Historical Phases of Global Economic Integration

Globalization: Gravitational Processes

Globalization involves growing financial, economic, environmental, political, social, and cultural integration at global, regional, national, and local levels. Historians recognize that steps in the process of globalization have occurred over the past 130 years.

First Phase of Globalization (1870–1913)

This initial phase was characterized by:

• High mobility of capital and labor.
• A huge boom based on commercial reduction of transport costs, rather than solely on free trade.

This phase was interrupted by World War I, leading to a period in the 1920s where previous trends could not resume, followed by a frank retraction of globalization in the 1930s.

Post-World War II Integration

After World War II, a new phase of global integration began. This period must be distinguished by a clear point of rupture occurring in the early 1970s. This shift resulted from:

1. The disintegration of the macroeconomic regulatory system established at Bretton Woods in 1944.
2. The first oil crisis.
3. The increasing mobility of private capital, which intensified after these two phenomena, finally ending the "golden age" of growth for industrialized countries.

Second Phase of Globalization (1945–1973)

This phase was characterized by:

• A great effort to develop cooperative international financial and commercial institutions.
• Remarkable expansion of trade in manufactures between developed countries.
• The existence of a variety of models of economic organization.
• Limited mobility of capital and labor.

Third Phase of Globalization (Late 20th Century)

The last quarter of the twentieth century consolidated the third phase of globalization. Its main features include:

Key Characteristics

• The gradual spread of free trade.
• The growing presence of transnational companies operating in integrated production issues globally.
• Expansion and considerable mobility of capital.
• A notable trend towards homogenization of development models.

However, this phase also notes the persistence of major restrictions on the movement of manpower, which is the ultimate expression of the unequal nature of the process: free movement of capital contrasted with lack of freedom for the movement of the workforce.