in the DNA of the new religion and its followers, and that showed. By the early 9th century, Muslim traders already  dominated Mediterranean and Indian Ocean  trade; afterwards, they could be found as far east as Indonesia, which over time became a Muslim-majority country, and as far west  as Moorish  Spain.The main focus of Islamic  trade in those Middle Ages were spices. Unlike silk, spices were traded mainly by sea since ancient times. But by the medieval era they had become the true focus of international trade. Chief among them  were the cloves, nutmeg and mace from the fabled  Spice islands – the Maluku islands in Indonesia. They were extremely expensive and in high demand, also  in Europe. But as with silk, they remained a luxury product, and trade remained relatively low volume.  Globalization still didn’t take off, but the original Belt (sea route)  and Road (Silk Road) of trade between East and West did now exist.

Age of discovery  (15th-18th) Centuries

Truly global trade kicked off in the Age of Discovery. It was in this era, from the end of the 15th century  onwards, that European explorers connected East and West – and accidentally discovered the Americas. Aided by the discoveries of the so-called “Scienti?c Revolution” in the ?elds of astronomy, mechanics, physics and shipping,  the Portuguese, Spanish and later the Dutch and the English ?rst “discovered”, then subjugated, and ?nally integrated new lands  in their economies.

The Age of Discovery rocked  the world. The most (in)famous “discovery” is that of America by Columbus, which all but ended pre-Colombian civilizations. But the most consequential exploration was the circumnavigation by Magellan: it opened the door to the Spice islands, cutting out Arab and Italian middlemen. While trade once  again  remained small compared to total GDP, it certainly  altered people’s lives. Potatoes, tomatoes, coffee and chocolate were introduced in Europe, and the price of spices fell steeply.

Yet economists today still don’t truly regard this era as one of true globalization. Trade certainly started to become global, and it had even been  the main reason for starting the Age of Discovery. But the resulting global economy was still very much  siloed  and lopsided. The European empires set  up global supply chains, but mostly  with those colonies they owned.  Moreover, their colonial model  was chie?y one of exploitation, including the shameful legacy  of the slave  trade. The empires thus  created both a mercantilistic and a colonial  economy, but not a truly globalized one.

First Wave of Globalization (19th Century - 1914)

The ?rst wave of globalization roughly occurred over the century  ending  in 1914. By the end of

the 18th century, Great Britain had started to dominate the world both geographically, through the establishment of the British Empire, and technologically, with innovations like the steam engine, the industrial weaving  machine and more.  It was the era of the First Industrial Revolution.

The “British” Industrial Revolution made for a fantastic twin engine  of global trade. On the one hand, steamships and trains  could transport goods over thousands of miles, both within countries and across countries. On the other hand, its industrialization allowed  Britain to make

products that were in demand all over the world, like iron, textiles and manufactured goods. “With its advanced industrial technologies,” the BBC recently  wrote, looking back to the era, “Britain was able to attack a huge and rapidly expanding international market.”

The resulting globalization was obvious in the numbers. For about a century, trade grew on average 3% per year. That growth  rate propelled exports from a share of 6% of global GDP in the early 19th century, to 14% on the eve of World War I. As John Maynard  Keynes, the economist, observed: “The inhabitant of London could order by telephone, sipping  his morning tea in bed, the various  products of the whole Earth, in such  quantity  as he might see  ?t, and reasonably expect their early delivery upon his doorstep.”

And, Keynes also  noted, a similar situation was also  true in the world of investing. Those with the means in New York, Paris, London or Berlin could also  invest  in internationally active  joint stock companies. One of those, the French  Compagnie de Suez, constructed the Suez Canal, connecting the Mediterranean with the Indian Ocean  and opened yet another artery of world trade. Others  built railways  in India, or managed mines in African colonies. Foreign direct investment, too, was globalizing.

While Britain was the country  that bene?ted most from this globalization, as it had the most capital and technology, others did too, by exporting other goods. The invention  of the refrigerated cargo ship or “reefer ship” in the 1870s, for example, allowed  for countries like Argentina  and Uruguay, to enter  their golden  age. They started to mass export  meat,  from cattle grown on their vast lands. Other countries, too, started to specialize their production in those ?elds in which they were most competitive.

But the ?rst wave of globalization and industrialization also  coincided with darker events, too. By the end of the 19th century, the Khan Academy notes, “most [globalizing and industrialized]European nations grabbed for a piece  of Africa, and by 1900 the only independent country  left on the continent was Ethiopia”. In a similarly negative vein, large countries like India, China, Mexico or Japan, which were previously  powers to reckon  with, were not either not able or not allowed  to adapt to the industrial and global trends. Either the Western powers put restraints on their independent development, or they were otherwise outcompeted because of their lack of access to capital or technology. Finally, many workers in the industrialized nations also  did not bene?t from globalization, their work commoditized by industrial machinery, or their output undercut by foreign imports.

The World Wars

It was a situation that was bound  to end in a major crisis, and it did. In 1914, the outbreak of World War I brought an end to just about everything  the burgeoning high society of the West had gotten so used to, including globalization. The ravage was complete. Millions of soldiers died in battle, millions of civilians died as collateral damage, war replaced trade,  destruction replaced construction, and countries closed their borders yet again.

In the years  between the world wars, the ?nancial markets, which were still connected in a global web, caused a further  breakdown of the global economy and its links. The Great Depression in the US led to the end of the boom  in South  America, and a run on the banks in many other parts of the world. Another world war followed in 1939-1945. By the end of World War II, trade as a percentage of world GDP had fallen to 5% – a level not seen in more than a hundred years.

Second and Third wave of Globalization

The story of globalization, however, was not over. The end of the World War II marked a new beginning for the global economy. Under the leadership of the United States of America, and aided by the technologies of the Second Industrial Revolution, like the car and the plane, global trade started to rise once  again.  At ?rst, this happened in two separate tracks,  as the Iron Curtain divided the world into two spheres of in?uence. But as of 1989, when the Iron Curtain fell, globalization became a truly global phenomenon.

In the early decades after  World War II, institutions like the European Union, and other free trade vehicles championed by the US were responsible for much  of the increase in international trade. In the Soviet Union, there  was a similar increase in trade,  albeit through centralized planning rather  than the free market. The effect was profound. Worldwide, trade once  again  rose  to 1914 levels: in 1989, export  once  again  counted for 14% of global GDP. It was paired  with a steep rise in middle-class incomes in the West.

Then, when the wall dividing East and West fell in Germany, and the Soviet Union collapsed, globalization became an all-conquering force. The newly created World Trade Organization

(WTO) encouraged nations all over the world to enter  into free-trade agreements, and most of them  did, including many newly independent ones. In 2001, even China, which for the better part of the 20th century  had been  a secluded, agrarian economy, became a member of the WTO, and started to manufacture for the world. In this “new” world, the US set  the tone and led the way, but many others bene?ted in their slipstream.

At the same time, a new technology from the Third Industrial Revolution, the internet,  connected people all over the world in an even more direct way. The orders Keynes could place  by phone in

1914 could now be placed over the internet. Instead of having them  delivered  in a few weeks, they would arrive at one’s doorstep in a few days.  What was more, the internet also  allowed  for a further  global integration of value chains. You could do R&D in one country, sourcing in others, production in yet another, and distribution all over the world.

The result  has  been  a globalization on steroids. In the 2000s, global exports reached a milestone, as they rose  to about a quarter of global GDP. Trade, the sum  of imports and exports, consequentially grew to about half of world GDP. In some countries, like Singapore, Belgium, or others, trade is worth much  more than 100% of GDP. A majority of global population has

bene?ted from this: more people than ever before belong  to the global middle class, and hundred of millions achieved that status by participating in the global economy.

Globalization 4.0

That brings us to today, when a new wave of globalization is once  again  upon us. In a world increasingly dominated by two global powers, the US and China, the new frontier of globalization is the cyber world. The digital economy, in its infancy during the third wave of globalization, is now becoming a force to reckon  with through e-commerce, digital services, 3D printing. It is further  enabled by arti?cial intelligence, but threatened by cross-border hacking and cyberattacks.At the same time, a negative globalization is expanding too, through the global effect of climate change. Pollution  in one part of the world leads to extreme weather events in another. And the cutting of forests in the few “green lungs” the world has  left, like the Amazon rainforest, has  a further  devastating effect on not just the world’s biodiversity, but its capacity to cope  with hazardous greenhouse gas  emissions.

But as this new wave of globalization is reaching our shores, many of the world’s people are turning their backs on it. In the West particularly, many middle-class workers are fed up with a political and economic system that resulted in economic inequality, social instability, and – in some countries – mass immigration, even if it also  led to economic growth  and cheaper products. Protectionism, trade wars and immigration stops are once  again  the order of the day in many countries.

As a percentage of GDP, global exports have stalled and even started to go in reverse slightly. As a political ideology, “globalism”, or the idea that one should take a global perspective, is on the wane.  And internationally, the power that propelled the world to its highest level of globalization ever, the United States, is backing away from its role as policeman and trade champion of the world.

It was in this world that Chinese president Xi Jinping  addressed the topic globalization in a speech in Davos in January 2017. “Some blame  economic globalization for the chaos in the world,” he said.  “It has  now become the Pandora’s box in the eyes  of many.” But, he continued,

“we came to the conclusion that integration into the global economy is a historical trend.  [It] is the big ocean that you cannot escape from.” He went on the propose a more inclusive globalization, and to rally nations to join in China’s new project  for international trade,  “Belt and Road”.