Elizabethtown College President Carl J. Strikwerda Delivers Inaugural Lecture on Jan. 24Feb 1st, 2012 | By Special Contributor | Category: Essays
(Special report by Alex Molloy) The Office of the Provost and Senior Vice President at Etown College are hosting the Inaugural Lecture Series, commemorating the inaugural year of the College’s 14th president. On January 24 Elizabethtown College President Carl J. Strikwerda gave the first lecture in the series . The lecture entitled, “The World at the Crossroads”, focused on globalization in an historical perspective. Elizabethtown College student, Alex Molloy, offers the following summary of Strikwerda’s talk:
Dr. Strikwerda began by introducing the fundamental and commonly misconstrued timescale of globalization. We learned that the world went through a Golden Age from the late 1800s up until 1914 when globalization flourished at levels that haven’t been matched since, let alone bettered. But this age came to an abrupt end. Why? How could huge levels of trade, combined with large flows of foreign investment and migration, all be brought to an immediate halt?
Nineteen-fourteen signaled the start of World War I, or the Great War, in which nine million people were killed, and $1 trillion was lost. It ended the longest period of peace in modern history. Trade levels, which were thirty times greater in 1913 than in 1815, were dramatically reduced. Globalization came to a shuddering halt.
The Great War was sparked by a terrorist incident in Sarajevo in the summer of 1914. Archduke Franz Ferdinand’s assassination is widely accepted as the touch paper which ignited the deadliest of fires. Dr. Strikwerda explained how the assassination of one leader led to this huge war, involving the major powers of Russia, France and Britain, all of whom had relatively little to do with the Austro-Hungarian.
Globalization started with industrialization. It was fuelled by the introduction of significant transport links with steam engine-drawn trains and ships permitting vast flows of trade. Advances in worldwide communications also helped. Trade barriers were dismantled. Migration became relatively easy, with migration rates twice those of today. A stable British Pound promoted economic stability during the Golden Age. Foreign investment exploded; British investment alone quadrupled from 1854 to 1874, and then quadrupled again by 1913. There were issues with colonialism, and racism became more of an issue, but lessons had to be learned to deal with these issues.
Dr. Strikwerda described how globalization played a key role in WWI’s outbreak, suggesting how economic growth had led to massive divides between the rich and poor. Education was reserved for the elite, social welfare was primitive if it existed at all, and there were revolutionary feelings bleeding throughout among the workers, the lower class, and the under-privileged. Militaristic solutions seemed to be the way forward to help the poor, feelings especially prevalent in Germany. New questions were raised about the adverse consequences of economic growth, especially very rapid growth. Dr. Strikwerdanoted that the Great War can be tied to to WWII, the rise of Nazism, Communism, and the revolution in Russia.
WWI undid the previously established foundations of globalization. Germany had to repay a figure of $66 billion in war reparations. Later estimates put it at $33 billion, or $738 billion in modern terms. This and other debts in Europe crippled economic growth and globalization. In addition, the League of Nations proved to be a failure, mainly due to the refusal of the USA to join the organization, even though it was the obvious global economic power, and had mooted the idea in the first place.
So what was needed to protect the world from future declines in globalization?
Governments realized they needed a strong economy with stable trade and international finance. A second Golden Era of globalization also depended on the introduction of multilateral institutions such as the UN, NATO, the World Bank, GATT (now the WTO), all helping to mediate problems and increase stability. These institutions are increasingly becoming more representative of the countries in the world. In addition, there are now several centers of trade and investment globally (Europe, USA, the BRICS, Turkey, parts of Africa), not just one as in the Golden Era. The introduction of the European Common Market, the 1970’s oil shocks which increased international finance with petrodollars having to be recycled, all led to the development of trade and financial markets. The fall of the Berlin Wall in 1989 reintegrated a further 400 million people into the world market.
A veneer of peace and prosperity can hide potentially dire complications, as the years immediately preceding the Great War show.Globalization is not inevitable. We have to learn from previous mistakes, especially those from WWI, and others such as the dreadful introduction in 1930 of the Smoot-Hawley Tariff. Keeping globalization on track requires international cooperation, peace and economic stability.