Chapter 11.1 A Global Economy
Learning Objectives
By the end of this section, you will be able to:
- Explain how trade agreements and attempts to regulate world trade have shaped the global economy since the 1990s
- Analyze the way multinational corporations have affected politics, workers, and the environment in developing nations
- Discuss globalization in the West and how it has affected workers around the world
In many ways, World Wars I and II were only temporary interruptions in a centuries-long process of global integration. This process is often called globalization, the interconnectedness of societies and economies throughout the world as a result of trade, technology, and the adoption and sharing of elements of culture. Globalization facilitates the movement of goods, people, technologies, and ideas across international borders. Historians of globalization note that it has a very long history. In the days of the Roman Empire and the Han dynasty, Europeans and Asians were connected to one another through trade along the Silk Roads. In the fourteenth century, the Black Death spread from Asia to Europe and North Africa, killing people on all three continents. With the European colonization of the Americas in the sixteenth and seventeenth centuries and British colonization of Australia, all of the world’s inhabited continents became enmeshed in exchanges of peoples, products, and ideas that increased in the nineteenth century as the result of both technological developments and the imperialist impulses of industrialized nations. Only the world wars of the twentieth century brought a temporary halt to these exchanges. Furthermore, once the world wars were over, globalization not only resumed its pre–World War I trajectory but even gained speed, despite the Cold War and decolonization efforts in Asia and Africa. As the Cold War came to a close, the United States, Europe, and increasingly powerful corporations ensured that capitalism and free-market economics would dominate the globe.
Global Trade
Even during the Cold War and decolonization, economic development and industrialization continued around the world. Japan and West Germany, destroyed and defeated in the 1940s, were striking examples. Each dove headlong into postwar rebuilding efforts that paid huge dividends. They invested heavily in their economies and saw industrial production and economic growth skyrocket over the 1950s and 1960s. By 1970, both had become economic powerhouses in their regions.
Similar, but smaller, economic miracles occurred in other places, especially in Europe. Spain underwent a period of spectacular growth fueled by imported technology, government funding, and increased tourism and industrialization in the 1960s. Italy began even earlier. By the early 1960s, its annual gross domestic product (GDP) growth—the increase in value of all the goods and services the country was producing—had peaked at just over 8 percent. France bounced back from the war years with a