Reflections on reading "A Brief History of Globalization" (1) The brewing period of globalization

"A Brief History of Globalization" revolves around the development process of globalization. Describe the three stages of globalization development: first, the brewing period of globalization, second, the rapid development period of globalization, and third, the decline period of globalization.

(1) Globalization brewing period

This stage cannot be regarded as globalization in the strict sense. It exists to prepare for the coming comprehensive and rapid globalization. Warm up.

This warm-up is first reflected in the emergence of new trade theory, which replaces the old trade theory.

In 1815, Ricardo proposed the theory of comparative advantage based on his criticism of the mercantilism theory represented by the old Corn Laws. The theory goes that tariffs should be lowered to open up grain trade, because as profits for local owners decrease, they will redirect their money into manufacturing and profit from both imports and exports. In this way, trading partners can also benefit from it, which is the theory of trade in the era of industrial capitalism.

The theory of comparative advantage has two characteristics: first, it reduces tariffs and opens up international trade; second, it initiates a win-win model, believing that open trade allows both domestic and foreign businessmen to benefit. Mercantilism is exactly the opposite of this: first, it is reflected in increased tariffs and restrictions on imports and exports; second, it is reflected in a one-way model that only considers how to make profits.

The second manifestation of this warm-up is the trial run of the globalization model. Globalization at this stage is more like a modeling, because from a geographical point of view, it only appears within Europe and has not yet formed global links. However, it also has manifestations of various aspects of globalization, which are specifically reflected in: concentration of wealth, inequality between rich and poor, development of overseas trade, and large-scale population mobility. These three basic aspects will be further developed and strengthened in the future stage of comprehensive globalization.

Unfortunately, the ensuing World War I and World War II brought the first wave of globalization to an abrupt end. The two wars also led to the most important result - the establishment of a new post-war world order. And this new order has further opened the way for the arrival of comprehensive globalization.

New order one: reflected in the establishment of the Bretton Woods system, which solved the problem of exchange rate instability.

New Order 2: It is reflected in the conclusion of the General Agreement on Tariffs and Trade, which solves the problem of tariff barriers. It is an expansion based on Ricardo's comparative theory. It has developed from mutual reduction of tariffs by two countries to mutual reduction by multiple countries. Tariffs make it easier for international trade to proceed smoothly.

New order three: The preliminary prototype of global geography has been formed. The first sign is the accession of the United States. The United States has fully joined the globalization sequence, which is also an expansion of the small-scale global simulation in pre-war Europe, dominated by Britain. The second sign is that third world countries have initially entered the sequence of globalization. The situation of the United States, Europe, and Asia being divided into three parts of the world has emerged.

After the two world wars, the process of globalization continued to develop. A very important condition for globalization, global transportation tools have been improved at this stage, and we are fully prepared for the arrival of comprehensive globalization.

Globalization has two important levers: one is international trade. The economic theory before the war has laid a good foundation for international trade; the other is international transportation. After World War II, with the development of international trade, transportation tools began to be optimized and upgraded. The emergence of container ships is a symbol of this optimization and upgrading. The emergence of container ships saves transportation space and transportation and handling time, thus promoting the globalization of trade. For example, the Japanese economy was born as a result. Japan quickly became a major export country. In the United States, Investment is 10 times what it was 10 years ago.

However, the economic crisis of 1973 halted the process of globalization. Globalization also suffered its first serious blow.

The 1973 oil crisis was triggered by the Fourth Middle East War. In order to crack down on countries that supported Israel, the Organization of the Petroleum Exporting Countries (OPEC) announced an oil embargo and suspended exports, causing crude oil prices to rise. The crude oil price rose from less than 3 US dollars per barrel to 13 US dollars in 2016. The sharp rise in crude oil prices caused an economic recession in Western developed countries. The GDP of the United States fell by 4.7% and Japan fell by 7%. It is worth noting that this is a series of economic events triggered by political events.

The oil crisis led to the disintegration of the Bretton Woods system, an important post-war economic order. In order to prevent the economy from continuing to deteriorate, the United States raised bank interest rates. This measure had a negative impact on countries around the world and eventually triggered the global financial crisis. As a result, rich economies paid for the global financial crisis and ran deficits, while less developed countries ran trade surpluses. This series of changes reveals for the first time another unfamiliar face of globalization.

In response to the economic crisis since 1973, European countries have chosen to further open up, allowing people from one country to work or immigrate to another country. The United States has relaxed transportation controls, and this transportation policy has had a profound impact on globalization.

After the transportation policy is further relaxed, transportation companies can transport goods according to the contract, and contract transportation is generated. This measure decisively promoted the globalization of factory production and helped mature private foreign trade investment.

By the late 1980s, the situation in the three-thirds of the world had become clearer, but there was a terrible thing that Americans did not realize. While American multinational companies were reaping great benefits from global trade, they were also losing money. New technology and more production jobs.

But before he realized it, globalization had entered an accelerating trajectory. When America realizes everything is beyond its control.