The highpoint of European Industrial-capitalist dominance of the global system was up to the years before the Great War. There were widespread ramifications of the European form of Industrial-Capitalist across different cultures: trading of precious metals was in vogue by 1550; this trade practice got extended to spices and luxury goods by 1700. Production of agricultural commodities for the development of Industrial –Capitalism started emerging by 1880. By 1900 this process went one step further - production of plantation crops and utilisation of minerals for the development of Industrial-Scientific Capitalist system started. By late 19th century trading started to take place in Fixed-Exchange Rate system supported by Gold standard, pioneered by UK . Simultaneous expansion of political administration by the Europeans took place through the following process : by 1550 what was occasional trade visits, took the shape of routine trade practice as also establishment of local agents. Later beyond 1800 it was extensive trading with growing political influence, and finally by 1900 this was transformed into trade conducted within imposed colonial rule. This process of Globalization was disrupted during the ‘inter-war’ period. Post-Second World War economic reconstruction gave birth to :- i) Marshall Plan , ii) Bretton Woods System (brief description follows . The end of 2nd World War saw emergence of USA as the most important nation in the global system. It took the first strategic initiative in formulating NATO , Marshall Plan and Bretton Woods systems.

NATO was the military accord restricting growth of Arms race in Europe. Marshall plan was an Aid of approx. $18Bn to help war ravaged European Economies to recover and continue to provide Depression-hit US manufacturers and Agri-producers with export markets under a US-designed free trade regime. Bretton Woods system created the financial twin sisters , i.e. IMF-WB. IMF was to be the supervisor of the Gold standard , prescribing devaluation as and when necessary. World Bank was to provide long-term project loans for sectional development. Correspondingly US Dollar became the vehicle currency of global trade. In 1958 , the European countries having sufficiently recovered , switched over to the ‘Dollar standard’, abandoning the ‘Gold Standard’ . So US Dollar began its journey as the vehicle of convertible wealth. The next form of Co-ordinated Globalization accompanied the growth of MNCs . Here ‘Globalization’ was a declared policy imperative. ‘Globalization’ was no longer just an open-ended exercise in International trade practices. It started gathering ‘critical mass’ in the 1980s.

A bit of current history starting in the 1980s can be of relevance here. In 1978 Premier Deng Shiao Ping initiated reforms in China. 1982 was the first full year of president Reagan’s Supply-Side tax cuts. Reagonomics, Thatcherism were in full swing. 1985 Plaza accord revalued Yen , to lower the value of US Dollar . Japanese Foreign Direct Investment flows flooded several regions. Cold war was at peak. ‘Strategic Defence Initiative’ or ‘Star Wars’ ( started on 23 Mar ‘1983) defence spending became mutually destructive for the Superpower economies and led to massive debt burden of US. US-JAPAN trade balance statistics became a household word. 1991 saw the end of Cold-War. 1992 saw US Fed Budget deficit at record US$292 bn. A paradigm shift was once again necessary to sustain the journey of US economy. Globalization took up a new destination in the ‘Emerging Markets’.

A positive externality of ‘Star Wars’ was exponential growth in R&D spending in Information Technology by US Defence Department and US Defence Industry. Massive funding was channelled to foster breakthrough in ‘cutting edge’ technology under the guidance of US Defence Research Project Services. Whole host of present products and services like Satellite communication, e-mail, image-processing, Global Positioning Satellite System etc were the manifestations of the ideas generated during this period only. Spiralling growth in IT industry began in the 1980s. Digital Technology became the darling of US showmanship. Also, domestic industry, especially in developing countries , has flourished under the indulgent patronage of ‘Crony Capitalism’ for years together. Globalization has started asking uneasy questions about the accepted forms of ‘institutionalised corruption’ in Banking practices, in licensing , and unfair trade practices amongst others. Obviously the general lot of common man is bound to improve if they can make the prevailing practices accountable to some Benchmark.

There is no reason to indulge in romantic nostalgia about the pre-Globalization days of ‘crony capitalism’. ‘Mismanagement of Bank Money’ , ‘Inferior quality of products’ thrust upon unsuspecting population under state controlled manipulation of resources. It is only a ‘moment of truth’ that these economies woke up to, thanks to Globalization. For example, in India we have witnessed 40 years of ‘license Raj’, where mediocrity thrived at the expense of mal-distribution and sub-optimisation of state resources. Inferior products manufactured with obsolete technology were the only choice of consumers. Now, threatened with extinction in the face of Global Benchmarks of quality, the Indian Industrialists ( Dinosaurs of license Raj) are crying hoarse for a level playing field . It is not unwise to ask "what level ?" , "who defines that level?’ , "why you never thought of these levels in last 40 years?" etc.

It is now postulated that , ‘Knowledge Gap’ and ‘Information Gap’ are the two factors that will determine the shape of things in the knowledge-based society of tomorrow. Significant investments in I) Basic education infrastructure & in ii) lifetime training & skill upgradation are necessary for any country desirous of staying competitive in the future form of Globalise system. But unfortunately most of the developing nations do not have enough resources to continue this learning game. Here ‘Digital Globalization’ has been playing a very constructive role. Apart from the ‘Diffusion of Innovation’ via satellite media, there is opportunity to tap foreign knowledge embodied in traded goods and services , to learn about business practices in other societies and a ready ‘state of the art Benchmark’ for domestic labour .

Also the promise of a global consumer market is too attractive. MNCs also try to achieve ‘economies of scale’ in a competitive marketplace. The accrued benefits of this ‘innovation to market’ race provides opportunities for developing countries to bye-pass the myth of ‘missing the bus’ . For example, now if a 5th standard student purchases a ‘Celeron-based PC’ in Sub-Saharan Africa , he or she is instantaneously at par with his counterparts in other societies , as far as access to technology is concerned. Similar examples are more abundant in Pharmaceutical Industry or Entertainment Industry. But the other side of the story is devastating. Globalization is integrating consumer markets around the world. Explosion of consumption options is taking place , but many are left out through lack of income. ‘Keeping up with the Jones’s’ has shifted from striving to match the consumption of a next-door neighbour to pursuing the lifestyles of the rich and famous depicted in movies and TV shows. Display of disproportionate Conspicuous Consumption behaviour creates high ‘negative externalities’ on society and this reinforces inequalities and poverty. ‘Affluent Society’ of J. K. Galbraith has assumed a global dimension - private affluence amid private squalor. Poorest 20% of world people are out of the consumption explosion. Well over a billion people are deprived of basic consumption needs. Rising pressures of conspicuous consumption can turn destructive, reinforcing exclusion , poverty and inequality. distinction between ‘luxuries’ , ‘convenience’ and ‘necessities’ are blurring. Household Debt i.e. Consumer Credit is gong up while household savings rate is going down. In 1960 the 20% of the world’s people who live in the richest countries had 30 times the income of the poorest ; by 1995 it has become 82 times .

Military spending is down by about a third in NATO countries between 1987 and 1996, but up 13% in south Asia , 11% in Middle East , 35% in the largest SE Asian countries .1998 was the year of reckoning for all. Asian and Latin American economies are suffering deepening recessions. USA and continental Europe faces mild recession as well. So much of the hope of Globalization at the existing pace and form depends on Asian recovery. IMF has gone back on its prescription for ‘Capital Account convertibility’ as the ‘golden key’ to GDP growth. Europe & US are desperately slashing interest rates to save their consumers from recession. Even in the USA, recent strikes at General Motors and other places have shown collective disapproval of the rising ‘lifestyle inequalities’ in their society. Timestar ( USA’s leading Union) leader Mr Hoffa says the present form of Globalization will only make things worse for USA workers.