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Globalization
Globalization became a buzzword following the end of the Cold War, but the phenomenon has long been a factor in the foreign relations of the United States and has deep roots in history. To the extent that it meant the expansion of trade and investments, it can be defined as economic expansion, as in the transition from territorial expansion in the nineteenth century to the increasing internationalization of markets in the twentieth century. In the aftermath of World War II, economic internationalism, or the suggestion of growing interdependence of nations and the development of international institutions, seemed to capture the essence of what more recently has been termed globalization. But such usages are too limited; they do not adequately define a phenomenon that shaped American diplomacy and its constituent elements of economics and culture.
Definition and Conceptualization
"Globalization" is a fairly new term. Professor Theodore Levitt, a marketing professor at the Harvard Business School, apparently first employed it in a 1983 article in the Harvard Business Review. It is arguable, however, that the basic concept dates to the first humans. Defined broadly, globalization is the process of integrating nations and peoples—politically, economically, and culturally—into a larger community. In this broad sense, it is little different from internationalization. Yet globalization is more than this incremental process that over the centuries has brought people and nations closer together as technological innovation dissolved barriers of time and distance, and enhanced flows of information promoted greater awareness and understanding.
The focus, as the term suggests, is not on nations but on the entire globe. Consequently, a more sophisticated definition might emphasize that contemporary globalization is a complex, controversial, and synergistic process in which improvements in technology (especially in communications and transportation) combine with the deregulation of markets and open borders to bring about vastly expanded flows of people, money, goods, services, and information. This process integrates people, businesses, nongovernmental organizations, and nations into larger networks. Globalization promotes convergence, harmonization, efficiency, growth, and, perhaps, democratization and homogenization.
Globalization also has a dark side. It produces economic and social dislocations and arouses public concerns over job security; the distribution of economic gains; and the impact of volatility on families, communities, and nations. Many also worry about a growing concentration of economic power; harm to the environment; danger to public health and safety; the disintegration of indigenous cultures; and the loss of sovereignty, accountability, and transparency in government. These, too, are issues that have been topics of concern to American diplomats and foreign policymakers throughout the twentieth century.
There are two principal drivers to globalization: technological innovation and changing ideas about how to organize and regulate economic activity. Rapidly changing technologies for transportation and communications continue to dissolve the barriers of time, distance, and ignorance that once complicated long-range relationships. In the twentieth century some of the most important technological innovations that changed diplomacy were the jet plane, satellite communications, fiber-optic cables, and the Internet. Ideas also shape globalization, particularly the widespread belief that free trade, private enterprise, and competitive markets promote efficiency and economic growth. Another set of ideas also influences the globalization process: the belief among international lawyers that harmonization of standards, rules, and legal systems is the most appropriate way to resolve business conflicts. The impact of technology and ideas are the building blocks of globalization, and have shaped U.S. power, policy, and diplomatic conduct.
The globalization process has other independent drivers. In the history of the modern world, a rising population in less-developed areas frequently has triggered emigration to areas of economic opportunity, and this in turn has frequently produced a stream of remittances to family members who remained behind. Famine and malnourishment, as well as the need for energy and industrial raw materials to support advanced economies, also affect the globalization process, promoting greater flows of materials, food, and goods, and thus enhancing the interdependence of people and economies. Also, two World Wars, a Cold War, and the Great Depression disrupted in significant ways the ongoing globalization process through much of the twentieth century. Finally, leadership is an important element of all human activity. Had the United States, as the world‘s leading economic and military power in the twentieth century, not committed its public policy to promoting an open, and nondiscriminatory, international economic system, it is quite possible that the globalization process would have taken a different course—perhaps one that gave priority to regional blocs.
In explaining the emergence of globalization, it is almost trite to observe that the underlying forces of technology and economics have transformed the traditional nation-state system and compressed once-formidable barriers of time and space. But post–Cold War globalization did just that, although the process had roots in the late-nineteenth-century growth of American power. The concept, therefore, requires scholars of foreign relations to leap outside of the normal parameters of the nation-state and political-military affairs and take into account such elements as the flows of goods, services, and money; the increasing international mobility of people (and especially business professionals and skilled workers); the emergence and growth of large corporations that view the world as a single market in which they allocate resources, shift production, and market goods; the expansion of financial, legal, insurance, and information services; and the interconnections of cultures, customs, political processes, and ideas.
Mindful that the concept addresses historical transformations, scholars in political science, economics, linguistics, anthropology, geography, law, art, and film studies help to define the term. Political scientists, economists, and business historians have accurately identified techno-economic globalization as the precursor of other forms of globalization, such as transnational cultural exchanges. That is, the open and expanding market, in a synergistic relationship with technology (including scientific developments), has given rise to concomitant political, institutional, social, intellectual, and diplomatic changes. Economics and technology exert an enduring impact on international relationships, seemingly proceeding on their own separate tracks but not immune from events.
This calls into question the interpretation of economic determinists, for globalization complicates while it also complements Marxism, corporatism, and the like. To be sure, the power of markets associated with money, goods, services, and information facilitates international relationships, but it does so in diverse ways. Wealth is only one of the critical factors propelling the global economy. When viewed from a perspective of globalization, Marxism overemphasizes capitalism‘s contradictions of overproduction and underconsumption, diverting attention from the impact of economic and business concerns on diplomacy. Corporatists tend to discount the influence of strategic, humanitarian, and idealist considerations in government circles and within the private sector as well, while world systems theorists draw on an international lineup of states rather than global, private-oriented networks.
Traditional approaches to diplomatic history, including post-revisionism, also ignore the globalization construct in that they relegate economics and technology to a second tier in their levels of analysis. Globalization requires attention to nongovernmental actors, including religious and philanthropic organizations, consumer and environmental groups, workers, and unions, along with those active in business and finance. By including these groups, globalization lends an appreciation to the variety of concerns in U.S. foreign relations, from national security to advancing national ideals to humanitarian concerns.
Globalization is also not event or crisis driven, which are common foci for diplomatic historians. Instead, it explores the factors that are significant to diplomacy in the long run. For instance, the dispute between Guatemala and the United Fruit Company that led to the ouster of the government of Jacobo Arbenz Guzmán in 1954 is considered a crisis point in Cold War diplomacy. But just as important is discussion of the efforts of Carl Lindner, owner of United Fruit‘s successor, Chiquita Brands. He opened Western European markets to exports of Central American bananas by using the power of the purse to reward American politicians of both parties, thus placing his agenda at the cutting edge of U.S. trade diplomacy toward the European Common Market. Diplomatic history can account for such actions, which are often hidden by more traditional approaches, by placing the Guatemala episode and other flash points in the context of the globalized expansion of business and culture.
With its application to the many strands of the historiography of U.S. foreign relations, it is clear that globalization promotes new ways of explaining American diplomacy. And because globalization is a historical phenomenon, scholars and commentators can draw on it as an interpretive device to examine change and continuity across the world at various times. Technology and economics have long colluded with each other, beginning at least with the Industrial Revolution. Yet conquests, trade, slavery, and religious expansion, across the world as it was then known, have occurred farther back than that. The spread of Islam, the Crusades, the Roman Empire, and continuous agricultural revolution all represented the inexorable push of the market and technology that lay at the foundation of globalization. Economic globalization undergirded strife, growth, and interchange within and beyond local boundaries throughout history, but the globalizing economy, through the penetrating impact of technology, has also changed culture and politics. Globalization is of a synthetic quality in that it addresses the factors that comprise American diplomatic history; it helps group priorities in foreign relations and explain them in a coherent way.
First Era of Modern Globalization: to 1914
The current brand of globalization in American diplomacy can be traced back to the post–Civil War era, when internationalization and Americanization emerged in U.S. ideology and expressions of power. From this period to World War I, globalization came under the rubric of Anglo-American control of the transatlantic economy. From about 1850 to 1914 an international economy existed, managed by Great Britain, resting on free trade and open capital markets and reliant on colonies and developing areas as resource bases and on consumers in advanced nations. It was in the midst of this first international industrial economy that the United States rode to world power on the strength of its economic muscle and competed with Europeans, spurred on by production and technological inventions.
This period did not experience the revolutionary form of globalization that characterized the post–Cold War years, with their highly synchronized and integrated worldwide communications, transportation, and politics. In the earlier era, less production was attributed to foreign operations. Those affected by globalization were mostly of the elite, rather than the masses, in the early twentieth century. In the pre–World War I period, it was clear which nation controlled production, marketing, culture, and the like, while the multitrillion-dollar world market of the 1990s and beyond had no natural owners. The velocity of globalization in the pre-1914 years was immensely slower than at the end of twentieth century, as were the volume and the scope. The years before World War I did not witness the fundamental transformation in the global economy that started in the last century‘s final two decades.
Evident in the earlier era, however, were improvements in technology and a greater volume of world economic connections that indicated the influence of globalization on American power, diplomacy, and the economy. However, remarkable changes wrought by new business networks were not fully understood by diplomats back then. Some policymakers noted the importance of new technology and economic relationships; the presidents of these times, for instance, became more aware of global economic concerns. That was particularly true of William McKinley, known for the protectionist tariff with his name but actually a far-sighted globalizer. But they could not possibly foresee all of their applications. Movement toward globalization occurred, nascent and incomplete and interrupted by events of the twentieth century though it was. Thus, it is fair to argue that globalization offered, and offers, a new paradigm in which to view not only diplomatic history, but world history as a whole.
By the twentieth century, the United States had begun to replace Britain‘s colonial and trans-Atlantic systems of free trade and governmentrun transportation and communication networks. The new form of organization was a structured but open economic system of private enterprise and business-friendly public support for access to foreign markets, inventions, immigration, and adherence to international law. Private enterprise could export and produce abroad, the fruits of America‘s leadership in technology and intellectual property. People and ideas could move easily, facilitating the outward diffusion of America‘s political ideals and cultural values. America practiced an informal imperialism—in which investment and trade accompanied missionaries and, on occasion, the military—that gradually superseded British industrial and agricultural power.
The early era of globalization, before World War I, was greased by the technological leaps of transportation improvements like the steamship, and by marvels like the Suez and Panama Canals, which sped European and American commerce around the globe. Transatlantic cables, then direct telegraph links to Latin America and connections through British cable to Asia, allowed American investors and merchants to communicate faster abroad, thus expanding their markets. The great expositions of the age—in Chicago in 1893, Omaha in 1898, Buffalo in 1901, and St. Louis in 1904, as well as later gatherings in West Coast cities—publicized American achievements and the promise of empire based on progress in technology. Global connections shrunk the world itself.
Globalization was also driven by the emergence of America in the international economy. Capital exports, the plethora of inventions with American trademarks that were sold overseas, and a greater presence in financial markets boosted U.S. power. For instance, one of the most successful exporters was a capital goods firm, the Baldwin Locomotive Works of Philadelphia, whose engines came to symbolize power, speed, and the march of civilization. In 1900 Baldwin exported an average of one engine a day, shipping locomotives to South America, Africa, Asia, Australia and Europe. Exports soared after its engines gained recognition for their speed and for hauling weight up steep grades. At the turn of the twentieth century, Baldwin locomotives climbed Pikes Peak, hauled the Trans-Siberian Express, roamed the Argentine pampas, and whistled past the Egyptian pyramids. In the British Empire, American firms won contracts for building railroad bridges in Uganda and supplying rails for the construction of Cecil Rhodes‘s Cape to Cairo Railway, a project intended to develop British trade in Africa. Elsewhere, in the world‘s breadbaskets, Argentine, Australian, and Russian farmers used U.S. machinery to gather grain. Here were the companies that engaged in the international economy, as well as the privately run globalized market that was outside the realm of states.
Such economic connections promoted cultural ones as well. Thus, early signs of globalization in cultural exchanges were evident in sports (the Olympic Games), marriage, tourism, entertainment (Buffalo Bill‘s Wild West Show), the temperance movement, missionary work, and philanthropy. Regarding the latter, American-led internationalization in the years before World War I involved magnates like Andrew Carnegie and John D. Rockefeller, who turned to global philanthropy to counteract the label of "robber baron" and to advance their social concerns. Carnegie bequeathed millions to build public libraries in the United States and throughout the British dominions. For his part, Rockefeller established a huge foundation with a global mission to promote the well-being of mankind throughout the world. The oil baron personally contributed some $530 million to foundations and his son added another $537 million, which went for medical and scientific research, public health, education, and international exchange programs. The Foundation combated yellow fever and tropical African diseases. In China it established Peking Union Medical College to spread knowledge of medicine and sanitation, conduct research, and support the medical activities of Western missionaries. In addition, Carnegie‘s associate Henry Phipps in 1908 donated enough money so that Washington, D.C., could host the sixth International Congress on Tuberculosis, a disease that had killed thousands across the world. His contemporary, Darius Ogden Mills, funded an expedition to Chile in 1912 that measured over three hundred of the brightest stars in one-quarter of the sky surrounding the South Pole.
Besides the globalization of science and medicine, the fortunes of Americans were also spent on human rights causes. Jacob Schiff, the famous head of the banking firm Kuhn, Loeb and Company, turned his attention in 1906 to funding the American Jewish Committee, an organization dedicated to alleviating the persecution of Jewry at home and abroad. A host of banking, mining, and export firms, moreover, poured money into relief projects before World War I. For example, the New York Merchants Association raised $8,000 to help the victims of the Valparaiso earthquake of 1906, Guggenheim Sons, W. R. Grace and Company, and others more than matched this amount. In sum, the rich in America transferred some of their wealth to the international stage, in the process moving outside the realm of nations to influence the world economy. This is the essence of globalization.
Disrupted Globalization: 1914–1939
The period from the end of World War I to 1950 also experienced some elements of globalization as new technology joined expansion in finance, trade, investment, and culture throughout the world. Yet in a major sense this was an era of deglobalization: first, the international economic system malfunctioned or broke down; then, during the Cold War, the world divided along ideological fissures.
World War I accelerated the expansion of U.S. business overseas. American firms were especially successful in replacing dominant British firms in Western Hemisphere and Asian markets. In addition, war requirements created a soaring U.S. demand for raw materials, especially copper, iron, and other key mineral products. Soon American firms, with the help of their government, began scouring the world for essential raw materials. Rubber companies acquired plantations in Sumatra, sugar producers expanded operations in Cuba, and meat packers enlarged their operations in South America. Paper companies opened pulp and papers mills in Canada, while mining companies purchased nitrate, iron, and copper mines in Chile. Oil companies explored China, the Dutch Indies, and other remote regions and invested heavily in unstable Mexico. War needs drove much of this overseas expansion, but American business leaders were not oblivious to long-term opportunities.
President Woodrow Wilson left an enduring mark on U.S. foreign relations, especially in providing American leadership for the postwar economic and financial system. But if he was the father of internationalism, then he also presided over the disruption of globalization. The defeat of the Treaty of Versailles demonstrated the variations in thinking about globalization. Prevailing sentiment was not prepared to abandon nationalism even as the expansive course of global commerce and investment and America‘s role in the world maintained their momentum. Americans would not fully adopt Wilsonian ideals until after the Cold War. In addition, globalization took a backseat to revolution. Mexico‘s new constitution under the Carranza government of Venustiano Carranza provided for restrictions on foreign ownership of land and subsoil resources. This meant that American investors would be limited to oil reserves; at the broader level, the clash was between nationalism and international legalism, with the former winning out. In Russia, the Bolshevik government survived a shaky start, including a civil war in which Americans participated, to create a decidedly anti-capitalist regime. At first the Soviet Union promoted globalization of the masses but not capital, lashing out at the imperialist nature of capitalist globalization. Moscow then retreated to building a socialist state under Communist Party control at home. Thus, the world started to split ideologically and politically even as Wilson‘s vision reached its expressive high point.
Yet many bankers and administration officials still sought outward, long-term solutions to promote peace and prosperity. Because Europe had bought three-fifths of American exports before the war, freer trade was a national interest after World War I. More generally, policymakers embraced internationalism. Understanding that the Great War had caused an explosion in U.S. exports and imports, that suffering farmers could be aided by overseas expansion, and that America held a key role in global finance, Republican administrations of the 1920s did not separate the international from the domestic. They pushed for globalism, albeit a less political brand than Wilson‘s. Global disarmament indicated one side of Republican engagement in the world. This effort energized citizens, diplomats, and businessmen into even more cooperative, internationalist endeavors during this era than before the war.
Cultural internationalism grew stronger as nations created numerous associations designed to facilitate global ties. An International Office of Museums, and International Congress on Popular Arts, and an International Society for Contemporary Music fostered linkages and understanding. In the United States, political scientists began studying the causes of war and universities offered new courses in various national histories and languages, all a reflection of the need to understand the global context in which America operated. Americans organized hundreds of scholarly discussion groups, such as the Institute of Pacific Relations, a multinational association of journalists, academics, and businessmen based in New York City. The new Guggenheim Foundation funded artistic projects and scholarly research, focusing on Latin American intellectuals. The Institute of International Education funded and directed foreign students to universities throughout the United States. Asians were the main beneficiaries, but increasingly, Latin American and European youth traveled to America to study. In this globalized ethos, Americans believed in peace and prosperity wrought by international contact. The influence of such private activity on foreign policy was extensive, demonstrating that globalization continued to some degree. Disarmament was one arena, regional stabilization and multilateralism another, and arbitration yet another.
Business made global connections in the 1920s. Air transport and travel became a reality under the machinations of Pan American World Airways under the leadership of Juan Trippe. American trade and investment multiplied. Along with the spread of radio, cinema was not only an American phenomenon but a global one as well; people around the world listened and watched the new media and thus developed some common cultural markers. Hollywood stars such as Douglas Fairbanks and Mary Pickford were known worldwide, for example.
Nonetheless, the onset of the Great Depression and World War II dealt a setback to further globalization. The globalizers of the 1920s—the Republican presidents and bureaucrats, the business and banking establishments—were ultimately limited by their own ideology and by the powerful concentration of forces that elevated the domestic economy over the international order. The effort at privatizing decisions and policy ultimately grounded itself on the Smoot-Hawley Tariff and imperial trade preferences of the 1930s, which reserved British Empire markets for member states and excluded or discriminated against outsiders such as America. And politics could not be taken out of the economy; businessmen could not be trusted with, nor were they capable of, running the global system of trade and finance. The Republican governments promoted the ideology of technoglobalization but often refused to take responsibility through policies of running the world economy. They were unwilling to make the tough moves that involved political haggling at home—on matters like reducing war debts and tariffs, for instance—that were requisites to continuing their brand of internationalism. This proved especially so when economic times spiraled from prosperity to misfortune during the Great Depression.
Paradoxically, however, as governments turned away from efforts to harmonize and integrate the international economy to cope with domestic distresses, advances in technology continued to erode the barriers of time, distance, and ignorance that separated nations and people. Some of the most significant improvements in air travel and mass communications, particularly the movies and short-wave radio, took place during the 1930s. At a time when dire economic circumstances compelled most government leaders to think local, a few leaders in government and business dared to speak up for closer international economic cooperation. Thus, Thomas J. Watson, Jr., the head of International Business Machines (IBM) and the International Chamber of Commerce, mimicked Secretary of State Cordell Hull in proclaiming that freer international economic relations meant world peace, and that if goods did not cross borders, he feared that armies would.
A World Divided: 1940–1950
World War II further threatened Anglo-American-style globalization. The Axis powers—a loose coalition of Germany, Italy, and Japan—resorted to military force to overthrow the post-Versailles world order and to establish closed, regional systems dominated from Berlin, Rome, and Tokyo. The conflict afforded the United States a second chance to provide leadership and to promote its vision of a peaceful, prosperous, and united world. The Roosevelt administration pressed plans for international rules and institutions that would structure the post–World War II global economic and political system. In joining technology with national security, the war forged an enduring partnership among business, government, and science. Afterward, the new military-industrial complex would sustain America as an economic and military superpower, develop endless frontiers for scientific discovery, and speed the globalization process.
In effect, scientists and their laboratories, with government funding and direction, contributed in a major way to the success of the war effort, and in the process they developed many new products that had commercial applications which would transform the postwar world. Atomic energy, for instance, had many peaceful applications, particularly as a source of electrical power. The mass production of penicillin transformed the treatment of disease. Also, radar provided the basis for microwave cooking. The first computers appeared during World War II to assist the military with code breaking and long-distance ballistics calculations. ENIAC, one of the first, was a huge machine, occupying 1,800 square feet and using 18,000 bulky vacuum tubes. Not until the development of transistors and the microchips that resulted from them could cheap and reliable computing power be loaded into desktop and portable units. The transistor, which was developed in 1947 and 1948, grew out of wartime research on silicon and germanium at Bell Telephone Laboratories in New Jersey. The transistor led directly to the technology of the personal computer, which itself spawned the globalized information age in the last third of the twentieth century.
No industry benefited more from wartime cooperation and federal contracts than aviation. At the outbreak of war the Boeing Company of Seattle, renowned for its seaplanes and engineering skills, had fewer than two thousand employees and was on the verge of bankruptcy. From this inauspicious beginning the company flourished on the strength of its bombers (the B-17 Flying Fortress and the B-29 Superfortress). Employment rose to nearly forty-five thousand. At the end of the war Boeing, on the strength of its experience and reputation in military aircraft production, turned its attention to the civilian market, using the B-29 as the basis of the luxurious 377 Stratocruiser that Pan American used on Atlantic routes. It contained a spiral staircase and a downstairs bar, but was soon superseded by the four-engine 707 passenger jet, launched in 1954. The latter also had roots in military work to develop a jet tanker and from wind tunnel experiments with jet engines during World War II. Thus, with government assistance, American companies like Boeing, Douglas, and Lockheed would come to dominate the rapidly expanding world market for civilian aviation.
Growth was also in order for consumer goods, which were also foundations for later globalization. Robert W. Woodruff, who had taken over the Coca-Cola Company in 1923, aimed to make his beverage an ordinary, everyday item for Americans and people around the world. He built on his foreign operations, particularly in Europe, during World War II by having Coke accompany the military overseas. Soldiers not only identified with Woodruff‘s product during and after the war but heroes requested it—as did an American pilot who crashed in Scotland and asked, upon regaining consciousness, for a Coke. The beverage was so pervasive that the Nazis and Japanese denounced it as a disease of American society. By war‘s end the company ran sixty-three bottling plants across the globe, on every continent. Its net profits in 1948 soared to $35.6 million, elevating it to near-universal acceptance as the world‘s beverage of choice.
The Cold War dashed the hopes of internationalists who would have facilitated the globalization of the world economy, but still strides were made toward the technoglobal system, induced particularly by governments working through the United Nations. In these instances, officials instilled international law and arbitration processes in the international economy, yet another foundation of globalization. For instance, the International Civil Aviation Organization (ICAO) pushed for global rules to govern the dynamic medium of air transport and travel. The objective was to establish international law, as well as promote order, safety, and efficient development in aviation, although ICAO authority remained limited by national desires to control lucrative commercial air traffic. The ICAO, established on a permanent basis in April 1947, provided the framework for the vast expansion of commercial airspace after World War II. By the late 1960s its 116 member nations connected markets around the world more closely by integrating various technical aspects of airplane transport, such as air navigation codes, as well as by devising a mechanism to resolve civil disputes, promote simpler procedures at borders, and boost Third World development in civil aviation—all enhancing globalization through air transport.
The protracted Cold War struggle that divided the world into two spheres of influence—one led from Washington, the other from Moscow—prompted national security considerations, rather than invisible market forces, to define international relationships. Governments continued to regulate trade and financial exchanges, despite efforts to lower barriers and promote commerce. But America‘s technological advantage, adaptable production processes, and access to resources, so decisive in the struggle against Axis aggressors, helped win the conflict. Also, a new generation of U.S. political and corporate leaders, familiar with mistakes made at the end of World War I when the United States shunned overseas responsibilities, chose to accept this second opportunity to guide the world. Furthermore, as it turned out, these internationalists were also better salesmen than Soviet leader Joseph Stalin and his heirs, who presided over a decrepit, controlled Soviet economy unable to satisfy basic consumer wants. Aware that a troubled world had an insatiable appetite for American values, goods, and services, U.S. leaders exploited their comparative advantage in communications and marketing to advance the American dream of democracy, mass consumption, and individual enterprise. In the long Cold War, the formula of guns, butter, and liberal ideals eventually proved a winner that spread American values on a global basis. Without America‘s Marshall Plan, support for Japan, and containment of the Soviet Union, the history of the Cold War might have turned out quite differently, and likewise for the course of globalization. Had the USSR won the Cold War, Soviet-directed expansion would have been far different—far more capricious, authoritarian, and state-managed—than the American-led alternative based on the rule of law, democratic elections, open markets, and the relentless energy of technology and entrepreneurship. Thus, the era of globalization that began near century‘s end evolved, ironically, from the deglobalized structure of the Cold War.
Globalization Undercurrents: 1951–1972
The indicators of globalization were present throughout the superpower struggle. Prosperity and peace brought greater individual mobility. Before World War I an average of 1.5 million people arrived annually at U.S. shores, with about half that many departing. Travel lagged until after World War II and then revived. Two million people arrived in 1956, 10 million in 1970. Immigration, which fell to a low of 24,000 in 1943 and stagnated during the Depression and World War II, revived slowly after the war, reaching 327,000 in 1957. The largest numbers of immigrants—many of them war refugees—continued to come from Europe, and at this time particularly from Germany. Air travel also took off. Before the 1940s the typical traveler from abroad came by sea; after World War II the traveler arrived by air. On domestic routes the number of revenue passengers rose rapidly from 6.6 million passengers in 1945 to 48.7 million in 1957 and 153.4 million in 1970. On international routes the rise was equally dramatic: from 476,000 in 1945 to 4.5 million in 1957 and 16.3 million in 1970.
Despite Cold War crises and the further regionalization of the world economy, highlighted by the launching of the European Common Market in 1957 (which lured massive American investment), a revolution in critical technologies—including transatlantic telephone service, satellite communications, computers, and jet travel—accelerated the globalization process and ushered in a new era of rapid intercontinental travel, instantaneous communications, and economic interdependence. America‘s humbling experience in Vietnam, dollar woes, and the rise of oil exporting nations in the 1970s did not dampen globalization. Americans still enjoyed the benefits of unprecedented prosperity spurred by technology and economic expansion overseas. They bought new homes equipped with the latest labor-saving appliances, vacationed and studied abroad, and followed breaking news and sporting events abroad on new color television sets receiving signals transmitted via space satellites. Despite domestic political turmoil, technoglobalization continued to press forward, gradually transforming the world of separate nations.
Marshall McLuhan, a Canadian who analyzed the impact of mass media on society, made the metaphor of the "global village" famous in 1962 as a reference to the new electronic interdependence that had recreated the world. At the time, McLuhan was concerned largely with how noninteractive communications like radio and television were homogenizing the world: everyone watched the same sporting events, news, and soap operas. He identified a significant trend. The late 1950s was a period of enormous change as technical developments in aviation, transportation, and communications brought cost reductions and improved service. People, goods, and capital began to move across borders, creating interactive bonds among people and between nations. These flows integrated markets, harmonized tastes, and homogenized cultures.
Some of the most significant advances involved air transportation for people and freight. In 1957, Boeing, having gambled 25 percent of its net worth on development of a long-range passenger jet, launched the 707-120, designed as both a tanker for the air force and a civilian jet. Equipped with long-range Pratt and Whitney J-57 engines, it halved flying time across the Atlantic and opened the era of cheap air travel. The number of passengers departing internationally on scheduled airliners rose 340 percent (from 4.3 million to 18.9 million) from 1957 to 1973 as airlines introduced tourist-class fares. A round-trip flight, New York to London, fell to $487. The arrival of the wide-bodied Boeing 747 in 1969 further expanded capacity and drove down costs. Originally designed as a cargo carrier, it could accommodate two containers side by side that could be transferred to trucks; soon, high-value goods were moving swiftly by jet freighter. It also offered lower operating costs at a time when fuel prices were rising.
Thus, by the early 1970s improvements in air transport made it possible for business to source suppliers and serve markets globally. From 1957 to 1973 the number of revenue ton miles for air cargo on scheduled international flights rose 866 percent from 128.2 billion tons in 1957 to 1.2 trillion ton in 1973. It would be a decade before the full impact of these improvements worked their way through the marketplace. Air service continued to expand rapidly and airfares fell. Charter service grew rapidly on the transatlantic route and fares on scheduled airliners fell below $200 (New York to London) by 1970. Millions of college students read Arthur Frommer‘s best-seller, Europe on $5 a Day (first published in 1957), put on their backpacks, and set out to see Europe and learn about "foreign affairs." Meanwhile, improved engine design and weight reduction led to longer-range planes. In 1976 Boeing launched the 747 SP, which had the capacity to carry 233 passengers nonstop with full payload between New York and Tokyo. By 1989 Boeing was producing the 747-400; it could carry 412 passengers for up to twenty hours at subsonic speeds.
Along with the arrival of reliable, efficient jet freight in the late 1960s, other important cost-saving developments occurred in maritime shipping, including containerization. In the 1950s longshoremen could typically handle from ten to fifteen tons of cargo per hour. The use of truck-trailer, standard-size containers, brought productivity up to from six hundred to seven hundred tons per hour. This meant faster ship turnaround, better coordination, and lower transportation costs. Beginning in April 1956, when the trucking executive Malcolm McLean first moved loaded trailers between two U.S. port cities on an old World War II tanker, containerization took off. Grace and Matson lines adopted it in 1960 and the rush to containerization peaked in 1969, during the Vietnam War. In addition, the international shipping industry developed specially designed ships for automobiles (the first auto carriers could handle from one thousand to two thousand cars) and LNG (liquified natural gas) tankers after the 1973 war in the Middle East..
Improvements in communications also boosted the globalization process. Until the mid-1950s individuals could not communicate quickly and easily across the Atlantic and the Pacific Oceans. In 1927 commercial telephone service using high-frequency radio opened between New York and London. But this interactive advance was not designed for mass communications. Radio telephones were noisy, unreliable, and costly—forty-five dollars for the first three minutes. September 1956 brought the most significant improvement in communications in over a century when American Telephone and Telegraph opened the first transatlantic telephone cable (TAT-1) by using microwave amplification techniques. The number of transatlantic telephone calls soared—climbing slowly from 10,000 in 1927 to 250,000 in 1957, and then jumping to 4.3 million in 1961. Soon large corporations such as Ford began using the telephone cable to exchange information and coordinate their over-seas operations from their U.S. headquarters. While telephone cables improved business communications among metropolitan centers, large areas of the world could not take advantage of telephone communications. Starting in the 1980s, satellite communications ended this isolation and made the emerging global village truly interactive.
The arrival of jet planes and transoceanic telephones facilitated business expansion, but so did American scientific leadership. World War II and the early Cold War saw many technological advances, and U.S. firms moved quickly to commercialize products from military research. Between 1945 and 1965 the number of patents granted in America more than doubled, rising from 25,695 to 62,857. Five times as many patents went to U.S. firms as to foreign corporations. As late as 1967 the United States accounted for 69 percent of research and development in major countries. A good illustration was the transformation of IBM, which took its domination into the global marketplace.
The Cold War generated momentum for globalization in other ways, too. National Science Foundation, National Space and Aeronautics Administration, and Defense Department contracts spurred basic research throughout the 1960s, and space research particularly spun off growth in intelligence gathering, electronics and engineering, and weaponry. Laboratories hired thousands of corporate engineers to work on missile and aerospace projects, and clusters of companies and laboratories sprouted up near major academic institutions. The space program‘s budget steadily increased to $1.2 billion by 1962, and steps were taken to orbit a man around the earth (via the Mercury Project from 1959 to 1962), and eventually to send him to the moon (through the Apollo Project in 1969). These were the precursors to the space shuttle and satellite communications of the 1980s and beyond, which fueled the globalization of information.
Decentralization Accelerates: 1973–1989
From the mid-1970s onward the process of world political and economic decentralization, so essential to globalization, picked up momentum. The technological transformations allowed American and other multinational firms to escape national regulations, and also helped free ordinary people from the boundaries of the nation-state. In addition, the rise of the OPEC (Organization of Petroleum Exporting Countries) oil cartel shifted global economic power away from the West. Free exchange rates, unfixed from the gold-dollar standard, gave great flexibility to international investors. American businesses would weather the energy crises and the final phase of the Cold War in different ways. With U.S. tariff barriers continuing to fall and foreign competition surging into the American market, high-cost domestic industries such as steel, autos, and machine tools lost market share to new entrants from abroad. But many bigand medium-sized firms did well in a changing, competitive environment. Firms with leading-edge technologies took advantage of market-opening opportunities to expand abroad. In the era of jet travel and networked business communications, the battle for market share was increasingly fought on a global playing field, involving all of the world‘s major high-income markets—Japan, Europe, and North America. Companies and nations converged as global markets for standardized consumer products appeared; transnational companies now sold the same reliable, low-priced goods in Brazil as they did in Biafra.
Even as the economic changes occurred, however, and despite the re-ignition of Cold War tensions during the late Carter and early Reagan administrations, ideological shifts occurred that reflected the emerging age of globalization. One was a new international outlook encouraged by better communications, transportation, open borders, deregulation, and the revival of nineteenth-century, laissez-faire liberalism. Business leaders began to think globally and to develop global networks that could exert influence over national political leaders through money and ideas. During the energy crisis of 1973, America‘s corporate elite reached out to foreign business leaders. Led by Chase Manhattan‘s David Rockefeller, they formed the multinational Trilateral Commission in 1973, with members from business, politics, law, and academia in America, Western Europe, and Japan. The idea was to facilitate cooperation among resource-rich nations, but outside of government supervision. Similarly, European business leaders began to meet in Davos, Switzerland, in 1982 to develop a common international strategy for European business. This network expanded in the 1980s to include world business and political leaders. In those years it launched the annual World Economic Forum, held every January and bringing together the world‘s movers and shakers to network, deal, and discuss public policy issues. Similarly in America during the Carter and Reagan years, business lobbying expanded from initial efforts to contain unions to the pursuit of an active agenda of deregulating markets, cutting taxes, and promoting free trade.
The deregulatory business agenda reflected another important paradigm shift that encouraged globalization. The Washington consensus had stressed an active and expansive role for the federal government, but in the 1970s economic thought turned toward a less-regulated marketplace. Under the influence of academic economists Murray Weidenbaum and Milton Friedman, a neoclassical attack on Keynesian interventionism was launched during the Reagan years. It emphasized entrepreneurship, reliance on the Federal Reserve System and monetary policy to manage the economy, tax relief, labor-market competition, deregulation, fluctuating exchange rates, and free trade in goods. In time, this consensus came to include free trade in money, or capital account convertibility.
President Ronald Reagan can be credited with fostering the second era of techno-economic globalization by expounding on the possibilities for freedom, political and economic, under U.S. leadership. He was the first president to push openly for free trade and privatization of government services, and one of the first to appreciate how new technologies of communication were transforming the marketplace and weakening the authority of totalitarian regimes. As he left office the technoglobal revolution was accelerating, bringing major changes to economics and politics, and to culture and society as well. His successors wrestled with the implications of globalization at home and abroad. They initiated new integrative bodies that restructured the global economy, such as the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO), institutions that emphasized a rules-based economic system and liberalization of international commerce and that further integrated business processes worldwide. The freer exchanges of goods, capital, and culture inherent in globalization arose from the Cold War‘s ashes and took America into a new era in which transnational contacts rivaled state power.
American-Led Globalization: 1990–2001
The Clinton administration perceived that globalization had the potential to harmonize behavior, customs, and politics and usher in prosperity, development, and democracy. As the world‘s only superpower, the United States would lead the way toward openness, free access, and political stability. Also, President William Jefferson Clinton‘s enthusiasm for globalization was not shared by all Americans; many wondered if globalization was both inevitable and desirable. As the new millennium began, the business community seemed united in support of globalization, but among ordinary people there were concerns about jobs, food safety, harm to the environment, sovereignty, cultural homogenization, and the like. Americans were as unsure about the costs and benefits of this second era of globalization as they had been during the first one before World War I.
The Clinton administration veered from postwar history and adopted the universalist, integrative, and democratic posture of globalization. Economics replaced security on the U.S. policy agenda; globalization was the focus. The administration tied free markets to democracy. After the Mexican peso crisis of 1994, the president placed economic diplomacy at the center of foreign policy, supporting the consolidation of market democracy throughout the world, an ideology that put him in stride with global business but at odds with many in his own party who were tied to the traditional big government, workerprotection liberalism of the past.
The outpouring of analyses of globalization grew during the mid-1990s. Scholars, journalists, and politicians focused on the concept and process, but above all, on its influence. The widespread use of the Internet (304 million people in 2000) brought the issue into homes throughout the world. When added to the Clinton administration‘s oftentimes single-minded purpose of expanding American trade and investments over-seas, the establishment of NAFTA and the WTO, and the soaring rebound of the U.S. economy from a recession early in the 1990s, globalization had a certain cachet among Americans of all political stripes and economic status.
Americans were not the only ones anxious over globalization. In western Europe and many developing countries, globalization was a dirty word, associated in the public mind with American sneakers, blue jeans, burgers, and videos. The French were most skeptical. In one poll, 65 percent said globalization increased the gap between rich and poor; 56 percent thought it threatened national identity. The French Ministry of Culture sought to rally Europeans and to restrict access for Hollywood films and American television programs.
Around the world, defenders of traditional values sought to block the spread of American-style pop culture, but globalization proved a worthy foe. Iranian religious fundamentalists raided homes to confiscate videos and satellite dishes, and in neighboring Afghanistan the Taliban closed movie theaters, burned films, and denied schooling to women. Try as they might, the fundamentalists could not eradicate this powerfully projected alien culture. Their efforts merely benefited smugglers and the flow of contraband. Many discreetly hid satellite dishes to access Western television. The failure of Islamic fundamentalists to stamp out Western influences, like the inability of state-controlled societies in Eastern Europe to block the appeal of Western democracy and consumerism, demonstrated the power of mass communications in the era of satellites and videocassettes. It also underscored the global appeal of American values to the young, the well-educated, and the affluent, an amorphous yet tangible element of U.S. power in the world.
Yet the argument that globalization led to American cultural dominance ignored the appeal of the competition. At the time anti-globalization demonstrators were protesting in Seattle against the WTO in December 1999, children throughout America were gripped by the Japanese fad game Pokemon. Film industries in India and Hong Kong presented competition to Hollywood, and MTV discovered the need to vary its formula in the world‘s various regional markets—providing, for example, Chinese music in China and Hindi pop in India. True cultural globalization, not just Americanization, was in effect.
Among the world‘s cosmopolitan elite—business leaders, government officials, academics, and media types—the requirements of globalization produced a convergence. English became the predominant language of commerce and transnational communications, and business and government leaders wore Western business suits, flew in the same airplanes, stayed in the same hotels, read the same newspapers (the Wall Street Journal and the Financial Times), and communicated with cellular phones and e-mail. The acceptance of American-style globalization reflected the success of U.S. business, the need to play by the rules of the world‘s largest open market, U.S. leadership in technological innovation and the information revolution, and the attraction of America‘s universal values. It also reflected the victories over fascism, militarism, and communism during the twentieth century that allowed the Anglo-American powers to establish the United Nations system, design the institutions of international economic and financial collaboration, and press for acceptance of common standards and the rule of law that were so crucial to globalization.
The post–Cold War era of economic globalization, however, also represented a synergistic dimension in which changes in technology, business strategy, and government policies combined to produce effects far more profound than the sum of incremental steps. The changes hinged on the integration of capital markets, the growing irrelevance of national borders, and the technological leveraging of knowledge and talent worldwide. As the Internet was empowering ordinary people with information, governance of the global system became more segmented in functional supranational institutions run by specialized elites. The International Monetary Fund (IMF), the World Bank, the WTO, and the Bank for International Settlements set the rules and handed out sanctions.
Integration and mobility were keys. Production, capital flows, and workers were increasingly integrated into a global marketplace dictated by transnational corporations. In 1970 there were 7,000 transnational corporations; in 2000 the numbers were some 63,000 parents and 690,000 foreign affiliates as well as a large number of interfirm arrangements. Gross product affiliated with the production of transnationals increased faster than global GDP and global exports. The foreign affiliates of transnational corporations employed six million persons and had foreign sales of $2 trillion. Their reach in every aspect of the world economy—from production to distribution—grew exponentially. In the last half of the twentieth century, international trade accelerated. The world economy grew sixfold in that time, climbing from $6.7 trillion in constant prices to $41.6 trillion in 1998, while global exports of goods rose seventeenfold, from $311 billion to $5.4 trillion. Much of the growth occurred among units of transnational corporations and involved services, which represented one-fifth of total world trade at the end of the century. From 1970 to 2000, the volume of foreign direct investment rose almost fifteenfold; in the latter year it was twice that of 1990. By then, dozens of nations had enacted special laws to attract foreign capital.
Financial globalization, reflecting the integration of equity and bond markets, was another powerful factor driving world economic integration and growth. As in late-nineteenth-century Britain, the upper and middle classes increasingly invested their savings overseas. The assets of U.S.-based international and global mutual funds climbed from $16 billion in 1986 to $321 billion in late 1996. Forty-four million American households held mutual funds, compared to 4.6 million in 1980. Moreover, the velocity of foreign exchange transactions spiraled. In 1973 average daily turnover in foreign exchange markets was $15 billion compared to $60 billion in 1983, $880 billion in 1993; and an estimated $1.5 trillion in 1998. Moreover, in a world of electronically integrated financial markets, money flowed into and out of countries in response to changing market conditions. In 1996 foreign investors put $100 billion into Asia; the next year they withdrew $100 billion.
Technology abetted globalization. World production of technology multiplied six times between 1975 and 1986; international trade in technology soared nine times. Improvements in communications and transportation abetted the process. In 1956, eighty-nine telephone conversations took place simultaneously through the transatlantic telephone cable. By the end of the millennium, about one million conversations occurred simultaneously by satellite and fiber optics. Add in e-mail and faxes and the ease, speed, and volume of communications have been magnified. Between 1955 and 1998, ship tonnage rose sixfold; the unit cost of carrying freight by sea fell 70 percent between 1920 and 1990. The volume of air freight soared from 730 million to 99 billion ton-kilometers. As with shipping, costs fell sharply. Between 1930 and 1990 the average revenue per mile for air transportation dropped from 68 cents to 11 cents (in constant dollars).
Cheaper airfares also enhanced individual mobility. Between 1950 and 1998 international tourist arrivals rose twenty-five-fold—from 25 million to 635 million. By 2000, two million people crossed a border somewhere in the world every single day. Some of them were political refugees; others simply seeking economic opportunities. At the end of the twentieth century, some 150 million people lived outside the country of their birth. This amounted to 2.5 percent of the world‘s population, or one in every forty people. Many of them remitted earnings to families and relatives in native countries. From 1970 to 1998, the number of immigrants living in America tripled from 9.6 million to 26.3 million. It is estimated that immigrants from Central America remitted $8 billion a year to their home countries during the last years of the twentieth century. Many of the foreign students who entered the United States for graduate education remain, contributing to the brain drain from developing lands but augmenting the supply of highly trained professionals in America. In 1990 one-third of Silicon Valley‘s scientists and engineers were foreign born.
Many of the less educated who remained in their homelands, moving from countryside to city, have joined the global economy. Labor became part of a global assembly line; transnationals working for the Nike Company and other multinational firms assembled products from components manufactured in factories throughout the world, while management, administration, and research and development were done at the headquarters. Service jobs in law firms, insurance, and data entry focused on electronic production, which meant that jobs flowed in and out of countries at great speed. Globalization had, simply, changed the world and its business, including the projection of national power and diplomacy.
Along with the globalization of brands like Nike, McDonald‘s, Coca-Cola, and Marlboro, the process also benefited sports teams. Michael Jordan‘s star qualities, as well as the global reach of satellite television, established a worldwide following for the Chicago Bulls. Soccer‘s Manchester United and baseball‘s New York Yankees also appealed to extensive audiences. An influx of eastern European players strengthened the international appeal of the National Hockey League. The National Basketball Association‘s open-door policy to talent attracted forty-five foreign players from twenty-nine countries, and as a result the NBA broadcast in 210 countries and forty-two languages. Major League Baseball, which began opening its season in foreign locations, inaugurated the 2001 season with 854 players, 25 percent of them born outside the United States. As a result of Ichiro Suzuki‘s success with the Seattle Mariners, the team‘s home games were televised live in Japan. Thousands of Japanese baseball fans even flew to Seattle to attend home games of a club owned by Nintendo president Hiroshi Yamauchi.
Along with rapid growth and increasing integration of markets, however, the age of globalization produced greater volatility. The Mexican peso crisis of 1994 and the Asian economic crisis of 1997–1998 underscored the vulnerability of the market-driven globalization system and how quickly strife could spread in a world linked by high-velocity communication, financial, and transportation networks. The Asian economic crisis also showed globalization‘s impact in the political arena. It aroused concerns about the merits of Western-style, free-market globalization to an extent that street protests, stimulated by the economic downturn, forced Indonesia‘s dictator of thirty-two years from power while politicians jockeyed for control in Thailand, the Philippines, South Korea, and Malaysia.
Over the preceding decade Wall Street, Washington, and international financial institutions had encouraged emerging economies to deregulate capital markets and open to foreign banks and financial institutions, but countries in Latin America and Asia paid for the deregulatory bonanza. By opening their markets, they made themselves susceptible to pressures from abroad and the international economy, and also lost independence over their fiscal policies. Abrupt changes in one country, region, or the world economy reverberated throughout these poorer nations, causing crises. Yet the bankers and U.S. financial officials blamed the catastrophic consequences on crony capitalism, the lack of transparency and inadequate disclosure of financial data, the absence of independent regulatory authorities, and the inadequacy of accounting standards. They stressed the benefits of liberalization under the process of globalization.
Opposition to the pro-globalization agenda emerged among a disparate alliance of activists concerned about the environment, labor standards, and national sovereignty. In 1992 the first Bush administration had refused to accept the entire Rio de Janeiro Treaty that protected biodiversity of plant and animal species. An argument also erupted over the existence of global warming, which many scientists and environmental groups blamed on the emission of carbon-based gases into the atmosphere. A total of 150 nations, including the United States, signed the Kyoto accord of 1997 that pledged to reduce such global emissions to 5.2 percent below the 1990 level. America would cut its release of carbon-based gases by 7 percent. But President Bill Clinton faced staunch opposition from powerful business interests such as the Business Roundtable, the Chamber of Commerce, and the National Association of Manufacturers who thought the agreement flawed. The Senate voted 95 to 0 to oppose the protocol if developing countries like China and India were not also required to cut their emissions. As a result, the administration never sent the agreement to Capitol Hill for ratification. The debate over global warming continued into the 2000 election when Democratic candidate Al Gore insisted that America join the Kyoto pact nations and GOP candidate George W. Bush countered that additional studies were needed to better understand the problem. It was clear that, just as with the economy, globalization of environmental concerns might require international intervention. Environmental concerns indicated that there was not a consensus on globalization.
Many people, especially in the labor and environmental movements and within academia, shunned this new globalization system, and argued that globalization undermined stability and prosperity and was leading to the disintegration of national economies and cultures. According to this view, workers had become pawns in transnational corporate agendas, the environment had been deregulated by the free-market rules of the WTO, and financial markets had been so decontrolled that the joint efforts of a handful of individuals could destabilize entire nations (as in Indonesia in 1997). The anti-globalization protesters took to the streets to voice their objections. The WTO ministerial meetings convened in Seattle in December 1999 to plan a new set of world trade negotiations called the Millennium Round, but huge demonstrations shut down the meetings. Seattle turned out not to be an isolated event; there were later demonstrations at gatherings sponsored by the United Nations, the IMF and World Bank, and Davo‘s World Economic Forum.
There were also optimists who saw the free market and meteoric advances in technology as a great boon or as an irreversible phenomenon that could not be halted. They announced that the world had entered a period of unity (unlike the divisive forty-five-year Cold War) that rewarded flexibility, high technology, and individualism.
Public opinion polls showed Americans divided on such issues as globalization and free trade. In general, those in the middle class and below voiced protectionist sentiments or questioned the fairness of NAFTA and the WTO. Among those warning of the perils of globalization were Pope John Paul II, UN Secretary General Kofi Annan, and former South African president Nelson Mandela.
As the twenty-first century opened, the globalization revolution continued to roll forward. While the global spread of information, the integration of markets, and the erasure of borders had the potential to promote global peace, prosperity, and the convergence of basic values, there was a dark dimension often ignored by corporate boosters. For one, globalization benefited organized criminals as well as corporations. The turnover of the criminal economy was estimated at about $1 trillion annually. Narcotics accounted for about half, but a trade in people was also lucrative. Gangs moved from four to five million people annually and earned some $7 billion in profits. In the health area, globalization presented a number of challenges. Public health officials worried that increased human mobility enhanced opportunities for microbes. The risks ranged from trade in illegal products and contaminated foodstuffs, divergent safety standards, indiscriminate spread of medical technologies and experimentation, and the sale of prescription drugs without approval of national authorities. With some two million people crossing borders daily, industrialized nations faced threats from emerging infectious diseases, exposure to dangerous substances, and violence such as chemical and bioterrorist attack. Furthermore, the spread of information on the Internet empowered individual terrorists like the Unabomber to exact their own revenge on global society.
Globalization was a phenomenon of the twentieth century, although it was often hidden from view. Its effects on diplomacy were enormous. In the age of instantaneous communication, rapid transport, and volatile markets, it was apparent that complexities of international relationships had moved far beyond the expertise of professional diplomats and foreign ministries. Diplomats and governments no longer served as gatekeepers. In the networked world, individuals, nongovernmental organizations, and officials communicated rapidly and regularly. But while technological innovation and information had networked millions of individuals into a system without central control, it is worth emphasizing that governments helped fund the networking revolution. The U.S. government had supported basic research in high-speed computers, telecommunications, networking, and aviation, all essential to the interconnected world of globalization. Moreover, Washington‘s commitment to market opening, deregulation, and liberalization of trade and finance provided the policy impetus that led to a variety of international agreements and arrangements promoting an open world order. Thus have diplomacy and techno-economic globalization been linked since the post–Civil War era.