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The last few years has seen a growing level of angst towards the overly connected world in which we live. There have been a number of key criticisms of the global system that has delivered plenty of good and bad; criticism including the exploitation of less developed countries and loss of domestic industries. The climate change crisis and global pandemic have also highlighted an important concern with globalisation: wasteful and complex supply chains. This being said, the ideology underlying this current wave of globalisation has been free markets and capitalistic endeavour and the resulting myriad of interconnectivity does have a semblance of efficiency and logic that might not be easily replaced.
But as this era of globalisation looks to come to an end, it might be a good idea to review how other waves throughout history have dissipated and new ones arose.
First Wave of Globalisation (1870 to WWI)
With most of the world being opened up through European colonisation, the first wave of globalisation was led by the British empire. The US was starting to stabilise after wars with Mexico and a civil war, and technologies such as the combustion engine and electricity were starting to accelerate factory production. This meant that trade was now becoming globally beneficial, whereby trade was no longer about building national wealth, but more about growing the pie for everybody.
World at war (WWI to WWII)
The backbone of globalistic endeavour - i.e. European colonialism - was ripped out of the international order during the two world wars. This saw a reversal in trade due to nationalistic fervour and security fears. The middle of this period also was the scene of the Great Depression, which led to heightened policies of protectionism.
Second Wave of Globalisation (WWII to 1971)
Coming out of WWII, the US was now the stand-alone titan of the global economy. A post-war boom heralded in the concept of the 'American Dream' alongside rebuilding efforts in Europe and Japan. Jet planes, satellites and bigger ships saw trade jump dramatically. US military activity and sanctions against communist countries was a headwind to further trade growth.
Oil and inflation crises (1972 to 1989)
Dual threats of recession and inflation saw much of the global economy struggle throughout the 1970s. Much of this was the result of oil price shocks, with the global economy's reliance on oil becoming overly apparent.
Third Wave of Globalisation (1990 to 2020?)
With the Cold War over, the global landscape became a much more placid environment. The age of the internet and microchips also helped the world become much smaller with goods, money, people and information moving across borders at its fastest ever pace. This wave hit a speed bump in 2008 with the US subprime mortgage crisis and credit crunch and its impending crash became evident in 2016 with the anti-establishment votes for Brexit and Trump. The final nail in the coffin was a global pandemic and its ongoing ramifications.
As with other waves of globalisation, the next decade is likely to see momentum towards deglobalisation. This might come in the form of increased protectionism, economic nationalism or cross border tensions. There is hope that any such period avoids major recessionary pressures and avoid the win-lose environment that often comes with reductions in trade. Furthermore, with the speed of waves fastening, the next wave of global growth might come sooner than later.
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