what is globalization of origin (4th to 7th centuries)?
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When Chinese e-commerce giant Alibaba in 2018 announced it had chosen the ancient city of Xi’an as the site for its new regional headquarters, the symbolic value wasn’t lost on the company: it had brought globalization to its ancient birthplace, the start of the old Silk Road. It named its new offices aptly: “Silk Road Headquarters”. The city where globalization had started more than 2,000 years ago would also have a stake in globalization’s future.
Alibaba shouldn’t be alone in looking back. As we are entering a new, digital-driven era of globalization – we call it “Globalization 4.0” – it is worthwhile that we do the same. When did globalization start? What were its major phases? And where is it headed tomorrow?
This piece also caps our series on globalization. The series was written ahead of the 2019 Annual Meeting of the World Economic Forum in Davos, which focuses on “Globalization 4.0”. In previous pieces, we looked at some winners and losers of economic globalization, the environmental aspect of globalization, cultural globalization and digital globalization. Now we look back at its history. So, when did international trade start and how did it lead to globalization?
Ancient silk roads
Ancient silk roads
Image: Flickr
Silk roads (1st century BC-5th century AD, and 13th-14th centuries AD)
People have been trading goods for almost as long as they’ve been around. But as of the 1st century BC, a remarkable phenomenon occurred. For the first time in history, luxury products from China started to appear on the other edge of the Eurasian continent – in Rome. They got there after being hauled for thousands of miles along the Silk Road. Trade had stopped being a local or regional affair and started to become global.
That is not to say globalization had started in earnest. Silk was mostly a luxury good, and so were the spices that were added to the intercontinental trade between Asia and Europe. As a percentage of the total economy, the value of these exports was tiny, and many middlemen were involved to get the goods to their destination. But global trade links were established, and for those involved, it was a goldmine. From purchase price to final sales price, the multiple went in the dozens.The Silk Road could prosper in part because two great empires dominated much of the route. If trade was interrupted, it was most often because of blockades by local enemies of Rome or China. If the Silk Road eventually closed, as it did after several centuries, the fall of the empires had everything to do with it. And when it reopened in Marco Polo’s late medieval time, it was because the rise of a new hegemonic empire: the Mongols. It is a pattern we’ll see throughout the history of trade: it thrives when nations protect it, it falls when they don’t.
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