2.2: A Brief History of Globalization

Learning Objectives

By the end of this section, you will be able to:

• Identify the conditions needed for people to form civilizations and the role technology plays in their development
• Recognize some of the major periods in world history that have promoted globalization and the main motivations behind the process
• Critically analyze the systems of trade and governance associated with these periods and understand the legacy these processes left in the contemporary world 
• Appreciate how important moments in technology, paired with political will and organization, can lead to comparative trading advantages, alliances, institutions, and power relations that impact people beyond state borders

Historical Precursors to Globalization 

Having established the concept of time-space compression and suggested some motivations for increased inter connectivity among populations, we will focus on some specific historical cases that show how these concepts can be applied as precursors to our modern understanding of globalization. Although, archeological evidence suggests that the earliest settlements in Mesopotamia, located primarily in present day Iraq and Syria, date back to around 10,000 BCE, during a period known as the Neolithic Revolution, we are going to chose closer to the year 3100 BCE as our starting point, when we begin to see more robust written historical records (Flannery, et al., 1965).

The culture of Ancient Mesopotamia is significant for a variety of reasons. Inventions such as the wheel, a major technological advancement in terms of time-space compression come from this area, as did some of the earliest forms of standardized mathematics (Faiella, 2006). Some of the first literary works, such as the Epic of Gilgamesh, come from this civilization, a complex society based on settlements in which inhabitants function via a collective sense of community. Urbanization and agricultural advancement are also critical moments in history associated with Ancient Mesopotamia. This is the area where cereal crops and grains first become domesticated, and mass produced (Ellison, 1981). It is also the region where we see some of the world’s first cities, such as Nineveh, Ur, Uruk, and Babylon arise (Kaplan & Holloway, 2014).  

The establishment of settlements, leading to cities, is a noteworthy precursor to globalization for several reasons. Firstly, building and sustaining urban populations only becomes possible when a surplus of food can be achieved. Prior to the Neolithic Revolution, humans tended to live in relatively small groups, practicing a traditional hunter-gatherer lifestyle (Latham, 2013). People who lived in these times spent most of their energy obtaining calories, consuming what they could kill, scavenge, or gather. These conditions often meant that people were highly migratory, especially when living in areas with seasonal changes that impacted the assortment of food options at various times of the year.  

The total human population at the time of the Neolithic Revolution was quite small, as starvation tended to be a constant threat. However, technological advancements that were first seen in Ancient Mesopotamia changed this scenario drastically. Around this time, some humans began to transition into what is known as a sedentary lifestyle, as opposed to constantly migrating. Their focus shifted to overcoming limitations posed by site and situation factors, which involved changing those factors by moving to new areas, or meeting their needs by modifying their local environments. This change involved deforestation to use wood for building materials and fuel, the domestication of animals and the implementation of irrigation technologies, which allowed for consistent planting and harvesting of crops (Marston, 2017). As more land was clearer, more crops could be planted. As more of those crops were harvested, they could support a larger population. The larger population could clear more land, and so the cycle continued. 

Advancements in agricultural technology provided the people of Ancient Mesopotamia with the ability to create an agricultural surplus. With enough food to nourish its populations, fewer people had to be directly involved with procuring calories, meaning they were free to pursue other tasks. Here we see the makings of a division of labor, whereby specific tasks could be organized and specialized, thereby leading to more efficiency. Economic specialization meant that people could become highly skilled at producing a limited set of goods, thus increasing the quality of these goods, and decreasing the time needed to produce them. Some worked in agriculture, while others became potters, carpenters, bakers or took on other types of artisan professions. Advanced productivity and surplus meant that people were able to trade their products among settlements (Kaplan & Holloway, 2014), thus creating networks of trade and accelerating time-space compression. 
 
Politically, conditions in Ancient Mesopotamia eventually led to the establishment of city-states, which were based on a relationship between the cities themselves, which served as centers of power, institutions, culture, and religion, and their hinterlands, the agricultural areas adjacent to the cities that provided food for themselves and the urbanized population (Kaplan & Holloway, 2014). Key elements in this relationship were the organization of defense and the management of surplus food, as cities would field armies to defend themselves and their hinterlands. Cities also housed markets, where the exchange of goods took place. Key religious officials and buildings were also located in the cities, as religious power was deeply connected to social power (Kaplan & Holloway, 2014). 

Eventually, political motivation to expand and consolidate power resulted in the formation of early empires in Ancient Mesopotamia, as city-states combined, or were taken over by force via the armies of other city-states. This process resulted in the formation of empires such as Sumer, Babylon and Assyria. Again, technology was involved, vis-à-vis advancements in metal working that allowed for new kinds of armaments. In these cases, cultural elements were diffused by hierarchical diffusion. In this process, ideas, innovations, or cultural traits spread in a structured, top-down manner, typically from a central source to other locations, or via political dominance. Diffusion also occurred with the movement of people for non-political reasons. People traveled to and from these empires for economic purposes, diffusing cultural elements through trade networks or permanent migration. This trade was facilitated by the specialized division of labor which resulted in high quantities of quality goods (Edens, 1992). Once more, technologies introduced in this region, such as wheel-based transportation and growing grain had an impact on time-space compression. Therefore, cultural elements from Ancient Mesopotamia were thus diffused by trade, migration, or by hierarchical diffusion as new areas were conquered and incorporated into the region’s various empires.  

The successes of Ancient Mesopotamia have landed it the title as one of the major cultural hearths of the ancient world, meaning that it was a place from which cultural elements originated and subsequently diffused (Smith, 2016). Other major cultural hearths include Meso-America, civilizations in the Andes Mountains of South America, the Nile River Valley, the Indus River Valley, Northern China, Southeast Asia, and West Africa. Although each of these regions has its own unique history, the basic process of development shared many similarities. In all these places we observe an agricultural surplus obtained via new technologies, settlement leading to civilization, with cities and their hinterlands eventually being subsumed into larger empires. Cultural elements are then diffused via trade, migration, and hierarchical diffusion. 

Classical Greece and Rome

Moving forward to around 1200 BCE, we begin to see the establishment and expansion of Greek culture, which would lay the foundations for Western Civilization. Much like ancient Sumer, the Greeks organized themselves into a series of city-states, which would eventually expand throughout the Balkan Peninsula and beyond, especially to the East. This largely involved sending groups of settlers to new areas to establish new settlements and communities. We might think of this as a process of colonization; however, it differs from later efforts of European Colonialism during the Fifteenth through the Seventeenth Centuries. The focus was generally on the expansion of Classical Greece itself, incorporating new people and new territories into a network of city-states that shared important cultural commonalities and actively traded with one another, whereas European Colonialism would come to encompass a firm reliance on political subjugation between the colonizer and the colonized.  

The Greeks were motivated to expand for several reasons. First, the larger successful centers of Greek culture, like Athens, saw a significant increase in population. More people to feed meant that the Greeks needed to secure more resources and territory to lessen environmental pressures from their local region, which was prone to issues like drought. Successful expansion meant having a reliable network of trade throughout the Eastern Mediterranean World, making the flow of goods and people among the Greek city-states more feasible. On occasion, the city-states also formed military alliances for protection against rival civilizations, such as from the Persian Empire in the East.   

Greek expansion relied heavily on seafaring technology, and they also introduced advances in mathematics, geographic awareness and representation, and navigation. For example, the Greeks invented a device known as the astrolabe, which allowed them to better understand the stars and other celestial bodies, leading to better maps and more accurate navigation. Mechanical odometers were also a meaningful Greek technology, making it possible to more accurately measure distances traveled. The Greeks focused on building wooden ships with metal fastenings (for transport and for protection), all of which relied on a combination of sail and oar power.  The cargo ships were larger and better equipped to hold goods, while the war ships were longer and narrower, built more for speed.  

Politically, the city-states of ancient Greece did not function with a top-down hierarchy, but rather as autonomous entities with their own local systems of governance. However, they had a few cultural commonalities that were vital for maintaining communication and connection, notably the use of the Greek language, along with the adherence to the Greek religion. The history of the Greek city-states was one of tumultuous relationships, they needed each other for the purpose of trade, but they also often went to war with one another during the late Classical Period. However, this did not mean an end of Greek cultural influence, as following the conquests of Alexander of Macedon (336-323 BCE) that influence was spread even more. Indeed, it was following the death of Alexander that the Greeks had their most influence. During a time known as the Hellenistic Period (323-30 BCE) the use of the Greek language could be found from India in the East to the Western Mediterranean (primarily in areas that Alexander had conquered), allowing for the easier movement of goods and ideas throughout the entire region. 

There is a saying that history does not like a vacuum. As we will see, the decline of Classical Greece and Alexander's Empire created space for the rise of new political entities to take their places. In the East, this gave birth to the Mauryan Empire of India (322-184 BCE) and the Seleucid Empire centered in Persia (312-63 BCE). In the West, a city-state known as Rome, located centrally on the Italian peninsula, eventually emerged as a new dominant cultural force, transitioning from a city-state, to a kingdom, to a republic, and then to an empire. Rome had some advantages over other city-states in terms of site and situation factors. It featured a protected harbor on the coast, a river and fertile lands that were good for growing crops, protection in the form of hilly terrain, and a central location, both on the peninsula and in the Mediterranean, that allowed for control of trade and ease of communication within its growing territory. Its more western location also meant that Rome was able to avoid some of the pressures from competitors in the East. 

While Greek expansion was mostly focused on trade, the Romans were more interested in imperial expansion through conquest. Throughout the Roman Empire’s pursuits, the concept of Romanization, the process by which non-Roman people were incorporated into the Roman Empire and assimilated into Roman culture, became very important (MacMullen, 2000). As Rome extended its reach into new territories, it set out to essentially convert conquered people into Romans. This process was done by encouraging conquered and incorporated people to adopt Latin, learn Roman law, and convert to the Roman religion. To facilitate this, once Rome conquered a region, for example the Iberian Peninsula (modern day Spain and Portugal), members of the local population would join the Roman legions. It was important for Rome to then send these soldiers to different parts of the empire. By taking them away from their native populations, these new recruits were forced to culturally assimilate to function. Thousands of people went through this process to eventually become Romanized, where they in turn would oversee people that were not of their own ethnic backgrounds, and thus they had to rely on Roman identity as their primary sense of allegiance. This service would also gain them status in Roman society. This process not only worked for native Roman ideas, but also external concepts that the Romans embraced. For example, in 380 CE, Christianity became the official religion of the Roman Empire. Not only did this cement the Christian faith in Roman society, but it also laid the groundwork for eventual global expansion of the faith (Ehler and Morrall, 1967). 
 
The spread of Latin as a lingua franca (the common spoken language) in the Roman Empire was a major advancement in time-space compression, as it gave people the ability to communicate with others over a vast distance. Romanization and the adoption of Christianity further worked as centrifugal forces to bring increasing amounts of people together into a shared identity. Other important advancements came by way of Roman technology. A vast system of roads connected the far corners of the Roman Empire and facilitated efficient overland transportation, allowing Rome to expand inland. At the height of the Roman Empire, it had constructed over 250,000 miles of roads, 50,000 miles of which were paved with stone (Grant, 1978). The road system was complemented with maritime advancements that allowed Rome to further expand into the greater Mediterrean as well. The Romans also constructed a great system of aqueducts, which brought water into cities and were also useful to irrigate crops, making its populations less susceptible to issues of drought.  

At its peak in the first and second centuries CE, the Roman Empire had a population of around 75 million people (Harper, 2017), which may have constituted 15 percent of the estimated global population.  With so many people in potential contact, Rome was able to build an economic system based on local functional specialization, whereby various regions of the Empire produced specialized goods, and traded those goods throughout the Empire, using Latin and the road network to facilitate trade. As new areas were incorporated, they were connected via expansions to the existing infrastructure and took on an economic identity by which they were able to focus on producing specific, higher quality goods, which they were then able to trade for other high-quality goods around the Empire. Eventually though, centripetal political forces took hold, as Rome overextended its empire, and became susceptible to attacks from populations around its periphery. The Empire itself was partitioned into Eastern and Western divisions between the Fourth and Fifth centuries CE, with the Eastern Roman Empire, continuing on as the Byzantine Empire, eventually falling to the Ottoman Turks in 1453 (Bartusis, 1997). 

The Silk Road and the Mongol Empire

After the collapse of the Western Roman Empire, Europe entered a period broadly known as the Middle Ages, generally understood to run from about 500 to 1500 CE (also known as the Medieval period). For the West, this was a stage when centripetal forces were quite powerful. Europe went through times of increasing isolation, counterurbanization (a demographic process whereby populations migrate from cities to rural areas), and population decline (Heikkilä & Kashinoro, 2009). However, efforts to improve time-space compression and interconnectivity were still going on in the East, mainly in the form of efforts to cross Eurasia and connect Eastern Europe to China. Roman rulers had seen the potential value in promoting economic exchange with East Asia. Initially interested in trading their goods for textiles produced in Asia, in particular silk, the Romans began establishing trade routes to the East, via Southwest and Central Asia. This series of trade routes eventually became known as the Silk Road, which ran from cities like Constantinople and Alexandria in the Eastern Roman Empire, through the Eurasian Steppes, all the way to China (Christian, 2000).  

While traveling along the various paths of the Silk Road opened numerous opportunities for economic and cultural exchanges, individual travelers seldom, if ever, made the entire overland trek. Traveling on the Silk Road often proved dangerous due to lack of security and harsh environmental conditions. Rather, goods were exchanged in markets and bazaars along the route. These goods changed hands many times along the way, and although some were inevitably lost before reaching the end, some did arrive, and the routes continued to flourish well into the Fifteenth Century. This regular exchange of goods brought many different groups of people into contact with one another, thus promoting both cultural and economic integration.  

 

Figure \(\PageIndex{1}\): Silk Road in the 1st Century. (Wikimedia by Kaidor is licensed under CC BY-SA 4.0)

 

The routes along the Silk Road were critical not only for the movement of goods, but also for the diffusion of culture, ideas, philosophies, and ultimately belief systems. Notably, the prominence of the Silk Road, which crossed through Southwest Asia, coincided with the Islamic Golden Age. With Europe in the so-called Dark Ages following the decline of the intellectualism that had been brought by the Roman Empire, much of the scientific and intellectual advancement from this period came out of Southwest Asia. The Silk Road continued to serve as a conduit for political, cultural, and economic diffusion, though now centered on the Islamic World. As those who has come before them, Islamic traders established bazaars and outposts along the routes. In some cases, these traders favored doing business with other Muslims over people of other faiths. This preference, along with innovations in commerce and transit, quickly prompted the spread of the Islamic faith outside of the Arabian Peninsula and on into Central Asia, eventually reaching South Asia and Southeast Asia as well (Liu, 2011). Great Islamic centers of culture were established along the Silk Road, such as Bukhara, Khiva, and Samarkand, all of which exist to this day.  

During the Thirteenth and Fourteenth Centuries, another very important Empire also existed in Eurasia, the Mongol Empire. Founded by Genghis Khan in the early Thirteenth Century, via the unification of various nomadic groups on the steppes of Central Asia, the Mongol Empire eventually encompassed more total land area than any other political movement in world history, stretching from Vienna in the west all the way to Southeast Asia (Turnbull, 2003). For the first time, the core of the Silk Road was controlled by one political entity. This promoted increased use, as taxation was regularized and the merchants felt some level of protection within the Great Khan's Empire. While violence was associated with their reign, the Mongols had a massive impact on early globalization as they worked to promote their empire, showing that it was possible to control huge amounts of territory under one central authority.  

Mongol technology comes from a tradition of pastoral nomadism, which focused on horsemanship. The Mongols utilized the horse extremely effectively.  It was common for the Mongols to travel with herds of horses, trading out for a fresh mount whenever the one they were riding tired. This strategy meant that the Mongols were able to travel long overland distances extremely quickly. Mobility, along with their political system, which was quite tolerant (at least post-conquest), also meant that the Mongols were able to act as a vehicle of cultural and economic diffusion.

Unlike the Romans, the Mongols were not interested in dominating the populations they conquered in a cultural sense. Rather, they were interested in taking tribute from their subjects. When the various peoples under Mongol rule paid their taxes and other tributes to the rulers, they were allowed to practice local religions and their cultures and way of life was tolerated (Zieme, 2016). Additionally, Mongols traveling from place to place, collecting these tributes, would also work to facilitate trade, and provide security along the trade routes. Regions paying tribute were thus afforded protection, making trade routes safer. Crime was disincentivized, and trade was heavily encouraged in the Mongol Empire because stealing from traders meant that one was essentially stealing from the Khan. Investors and traders found it easier to move from place to place throughout the Mongol Empire because participants knew the legal and cultural norms would be consistent. Mongol trade routes included not only silk and textiles, but also spices, metals, and pottery. Artisans and intellectuals were also able to spread ideas across the Empire, leading to important elements such as gun power, the compass, paper making, and even important foodways (the cultural, social, and economic practices related to food production and consumption) to make their way from East Asia across the empire to Europe (Kalra, 2018).  

As was the case with previous examples, the Mongol Empire met its demise when centrifugal forces took over. After the death of Genghis Khan, the Mongol Empire, which had been divided into a loose network of polities called Khanates, began to compete internally rather than cooperate. The Khanates eventually succumbed to internal collapse or became too weak to maintain control under external pressure for competing powers. By 1783, the last Mongol stronghold in the West, the Crimean Khanate, was subsumed into the Russian Empire (Morgan, 2009).

The "Age of Discovery," European Colonialism, and Mercantilism 

A massively important moment in time-space compression happened in the late Fifteenth Century when explorers from Western Europe, men like Vasco da Gama and Christopher Columbus, set out by sea in search of new trade routes to Asia. Da Gama was the first European to make the sea voyage around the southern tip of Africa and arrive in the Indian Ocean. Columbus took a different route, setting off to the west across the Atlantic Ocean. Although Columbus was not actually the first to posit that the Earth was spherical in shape, his voyages did ultimately suggest to the sea-faring powers of Europe that new lands in the Western Hemisphere existed, and that these lands were worth exploring and ultimately claiming and settling, thus beginning the so-called "Age of Discovery" and with it the era of European Colonialism. 
 
Important figures in the Age of Discovery, which in addition to Columbus include figures like Ferdinand Magellan, James Cook, and Amerigo Vespucci (for whom the Americas are named), were very much products of the Renaissance in Europe. The Renaissance can be understood as a time of intellectual awakening, whereby Europe embraced a rediscovery of the knowledge, scholarship, and philosophy that had largely been ignored since antiquity.  Science and the arts in Europe flourished during this time, leading once again to the development of new technologies that would be used to pursue time-space compression. Among them were newly designed ships that were large enough to carry substantial cargo and crews and that were capable of long voyages via sailing, not relying on manpower for propulsion. Notable ships of the time were the caravel, which was light, maneuverable, and able to be sailed effectively against the wind, along with the galleon, which was larger than the caravel, but could handle more cargo and could be more heavily armed (Gardiner and Unger, 1994). Advances in cartography were also rapidly developing at this time. Portolan charts, for example, served as navigational maps based on compass directions and estimated observed distance (Klien, 2011). As the number of expeditions increased, more knowledge was gathered, reported, and compared, leading to navigational tools like globes and atlases.  

In the years following their arrival in the Western Hemisphere, several European powers went about establishing colonies there, and elsewhere throughout the world. While many attempted colonization to some degree, the powers that were most successful included Spain, France, Portugal, Britain, and the Netherlands. These colonial projects differed to some degree in terms of their overall administration and the tactics of conquest, but the congruent theme for all of them was to claim new lands, thus establishing Empires which would work to create new wealth for the colonizers (Janssens & Yun-Casalilla, 2017).  

These colonial powers became known as Sea-borne Empires because their core areas were not contiguous with their colonies.  In each case, settlers came from Europe to establish the new territories. In most cases, these European settlers met resistance from the indigenous populations upon arrival in the New World.  However, the Europeans had several important technological and epidemiological advantages over the indigenous peoples. Not only did the Europeans possess superior weapons and military technology, but they also carried diseases, for which the indigenous peoples had no natural immune defense. The general term associated with these interactions, coined by Alfred Crosby in 1972, is the Columbian Exchange. While today most focus is on the movement of people, disease, food, plants and animals from Europe, Africa and Asia to the Americas, it is important to recognize there was also important goods that moved in the opposite direction. For example, the potato has its origins in the Inca civilization, who were the first to cultivate it. Spanish conquistadors brought the potato back to Europe in the late 16th century, but it did not become popular there until the next century.

Figure \(\PageIndex{2}\): Potatoes for sale in Southern Peru. (Wikimedia by Eric Hunt is licensed under CC BY-SA 3.0)

The reason the movement from Old World to New is highlighted the most though, is the detrimental impact that it had on the indigenous population. Indeed, just a few decades after initial contact, the indigenous population of the Americas suffered severe losses due to disease in one of the greatest demographic disasters in human history (McNeill, 2019). With the indigenous populations severely weakened, the colonizers were able to establish firm control over their new lands, both politically and culturally. In many cases, the indigenous peoples who survived were taken over by the Europeans and put to work gathering resources and producing raw materials that would be taken back to Europe, providing the colonial powers with great wealth (Fessenden, 2016). When the remaining indigenous labor proved insufficient to meet the colonizers’ goals, the Europeans turned to chattel slavery to further expand their colonial operations (Smallwood, 2019). This involved purchasing enslaved peoples primarily from West Africa and forcing them to cross the Atlantic Ocean against their will, suffering severely inhumane conditions in the process. 

The economic system practiced during the colonial period has come to be known as mercantilism. This theory aimed at regulating the economy as a means of augmenting state power. Each empire would derive resources and materials from its colonies, which were then shipped across the Atlantic back to Europe to be made into value added goods. These goods were then sold back to the colonies, generating huge amounts of wealth for the core in Europe. The introduction of new foodstuffs, textiles, and goods that were produced with raw materials from the colonies drastically changed the economies and ways of life for people living in the core areas (Boivin et al., 2012). These changes demonstrated the nature of the relationship as a two-way street in terms of exchange, all be it with more wealth ending up in Europe than in the colonies.  

Competition among the colonial empires was another feature of mercantilism. The basic idea was to maximize exports and minimize imports among the empires, encouraging the major powers to treat their economies as zero-sum, and engage in rent seeking behavior, an attempt to gain economic advantage via the manipulation of the social or political environment rather than through trade and production of goods and services. Mercantilist logic posited that the total value in the global economy was a set sum, whereby the gains of one party had to be offset by the losses of another. Therefore, the colonial empires sought to maximize their holdings at the expense of their competitors through protectionism, although not exactly in the modern economic sense (Magnusson, 2003). The empires would charge high tariffs on imported goods, thus heavily encouraging the people in Europe and their colonies to do business primarily within the empire, favoring internal trade.  

Mercantilists understood precious metals to be a critical measure of wealth, and they sought to accumulate as much of these resources as possible.  If a country was able to engage in a trade surplus, it would, in theory, be able to ensure an inflow of value. This type of economic system is rent seeking, in that the priority in managing the economy lies in controlling and manipulating use and exchange, rather than focusing on efficiency and innovation. Therefore, monopoly control over production was a priority, and economic growth and diversification was quite limited.  

Despite the drawbacks of mercantilism and the obvious moral indignation regarding the treatment of those it subjugated, European colonialism was critical for setting the stage for contemporary globalization. The efforts of the empires had several profound effects on populations globally that made efforts of economic, cultural, and political integration more feasible. Beyond the obvious economic motivations, there were also significant cultural and political impacts for both the colonizers and their colonies. Europeans utilized various artifacts (physical objects), sociofacts (ways of behavior), and mentifacts (values and belief systems) in their colonial projects. For example, we see English, Spanish, Portuguese, and French (the languages of our major colonial powers) as the official language in areas far away from those countries, as it was often a good career move for local officials to adopt the language of ther colonial bosses. Cultural dominance can be observed in terms of belief systems as well. Various dominations of Christianity were practiced by these colonial empires. The authority of colonial governments was bolstered when indigenous populations practiced the same faith as themselves, especially when the European monarch was supported by the idea of a divine right to rule. Therefore, the spread of Christianity via colonialism was vast.  

The European colonial empires were motivated to expand further across the globe, spreading to Asia, and eventually to Africa. By the late colonial period, several new countries had attempted to establish overseas colonies of their own, with countries like Germany and Belgium claiming and colonizing territory in Africa (Conrad, 2011). Japan also joined the ranks, as it ended centuries of isolation and began to colonize East and Southeast Asia. In addition to the sea-borne empires previously mentioned, there were also few notable land-borne empires that expanded overland. These included the Russian, Austro-Hungarian, and Ottoman Empires. 

Capitalism and the Industrial Revolution 

The Enlightenment period in Europe during the Eighteenth and Nineteenth Centuries saw the rise of new political and scientific thinking that favored ideals of such as logic and reason over religious dogma, and democratic governments over monarchies and empires (Williams, 1999). Mercantilism was replaced by capitalism, an economic system based on the idea of private ownership of the means of production, whereby firms produce goods which are then exchanged in markets. Firms, or companies, are the main forces of production, who distribute their goods to consumers. These firms hire labor to add value to their inputs, turning primary materials into value-added products. For compensation, workers are paid wages or salaries for their time and effort, money which they in turn use to purchase goods and services within the economy. Although workers are never able to realize the full value of their labor, as surplus value is extracted by firms (the capitalists), the compensation workers received was notably better than what they had been able to earn working in the primary sector. With more people able to participate in the economy with increasing purchasing power, they became known as the middle class (Morris, 1979). 
   
Under capitalism, the concept of the free market became important, where firms can compete with one another for market share. This being said, truly free markets have never really existed, as the state plays the role of a regulator that establishes norms and laws to keep the system running smoothly. The state also provides infrastructure and takes on projects that are either too large or too risky for individual capitalists to pursue. Building a national system of roads, a postal system, or a public education system are good examples of the state’s traditional role within capitalist economies.     

Capitalism is also associated with innovation and competition. Firms that can gain a comparative advantage over their rivals will ultimately prove more successful in the market. An important example can be seen with the Industrial Revolution in the Eighteenth and Nineteenth centuries, which facilitated time-space compression at a rapid rate and helped lay the groundwork for contemporary globalizing efforts. The Industrial Revolution also had profound effects on cultural, economic, and political relations writ large, drastically reshaping the way people lived, the agency they possessed within the economy, their material goods and built environment, healthcare, and radical advancements in terms of technological change (Ashton, 1997). Economies were shifted away from primary sector activities and reoriented to pursuing higher order activities, like manufacturing. Much of the population shifted from rural to urban environments, and mass waves of immigration from Europe to North America were spurred on by new opportunities. Quality of life improved, overall life expectancy increased, and the population began to increase exponentially. From its origins in the Midlands of England, the Industrial Revolution spread across Europe and Eurasia, eventually reaching Japan by the mid-Nineteenth Century (Stearns, 1969).  

The Industrial Revolution is often subdivided into four parts, with the First Industrial Revolution being focused primarily on the production of textiles and industrial goods. It was sparked by innovations in engineering, especially in the areas of mechanical production. Rural economies, which for millennia had relied predominantly on the labor of humans and animals to produce food and harvest resources, were radically transformed as mechanized agriculture drastically reduced the amount of labor needed to produce the same output. Much agricultural work became redundant, and workers migrated to cities, where factories began demanding a greater and greater labor force. Eventually, the factory system began to dominate capitalist economies, serving as places for centralized production. It became increasingly standardized and efficient. Mass distribution of these goods and mobility of people were made possible via advancements in transportation technology, namely the use of steam power to drive trains and steam ships. Steam power was also employed in the factory system itself, allowing further facilitation of mass production. 
 
The Second Industrial Revolution, which took hold in the late Nineteenth and early Twentieth centuries, further accelerated capitalist economies.  Mass electrification, made possible by fossil fuels, allowed for more factories to open, and for them to operate more effectively. The telegraph was invented, and physical lines of communication were laid to allow people in different cities to communicate in real time. The completion of the Panama Canal drastically cut shipping times between the Atlantic and Pacific. Additionally, advancements in steel and civil engineering meant that the cities, which were still growing rapidly, could now build up instead of out, utilizing vertical space, maximizing potential occupancy, and minimizing transport times around urban areas. Innovations in production procedures paired with reliable energy saw the assembly line drastically improve the time it took to manufacture durable goods, such as the personal automobile (Wilson & McKinlay, 2010). 

The Eighteenth Century and beyond also saw numerous political revolutions, namely events such as the American and French Revolutions, which posed serious threats to the validity of imperial rule. Romantic nationalist movements also arose in Europe, which sought self-determination for individual ethno-national groups who harbored discontent with the exploitative nature of the imperial ruling structure. Often tied to the Treaty of Westphalia in 1648, the concept of the nation-state, by which people of the same national group would have territorial sovereignty and self-determination, became an ideal sought after by many groups in Europe and later globally (Hannsan, 2006). Many of these movements became increasingly organized and violent, culminating in the World Wars. Following World War II, the nation-state has come to typify the major type of polity in the world. This, coupled with capitalism and the innovations of the Industrial Revolutions, have set the stage for contemporary efforts of globalization.