Globalization is now often dismissed as another over-hyped fad of the 1990s. Like Internet companies or market reforms in poor countries, globalization promised much and delivered little. After all, the argument goes, aren’t terrorism, US unilateralism, and stalled global trade talks enough proof that the most powerful trends are those not that unite the world but that divide it? Moreover, globalization cannot be an important trend when some of the government policies needed to sustain it have become a recipe to lose elections or major threats to the stability for governments already in power. In most rich countries, politicians cannot hope to be elected if they are soft on policies toward immigrants. Similarly, in the majority of the less developed countries it has become politically suicidal to argue that lowering barriers to imports or privatizing state-owned enterprises to foreign investors is a good idea.

And it is not only governments. Airlines and telecommunications, globalization’s backbone industries, are in desperate fi nancial straits. Many companies in these sectors have either fi led for bankruptcy or will soon do so unless they drastically change their ways. But despite these powerful counter-trends, the integration of world economies, politics, and cultures continues to defi ne our time. Governments, businesses, families, or individuals that ignore it or misunderstand its virtues and vices will do so at their peril.

A crucial intellectual challenge of our time is to understand which changes in the 1990s were transient and which have permanently altered how the world works. The wave of democratization that swept the globe during that time has slowed; some countries, like Russia or Venezuela, are experiencing serious reversals. The seeming incapacity of democracies to deliver quick prosperity, equality and security has made some publics long for a more authoritarian past. Yet some of democracy’s elements—the legitimacy endowed by free elections, free media, respect for human rights—are showing great endurance and have become standards and expectations that no government can disregard. Today’s dictators, for example, cannot ignore the fates of Yugoslavia’s Slobodan Milosevic and Chile’s Augusto Pinochet. Thanks to international treaties and institutions put into place in the 1990s, both men are living legal nightmares previously unimaginable.

In fact, the convergence of political and technological changes in the 1990s did create rules, actors, institutions, and expectations that are new, permanent, and global. Sorting these enduring changes from the overblown ephemeral claims of academics, politicians, journalists, and businessmen, in turn, depends on the assumptions one makes about the nature of globalization.

Globalizations: Old and New

Globalization is not new. In an article published in Foreign Policy magazine in June 1999, historian Emma Rothschild quoted German philosopher Johann Gottfried von Herder marveling in 1774 about the tight interdependence wrought by globalization: “When was the entire earth ever been so closely joined together by so few threads? Who has ever had more power or more machines such that with a single impulse, with a single movement of a fi nger entire nations are shaken?” Rothschild also cites Adam Smith, who in 1776 warned countries not to tax investors too much because when capital can wonder, investors would take their money elsewhere if taxes became too high. This volatility, he explained, is because “the proprietor of stock is properly a citizen of the world and is not necessarily attached to any particular country.”

These 18th century observations on globalization were regularly repeated in ensuing centuries and more recently and stridently throughout the 1990s. New technologies that accelerate travel and facilitate communication have always stimulated predictions of an irreversibly united world where the infl uence of boundaries and nation-states is eroded. Texts explaining how the advent of the steam engine and the telegraph would shrink and change the world are uncannily similar to those extolling the widespread changes caused by the introduction of the jet engine and the Internet. Consider the following: “The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fi t, and reasonably expect their early delivery upon his doorstep; he could adventure his wealth in the natural resources and new enterprises of any quarter in the world.” Some 1990s New Labor apparatchik extolling the goodness of life in Tony Blair’s Britain? No; it is economist John Maynard Keynes in 1919, reminiscing about the years prior to World War I.

But Globalization in the 1990s Was Different

Proclaiming that globalization in the 1990s is merely the quotidian continuation of a centuries-old trend is as simplistic as claiming that globalization is a new phenomenon. The type of globalization that emerged in the early 1990s did have several unprecedented features. The most important of these greatly expanded the options available to individuals while narrowing the room for maneuvering available to governments.

A century ago the telegraph shrank the world, but it did so more for institutions than for individuals. In contrast, the more widespread Internet empowered individuals as much as it did governments or corporations. It has enabled likeminded individuals—from terrorists to anti-globalization activists to hobbyists—to share passions and coordinate actions across the globe. Thus while previous bouts of globalization increased the options individuals had to consume products imported from other countries, globalization in the 1990s also increased the ability of individuals to affect politics inside and outside the borders of their country.

Prior episodes of globalization boosted the opportunities for international human contact. Yet in the 1990s, the costs of international travel and transport declined precipitously and, along with the opening of political borders, spurred an exceptional increase in the international movement of people. Never before have so many people traveled so much. Meanwhile, as options for individuals multiplied, those of governments dwindled. Money that was now capable of being electronically transferred forced governments to create a hospitable environment for highly mobile capital.

The tide of democracy that swept the world in the 1990s, the emergence of unbridled media, the proliferation of nongovernmental organizations with enormous fi nancial and political resources, and the growth of international criminal and terrorist networks—all have helped erode the autonomy of governments. But the nation-state is not about to disappear. Indeed, governments continue to be central players. Also, the vast majority of people in the global community are yet to be empowered by the technological and political changes of the 1990s. Instead, they continue to live imprisoned by poverty, hunger, illness, and ignorance.