Chapter 30 - After the Fall: The Western World in a Global Age, Since 1985

Toward a Global Civilization: New Challenges and Hopes

FOCUS QUESTION: What is globalization, and what are some of its important aspects in the twenty-first century?

Multiculturalism in art reminds us that more and more people are becoming aware of the political, economic, and social interdependence of the world’s nations and the global nature of our contemporary problems. We are coming to understand that destructive forces generated in one part of the world soon affect the entire world. Smokestack pollution in one nation can produce acid rain in another. Oil spills and dumping of wastes in the ocean have an impact on the shores of many nations. As crises of food, water, energy, and natural resources proliferate, one nation’s solutions of ten become other nations’ problems. The new globalism includes the recognition that the challenges that seem to threaten human existence today are global. In October 2001, in response to the terrorist attacks of September 11, British prime minister Tony Blair said, “We are realizing how fragile are our frontiers in the face of the world’s new challenges. Today, conflict rarely stays within national boundaries.”

As we saw in the discussion of the Digital Age, an important part of global awareness is the technological dimension. The growth of new technology has made possible levels of world communication that simply did not exist before. At the same time that Osama bin Laden and al-Qaeda were denouncing the forces of modernization, they were doing so by using advanced telecommunication systems that have only recently been developed. The technology revolution has tied peoples and nations closely together and contributed to globalization, the term that is frequently used today to describe the process by which peoples and nations have become more interdependent. Economically, globalization has taken the form of a global economy.

The Global Economy

Especially since the 1970s, the world has developed a global economy in which the production, distribution, and sale of goods are accomplished on a worldwide scale (see Images of Everyday Life on p. 954). Several international institutions have contributed to the rise of the global economy. Soon after the end of World War II, the United States and other nations established the World Bank and the International Monetary Fund (IMF). The World Bank is a group of five international organizations, largely controlled by developed countries, which provides grants, loans, and advice for economic development to developing countries. The goal of the IMF, which was also founded in 1945, is to oversee the global financial system by supervising exchange rates and offering financial and technical assistance to developing nations. Today, 188 countries are members of the IMF. Critics have argued that both the World Bank and the IMF push inappropriate Western economic practices on non-Western nations that only aggravate the poverty and debt of developing nations.

Another reflection of the new global economic order is the multinational corporation or transnational corporation (a company that has divisions in more than two countries). Prominent examples of multinational corporations include Siemens, General Electric, ExxonMobil, Mitsubishi, and the Sony Corporation. These companies are among the 200 largest multinational corporations, which are responsible for more than half of the world’s industrial production. In 2000, 142 of the leading 200 multinational corporations were headquartered in three countries-the United States, Japan, and Germany. In addition, these super corporations dominate much of the world’s investment capital, technology, and markets and control 75 percent of the world trade in manufactured goods. A recent comparison of corporate sales and national gross domestic product disclosed that only 49 of the world’s largest economies are nations; the remaining 51 are corporations. For this reason, some observers believe that economic globalization is more appropriately labeled “ corporate globalization.”

Another important component of economic globalization is free trade. In 1947, talks led to the General Agreement on Tariffs and Trade (GATT), a global trade organization that was replaced in 1995 by the World Trade Organization (WTO). Made up of more than 150 member nations, the WTO arranges trade agreements and settles trade disputes. Yet many critics charge that the WTO has ignored environmental and health concerns, harmed small and developing countries, and created an ever-growing gap between rich and poor nations.

The relaxation of trade barriers created a boom in international trade in the last quarter of the twentieth century. In 1973, international trade was valued at $1.7 trillion; by 2000, it had increased to $5.S trillion. At the same time, international financial transactions involving financial instruments such as bonds and equities were becoming an increasingly important component of the global economy. The value of financial transactions involving financial instruments rose to fifty times the value of world trade in goods. The global economy had entered a new era of finance, in which profits from financial transactions outpaced profits from manufactured goods, leading to catastrophic consequences in 2005.

THE END OF EXCESS The global economy began to experience worldwide financial troubles in 2007, following the collapse of the U.S. housing market. Spurred by low interest rates in the early 2000s, easily available mortgages drove up housing values in the United States. In response, investment banks began selling financial investments called collateralized debt obligations (CDOs), which were based on bundles of mortgages. Banks in New York sold CDOs to banks in Europe and elsewhere, spreading the wealth and the risk of investment. Many of the mortgages used as investments had been subprime-issued to borrowers with low credit ratings and a high likelihood of default. As the low introductory rates on the mortgages expired beginning in 2006, default rates increased. By September 200S, a number of large financial institutions, insurance and mortgage companies, investment firms, and banks were approaching or had entered bankruptcy. The rapid collapse of CDO values and falling housing prices caused a precipitous decline in the U.S. stock market as stocks lost almost $S trillion in value from mid-September to November.

In a globalized world economy, financial distress quickly spread as the inflated credit market burst leaving many banks without enough capital (funds) to pay their depositors. Credit became largely unavailable in the last quarter of 200S, crippling industrial output. The IMF supplied rescue packages for many Eastern European countries, while Europe’s stronger economies, primarily Germany and France, provided emergency funds to recapitalize their banks. In the United States, the government responded with an emergency program to recapitalize financial institutions and a stimulus package to support growth and reduce unemployment.

The greatest threat to the global economy, however, came from one of Europe’s smallest nations. Despite its small size, Greece experienced an economic crisis that destroyed the country’s economy, brought down the government, unleashed social unrest, and threatened the euro. Greece exemplified the European debt crisis-low interest rates, easily available bonds, and a strong euro had enabled the Greek government and people to run up large amounts of debt. By 2010, Greece had accumulated a national debt larger than its national economy. Unable to grow its way out of the problem because of its small economy, Greece faced the prospect of defaulting on its debt. It managed to avoid default only by agreeing to extreme austerity measures in return for a bailout of almost 240 billion euros from the European Union. The Greek government accepted the EU’s plan for tax increases, spending cuts, and wage cuts, which sent the country into a deep recession. The Greek public responded with mass protests, and the social unrest, in turn, has led to the rise of far left and far right political parties.

Greece was not the only troubled nation in the European debt crisis, making recovery that much more difficult. Portugal, Ireland, Italy, Spain, and Cyprus also faced severe economic problems. Spanish unemployment rose to approximately 26 percent and exceeded 50 percent for young people. Property values plummeted by almost 15 percent in 2012, while 1.2 million houses remained empty, many due to foreclosures. The welfare state has been partially dismantled as pensions and health care services have been cut to provide funds to recapitalize the banks.

As of 2013, the United States and much of Europe had not recovered from the economic crisis. The austerity measures put into place have reduced pensions, wages, and health care services, leading to a wave of homelessness and hardship. Many of the severely affected European countries resent the policies imposed by the wealthier EU states, especially Germany. A growing mistrust of established governments has led to political upheaval. As the crisis deepens, Europeans will be forced to decide if they should move toward a more politically unified Europe or retreat into possible political chaos within the borders of their individual states.

Globalization and the Environmental Crisis

Taking a global perspective at the beginning of the twenty-first century has led many people to realize that everywhere on the planet human beings are interdependent in regard to the air they breathe, the water they drink, the food they consume, and the climate that affects their lives. At the same time, however, human activities are creating environmental challenges that threaten the very foundation of human existence on earth, especially evident in the Gulf of Mexico oil spill in 2010-the worst oil spill in U.S. history (see the box on p. 956).

One problem is population growth. As of April 2013, the world population was estimated at more than 7 billion people, only twenty-five years after passing the 5 billion mark. At its current rate of growth, the world population could reach 12.8 billion by 2050, according to the United Nations’ long-range population projections. The result has been an increased demand for food and other resources that has put great pressure on the earth’s ecosystems. At the same time, the failure to grow enough food for more and more people has created a severe problem as an estimated 1 billion people worldwide today suffer from hunger. Every year, more than 8 million people die of hunger, many of them young children.

Another problem is the pattern of consumption, as the wealthy nations of the Northern Hemisphere consume vast quantities of the planet’s natural resources. The United States, with just 6 percent of the planet’s people, consumes 30 to 40 percent of its resources. The spread of these consumption patterns to other parts of the world raises serious questions about the ability of the planet to sustain itself and its population.

Yet another threat to the environment is global warming, which has the potential to create a global crisis. Virtually all of the world’s scientists agree that the greenhouse effect, the warming of the earth because of the buildup of carbon dioxide in the atmosphere, is contributing to devastating droughts and storms, the melting of the polar ice caps, and rising sea levels that could inundate coastal regions in the second half of the twenty-first century. Scientists reported that 2012 was the hottest year on record in the United States. Also alarming is the potential loss of biodiversity. Seven out of ten biologists believe that the planet is now experiencing an alarming extinction of both plant and animal species.

The Social Challenges of Globalization

Since 1945, tens of millions of people have migrated from one part of the world to another. These migrations have occurred for many reasons. Persecution for political reasons caused many people from Pakistan, Bangladesh, Sri Lanka, and Eastern Europe to seek refuge in Western European countries, while brutal civil wars in Asia, Africa, the Middle East, and Europe led millions of refugees to seek safety in neighboring countries. Most people who have migrated, however, have done so to find jobs. Latin Americans seeking a better life have migrated to the United States, while guest workers from Turkey, southern and eastern Europe, North Africa, India, and Pakistan have migrated to more prosperous Western European lands. In 2005, nearly 200 million people, about 3 percent of the world’s population, lived outside the country where they were born.

As discussed earlier, the migration of millions of people has created a social backlash in many countries. Foreign workers have of ten become scapegoats when countries face economic problems. Political parties in France and Norway have called for the removal of blacks and Arabs in order to protect the ethnic purity of their nations, while in Asian countries, there is animosity against other Asian ethnic groups. The problem of foreigners has also led to a more general attack on globalization itself as being responsible for a host of social ills that are undermining national sovereignty.

Another challenge of globalization is the wide gap between rich and poor nations. The rich nations, or developed nations, are located mainly in the Northern Hemisphere. They include countries such as the United States, Canada, Germany, and Japan, which have well-organized industrial and agricultural systems, advanced technologies, and effective educational systems. The poor nations, or developing nations, are located mainly in the Southern Hemisphere. They include many nations in Africa, Asia, and Latin America, which of ten have primarily agricultural economies with little technology. A serious problem in many developing nations is the explosive population growth, which has led to severe food shortages of ten caused by poor soil but also by economic factors. Growing crops for export to developed countries, for example, may lead to enormous profits for large landowners but leaves many small farmers with little land on which to grow food.

Civil wars have also created food shortages. War not only disrupts normal farming operations, but warring groups try to limit access to food to destroy their enemies. In the Sudan, 1.3 million people starved when combatants of a civil war in the 1980s prevented food from reaching them. As unrest continued during the early 2000s in Darfur, families were forced to leave their farms. As a result, an estimated 70,000 people starved by mid-2004.

New Global Movements and New Hopes

As the heirs of Western civilization have become aware that the problems humans face are not just national but global, they have responded to this challenge in different ways. One approach has been to develop grassroots social movements, including environmental, women’s and men’s liberation, human potential, appropriate-technology, and nonviolence movements. “Think globally, act locally” is frequently the slogan of these grassroots groups. Related to the emergence of these social movements is the growth of nongovernmental organizations (NGOs). According to one analyst, NGOs are an important instrument in the cultivation of global perspectives: “Since NGOs by definition are identified with interests that transcend national boundaries, we expect all NGOs to define problems in global terms, to take account of human interests and needs as they are found in all parts of the

When Mikhail Gorbachev came to power in the Soviet Union in 1985, he proposed radical reforms in both the economy and Soviet government. With these reforms, the pressure for more drastic change began to mount. In 1989, a wave of revolution swept through Eastern Europe as Communist regimes were overthrown and a new, mostly democratic order emerged, although serious divisions remained, especially in Yugoslavia. In 1991, the attempt of reactionary forces to undo the planet.” NGOs are of ten represented at the United Nations and include professional, business, and cooperative organizations; foundations; religious, peace, and disarmament groups; youth and women’s organizations; environmental and human rights groups; and research institutes. The number of international NGOs has increased from 176 in 1910 to many thousands today.

And yet hopes for global approaches to global problems have also been hindered by political, ethnic, and religious disputes. Pollution of the Rhine River by factories along its banks provokes angry disputes among European nations, and the United States and Canada have argued about the effects of acid rain on Canadian forests. The collapse of the Soviet Union and its satellite system seemed to provide an enormous boost to the potential for international cooperation on global issues, but it has had almost the opposite effect. The bloody conflict in the former Yugoslavia indicates the dangers inherent in the rise of nationalist sentiment among various ethnic and religious groups in Eastern Europe. The widening gap between the wealthy nations in the Northern Hemisphere and the poor, developing nations in the Southern Hemisphere threatens global economic stability. Many conflicts begin with regional issues and then develop into international concerns. International terrorist groups seek to wreak havoc around the world.

Thus, even as the world becomes more global in culture and interdependent in its mutual relations, centrifugal forces are still at work attempting to redefine the political, cultural, and ethnic ways in which the world is divided. Such efforts are of ten disruptive and can sometimes work against measures to enhance our human destiny.

Many lessons can be learned from the history of Western civilization, but one of them is especially clear. Lack of involvement in the affairs of one’s society can lead to a sense of powerlessness. In an age that is of ten crisis-laden and chaotic, an understanding of our Western heritage and its lessons can be instrumental in helping us create new models for the future. For we are all creators of history, and the future of Western and indeed world civilization depends on us.


When Mikhail Gorbachev came to power in the Soviet Union in 1985, he proposed radical reforms in both the economy and Soviet government. With these reforms, the pressure for more drastic change began to mount. In 1989, a wave of revolution swept through Eastern Europe as Communist regimes were overthrown and a new, mostly democratic order emerged, although serious divisions remained, especially in Yugoslavia. In 1991, the attempt of reactionary forces to undo the reforms of Gorbachev led instead to the complete disintegration of the Soviet Union and the emergence of a new Russia. The Cold War, which had begun at the end of World War II and had led to a Europe divided along ideological lines, was finally over.

Although many people were optimistic about a new world order after the collapse of communism, uncertainties still prevailed. Germany was successfully reunited, and the European Union became even stronger with the adoption of a common currency in the euro. Yugoslavia, however, disintegrated into warring states that eventually all became independent, and ethnic groups that had once been forced to live under distinct national banners began rebelling to form autonomous states. Although some were successful, others, such as the Chechnyans, were brutally repressed.

While the so-called new world order was fitfully developing, other challenges emerged. The arrival of many foreigners, especially in Western Europe, not only strained the social services of European countries but also led to anti-foreign sentiment and right-wing political parties that encouraged it. Environmental abuses led to growing threats not only to Europeans but also all humans. Terrorism, especially that carried out by some parts of the Muslim world, emerged as a threat to many Western states. Since the end of World War II, terrorism seemed to have replaced communism as the number one enemy of the West.

As the beginning of the twenty-first century, a major realization has been the recognition that the problems afflicting the Western world have also become global problems. The nation-state, whose history dominated the nineteenth and twentieth centuries and which still plays an important role in contemporary affairs, nevertheless appears to be an outmoded structure if humankind is to resolve its many challenges. Nations and peoples have become more interdependent, and many Westerners recognize that a global perspective must also now become a part of the Western tradition.