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The five stages of globalisation: where it came from and where it is going

By Peter McMahon - posted Friday, 27 February 2004


When most people think of globalisation they think of the rapid expansion of trade, finance markets and corporate activity, and perhaps the associated decline in government power that has occurred in the last decade or two. Certainly, the term “globalisation” is little older than that, but the actual phenomenon of global expansion is much older and it has gone through a series of different stages that have culminated in the current situation. We need to understand this long history of globalisation to have some idea of where it is leading.

Specifically, there have been five distinct but overlapping stages in the fifth-century long process of globalisation. We are currently in the early phase of the last stage, which began around the middle of the 1990s and really accelerated after the 9-11 attacks.

The core change at the heart of this long process and the stages that make it up is in the prevailing social control structures. These are the basic institutions, systems, technologies and behaviour patterns that give a society a particular character, enable it to survive and sometimes to expand. Historically, and certainly in modern times, the overall form of the control structure is increasingly shaped by technology, and particularly technological systems. The exact form of the control structure can vary from, for example, primitive theocracies to high-tech liberal democracies but as the size and complexity of the society grows, more and more resources must be dedicated to the actual control process. More specifically, information and communications capacities increasingly define these central control processes. This condition is the basic cause of the so-called information revolution of the last century.

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Globalisation properly began in the late fifteenth century when one particular society consisting of the nations of northern Europe began to impose its ways onto the rest of the world through exploration, trade and conquest. This process, in which an increasingly large part of the world’s human, cultural and material resources were exploited to generate wealth and power for these European adventurers, changed from what was mainly an extensive operation to an intensive operation that eventually resulted in industrialisation in Britain, international mass industrialisation and then globalisation.

The first stage of globalisation was from the late 1400s to 1815; the second stage was from 1815 to 1914; the third stage was from 1914 to 1968; the fourth stage was 1968 to 2001, whence the last stage began. The ever-decreasing duration of each phase reflects the underlying impact of technology, the capacity of which has been advancing in an almost hyperbolic way.

It was the late fifteenth century Portuguese prince, Henry the Navigator, who first sent his captains to explore the world and make a profit out of what they found. The rest of northern Europe followed and through force of arms, disease and religion, Europeans subjugated increasingly large regions and their populations. However, the expansion of the European powers was distorted and constrained by constant struggle at home for European and potentially global hegemonic ascendancy. This issue was disputed at various times by Portugal, Spain, the Netherlands, Britain and France. Nonetheless, whatever disruption it caused to world production and trade, military competition maintained pressure on development of technologies, which would form the basis of the industrial revolution. Furthermore, the constant warfare created the modern nation state and domestic and international finance operations.

The power-struggle in Europe was resolved when Britain emerged as global hegemon after Waterloo, the Royal Navy policing the waves and sterling acting as defacto global currency. In this new liberal world order, new institutional forms (notably firms) and new technologies of transport (especially steam-powered rail and shipping) and communications (most importantly, telegraphy) enabled ever tighter control over day-to-day business, while the high financiers and statesmen maintained the system as a whole by wielding commercial and military power.

It was mass industrialisation itself that caused the decline of the old system and the rise of the new, based on more direct control over industrial development by national governments and large, nationally oriented industrial firms. Unfortunately, a corollary of this trend was national chauvinism and warfare, the latter now highly industrialised. When the smoke eventually settled in 1945, a new hegemon, the United States, had arisen due to its unassailable industro-military power. A world order in which the American mode of development was translated across the world to those regions not controlled by communism lasted until around 1968.

The stage that followed resulted from the weaknesses emerging in the existing system, the return to strength of private business interests - especially high finance - and the possibilities presented by new technologies largely developed out of the two world wars. These technologies, such as jet planes, computers and satellite communications, enabled the spread of intensified corporate activity across the globe. Along with this development went an ideological campaign by the private, increasingly corporate sector, and consequent privatisation and liberalisation of markets, all generally weakening the nation state.

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However, by the mid 1990s problems were emerging just as the rise of the Internet seemed to epitomise the transformative structural power of what was now called globalisation. The continued rise of explicitly anti-globalisation movements, who fought police in Seattle and elsewhere, the demise of the multilateral agreement on investment (MAI), the Asian economic crisis and the dot.com bubble all indicated the limits of this stage of development.

The response was clear in the strong ideological stance of the Bush Jr administration. The new unilateralism in fact reflected an intention to re-establish direct control over global issues by the US utilising new techno-military systems. The 9-11 attacks then gave Washington carte blanche. Although the wars in Afghanistan and Iraq and growing pressure on other “rogue states” was the overt manifestation of this new control approach, the concomitant emplacement of systems of permanent surveillance and arrest over more and more of the world’s communications and transport arrangements was even more important.

In effect, the current US government is endeavouring to re-establish direct control over global processes through increasingly extensive and intensive intelligence and military systems, and through a total dominance of the final contested realm, outer space. It is assumed that this combination of specific control systems and the maintenance of more abstract control though electronic finance markets will enable even greater extensive and intensive exploitation of human and material resources globally in the service of corporate-led economic development.

Paradoxically, although this latest stage is manifestly American in authorship due to the central role of the US government, in reality it actually accelerates the creation of an increasingly integrated global society.

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About the Author

Dr Peter McMahon has worked in a number of jobs including in politics at local, state and federal level. He has also taught Australian studies, politics and political economy at university level, and until recently he taught sustainable development at Murdoch University. He has been published in various newspapers, journals and magazines in Australia and has written a short history of economic development and sustainability in Western Australia. His book Global Control: Information Technology and Globalisation was published in the UK in 2002. He is now an independent researcher and writer on issues related to global change.

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