It hasn’t been possible (yet) to arrive to a common definition of GLOBALIZATION. However, many researchers have been studying its evolution, identifying different key periods as well as major characteristics of each of them. Therefore, we would like to share general considerations related to 3 MAIN PHASES of the history of globalization over the past 500 years. This post will we focus on ‘phase one’.
Phase one begins in 1492, with the voyage of Christopher Columbus to the new world, and continues with later European voyages of exploration that eventually made possible the formation of Europe’s colonial empires.
Who were these explorers, and why were their voyages unlike passages across oceans that were made during the prehistoric period, true forerunners of what we call globalization?
The Italian explorer Christopher Columbus, financed by the Spanish crown, completed four voyages across the Atlantic Ocean that created a European awareness (not discovery, as it is usually considered) of the North and South American continents. The Portuguese explorer Vasco da Gama was the first to lead a maritime expedition to India in 1498. The conquistador Hernan Cortes brought much of Mexico under Spanish control in the early 16th century. Ferdinand Magellan completed the first circumnavigation of the world between 1519 and 1522 in the service of King Charles I of Spain. Sir Francis Drake achieved the second circumnavigation of the Earth in the late 16th century, and played the role of a global buccaneer, carrying out attacks and confiscating foreign treasures around world, mainly as well as the other explorers and their colleges.
These adventurers were globalizers for the following reasons:
- they engaged in the state-sponsored acquisition of strategically significant knowledge that enabled nations such as England and Spain to establish colonial empires across the globe;
- they carried out state-sponsored expeditions to confiscate wealth that could become the property of the state, thereby anticipating future alliances between states and private companies;
- state sponsorship of global trading monopolies was a foreshadowing of state-sponsored national champion global corporations of the modern era.
The monopoly of trade granted to the by Queen Elizabeth I in 1600 is a prime example of the state-corporate partnership that today takes the form of the state capitalism practiced on the larger scale by many countries.
At the same time, the East India Company was the great progenitor of the modern multinational corporation that benefits from the protections provided by the nation state. The limited liability it offered to its shareholders promoted the development of investment capitalism by limiting the financial risk undertaken by their investors.
Today’s global economy confirms the importance of this showpiece enterprise of the first phase of globalization. State-controlled companies are thriving and have enormous influence in emerging economies. These state-owned enterprises can also become monopolies in their own right, along the lines intended once upon a time by the imperial monarch of the 16th century.
Source: Ferrer (1996; 1997; 2000); Hoberman