For one, we've entered an age where the economies of most of the countries in the world have become interconnected to some extent. Just 100 years ago, this wasn't the case.
I don't blame you because this is the kind of conventional trope that everybody parrots and just feels right, but economic historians agree on that the extent of globalization 100 years ago was in fact just as high as it is today in many respects --and in some respects such as labor mobility, it was even higher then [1,2].
In fact, it was only after the collapse of the transoceanic European colonies after the wars that nationalism and the Great Depression gave rise to isolationism and trade protectionism as the natural state of affairs; only to be gradually re-dismantled towards the end of the twentieth century. But if you think about it, the technical and institutional elements of globalization --efficient mechanized shipping, industrialized commodities production/extraction, global electronic communications, settling/clearing institutions-- were all there then.
I was specifically thinking of the European Union (which didn't exist 100 years ago) and its relationship with the Greek economy, and the extent to which a Greek default in 2011 or 2012 might have affected economies across Europe and overseas, as well as the effects of the U.S. economic recession in 2008 on the rest of the world.
You're right to point out that all (edit: many) of the pieces of globalization were well in place by 1915, but the number of countries involved now, and the extent to which they're involved, is quite a bit different. Political conflicts between countries are now as likely to be handled economically as by any other means.
I thought my comment was already way too long, so I didn't explain what I meant.
Again, I don't blame you because it is counterintuitive, but I invite you to read Section 6 ("Financial Crises") of the Bordo, Eichengreen and Irwin 1999 paper (linked above), to appreciate the extent to which globalization then was indeed similar to today's --even in terms of the number of countries involved, the role of supranational institutions, and the "contagion" effects of local crises via economic linkages. It's quite fascinating.
I'm reading that paper now (and I'll read the other later tonight). Thank you for linking to it, it's interesting so far.
I'm a little confused though: in the beginning of the paper, it seems to be supporting some of my thesis, that the modern global economy is more interconnected than it has been at any recent point in history. e.g., "We conclude that our world is different: commercial and financial integration before World War I was more limited. ...integration is deeper and broader than a hundred years ago."
...maybe they go on to refine that point in a way that refutes me. I'll keep reading.
No, you are right! I completely misread the paper. From the conclusion:
"While presenting a good deal of detail, we have sought in this paper to emphasize a small number of general points. First, the globalization of commodity and financial markets is historically unprecedented. Facile comparisons with the late nineteenth century notwithstanding, the international integration of capital and commodity markets goes further and runs deeper than ever before."
Thank you for pointing this out! I stand corrected.
I don't blame you because this is the kind of conventional trope that everybody parrots and just feels right, but economic historians agree on that the extent of globalization 100 years ago was in fact just as high as it is today in many respects --and in some respects such as labor mobility, it was even higher then [1,2].
In fact, it was only after the collapse of the transoceanic European colonies after the wars that nationalism and the Great Depression gave rise to isolationism and trade protectionism as the natural state of affairs; only to be gradually re-dismantled towards the end of the twentieth century. But if you think about it, the technical and institutional elements of globalization --efficient mechanized shipping, industrialized commodities production/extraction, global electronic communications, settling/clearing institutions-- were all there then.
[1] http://groups.csail.mit.edu/mac/users/rauch/misc/globalizati...
[2] http://eml.berkeley.edu/~eichengr/research/brooking.pdf