When most people speak of globalization, they are referring to the immense acceleration in international economic transactions that took place in the second half of the twentieth century and continued into the twenty-first. Many have come to see this process as almost natural, certainly inevitable, and practically unstoppable. Yet the first half of the twentieth century, particularly the decades between the two world wars, witnessed a deep contraction of global economic linkages as the aftermath of World War I and then the Great Depression wreaked havoc on the world economy. International trade, investment, and labor migration dropped sharply as major states turned inward, favoring high tariffs and economic autonomy in the face of a global economic collapse.

The aftermath of World War II was very different. The capitalist victors in that conflict, led by the United States, were determined to avoid any return to such Depression-era conditions. At a conference in Bretton Woods, New Hampshire, in 1944, they forged a set of agreements and institutions (the World Bank and the International Monetary Fund [IMF]) that laid the foundation for postwar globalization. This “Bretton Woods system” negotiated the rules for commercial and financial dealings among the major capitalist countries, while promoting relatively free trade, stable currency values linked to the U.S. dollar, and high levels of capital investment.

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Technology also contributed to the acceleration of economic globalization. Containerized shipping, huge oil tankers, and air express services dramatically lowered transportation costs, while fiber-optic cables and later the Internet provided the communication infrastructure for global economic interaction. In the developing countries, population growth, especially when tied to growing economies and modernizing societies, further fueled globalization as dozens of new nations entered the world economy.

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The kind of economic globalization taking shape in the 1970s and later was widely known as neoliberalism. Major capitalist countries such as the United States and Great Britain abandoned many earlier political controls on economic activity as their leaders and businesspeople increasingly viewed the entire world as a single market. This approach to the world economy favored the reduction of tariffs, the free global movement of capital, a mobile and temporary workforce, the privatization of many state-run enterprises, the curtailing of government efforts to regulate the economy, and both tax and spending cuts. Powerful international lending agencies such as the World Bank and the IMF imposed such free market and pro-business conditions on many poor countries if they were to qualify for much-needed loans. The collapse of the state-controlled economies of the communist world only furthered such unrestricted global capitalism. In this view, the market, operating both globally and within nations, was the most effective means of generating the holy grail of economic growth. As communism collapsed by the end of the twentieth century, “capitalism was global and the globe was capitalist.”2