Humanity has always been globalized, since the dispersals of modern humans from Africa some seventy thousand years ago. Yet globalization has changed its character from age to age. Those changes have often come quickly and violently. In the twenty-first century, we need to change peacefully and wisely; in the nuclear age, there may be no second chances in the event of global war. By studying the history of globalization, we can arrive at an informed understanding of globalization in the twenty-first century and how to manage it successfully.
In my interpretation, we have passed through seven distinct ages of globalization from the deep past to the present day. In each of these seven ages, global change emerged from the interplay of physical geography, technology, and institutions. Physical geography in this context means the climate, flora and fauna, diseases, topography, soils, energy resources, mineral deposits, and Earth processes that affect the conditions of life. Technology refers to both the hardware and software of our production systems. Institutions include politics, laws, and cultural ideas and practices that guide society. Geography, technology, and institutions are subject to remarkable variability and change, and they interact powerfully to shape societies across place and time.
Understanding the interplay of geography, technology, and institutions is fundamental to understanding human history. This understanding is also fundamental to navigating the changes under way in the twenty-first century. By examining the history of globalization, we can make wiser choices for our societies and economies in our own time.
Philosophers, historians, theologians, and others have long asked: Is there a direction to history? Can we speak of long-term change or only of repeating cycles of history? Is there long-term progress? I will suggest that, yes, there is an arrow of history. In each age, human beings have become more aware of the wider world. Technological advances—especially in transport and communications—and demographic changes in the size and structure of human populations have intensified our global-scale interdependencies and awareness. As a result, politics too has gone from being very local to being global, never more so than in our own time.
Let us keep our eye on five big questions. First, what have been the main drivers of global-scale change? Second, how do geography, technology, and institutions interact? Third, how do changes in one region diffuse to others? Fourth, how have these changes affected global interdependence? Fifth, what lessons can we glean from each age to help us meet our challenges today?
Globalization signifies the interlinkages of diverse societies across large geographical areas. These interlinkages are technological, economic, institutional, cultural, and geopolitical. They include interactions of societies across the world through trade, finance, enterprise, migration, culture, empire, and war.
To trace the history of globalization, I will describe seven distinct ages: the Paleolithic Age, our prehistory when humans were still foragers; the Neolithic Age, when farming first began; the Equestrian Age, when the domestication of the horse and the development of proto-writing enabled long-distance trade and communications; the Classical Age, when large empires first emerged; the Ocean Age, when empires first expanded across the oceans and beyond the accustomed ecological zones of the homeland; the Industrial Age, when a few societies, led by Great Britain, ushered in the industrial economy; and the Digital Age, our own time, in which nearly the entire world is instantaneously interconnected by digital data.
In the Paleolithic Age, which I date from 70,000 BCE to 10,000 BCE, long-distance interactions were by migration, as small groups migrated from one place to another. As these groups moved, they carried with them their tools, their know-how, and their emerging cultures. As migrating groups of Homo sapiens (anatomically modern humans) entered new regions, they had to fend for themselves in new ways, confronting other hominins (members of the genus Homo) such as Neanderthals and Denisovans, new predators and pathogens, new ecological conditions (such as living at high elevations), and of course, other competing groups of modern humans. That competition contributed to cultural patterns that have continued to the present day.1
The end of the last ice age and the onset of a warmer climate enabled the next phase of globalization, the Neolithic (“new stone”) Age, which I date from 10,000 BCE to 3000 BCE. The fundamental breakthrough was agriculture, both crop cultivation and animal husbandry. As foraging gave way to farming, nomadism gave way to sedentary life in villages. The range of human interaction widened from the clan to the village and to politics and trade between villages. Trade in precious items—gemstones, shells, minerals, tools—was pursued at distances of hundreds of kilometers.
The domestication of the horse ushered in a third age of globalization, the Equestrian Age, which I date from 3000 BCE to 1000 BCE. This period is typically labeled the Copper and Bronze ages, though I prefer to emphasize the role of the horse over that of the minerals. With the domesticated horse, rapid, long-distance overland transport and communications became possible. The horse served several basic roles: animal traction (horsepower), communications (conveying messages), and military (cavalry). In modern jargon, we would say that the domesticated horse was a “disruptive technology,” somewhat like the invention of the steam engine, locomotive, automobile, and tank combined. In politics, the horse hastened the arrival of the state, by enabling the reach across much greater distances of public administration and coercive force.
The next age, known to us as the Classical Age, which I date from 1000 BCE to 1500 CE, marked the rise and intense competition of large land-based empires. Starting around 1000 BCE, some states—such as the neo-Assyrian state in Mesopotamia and, soon after, the Achaemenid state of Persia—embarked on vast territorial expansions, which succeeded as the result of advantages in governance, both military and political. Ideas mattered enormously in the rise of the empires. The major empires were spurred by new religious and philosophical outlooks, such as the new philosophies of the Greco-Roman world, that profoundly shaped the outlooks of these societies. The imperial age ushered in trans-Eurasian trade, such as between the Roman Empire in the west and the Han Empire of China in the east, carried out both overland and by sea routes along the coastlines of the Indian Ocean and the Mediterranean.
By around 1400 CE, advances in oceangoing navigation and military technologies led the transition to a new era, the Ocean Age, which I date from 1500 to 1800. During this new age, empires became transoceanic, indeed global, for the first time, with temperate-zone imperial powers of Europe conquering and colonizing tropical regions in Africa, the Americas, and Asia. Revolutionary changes in global trade ensued, such as the rise of multinational corporations, the vast expansion of transoceanic trade, and the mass movement of millions of people across the oceans, including the forcible enslavement of millions of Africans bound for American mines and plantations. Politics also became global in scale for the first time, leading to the first global wars fought simultaneously across several continents.
The Industrial Age, which I date from 1800 to 2000, marked another profound acceleration of global change. Changes that used to take place over the course of centuries or even millennia now occurred over just a few decades. The Industrial Age was marked by remarkable waves of technological advance, and a powerful new alliance of science and technology. With the tapping of fossil fuels, made possible by the invention of the steam engine and the internal combustion engine, industrial production soared. Global populations soared too, as the result of massive increases in food production. While the Ocean Age gave rise to transoceanic empires, the Industrial Age gave rise to the first global hegemon, Great Britain, and later, the United States. These two powers bestrode the entire globe with unprecedented military, technological, and financial power. But, as the end of the British Empire demonstrated, even hegemons can quickly lose their place at the apex of the global competition.
We have now entered the Digital Age, from 2000 to the present, the result of the astounding capacities of digital technologies: computers, Internet, mobile telephony, and artificial intelligence, to name a few. The global transmission of data is pervasive: computational power has multiplied billions-fold, and information technologies are disrupting every aspect of the world economy, society, and geopolitics. We are moving from an era of hegemonic power to a multipolar world, in which several regional powers coexist. The ubiquitous flows of information have globalized economics and politics more directly and urgently than in the Industrial Age. We have seen how a hiccup in one part of the world economy, for example, the failure of the Wall Street investment bank Lehman Brothers on September 14, 2008, can within days create a global-scale financial panic and economic crash.
Table 1.1 summarizes the seven ages, with their time intervals, major technological changes, and scale of governance.
Table 1.1 Ages of Globalization: Dates and Breakthroughs
At the dawn of human history, all humans were foragers, engaged in hunting and gathering food for their survival. There was no urban-rural divide, as there were no villages, much less cities. The Neolithic revolution in agriculture gave rise to farm villages and sedentary life, mostly (but not completely) displacing foraging and nomadism. For thousands of years, up to the start of industrialization itself, almost all of humanity lived in rural areas, and most engaged in subsistence agriculture. Each farm family struggled to feed itself, with only a tiny margin of surplus, if any, sold in the marketplace or used to pay taxes.
Up until the twentieth century in much of the world, and until today in the poorest countries, agricultural production was so meager that the risk of famine and mass hunger was ever present. The French Revolution in 1789 was partly provoked by widespread hunger during attempts by the government to raise taxes to cover public debts. The Irish famine of the 1840s claimed around 1 million deaths. In the second half of the nineteenth century, repeated famines in British India and other colonized regions killed tens of millions.2
Industrialization and the accompanying advances in farm mechanization and agronomic know-how vastly expanded the food production per farmer in the industrial economies. Where it was once necessary for almost all households to be engaged in farming in order to grow enough food for the population, it became possible for a smaller and declining share of the workforce to feed the rest. The expanded food output led to sharply lower risks of generalized famines and widespread hunger. The “surplus” agricultural workers, replaced by farm machines, left for the cities to find employment. Britain, the world’s first industrial society, became more than half urban around 1880, at a time when most of the world was still overwhelmingly rural. As industrialization spread, albeit very unevenly around the world, urbanization and living standards began to rise.
The remarkable fact is how long it took for humanity to break free of omnipresent and nearly all-encompassing poverty and hunger. Looked at in the long sweep of the human experience, most economic and demographic change has occurred in the blink of an eye, during the past two hundred or so years of our roughly three hundred thousand years as a species. The first lesson of long-term global change, then, is that it has been super-exponential, meaning that it has come at a rising rate, with the largest changes occurring in the very recent past.
Let us consider three dimensions of long-term change. The first is the total human population. The second is the rate of urbanization—that is, the share of the global population residing in urban areas. The third is the global output per person. The Hyde 3.1 Project has heroically worked to construct consistent estimates of population and urbanization globally and by region during the period since 10,000 BCE.3 It is a remarkable accomplishment and a vital body of evidence. The estimates of output per person come from a similarly remarkable effort, that of Angus Maddison, a late and great economic historian.
The estimated total world population over the past twelve thousand years is shown in figure 1.1. Between 10,000 and 3000 BCE, during the Neolithic Age, the estimated population rose from 2 million to 45 million, an annualized growth rate of just 0.04 percent. Between 3000 and 1000 BCE, the Equestrian Age, the growth rate rose slightly to 0.05 percent. From 1000 BCE to 1500 CE, the Classical Age, the growth rate rose again to 0.06 percent. During 1500 to 1800, the Ocean Age, the annualized growth rate rose further to 0.25 percent, and the global population doubled from an estimated 461 million to 990 million. Then, during 1800 to 2000, the Industrial Age, the growth rate jumped to 0.92 percent, resulting in a more than sixfold increase in world population—from 990 million to 6.145 billion. Thus, for most of human history, the rise of population year to year, even century to century, was imperceptible. With the Ocean and Industrial Ages, the global population soared.
1.1 World Population, 10,000 BCE to 2000 CE
Source: Kees Klein Goldewijk, Arthur Beusen, and Peter Janssen. “Long-Term Dynamic Modeling of Global Population and Built-up Area in a Spatially Explicit Way: Hyde 3.1.” The Holocene 20, no. 4 (2010): 565–73.
The estimated urbanization rate is shown in figure 1.2. The graph looks nearly the same. At the start of the Neolithic period, almost all humans were still foragers. Urbanization was zero. Yet even ten thousand years later, in 1 CE, while most of humanity lived in small agricultural settlements, the proportion living in cities was still only 1 percent. A thousand years later, in 1000 CE, urbanization had reached around 3 percent. By 1500, the urbanization rate stood at a mere 3.6 percent. As late as 1900, the global urbanization rate was only 16 percent. It is only in the twenty-first century that more than half of humanity lives in urban settings (an estimated 55 percent as of 2020). Though we marvel at the magnificent urban remains of ancient Rome and delight in the dazzling urban achievements of Renaissance Florence and Venice, the world’s cities in total were home to only a very small share of humanity until very recently.
1.2 World Rate of Urbanization, 10,000 BCE to Present
Source: Kees Klein Goldewijk, Arthur Beusen, and Peter Janssen. “Long-Term Dynamic Modeling of Global Population and Built-up Area in a Spatially Explicit Way: Hyde 3.1.” The Holocene 20, no. 4 (2010): 565–73.
Maddison’s estimates of global output per person from 1 CE to 2008 are shown in figure 1.3. Again, we see the same pattern as with population and urbanization: no perceptible change in global output per person before 1500, with annual growth at 0.01 percent; a tiny rise in output between 1500 and 1820, with annual growth at 0.05 percent; and then, with the onset of industrialization, a decisive turn upward, with annual growth between 1820 and 2000 at 1.3 percent. During the 180 years from 1820 to 2000, world output per person increased roughly eleven times, leading to an equally dramatic fall in the global rate of extreme poverty—from around 90 percent in 1820 to roughly 10 percent as of 2015.4
1.3 World Output per Person, 1–2008 CE. Output in 1990 International Geary-Khamis dollars.
Source: Angus Maddison. “Statistics on World Population, GDP and Per Capita GDP, 1–2008 AD.” Historical Statistics 3 (2010): 1–36.
These three cases of super-exponential growth are dramatic. They remind us of the dramatic changes in the world since the onset of industrialization. Yet we should not infer that societies were static before 1800. The long period until the start of industrialization was an active and necessary runway for the eventual liftoff of the world economy. The preceding ages of globalization set the essential foundations of science, technology, governance, commercial law, and sheer ambition that ultimately gave rise to the Industrial Age.
There is a basic idea in economics that a larger market leads to higher incomes and more rapid growth. With a larger market, there can be more specialization in job tasks, leading to greater skills and proficiency of the workforce in each line of economic activity (farming, construction, manufacturing, transport, healthcare, and so forth), and falling costs of production. With a larger market, there are also greater incentives to invent new products—because they reach more consumers—and more inventors are available to produce breakthroughs.
The most fundamental reason for the takeoff of economic growth around 1800 is therefore scale. World population had reached nearly 1 billion people by 1800, and humanity was increasingly interconnected through trade, transport, migration, and politics. Of course, some parts of the world, notably the North Atlantic, were the biggest beneficiaries of this new scale, and some places, notably sub-Saharan Africa and India, succumbed to brutal and debilitating imperial conquest. Yet the scale of global enterprise by 1800 was incomparably larger than, say, in 10,000 BCE, when an estimated 2 million widely-dispersed human beings constituted the entirety of humanity.
One can therefore see the history of globalization as a series of scale-enlarging transformations. In the Paleolithic Age, modern humans enlarged the scale of human settlement through migration across the world, yet most individuals spent their lives within a band of some thirty to fifty people.5 In the Neolithic Age, the global population rose roughly twenty-two times, from around 2 million in 10,000 BCE to around 45 million in 3000 BCE, and individuals lived in villages of several hundred persons. In the Equestrian Age, the population rose from around 45 million in 3000 BCE to 115 million in 1000 BCE, with the vast majority in an increasingly interconnected east-west band of Eurasia. Now, for the first time, humanity was organized into recognizable states, no longer merely interspersed villages. In the Classical Age, the human population soared to 188 million by 1 CE, 295 million by 1000, and 390 million by 1400. Human beings increasingly lived in large multiethnic, multireligious empires covering vast land areas including the Roman, Han, Mauryan, Persian, Byzantine, Umayyad, Mongol, and other empires. These empires not only fought with each other, but also traded with each other over vast distances.
With the voyages of Christopher Columbus and Vasco da Gama, and the transition to the Ocean Age, scale increased yet again, this time to a global reach that reconnected the Old World and the New World through ocean navigation. The world population soared again as food varieties were exchanged across the oceans, such as wheat from the Old World to the Americas and maize from the Americas to the Old World, permitting a vast increase in food production and populations. By 1800, the population stood at 990 million. The Industrial Age decisively intensified global interconnections—by rail, ocean steamer, automobile, aviation, telegraph, telephone, satellite, and eventually the Internet and the global population soared. For the first time in human history, there were truly hegemonic political powers with sway over much of the globe: first the British Empire and then, after World War II, the United States. With the transition to the Digital Age, global power is shifting again, and the intensity of global interactions continues to rise, this time with pervasive, real-time flows of data across the planet.
In this sense, the ages of globalization both explain and are explained by the rising scale of global interactions. Each boost in global scale has given rise to new technologies that have expanded populations and production. Each boost of scale, in turn, has changed the nature of governance and geopolitics. We are now reckoning, however, with a phenomenon unique to our time. In 2020, with the population now at 7.7 billion and rising by 75–80 million each year, and with output now at around $17,000 per person on average (measured at purchasing-power-adjusted prices), the sheer scale of human activity is dangerously impinging on fundamental environmental processes: climate, water, air, soils, and biodiversity. We have reached a scale at which human activities taken as a whole are dangerously changing the climate, biodiversity, and other Earth systems such as the water and nitrogen cycles. We take up that theme later in the book.
While scale is crucial for productivity and innovation, geography is often decisive in determining scale. The scale of an economy, or a group of interconnected economies, depends on the ability to trade, and therefore on the geographic conditions for the movement of goods, people, and ideas. Places that are remote or isolated will not benefit as much from trade and the diffusion of ideas and technologies as places that are more accessible. The Americas, for example, lagged far behind the Old World in technological advances until the two hemispheres, separated for ten thousand years, were reconnected by ocean-based transport after 1500. Remote mountainous societies and small island societies far from the mainland and from shipping lanes typically lag technologically behind more coastal and therefore accessible regions. Eurasia long had vast geographical advantages over the Americas, Africa, and Oceania in achieving scale—through more connected trade, easier communications, and shared ecological niches that facilitated the diffusion of technologies, institutions, and cultural practices.
The basic history described so far seems to be one of unfolding progress, albeit progress repeatedly marked by injustice, inequalities, and extraordinary violence. Yet there have long been powerful voices of caution regarding the sustainability of progress. The most influential pessimist in modern economic thinking has no doubt been Thomas Robert Malthus, an English pastor writing in the late eighteenth and early nineteenth centuries. Malthus famously warned against trying to improve the lot of the poor, and even against the chances for long-term economic progress. He argued that following any rise in productivity, the world would simply end up with more poor people, but with no long-term solution to poverty. Malthus’s provocative pessimism became known as the Malthusian curse. He raised the fundamental question as to whether long-term gains in living standards can be sustained.
Here is Malthus’s reasoning. Suppose that farmers learned to double their output. It would seem that everybody could eat twice as much, and that hunger and poverty would plummet. But what if the population were to increase as a result, as more children survived to adulthood and more young people could afford to start families? If the population doubled while the farmland remained unchanged, the amount of food per person would be back where it started. And if the population were to more than double—that is, if the population were to overshoot—then living standards could actually fall below the starting point, until new bouts of hunger and disease reversed the overshooting.
Malthus made a provocative and important point, but fortunately for us, his conclusions were far too pessimistic. When living standards began to rise globally in the nineteenth and twentieth centuries, and as more people moved to cities, families chose to have fewer children and to invest more in the education, nutrition, and health care of each child. They shifted, in the jargon of demography, from “quantity” to “quality” of child-rearing. As living standards, literacy, and urbanization have risen worldwide, fertility rates have declined in most parts of the world to “replacement rate,” two children per mother, or below.6 As a result, productivity improvements are not being offset by rising populations. There are still a few regions with very high fertility rates—notably in sub-Saharan Africa—and as a result, living standards are not yet rising at the rates needed to end poverty in those places. The expectation is that with more urbanization and longer years of schooling, especially for girls, fertility rates will decline in those places as well.
Yet Malthus’s pessimism is still all too relevant for us today; we have not yet fully disproved his warnings. With nearly 8 billion people on the planet, and with population projected to rise to around 9.7 billion by 2050, and the massive environmental dangers ahead—climate change, loss of biodiversity, mega-pollution—we have not yet shown that we can sustain the progress to date. To do so will require not only stabilizing the global population but also ending the massive environmental harms we are now causing. We must still make the transitions to renewable energy, sustainable agriculture, and a circular economy that safely recycles its wastes. Until those transitions are accomplished, Malthus’s specter will continue to loom large.
Across the ages of globalization, we have seen not only an increase in scale—of the human population, of economic production, and of politics—but also a decisive shift from rural to urban life. It is only in recent decades that a significant proportion of humanity has resided in cities and engaged in nonagricultural activities. To understand this change, we should examine in more detail the structure of an economy.
Economic activities are usefully categorized into three productive sectors, called the primary, secondary, and tertiary sectors. The primary sector includes the production of food and feed crops, animal products, other agriculture (such as cotton, timber, fish, and vegetable oils), and mining products (such as coal, oil, copper, tin, and precious metals). The secondary sector, or industrial sector, involves the transformation of primary commodities into final products (such as buildings, machinery, processed foods, and electric power). The tertiary sector involves services that support productive activities (freight transport, warehousing, and finance), individual wellbeing (education, health, leisure), and governance (military, public administration, and courts).
The primary sector requires large inputs of land and marine resources per worker and therefore takes place mainly in rural areas, where population densities are relatively low. Tertiary, or service production, on the other hand, requires extensive face-to-face interactions and therefore takes places mainly in urban areas, where population densities are high. Industrial production can be located both in rural areas (in the case, say, of a smelting operation close to a mine) and in urban areas (in the case, say, of a construction site or a garment factory close to customers).
The production of goods (in the primary and secondary sectors) and of services (in the tertiary sector) uses both human effort and machines. The human effort can be mainly physical, as in weeding a field by hand or clearing a forest, or cognitive—for example, a medical doctor diagnosing a disease or a judge deciding a case. Generally, physical labor requires good health, youthful vigor, and adequate nourishment, while cognitive labor also requires formal schooling, training, mentorship, and experience.
Over time, humanity has built more and more powerful machines to substitute for human brawn. In ancient societies, almost all production was achieved through human physical labor aided by a small range of tools such as flints, awls, bows and arrows, containers, and hammers. Transport was accomplished by carrying goods from one place to another. Communication was by word of mouth. Today, machines have replaced physical labor in most arduous activities, and work is increasingly cognitive, based on human thought. Smart machines will substitute for that kind of work, as well, in the coming decades.
Economists have identified a basic recurring pattern of change among the three sectors. In the Paleolithic Age, before the advent of agriculture, all humans were part of the primary sector. Productive activity involved hunting and gathering. The industrial sector occupied a tiny proportion of activities: making tools and weapons, building shelters, sewing clothing, preparing food. Services were performed within the household or shared within clans. In the Neolithic Age, with the advent of agriculture, around 90 percent of humans remained engaged in the primary sector, with up to 10 percent engaged in industry (construction, metallurgy) and services (religion, public administration). Indeed, for most of human history, the primary sector occupied 80 percent or more of human activity, with the rest divided between industry and services.
With the advent of scientific farming beginning in the eighteenth century (including early mechanization and scientific knowledge about soil nutrients), the proportion of employment in the primary sector began to decline. The reason is simple. Society must devote enough labor effort to feed the population. When agriculture is rudimentary, each household feeds itself with almost no surplus for nonfarm households. Almost every household must therefore engage in agriculture to provide the food needed for survival. When agriculture is modernized and yields per farmer rise, one household can feed itself and many others. In the United States today, one farmer can feed around seventy families, so that employment in agriculture accounts for just 1.4 percent of the workforce.
The global result is the time pattern illustrated in figure 1.4, which uses very approximate numbers to illustrate the key points. In the Paleolithic Age, all work—hunting and gathering—was in the primary sector. Today, primary employment (agricultural and mining) is around 28 percent of worldwide employment, and secondary employment is now around 22 percent, while tertiary (service) employment is now around 50 percent of total employment. In the future, both the primary and secondary sector shares will continue to decline as jobs continue to shift toward services. In the United States, the shift from primary to tertiary employment is much further along. U.S. primary-sector employment is now a mere 2 percent of the total, with industry (construction and manufacturing) accounting for only 13 percent and services accounting for 85 percent of all jobs!7 In the course of the twenty-first century, global employment will continue to shift relentlessly to the service economy as machines increasingly take over the tasks of agriculture, mining, construction, and manufacturing.
1.4 Estimate of Employment Shares by Major Sector in the Seven Ages of Globalization
The economic system of any time and place rests on three foundations: geography, technology, and institutions. The three are, of course, mutually dependent. Consider the coal-burning steam engine, the most important invention of the Industrial Age. The steam engine offered a brilliant new way to create motive force in factories and transport, leading to industrialization and eventually to a vast increase in productivity and living standards (while displacing and even impoverishing many people in the short term).
The invention of the steam engine in eighteenth-century Britain depended on geography—specifically, the presence of coal in England that could be mined and transported at low cost. Its invention and deployment also depended on Britain’s economic institutions. The inventor of the modern steam engine, James Watt, was out to make a profit, and he expected to do so in part because Britain offered legal protection for intellectual ideas and a market to sell the product. Watt patented his invention and successfully defended his patents from those who tried to cash in on his invention. Moreover, industrialists purchased and deployed Watt’s steam engines because they could readily establish their own companies under British law.
Economists have long debated whether economic wellbeing and progress are the results of geography, technology, or institutions. Some have argued vociferously that institutions are the key: without patents, there would have been no steam engine. Some have argued that technologies are the key: without Watt’s ingenuity and skill as a craftsman, there would have been no patent and no industrial revolution. Others have that geography is decisive: without the physical accessibility of coal, Watt’s ingenuity would have been theoretical at best.
Clearly this debate is misguided. The industrial revolution emerged as a result of the interaction of geography, technology, and institutions. That complex interaction, indeed, is why the industrial revolution was such an extraordinary event. Many factors had to combine to produce the breakthrough of the commercially successful steam engine. To understand the dynamics of change, we need to think interactively among the three pillars of geography, technology, and institutions, as illustrated in figure 1.5. These three domains are interdependent; we cannot understand economic history and economic change without taking all three into account.
1.5 Geography, Technology & Institutions
Let us look at some of the detailed dimensions of geography, technology, and institutions. Geography involves at least six major factors. The first is climate, meaning the year-round typical patterns of temperature and rainfall that shape the kinds of crops that can be produced, the kinds of farm animals that can be raised, and the suitability for human work and habitation. The second is biodiversity, including the presence or absence of particular species of plants and animals. The third is patterns of disease incidence, transmission, and prevalence, which are shaped by climate, biodiversity, human population densities, and the accidents of evolution and history. The fourth is physical topography and proximity to coasts, rivers, and mountain passes. The fifth is primary energy resource availability. The sixth is deposits of copper, iron, tin, gold, and other minerals.
These geographical factors must be considered in light of existing technologies. An economy depends both on its physical resource base and on the know-how to use those natural resources. Since each age of globalization has been characterized by advances in know-how, the implications of geography have changed along with the advances of knowledge. The great grasslands of the steppe region meant a lot more after the domestication of the horse than before. The presence of coal and oil reserves meant a lot more after the invention of the steam engine and the internal combustion engine, respectively. The intense sunshine of the deserts will mean a lot more in the future with the deployment of low-cost photovoltaic energy.
Such examples run deep throughout the human experience. The control of fire enabled early humans to move to colder biomes; the multisite invention of agriculture enabled dense human settlements in alluvial plains; the domesticated horse expanded the zones of agriculture; Columbus’s voyages of discovery ultimately led to massive European migrations to the Americas; the Suez and Panama canals deeply altered the costs and patterns of global trade and, with global warming, new trade routes in the Arctic Sea may do the same; the British mass production of quinine to control malaria enabled the European conquest of tropical Africa; the railroad opened up the interiors of continents for food production and trade. The economic importance of geography is therefore constantly reshaped by changing knowledge and technologies.
We should keep in mind that the Earth’s physical geography is itself subject to long-term change, and indeed that humanity is dangerously changing the Earth’s physical geography in the twenty-first century. Human evolution and the ages of globalization have been fundamentally reshaped by natural changes in the Earth’s physical geography. The end of the last ice age, paced by changes in the Earth’s orbital characteristics, opened the way for agriculture, sedentism, and civilization itself, while raising sea levels and thereby submerging the Beringian land bridge between Asia and the Americas. The drying of the African Sahel during 5000–3000 BCE created the vast Sahara and perhaps caused the densification of human settlements along the Nile that gave rise to pharaonic Egypt. The little ice age in Europe in the 1600s, possibly the result of the steep decline in the indigenous populations of the Americas in the sixteenth century that led to reforestation and a reduction of atmospheric carbon dioxide, may have helped to spur Europe’s Thirty Years’ War and other political upheavals.8 Other examples of environmental changes and their impacts on human society include the depletion of soil nutrients by overexploiting farmlands; the spread of pathogens into new populations; the human-driven extinctions of plant and animal species (such as the horse in the Americas); and siltation and other changes in the flow of rivers and the location of natural harbors.
Social institutions, the third fundamental driver of societal change, include the range of cultural, legal, organizational, and political rules of daily life. Cultural practices include religious observance, use of languages, adherence to philosophical ideas, and patterns of gender relations. Legal practices include commercial law (for establishing businesses and entering into contracts), private law (for marriage and inheritance), public law (for public administration), and systems for adjudicating conflicts and enforcing the laws. Economic organizations include business partnerships, corporations, and not-for-profit associations. Political rules, such as a constitution, define the organization of state power, backed by the state’s “monopoly of the legitimate use of physical force,” to use Max Weber’s terminology. Institutional innovations are of course essential determinants of human history. Like technological innovations, they flow across the globe, carried by migrants, conquering armies, and scholars, diplomats, travelers, and even spies reporting on developments in other parts of the world.
Unfair as it is, certain parts of the world have been more favorable for economic development than others throughout most ages of globalization. Eurasia has been advantaged relative to Africa, the Americas, and Oceania. Temperate climate zones have been favored relative to other climates. Coastal regions have been favored relative to hinterlands (in the interior of continents). Places with accessible primary energy resources have also been advantaged. Let us consider these advantages in turn.
The Advantages of Eurasia
The Eurasian landmass, combining Europe and Asia, makes up 43 percent of the world’s land area, not including Antarctica, and is currently home to around 70 percent of the world’s population. For the past two millennia, it has consistently been home to around 80 percent of humanity, falling below 75 percent only around 1980. Throughout most of history, until the rise of the United States in the late nineteenth century, Eurasia consistently led the world in technological innovations and economic activity. As shown in figure 1.6, using the production estimates of Angus Maddison, Eurasia accounted for around 90 percent of world output during the long period from 1 CE to 1820.9 With the industrialization of the United States after 1820, Eurasia’s share of world production declined to around 58 percent as of 1950, then rose again with the post–World War II growth of East Asia and South Asia, reaching around 67 percent in 2008, the last year of Maddison’s data.
1.6 Eurasia’s Share of World Product, 1 CE to 2008
Source: Angus Maddison. “Statistics on World Population, GDP and Per Capita GDP, 1-2008 AD.” Historical Statistics 3 (2010): 1–36.
During most of human history until very recently, the rest of the world—the Americas, Africa, and Oceania—were generally far behind the leaders of Europe and Asia in the deployment of technologies and economic development. Once the sea level rose at the end of the last ice age, the Americas and Eurasia were separated for around ten thousand years, until Columbus’s voyages. As of 1000 CE, Eurasia had 77 percent of the world’s population, while the population of the Americas amounted to a mere 8 percent, far too small and dispersed to develop technologies at anywhere near the pace of Eurasia. Africa’s population was a mere 14 percent of the world total, and while northern Africa and the Horn of Africa were actively linked with Eurasia, sub-Saharan Africa was effectively cut off by the vast desert, not to mention ecological barriers such as endemic malaria and trypanosomiasis (sleeping sickness that afflicts livestock, as well as people). Oceania, too, was cut off from Eurasia, with a population under 1 percent of the world total.
The United States is the exception that proves the Eurasian rule. Today, it is the world’s richest economy, but for most of human history, North America was poor and sparsely settled. North America has unparalleled geographical bounties: a temperate climate, vast and fertile lands, navigable rivers, a vast coastline, and enormous mineral and energy resources. Yet without the benefit of Old World technologies—horsepower, metallurgy, wheat cultivation, writing systems, science and mathematics, and more—economic development stopped at hunting, gathering, and a bit of agriculture. After Columbus’s voyages, North America was increasingly settled by European colonists, who inflicted horrific violence on the native populations in the process of spreading across the continent. By the late nineteenth century, the United States had become the world’s richest economy, in line with its geographic bounty. The gains were entirely appropriated by the European settlers and their descendants.
The Advantages of the Temperate Climate
According to the very useful Köppen-Geiger climate system, the world’s climates are categorized into six main zones: tropical, dry, temperate, cold, highland, and polar. The tropical zones are hot year-round, with adequate rainfall for farming; the dry regions are dry all year long, resulting in deserts or grasslands suitable for livestock rearing, but not for much crop production (except in irrigated river valleys); the temperate zones have winters and summers, with adequate rainfall for crop production; the cold regions have long, cold winters; the highlands and polar regions are sparsely populated, at high elevations or high latitudes (near the North and South poles).
These climate zones are shown in figure 1.7. Let us start at the equator, in the tropics (shown in red and pink), and move poleward (toward the North Pole in the northern hemisphere and the South Pole in the southern hemisphere). We first pass through the dry zones (yellow and beige), then through the temperate zones (shown in green), then through the cold zones (shown in blue), and finally to the polar zones (shown in gray). The highland (or mountainous) regions are shown in darker gray.
1.7 The Köppen-Geiger Climate Classification System
The temperate zones, in green, have long enjoyed a remarkable advantage in economic development compared with the other climate zones. With a mix of summers and winters, and adequate year-round levels of precipitation, the temperate zones at midlatitudes have been the preeminent regions for grain production (wheat, maize, rice) and mixed farm systems (combining food crops and farm animals). The temperate climate is hospitable to horses and other beasts of burden, such as donkeys and oxen. The winter season breaks the transmission of many vector-borne diseases, such as malaria. Most of Eurasia’s population has always been concentrated in the temperate climate zones, notably in eastern China, northern India, and western Europe.
The Cw temperate monsoon climate deserves special mention. The monsoon climate, covering much of south, southeast, and east Asia, is characterized by the wettest months of summer bringing more than ten times the rainfall of the driest months of winter. The monsoon rains are the lifeblood of Asia’s highly productive rice-growing agriculture, which in turn feeds much of humanity. It is because of the temperate-zone monsoons of Asia that Southern, Southeastern, and Eastern Asia are home to 55 percent of the world’s population in 2020.
Tropical climates are home to rain forests and savannas, the ancestral homes of humanity in Africa. Yet the very high year-round temperatures give rise to many great difficulties for long-term economic development. These include the difficulties of heavy physical labor at high temperatures; the year-round transmission of vector-borne diseases in humans, such as malaria, and in farm animals, such as trypanosomiasis; and the rapid proliferation of pathogens in food and water. Moreover, many tropical soils are easily depleted of their nutrients as soil organic matter decomposes very quickly. Throughout history, these tropical disadvantages weighed particularly heavily on Africa, which lies mostly in the tropics.
The dry climate zones are too dry for most crop production except with irrigation, or the production of short-season, low-yield crops such as sorghum and millet. Population densities are therefore typically low with the exception of river valleys like the Nile, the Tigris, and the Indus, where the rivers enable irrigation and also replenish the soil nutrients with alluvium. Most dryland agriculture other than in the river valleys is based on animal herding in the wetter part of the drylands, called steppes or grasslands. The Eurasian steppes were home to the wild horse and were the original sites of horse domestication. Before the Industrial Age, the steppes were for millennia the vast east-west “highway” for horse-based transport and communication, known today as the Silk Road (a name given to these ancient trade routes in the nineteenth century).
The cold zones have growing seasons that are too short and too cold to support high-yield crop production, other than some wheat-growing areas in the more hospitable parts of the cold zones, such as in Canada and Russia. As with the dry climates, population densities tend to be low. Other agriculture includes logging, trapping animals for furs, fishing, and reindeer herding.
Mountain zones are distinctive because of their very high transport costs and often difficult terrain for crop production because of their alpine climates and steep slopes, though specialty crops such as coffee and tea often thrive in such high-elevation zones. More favorably, mountainous regions are often rich in minerals, and societies in mountain regions often have a decisive advantage in defending themselves against attackers from the lowlands. The typical outcomes are a low population density, cultures that are quite distinct from those of lowland populations, many distinct languages or dialects within a small geographic area, fierce traditions of independence, high attractions for mining, and in the twentieth century, high suitability for low-cost hydroelectric power, as in Switzerland.
Population density is a useful shorthand indicator of the relative agricultural productivity of the different climate zones. Favorable climates support more people per square kilometer than harsh climates. Let us consider, therefore, Eurasia’s population distribution by climate zone at four dates: 3000 BCE, 100 CE, 1400, and 2015, as shown in table 1.2. These four dates have been chosen to represent the end of the Neolithic Age, the high Classical Age of the Roman and Han empires, the world just before Columbus, and the modern era. In each period, the population density of the temperate regions (C climate) was by far the highest, followed by the tropical regions (A climate), the dry regions (B climate), the highlands and polar regions (E + H climates), and finally the cold regions (D climate) with their low crop yields and frigid winters. Even as Eurasia’s overall population density rose more than a hundredfold between 3000 BCE and 2015 CE, from one person per km2 to 94 persons per km2, the relative ranking of density by climate zone remained the same.
Table 1.2 Population Distribution of Eurasia by Climate Zone
The Advantages of Proximity to Coasts and Rivers
Economic prosperity depends on trade, because no place can produce on its own the range of goods and services needed for wellbeing. Yet the feasibility of trade depends on low transport costs. To move bulk freight, transport by water has long been by far the lowest cost method. Even in ancient times, grains were shipped across the Mediterranean to feed and provision the Roman Empire. Overland transport is far more expensive, taking into account the cost of not only the transport itself (horses, cars, trucks, rail), but also the necessary infrastructure (roads, rail lines) and security along the route.
Regions along navigable waterways, including rivers, lakes, and oceans, have therefore long been favored in economic development. Living far from waterways has always been a huge disadvantage and living in the high mountains in the interior of continents has been nearly a sure obstacle to economic development. (The highland civilizations of the Americas are a partial exception to this rule.) Adam Smith, in his Wealth of Nations, famously put it this way:
As by means of water-carriage a more extensive market is opened to every sort of industry than what land-carriage alone can afford it, so it is upon the sea-coast, and along the banks of navigable rivers, that industry of every kind naturally begins to subdivide and improve itself, and it is frequently not till a long time after that those improvements extend themselves to the inland parts of the country.10
There is another crucial advantage to settlements in river valleys: agricultural productivity. Rivers provide fresh water for irrigation, and in traditional riverine farm systems, such as along the Nile, the Tigris, and the Euphrates, annual flooding replenished soil nutrients thanks to the fine-grained sediments carried by the river flow from the mountains to the river valleys. The earliest states were formed along riverways, with the dual benefits of low-cost transport and high food production. In 3000 BCE, for example, around 30 percent of the Eurasian population lived within twenty kilometers of a river, though the river valleys constituted only around 18 percent of Eurasia’s land area. Put another way, the population density near rivers was roughly twice the density farther from rivers.
Indeed, from ancient times until today, most of the world’s major settlements and cities have been built along riverways or ocean coasts. Riverine cities have been the centers of agriculture, and coastal cities have been the centers of industry, trade, and innovation and the hubs of global networks of knowledge and culture. As of 2015, around 38 percent of the world’s population lives within 100km of the oceans and 28 percent live within 20km of rivers, though the land area near the coasts is only around 20 percent of the total, and the land around rivers is only around 16 percent of the total. Throughout the course of civilization, back to at least 3000 BCE, roughly 30 percent of the world’s population has lived near the oceans and another 30 percent or so has lived near rivers.11
The continents differ markedly in their coastal proximity and the extent of their river basins. In this respect, Europe is especially blessed: 51 percent of Europe’s land area is within one hundred kilometers of the oceans, and 25 percent of Europe’s land area is within twenty kilometers of a river. Around 80 percent of Europe’s population lives near a waterway (2015 data), either a coast or a river. Europe has had the advantage of a temperate climate and a great proximity to water-based trade. On the other hand, only around 16 percent of today’s Commonwealth of Independent States (CIS), essentially the former Russian Empire, is within one hundred kilometers of the oceans, and around 19 percent within twenty kilometers of a river. Only 14 percent of the CIS population lives near the oceans, while 39 percent live near a river, roughly half in total. The CIS is northern, cold, and far from ocean sea routes. The rivers and overland routes, rather than the oceans, have been Russia’s pathways of trade. These characteristics have long defined Russia’s history. In Asia, around 40 percent of the population lives near the coasts and another 30 percent near rivers, in between the high coastal proximity of Europe and the low coastal proximity of the CIS.
The Advantages of Primary Energy Reserves
Economic development is limited by the availability of energy for work, including for industry (e.g., metallurgy), farm production (e.g., plowing), transport, and communications. Primary energy resources include biomass, fossil fuels (coal, oil, and natural gas), wind, water, solar, geothermal, nuclear (uranium), and ocean power. The ability to tap them, of course, depends on technological know-how. For most of history, energy depended on animal power and hard human labor, and therefore ultimately on the supply of foods for human beings and feed grains for beasts of burden. The great Eurasian empires that conquered on horseback did so, ultimately, based on the solar energy captured by the vast grasslands that fed the hundreds of thousands of horses in the conquering cavalries.
From ancient times, such energy was abetted by wind power for sails and windmills and waterpower to turn waterwheels. From the steam engine onward, fossil fuels came to economic preeminence in the nineteenth and twentieth centuries. Those places lucky enough to have economically accessible coal tended to industrialize well before those that did not. In the twenty-first century, we will have to turn to zero-carbon energy—wind, solar, hydro, geothermal, and ocean—to avoid the great risks of human-induced global warming caused by the fossil fuels, and geographical advantages will shift once again. We will also depend on great advances in technological know-how, such as utilizing solar energy through photovoltaics.
Since the great dispersal from Africa, and surely before that within Africa, human groups have battled each other for territory and to secure their basic survival needs (including water, food supplies, shelter, and minerals). Indeed, human nature was forged in the cauldron of territorial competition, which instilled in our genes and our cultures a remarkable capacity to cooperate within a group, combined with a deeply rooted tendency toward conflict and distrust between groups (according to race, religion, language, national origin, and other markers of identity).
Since at least the second millennium BCE, globalization has involved intense geopolitical, economic, and military competition among rival empires. The first great Western historian, Herodotus, described the competition between the Greek city-states and the Persian Empire. Since then, globalization has entailed the rise and fall of competing empires: Assyria, Macedonia under Alexander the Great, the Hellenistic empires, Rome, Persia, Chinese dynasties, Indian empires, Arab caliphates, the European empires, the Soviet Union, the United States. Since around 1600, the European empires increasingly gained sway over other parts of the world, and during the Industrial Age, Britain and the United States became global hegemons.
One of the crucial links among geography, technology, and institutions is the interplay of military technology with physical geography and political institutions.12 The ages of globalization are marked by technological innovations in the areas of transport, communications, energy, food production, public health, construction, and others that typically have included significant changes in military technologies and relative power. The innovators have often gained a decisive, albeit temporary, advantage in military force, which led to upheavals of global power through military conquest. Typically, the innovations would sooner or later diffuse to the adversaries, often causing a decisive reversal of fortunes of the conquerors and the conquered.
Of course, military technology is multidimensional and highly complex, involving offense and defense; land, air, and sea; light, heavy, and now nuclear weapons; tactics, logistics, transport, communications, deception, psychological warfare, and much more. We will have occasion to mention some of the key military breakthroughs that helped launch new ages of globalization. The horse-drawn chariot enabled Mesopotamian cities to become states and Egyptian kingdoms to unify and control Upper and Lower Egypt. The Greek and Roman massed infantry, the phalanx, supported by the cavalry, achieved major victories in land battles. The Macedonian phalanx was empowered by the innovation of the sarissa, the long spear, giving Alexander a decisive advantage in his Asian conquests. Greek and Roman oar-powered galleys were effective battering rams against opposing navies. The steppe-region archers sweeping in on horseback landed decisive blows on opposing infantries.
China’s invention of gunpowder gave rise, centuries later, to the musket and other firearms that, in turn, decisively ended the advantages of the archers. The cannon artillery enabled by gunpowder helped to account for the spectacular successes of the Ottoman, Mongol, and Timurid empires. When the Atlantic powers, including the Spanish, Portuguese, Dutch, and English, successfully added cannon power to their ocean vessels, they were able to dominate the Indian Ocean trade routes. Britain’s early industrialization tremendously spurred its military power, through a steam-powered navy, mass-produced firearms and heavy artillery, machine guns, logistics and transport supported by rail and telegraph, and in the early twentieth century, armored personnel carriers and tanks. The invention of powered flight in the first decade of the twentieth century led to bombardments by plane as early as 1912 in the first Balkan War, and then at a much greater scale in World War I. World War II introduced ballistic missiles and the atomic bomb in 1945.
A constant theme of history is that major changes in military technologies almost inevitably lead to deep changes in political institutions, as well. Larger empires, for example, facilitated by a new military advantage, often have led to new forms of political control in order to govern a larger population and territory. Weapons systems that require vast state outlays have given advantages to larger states over smaller states. Some military innovations, by contrast, are cost-saving, thereby giving a relative boost to smaller and poorer nations.
In the early twenty-first century, we are again entering into a new geopolitical era; power is becoming more diffused, most notably with Asia joining Western Europe and the United States in technological, economic, and military preeminence. China, India, North Korea, and Pakistan are nuclear powers. The new age of digital technologies is abetting the global shift in power relations generally, but also through the advent of new forms of cyberwarfare.
What is notable about geopolitics is how rapid global change can be. Empires rise and fall with stunning speed. In 1914, Britain still ruled the world. By 1960, Britain’s empire had essentially vanished and the Soviet Union seemed to challenge the United States for hegemonic leadership. By December 1991, the Soviet Union too had vanished from the map. In our own time, the rise of China, the rapid growth of India, and the soaring population of Africa all portend a remarkably different world in the twenty-first century. Bob Dylan’s lyrics certainly ring true:
Many of these decisive changes were ushered in by technological changes that produced new inequalities of power that, in turn, led to new wars. This is a reality of globalization that must be fundamental to our investigation. Yet we cannot afford another global war. Our technologies today mean that another such war could be the end of our species.
We may refer to the wise words of President John F. Kennedy, who defined our modern existential reality in his 1961 inaugural address: “The world is very different now, for man holds in his mortal hands the power to abolish all forms of human poverty and all forms of human life.” That is our own truth about globalization. We cannot afford to have the kinds of disruptions that we had in the past, lest we lose everything.
With that in mind, I want us to consider three great issues for our time as we use our backward gaze at history to gain insights for the future. First, can the world choose a path of shared prosperity, social inclusion, and environmental sustainability in this seventh age of globalization? We can call this the challenge of sustainable development. Second, how should our global governance be organized if, as seems likely, the Anglo-American age has ended and we are now in a truly multipolar world? We can call this the challenge of multilateral governance. Third, is global peace possible, and if so, on what model of human understanding and ethics could this be accomplished? We can call this the challenge of universal values.
The successive ages of globalization have expanded our outlook and our interdependence. We have learned to think globally. By understanding our common history, and our common vulnerability, we can also grasp our common interests and values. In that way, we can also find a path to shared prosperity and peace.
