Over the last few centuries, an increasingly globalized world spurred onwards by technological innovation that continually overcomes the limits of time and space has created a global web of economic dependency. Globalization itself is international interaction among different entities - people, governments, corporations, etc. Societies have long interacted with each other, but I want to specifically focus on global, intercontinental interactions, beginning with the European conquest of the Americas in the sixteenth and seventeenth centuries. It marked the beginning of a significant connection between the world’s two major landmasses as mercantilism took hold of Europe.
In 1760, the Industrial Revolution sparked the first widespread, efficient manufacturing practices and created major demand for raw materials. Previously, the need for raw materials had mainly been driven by bullionism, an economic theory that measures wealth based on the accumulation of gold and silver. Roughly a century after the Industrial Revolution began, European countries would take part in the Scramble for Africa and establish colonies whose purpose was almost exclusively to provide raw materials. These materials would then be manufactured in Europe for Western markets. Today, in the third stage of globalization, marked by the internet and 24/7 connection, the interrelation of the global economy is at its most developed.
One framework for understanding the modern world economy divides the globe into three classes of countries, each of which is vital to maintaining the current world order and global supply chains. European, North American, and East Asian nations are the core countries - they provide the major markets for goods produced globally and generally rake in the majority of the money. They have service or skills-based economies. Next, you have the semi-peripheral countries, mostly located in parts of Latin America, Asia, Eastern Europe/Western Asia, North Africa and the Middle East, and some parts of the African continent. These are your manufacturing economies, chiefly responsible for producing the billions of goods that humans buy every year. Lastly, there are the peripheral countries in Asia, Africa, and Latin America. Generally, these countries have raw-material based industries and play the role of extracting materials for the world economy.
Together, these three classes of countries all depend on each other and are part of a cycle of production and consumption. Over the past year and a half, global supply chains have been hit hard by COVID. The impact continues today, with the WSJ warning that it is “too late to save the Christmas retail season,” shipping prices are skyrocketing, and raw material prices have gone through the roof. A labor shortage in crucial countries, uneven recovery across the globe, and a renewed demand for finished products in the reopened Western markets have all made a mess of supply chains.
However, as big of a disaster as COVID is for the global economy, humanity is facing a far larger, long-term crisis: climate change. Climate change is caused by a buildup of greenhouse gases in the atmosphere - gases put there by humans chiefly through the systemic combustion of fossil fuels, but also through deforestation, the combustion of trash and biomass, and livestock methane emissions, to name just a few causes. This buildup of greenhouse gases has a warming effect on the planet’s temperature, changing weather patterns globally and leading to a host of well-documented impacts on the environment, such as habitat loss, rising sea levels, and increased occurrence as well as intensity of dangerous weather events. Driven by our relentless cycle of fossil fuel-reliant production and consumption, climate change is having and will continue to have very real impacts on the global economy.
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