When did globalisation start?

By Paul Walker 24/09/2013

A good question. But is there a good answer? The Free Exchange blog at the Economist website has asked this question and as part of their answer they write,

However, economic historians reckon the question of whether the benefits of globalisation outweigh the downsides is more complicated than this. For them, the answer depends on when you say the process of globalisation started. But why does it matter whether globalisation started 20, 200, or even 2,000 years ago? Their answer is that it is impossible to say how much of a “good thing” a process is in history without first defining for how long it has been going on.

Early economists would certainly have been familiar with the general concept that markets and people around the world were becoming more integrated over time. Although Adam Smith himself never used the word, globalisation is a key theme in the Wealth of Nations. His description of economic development has as its underlying principle the integration of markets over time. As the division of labour enables output to expand, the search for specialisation expands trade, and gradually, brings communities from disparate parts of the world together. The trend is nearly as old as civilisation. Primitive divisions of labour, between “hunters” and “shepherds”, grew as villages and trading networks expanded to include wider specialisations. Eventually armourers to craft bows and arrows, carpenters to build houses, and seamstress to make clothing all appeared as specialist artisans, trading their wares for food produced by the hunters and shepherds. As villages, towns, countries and continents started trading goods that they were efficient at making for ones they were not, markets became more integrated, as specialisation and trade increased. This process that Smith describes starts to sound rather like “globalisation”, even if it was more limited in geographical area than what most people think of the term today.


The German historical economist, Andre Gunder Frank, has argued that the start of globalisation can be traced back to the growth of trade and market integration between the Sumer and Indus civilisations of the third millennium BC. Trade links between China and Europe first grew during the Hellenistic Age, with further increases in global market convergence occuring when transport costs dropped in the sixteenth century and more rapidly in the modern era of globalisation, which Mssrs O’Rourke and Williamson describe as after 1750. Global historians such as Anthony Hopkins and Christopher Bayly have also stressed the importance of the exchange of not only trade but also ideas and knowledge during periods of pre-modern globalisation.

That long-distance trade, one aspect of globalisation, is ancient is noted by Elhanan Helpman in this book Understanding Global Trade:

While long-distance trade plays an essential role in modern economies, it was also a salient feature of economic development after the Neolithic Revolution, as hunter-gatherers evolved into sedentary societies that specialized in food crops. The importance of trade further increased with the emergence of cities and early civilizations. Caravans traveled along the Fertile Crescent, trading between Mesopotamia and the Levant, and trading routes expanded over time to distant parts of Asia and Europe.

The Economist concludes by saying,

But it is clear that globalisation is not simply a process that started in the last two decades or even the last two centuries. It has a history that stretches thousands of years, starting with Smith’s primitive hunter-gatherers trading with the next village, and eventually developing into the globally interconnected societies of today. Whether you think globalisation is a “good thing” or not, it appears to be an essential element of the economic history of mankind.

In other words, globalisation (or at least some aspects of globalisation) is a lot older than most people would have thought.

0 Responses to “When did globalisation start?”

  • Could I argue for a start at time where communication between parties became short enough and rational decisions made after timely thought was likely not to happen?

    Was it when it took 4 or 5 years of walking to China and back to get the silk? Or it took 2+ years to get a ship of spices back from the “Spice Islands”? Or it took 12 months to get a letter reply by ship between here and England? Or a couple of days to a week by pony express across USA? Or less than a day when cablegrams finally stretched across the world? Or when radio transmissions managed in a few minutes? Or Fax machines shifted signatures in less?

    A big punch is happening when consortia are putting in a fibre optic cable across the Atlantic that will cut transmission time by 34 millisecs because it is laid on a better Great Circle.

    But the ultimate killer blow was when the NY Stock Exchange allowed (special) brokers servers to be just through the wall from the NYSE servers. Both of these are designed to gazump the “Buy Sell Brigade” all-so-rans as they churn the money go round.

    Productive globalisation? Joke.

    My first guess is when the fax machine hit the system. But when the internet arrived all bets were off. Nothing in history compares to today.