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A Big
History of
Globalization
Julia Zinkina · David Christian
Leonid Grinin · Ilya Ilyin
Alexey Andreev · Ivan Aleshkovski
Sergey Shulgin · Andrey Korotayev
The Emergence of a Global
World System
World-Systems Evolution and Global Futures
The First “Golden Age”of Globalization
(1870–1914) 11
The period lasting from 1870 to the beginning of the First World War is commonly
described as the first “golden age”of globalization. The following quote from the
economist John Maynard Keynes clearly explains the reason why this period was
termed as such:
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 fit, and reasonably
expect their early delivery upon his doorstep; he could at the same moment and by the same
means adventure his wealth in the natural resources and new enterprises of any quarter of the
world, and share, without exertion or even trouble, in their prospective fruits and advantages;
or he could decide to couple the security of his fortunes with the good faith of the
townspeople of any substantial municipality in any continent that fancy or information
might recommend. He could secure forthwith, if he wished it, cheap and comfortable
means of transit to any country or climate without passport or other formality, could
despatch his servant to the neighboring office of a bank for such supply of the precious
metals as might seem convenient, and could then proceed abroad to foreign quarters, without
knowledge of their religion, language, or customs, bearing coined wealth upon his person,
and would consider himself greatly aggrieved and much surprised at the least interference.
But, most important of all, he regarded this state of affairs as normal, certain, and permanent,
except in the direction of further improvement, and any deviation from it as aberrant,
scandalous, and avoidable. (Keynes 1920: 10)
In order for the situation described by Keynes to become a reality, a combination
of numerous factors was required. Some of these factors have already been examined
earlier in this book. For example, one of the most important roles was played by the
Industrial Revolution, which provided essential technologies and stimuli for the
formation of a global division of labor and a global trade network. Without the
inventions of the first and second technological paradigms (see Sects. 8.2 and 8.3),
especially the ones related to transportation and communications, the world would
not have been able to achieve such a degree of informational connectivity. A crucial
role was also played by the spread of primary, secondary, and higher education
#Springer Nature Switzerland AG 2019
J. Zinkina et al., A Big History of Globalization, World-Systems Evolution
and Global Futures, https://doi.org/10.1007/978-3-030-05707-7_11
195
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(see Sects. 10.1 and 10.2). The complex effect of these and many other factors
increased global connectivity, forming the basis for the first wave of globalization in
the modern meaning of the term. The three foundations of this wave were capital,
trade, and migration. In the next three sections, we will examine each of these in
greater detail.
11.1 The Birth of Global Capital
Global flows of precious metals have long permeated the Afro-Eurasian world-
system. With the discovery of the Americas and their silver mines, these flows
came to penetrate the whole world. A free silver market was “the chief globalizing
factor from the early modern period down to the late nineteenth century”
(Osterhammel 2014: 732). One of the financial innovations of the nineteenth century
was countries’attempts to create an international regulatory system for managing
these flows at the global level. These attempts were reflected in the creation of
various international monetary systems and unions. The most famous and popular of
them was the gold standard. Another major novel phenomenon in the world of
nineteenth-century finance was the emergence of a truly global market for capital
(to which the spread of the gold standard greatly contributed). Below we will discuss
the details of nineteenth-century global capital movements.
11.1.1 International Monetary System of the Gold Standard
In the early nineteenth century, the monetary systems of many countries allowed for
the simultaneous minting and circulation of both gold and silver coins—in other
words, these countries stuck to bimetallic standard. In some realms, such as the
German states, the Austro-Hungarian Empire, the Scandinavian nations, Russia and
some Asian countries, the silver standard was used. Britain was the only country
where, beginning in the nineteenth century (more precisely, since 1821), the gold
standard was used.
During the Napoleonic Wars, increased expenses led to inflation and the convert-
ibility of banknotes was suspended in Britain. In 1819, parliament ordered the Bank
of England to make its banknotes convertible into gold again at the market price of
1821. Thereafter, a new monetary order was established in the UK, namely the gold
standard system. It ensured that all issued currency could be at any time and at a short
notice exchanged for a corresponding amount of gold. The Royal Mint was required
to trade unlimited amounts of gold at a fixed price; the Bank of England (as well as
all other British banks) was obliged to exchange banknotes into gold; the import and
export of gold had no restrictions. Gold functioned as a reserve for the total volume
of money in the country (Osterhammel 2014: 733).
Until the mid-nineteenth century, Great Britain remained the only country with
such a system. However, in the second half of the nineteenth century bimetallic
systems (widespread in Continental Europe) started to disappear, and one after
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another, European governments shifted to the gold standard (which greatly
facilitated the obtaining of international loans and trade with England). Germany
was the first continental country to switch to the gold standard (in 1873), this in part
due to its close financial relations with Britain. This transition (together with the
global discovery of new deposits of silver) contributed to a drop in the market price
of silver and prompted other countries—Denmark, Sweden, Norway, the
Netherlands, and the countries of the Latin Monetary Union—to adopt the gold
standard (Eichengreen 1996:17–18). In 1879, the USA joined the gold standard,
although Congress officially recognized this fact only in 1900. The gold standard
spread to Russia in 1897 and Japan joined in 1898, using the reparations paid by
China after the defeat in the 1895 war for creating gold reserves in its central bank.
Also in 1898, the British colonial administration of India (which for a long time had
adhered to the silver standard) attached the rupee to the pound (in other words, to
gold). In Latin America, the convertibility of national banknotes into gold was
introduced by Argentina, Mexico, Peru, and Uruguay (ibid.: 19). The adoption of
the gold standard meant “international respectability”for a country, emphasizing its
willingness to respect the Western “rules of the game,”as well as hope for Western
investment (Osterhammel 2014: 733):
The gold standard, as a regulatory mechanism effective across the world from North
America to Japan, was not simply the abstract apparatus presented in textbooks. ... This
institution required from participating governments an explicit or implicit willingness to
do anything necessary to defend currency convertibility—hence a consonance at the level
of economic policy. This meant, for example, that no one was supposed even to think
of devaluation or revaluation, and that in a highly competitive international system,
governments were ready to solve financial crises by mutual agreement and mutual assis-
tance. This happened in the Baring crisis of 1890, for example, when a large British private
bank declared itself insolvent and only prompt support from the French and Russian state
banks maintained liquidity on the London market. (Osterhammel 2014: 734; see also
Eichengreen 1996: 34)
Nevertheless, we should not imagine the late nineteenth-century world as a space
uniformly covered by the gold standard and acting according to a single set of
financial rules. First, the standard did not encompass the whole world. China, a
number of countries in Central America, and many colonies continued to adhere to
“archaic”silver. Second, even in countries that adopted the gold standard, the “rules
of the game”differed—or, more exactly, the extent to which the countries followed
these rules varied greatly. Thus, although many Latin American countries
announced the adoption of the gold standard, none of them (until the 1920s) had a
central bank or private banks that could provide a reliable guarantee against crises.
Not infrequently the convertibility of gold was suspended in the interests of
oligarchs or large landowners (commodity exporters interested in high inflation
and weak national currency) (Osterhammel 2014: 735).
Only four countries—England, Germany, France and the USA—adhered to the
“pure”gold standard, with gold coins in circulation, and central banks containing
enough gold to cover the total volume of paper money (Obstfeld and Taylor 2004:
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20). Nevertheless, by the end of the nineteenth century, during the heyday of the gold
standard, there developed a truly international financial system based on it. There is
no doubt that the expansion of the gold standard system would have been impossible
in its mature form without the discovery of significant gold deposits on three
continents (in 1848 and later on), due to which global production of gold increased
by almost an order of magnitude (Eichengreen 1996: 13; Osterhammel 2014: 736).
It is important to emphasize the role of the international gold standard system in
shaping the network space of the global economy, particularly in the field of
international investment. This issue will be discussed in more detail below.
11.1.2 Emergence of a Global Financial Network in the Nineteenth
Century
The emergence of a global network of capital flows should be considered as a key
innovation of the nineteenth century. Of course, the history of capital investment
goes back to much earlier times. One of the first attempts to legislatively regulate the
investments of private capital and the profit from them was made in the Code of
Hammurabi (the 1750s BCE). In the following centuries and millennia, long-distance
trade required the development of increasingly diverse financial instruments for the
collection of initial capital when preparing distant trade expeditions, as well as
securing financial guarantees for each participant. These processes could be
observed in various regions of the Afro-Eurasian world-system. However, despite
the abundance of financial instruments enabling long-distance trade, which existed
and were actively used in the Middle Ages [such as credit, short-term and long-term
loans, investments, various forms of debt, and participation in commercial
partnerships (Postan 1978)], no global financial network existed at that time.
The conventional wisdom is that the international financial revolution began at
the end of the sixteenth century in the Netherlands. It was associated with the
development of the bill market and a system of interacting commercial banks in
Antwerp, London, and Amsterdam, which provided for those bills. The first signifi-
cant instrument to be regularly used in international financial transactions was the
negotiable foreign bill of exchange created in Antwerp, one of the largest interna-
tional trade and financial centers. There is evidence that in the major port cities the
bill served as a form of currency exchange, in addition to local money (Neal 1990:
5–7; Obstfeld and Taylor 2004: 18).
An important milestone in the history of global capital was the opening of the first
permanent stock exchange in Amsterdam. It transformed the city not only into the
central warehouse of world trade, but also into the central market of money and
capital for the European world-economy (Arrighi 1994). Excess capital from all over
Europe flowed to the Amsterdam Stock Exchange.
However, even in the era of the Amsterdam Stock Exchange (or, in the terminol-
ogy of Giovanni Arrighi, in the era of the Dutch financial cycle) trade and financial
instruments functioned within the limits of separate regional world-economies (for
example, the Muslim one or the European one). “The ‘cosmopolitanism’of the early
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modern period had been confined to Europe; no ruler and no private individual from
Asia or Africa had thought of borrowing money in London or Paris, Amsterdam or
Antwerp. This changed in the nineteenth century, especially during its second half”
(Osterhammel 2014: 737).
Capital movements began to acquire a truly global scale in the second half of the
nineteenth century (see Table 11.1). In 1820, international investment was very
small and mostly limited to the UK, the Netherlands, and France. However, after
1850, the necessary conditions and prerequisites for capital flows gradually formed
outside Europe as well, including special financial institutions both in borrowing and
lending countries, the accumulation of savings within the new middle class, and a
greater awareness of foreign investment opportunities.
The capital placed abroad usually took one of the following forms: (1) credits to
foreign governments; (2) loans to private individuals; (3) corporate stock and bonds
held by foreigners; or (4) direct investment by European firms in other countries,
often through branches and subsidiaries (Osterhammel 2014: 737).
The largest capital exporter of the late nineteenth and the early twentieth centuries
was Great Britain, “the world’s banker”at that time. The peak value of the British
share in global capital exports was enormous—80% (by comparison, the share of the
USA in global capital exports was 25% in 2000) (Obstfeld and Taylor 2004: 55). The
London capital market mobilized credit internationally and financed business activ-
ity far beyond the British Empire, attracting funds from around the world and
overseeing the issue of securities in many countries: “British capital was present
everywhere in the nineteenth century. It financed the Erie canal, the early railroads in
Argentina and Japan, and conflicts such as the war of 1846–1848 between the United
States and Mexico”(ibid.: 737).
British capital placed abroad as of 1914 is estimated to have been in the range of
£4.1–6.6 billion pounds ($20–33 billion)
1
(Twomey 2000: 42). Of this amount,
foreign direct investment accounted for less than one half, about 30% were loans to
governments and municipalities, and about 35% consisted of capital invested in
railways (ibid.). A similar distribution was observed in the export of French capital,
which ranked second in the world (but far behind the UK). More than a half of
French capital abroad was allotted to state and municipal loans, about 15% was
Table 11.1 The total
amount of capital placed
abroad, in billions of
current US dollars
1825 1855 1870 1900 1914
Great Britain 0.5 0.7 4.9 12.1 19.5
France 0.1 n.d. 2.5 5.2 8.6
Germany n.d. n.d. n.d. 4.8 6.7
The Netherlands 0.3 0.2 0.3 1.1 1.2
USA 0 0 0 0.5 2.5
Canada n.d. n.d. n.d. 0.1 0.2
Data source: Woodruff (1967: 150–159); n.d. ¼no data
1
Most estimates are closer to the lower end of this range.
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destined for the construction of railways, and about a third (same as in Britain) was
used by other private enterprises. The largest market for French capital was Russia,
about one-fifth of all French foreign investments was received by Latin America, and
only a tenth of it went to French colonies (ibid.: 47).
On the eve of the First World War, when Britain had lost its absolute industrial
superiority, its 50% share of total world capital invested abroad still made it the
largest foreign investor. It was followed by France and Germany, although their
shares were much lower. The USA was the largest importer of capital and did not
play a significant role in the export of capital (Obstfeld and Taylor 2004: 55).
Overall, in 1870, total capital placed abroad accounted for only 7% of world
GDP; but by 1900–1914, the zenith of the classic gold standard, this proportion rose
to 20%. This figure collapsed after the First World War, and only managed to regain
its pre-war level in the 1980s (ibid.: 55–56). Between 1900 and 1914, it was already
possible to trace quite clearly the structure of the emerging global network of capital
flows:
Though international finance developed in response to the needs of global trade and
communications, it would be misleading to think of the basic structure of capital flows as
a fully articulated network. They did not have the reciprocity of trade relations: capital was
not exchanged but transferred from core to periphery. The reverse flow from countries in
receipt of the credits and investments consisted not of loan capital but of profits, which
disappeared into the pockets of the financiers. It was thus a typically imperial constellation,
in which the asymmetry was plainly visible. The export of capital could be steered much
better than trade flows, for there were only a few control centers. ... Unlike trade, it
presupposed the creation of modern institutions such as banks, insurance companies, and
stock exchanges all around the world. (Osterhammel 2014: 737–738)
Not only was the network asymmetric in terms of donor-recipient structure, but
the distribution of capital among recipients was also extremely uneven, and “the
institutional structures of domestic capital markets ... ranged from primitive to
modern”(Davis and Gallman 2001: 4). For example, about a half of all British
capital invested abroad was directed to only four countries—the USA, Argentina,
Australia, and Canada (ibid.: 5).
Considering foreign investment (including foreign direct investment), the follow-
ing most significant recipients of such investment can be identified on a global scale:
in first place, the “settler”countries of North America (USA and Canada), Latin
America (Argentina, Chile), Africa (Union of South Africa), and Oceania
(Australia). In these countries, the volume of foreign investments in 1913 ranged
from $100 to $400 per capita. The second echelon of investment recipients (from
$25 to $75 per capita) included some Latin American countries, such as Brazil,
Mexico, Honduras, Peru, Jamaica, as well as the large states (including the European
colonies and protectorates) of the Middle East, such as Egypt, Algeria, and Turkey.
Finally, the third echelon with less than $25 (or in some cases less than $10 of
foreign investment per capita) included mostly East Asia—India, Indochina, China,
Thailand, Korea, and so on (see Table 11.2). It should be noted, however, that the
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absolute amount of foreign investment received by India and China was very large,
and per capita investment rates were comparably low because of their dense
populations, and not because of a lack of interest from investors.
When considering the amount of foreign investment in relation to economy size
(rather than the population of a country), the picture is somewhat different (see
Table 11.3), but, nevertheless, the top places remain occupied by settler economies.
As for the distribution of these investments, let us present two examples. In
Argentina, the bulk of foreign investment was distributed almost equally among
the public debt (about 30%), construction of railways (35%) (owned exclusively by
foreigners), and other sectors (about 35%); however, the volume of investment
received by various sectors subsumed under the latter category varied substantially
(Twomey 2000: 154–157). Another typical example is Turkey, where government
Table 11.2 Foreign investment per capita and direct foreign investment per capita in the recipients
of global capital, 1913–1914
Country
Foreign investment per
capita, current US dollars
Direct foreign investment per
capita, current US dollars
Canada 1913 385 73
Australia 1914 275 70
Argentina 1913 266 186
Union of South Africa 1913 202 140
Cuba 1913 175 147
Chile 1913 114 74
Egypt 1914 63 29
Brazil 1913 59 35
Malaysia 1914 58 45
Mexico 1910 54 46
Honduras 1913 50 13
Algeria 1914 48 15
Peru 1913 44 44
Turkey 1913 41 14
Jamaica 1913 31 13
Ghana 1911 29 24
Tunisia 1914 22 6
Venezuela 1913 17 10
Morocco 1914 13 4
Indonesia 1914 12 11
Colombia 1913 10 6
The Philippines 1914 10 9
Indochina 9 4
India 1911 7 2
Thailand 1914 6 2
China 1914 3 2
Korea 1914 2 1
Data source: Twomey (2000)
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loans used up the major part of foreign capital. As for foreign investment, about
two-thirds of all funds invested went to the construction of railways (ibid.: 150).
11.2 Global Trade Network and the First Modern Multinationals
11.2.1 The Expansion of Global Trade in the Nineteenth Century
An important role in the powerful rise of globalization in the nineteenth century was
played by the enormous growth in global trade.
Table 11.3 Foreign investment and direct foreign investment as a % of GDP in the recipients of
global capital, 1913–1914
Country
Foreign investment,
% of GDP
Foreign direct investment,
% of GDP
Argentina 1913 248 173
Union of South Africa 1913 235 163
Chile 1913 197 127
Peru 1913 168 168
Honduras 1913 156 42
Malaysia 1914 148 115
Canada 1913 146 23
Cuba 1913 138 116
Mexico 1910 119 101
Egypt 1914 105 48
Algeria 1914 103 32
Turkey 1913 98 34
Australia 1914 80 20
Ghana 1911 75 60
Brazil 1913 65 34
Jamaica 1913 59 25
The Philippines 1914 53 47
Indonesia 1914 51 47
Venezuela 1913 49 29
Morocco 1914 44 18
Tunisia 1914 43 11
Thailand 1914 40 15
India 1911 35 10
Colombia 1913 25 16
China 1914 24 16
Korea 1914 14 6
Data source: Twomey (2000)
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According to the estimates provided by Simon Kuznets (1967), in the early
nineteenth century the volume of global exports equaled just 1–2% of global
economic production. By 1850, this proportion had increased to 5%, and further
on to 10% by 1880. In 1880–1913, the growth of this indicator somewhat slowed
down, but still continued, reaching 12% by the First World War (Krugman 1995).
This means that, all in all, the proportion of global exports in global economic
production increased by an order of magnitude over the course of less than a century.
In absolute figures, the dynamics of the volume of global exports was even more
astonishing—it increased by nearly two orders of magnitude between 1800 and 1913
(see Fig. 11.1).
Such an impressive expansion was to a large extent made possible by revolution-
ary technologies in transportation, such as global networks of railways and seaways
used by trains and steamships (see Sect. 8.3). These global networks dramatically
lowered the cost of transporting goods and made long-distance trade in bulk mass
consumption goods and raw materials profitable. Other aspects of modernization
also encouraged the growth of international trade. Industrial production created
tremendous amounts of goods in certain countries, which could not possibly be
consumed by the domestic population and had to be exported.
Another factor behind the growth in trade in the nineteenth century was financial
modernization. New financial instruments coupled with technological innovations
facilitated the long-distance transfer of large payments for vast amounts of goods,
obtaining trade credits, providing insurance for trade operations, and so on. The
informational revolution, first and foremost the invention and global spread of the
telegraph (see Sect. 8.3), provided participants in the global trade network with an
opportunity to rapidly receive information about where the greatest profit could be
obtained from selling a certain product at a particular moment. Moreover, trade
0
50
100
150
200
250
300
350
1700 1750 1800 1850 1900 1950
Billions of dollars
Fig. 11.1 Global exports
dynamics, 1700–1913, in
billions of international 1990
dollars. Data sources: Kuznets
(1967), Krugman (1995),
Maddison (2010)
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growth was facilitated by global institutional changes, such as the triumph of free
trade in the mid-nineteenth century, which significantly lowered tariff barriers.
A role in the growth of global trade was also played by the Great Divergence of
the nineteenth century (see Sect. 6.3). Indeed, global industrial production became
concentrated in the World-System core (the countries of Western Europe and North
America). This contributed to the development of the global division of labor
between the industrially developed World-System core, which exported industrial
goods worldwide, and the periphery, which supplied core countries with raw
materials and agricultural products. Thus, a system of intense trade relations formed,
covering the whole globe.
11.2.2 The Structure of Global Trade Networks in the Nineteenth
Century
We possess sufficient data on country-to-country trade in the late nineteenth and
early twentieth centuries and so are able to reconstruct the general contours of the
global trade network at that time. Below we present three figures (Figs. 11.2,11.3,
and 11.4) that describe the network in 1896, 1901, and 1906 (graphs for each year
within the period from 1896 to 1906 are presented in Appendix B, Figs. B.1–B.11,
for a more detailed comparison). These figures reveal the deep transformations
experienced by the global trade network in the years prior to the First World War.
For each country we choose its main trading partner, a country with which the given
nation had the maximum trade volume (sum of exports and imports) in the given
year. After that we construct a graph where countries correspond to vertices, and
edges point towards their main trading partners. We use a type of force-directed
algorithm for drawing the graph, where the connection between the main trading
partners “attracts”vertices to each other, while unconnected vertices are pushed
away from each other (Fruchterman and Reingold 1991).
The area of a vertex is proportional to the total volume of trade of the given
country with all other countries in the given year. The thickness of the edge between
two vertices is proportional to the volume of trade between the two countries
designated by these vertices in that year. The color of the edge is the same as the
color of the vertex for which this edge indicates the main trading partner.
We use the same color for countries belonging to one region; different subregions
within one macro-region are designated by different shades of one color. For
example, we use green for Europe. Northern European countries are designated by
dark green, Southern Europe by light green, and so on. We use red for Africa, blue
for North and South America, yellow and brown for Asia, and purple for Australia
and Oceania. The vertices are named using the three-letter ISO code of country
names (see Appendix A).
The network of main trading partners accounts for 20–25% of total world trade.
We use grey lines to show the 1000 largest trade flows; together with the flows
between the main trading partners, they account for 83–90% of global trade.
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Let us briefly describe the graphs above. Figure 11.2 shows that the RUS
(¼Russia) circle is connected to the DEU (¼Germany) circle by a thick solid
line, and to FIN (¼Finland), AFG (¼Afghanistan), and IRN (¼Iran). This means
than in 1896, Russia’s main trading partner was Germany; in turn, Russia was the
main trading partner for Finland, Afghanistan, and Iran.
The greater the number of countries for which a given country is the main trading
partner, the bigger the role of the given country in the global trade network. When
viewed from this perspective, Fig. 11.2 clearly demonstrates that the World-System
core (Western Europe and, to a lesser extent, the USA) dominated the global trade
network. Within this core, Great Britain (GBR) was uncontested hegemon as
of 1896.
However, Figs. 11.3 and 11.4 reveal some rapid and profound changes in the
global trade network (and the World-System as a whole) in the late nineteenth and
early twentieth centuries. First of all, let us emphasize the impressive growth of the
Fig. 11.2 Global trade network of main partners in 1896. Data source: US Bureau of Statistics,
Department of Commerce and Labor (1909)
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US and German trade clusters, which are visible by 1901 and become even larger by
1906. Britain’s dominance was contested by two serious rivals—the USA, which
eventually became the global hegemon, and Germany, which later tried to bring its
geopolitical ambitions to fruition with the two World Wars.
11.2.3 The Emergence of Multinational Companies
Transborder economic interactions have long been one of the tenets of globalization,
first in the Afro-Eurasian space, and later in the global world. The nineteenth century
witnessed the emergence of a new major phenomenon in these interactions, namely
the modern multinational enterprise (MNE). From here on we use the definition of
MNE proposed by Mira Wilkins, who considers it as “afirm that extends itself over
borders to do business outside its headquarters country”(Wilkins 2005: 45).
Fig. 11.3 Global trade network of main partners in 1901. Data source: US Bureau of Statistics,
Department of Commerce and Labor (1909)
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Foreign direct investments in agriculture, mining, and manufacturing existed in
the world well before the Industrial Revolution. However, these investments were
most commonly made by bankers, traders, and individual entrepreneurs rather than
multinational companies. Such investors could boast neither vertical nor horizontal
transborder integration, and would generally not reach across borders for supplies,
manufacturing, and distribution of goods (ibid.: 48).
Many researchers suggest that the “pioneer”American-headquartered MNE was
Singer, the maker of sewing machines, founded in 1851 (Wilkins 1970:37–40;
Tugendhat 1973:12–13). By 1861, the company already had a network of foreign
agents in England, Scotland, Germany, Mexico, Canada, Cuba, Venezuela, Uruguay
and Peru, who sold Singer machines in those countries. After the end of the
American Civil War, in 1867 Singer established a manufacturing facility in the
UK in order to be closer to the European market. By 1874, the company was selling
more than a half of its sewing machines abroad. Singer had 26 offices in the UK by
Fig. 11.4 Global trade network of main partners in 1906. Data source: US Bureau of Statistics,
Department of Commerce and Labor (1909)
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1879, and more offices in France, Spain, Belgium, Italy, Switzerland, South Africa,
India, and New Zealand (Wilkins 1970:37–45, 2005:73).
By the 1880s (and even the 1870s) Singer was not alone in conducting its
business abroad. Many more American companies were taking steps to conquer
foreign markets, including “companies producing screws, harvesters, cash registers,
elevators, steam pumps, locomotives, locks, and guns. ... As American prices
declined in the 1870s and 1880s these goods became more competitive abroad”
(Wilkins 1970: 45). The beginning of the twentieth century also saw an internation-
alization in other spheres of American business, for example, car manufacturing, oil,
insurance. Let us analyze several examples in more detail.
The Ford Motor Company was created in June 1903; very early on an agent
company was founded in Canada, a promising nearby market. In 1904, a Ford
agency was established in London (Dassbach 1988: 53, 65–66). The year 1908
saw Ford’sfirst foreign branch office open in Great Britain, followed by the
construction of an assembly plant in Manchester with the aim of reducing shipping
costs for cars sold in Europe. In early 1913, a second assembly plant was opened in
Bordeaux, France; by this time, Ford was exporting its cars to the Far East and Africa
(ibid.: 68–70). Ford’s key innovation which changed global principles of production
was the introduction of a moving assembly line in 1913. For some of the most
important car parts, output per worker nearly trebled in the course of a single year,
while general worker productivity increased by 70% (ibid.: 75, 77; see also Moore
and Lewis 2000: 230). During the First World War, Ford’s non-military sales
decreased in Europe but went up in other parts of the world, especially in Latin
America, which led to the opening of a branch office in Argentina and agencies in
Chile, Brazil, Venezuela, and Uruguay by the end of 1914. New assembly plants
were established in Argentina (1916), Cuba (1922), Chile (1924), Japan (1924),
Mexico (1925/1926) (Dassbach 1988: 81, 90).
General Motors (GM) came into existence as a holding company in September
1908. As early as 1910 a separate company was formed to take charge of overseas
sales. Almost simultaneously GM acquired its first wholly owned foreign subsidiary
in England (ibid.: 118). GM’s foreign expansion resumed after the First World War;
its first plant on the European continent was established in 1923 in Denmark,
followed by another in Belgium in 1924, and some more plants in Argentina,
Spain, and Brazil in 1925 (ibid.: 142).
The largest companies in American insurance were also active abroad. For
example, New York Life Insurance Co first penetrated the Canadian market; in
1870, it began selling insurance in England, and in the course of a single decade
established its presence across Europe (France, Germany, Scotland, Belgium,
Ireland, Switzerland, Italy, Austria, and Russia) as well as many countries and
territories beyond it (the West Indies, Mexico, British Guiana, and Venezuela). In
the next decade, 40 more countries were added to this list, “from China to Peru, from
South Africa to Australia”(Wilkins 1970:64–65).
British firms conducting foreign operations can be classified into two major
groups, namely “free-standing”companies (the term introduced by Wilkins)—
companies registered in the UK but initially designed to do business in a certain
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country abroad—and companies that began their business in Britain, and later
expanded overseas (Wilkins 1988: 14). Free-standing companies were the most
common source of British FDI, taking part “in many different activities from rubber
in Malaya to copper mining in Russia, from cattle ranches in the United States to
nitrate mines in Chile, from railroads in Brazil to hotels in Egypt, from mortgage
companies in Australia to meat-packing in Argentine”(ibid.: 15). Companies of the
second type mostly concentrated on industry, services, and the production of
consumer goods (ibid.: 14).
According to John Stopford, out of the 100 largest British firms in 1970, 14 had
had extensive foreign operations in 1914 (Stopford 1974: 315–316). One of the
largest British MNEs, British American Tobacco, operated throughout the
Dominions (Australia, Canada) and the British Empire (India, Trinidad), in Europe
(Germany, Denmark) and far beyond (Japan, Korea, China, and Brazil) (ibid.: 316).
The case of Royal Dutch Shell is also notable, as its operations had a wide
geographic coverage, with business interests reaching as far as Russia, Indonesia,
Mexico, Romania, and Egypt (ibid.: 317). To name one of the early “purely British”
MNEs let us cite the example of Dunlop, a tire and rubber goods manufacturer,
which established manufacturing subsidiaries in France and Germany (1892), the
USA (1893), and Japan (1909) (Jones 1986: 97).
As regards Continental Europe, one of the leaders in the emergence of MNEs was
Germany. In contrast to their British counterparts, German multinationals frequently
engaged in “high-technology”production, especially in the electrical and chemical
industries (Wilkins 1988: 21). Siemens, established in 1847, made its first foreign
investment in the UK in 1858; a Russian subsidiary was established earlier, in 1855.
In the 1850s, Siemens laid telegraph cables in Russia, the Mediterranean and the
Near East, and in the 1860s from London to Calcutta. In 1883, it merged with the
German Edison Company of Emil Rathenau. Thus, the Allgemeine Elektrizitäts
Gesellschaft was born, which by 1900 had more than 120 offices, only one-third of
them in Germany (Moore and Lewis 2000: 245; Schroeter 1993a: 28). Bosch,
involved in the electro-technical and mechanical industry, had agencies and factories
in 25 countries, and 88% of its production was exported (Hertner 1986: 120). Merck,
the largest of the “purely”pharmaceutical companies in Germany before 1914, had
77% of its sales abroad in 1900–1901, being present in the markets of Russia, USA,
Latin America, Britain, Austria-Hungary, Spain, Portugal, and Italy (Hertner 1986:
115–116). Daimler, which founded a subsidiary in Austria in 1899, became the first
multinational motor company (Fridenson 1986: 157). Some German banks (espe-
cially Deutsche Bank) were also active abroad, not only in Europe but worldwide
(Wilkins 1988: 21). One should emphasize that the internationalization of business
was taking place not only among larger companies, but also among medium-sized
companies. For example, the machine-builder Orenstein & Koppel had production
facilities in the USA, France, Switzerland, Austria, the Netherlands, South Africa,
Russia, and Spain by 1913 (Schroeter 1993a: 31).
Other Western European countries also had MNEs, though not as numerous as
the three leaders described above (Great Britain, the USA, and Germany). Thus, the
largest Swiss MNE before the First World War was Nestlé, with several plants
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abroad. Royal Dutch of the Netherlands had a refinery in Germany and was involved
in the production of oil in Romania, Russia, the USA, Mexico, and Egypt (Schroeter
1993b: 54, 68). The Italian Fiat motor company created manufacturing branches in
Austria, the USA, and Russia (Fridenson 1986: 157). Before the First World War,
France was the global leader in world exports of motorcars; by 1914, Renault had
31 foreign agents (in Great Britain, the USA, Germany, Spain, Hungary, and Russia)
(ibid.: 157–158).
As for the rest of the world beyond the USA and Europe, it hosted few headquar-
ters of MNEs; this situation only changed in the later decades of the twentieth
century. However, a few cases of early MNEs can be found in Japan; their area of
influence was usually concentrated in East Asia (for example, Mitsui).
11.3 Global Migration Network
Migration was one of the main drivers of globalization even in ancient times—
moving from one territory to another, migrants transferred ideas, technologies, and
social and cultural patterns. Moreover, migration to new lands gradually expanded
the ecumene. In the nineteenth century, many migration processes acquired a
previously unimaginable scale. When taking into account the main types of migra-
tion specified by Lucassen and Lucassen (rural–urban migration, emigration, immi-
gration, seasonal migration, migration of soldiers and sailors, and colonization), it
turns out that the proportion of migrants in the European population almost doubled
during a century (from 17.4% in the second half of the eighteenth century to 30.8%
in the second half of the nineteenth century), while the absolute number of migrants
quadrupled during the same period (from 26.3 million to 100.4 million people)
(Lucassen and Lucassen 2011: 304). McKeown describes the global span of migra-
tion as follows:
by the 1850s, if not earlier, migrants from Africa, Europe, and western and eastern Asia were
meeting in places as distant as the Caribbean, Australia, and the steppes of Central Asia.
From the islands of Polynesia to the mountains of Norway, and from the Alaskan gold fields
to the Mekong Delta rice paddies, no part of the world was untouched by migration.
(McKeown 2011: 162)
Naturally, this phenomenon has attracted lots of attention from researchers.
Trying to explain the increase in migration, the classic work by Wilbur Zelinsky
suggests that migration transition (in other words, the transition from strictly limited
to widespread mobility) is an inherent part of social modernization and parallels the
demographic transition (Zelinsky 1971: 222). We agree with this idea in that the
intensification of migration is likely to be related to demographic transition (and,
accordingly, to the more general process of modernization). However, we also
partially agree with the critics of Zelinsky’s hypothesis, who state that the leap in
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migration observed in the nineteenth century (especially during its second half) was
not radically innovative in its essence (Lucassen and Lucassen 2009: 348). Rather, a
significant intensification of the previously ongoing migration took place due to a
simultaneous increase of “push”factors in donor countries and “pull”factors in
recipient countries, as well as a significant weakening of migration barriers (largely
facilitated by innovative technologies in transportation and communications).
In the next section, we will focus on two major processes that can be singled out
in the complex structure of migration flows in the late nineteenth and early twentieth
centuries. The first process is the transatlantic migration of the European population,
the largest flow within the global migration network at that time. The second is the
colonizing migration to the largest frontier territories remaining on Earth, which took
place in Russia (to Siberia), China (to Manchuria), and the USA (to the “Wild
West”).
11.3.1 Eurasian Migration to the New World
11.3.1.1 Quantitative Estimates
Between 1820 and 1930, 55–60 million Europeans migrated outside Europe; more
than one half of them (about 35.4 million) migrated between 1870 and 1915 (Nugent
1992:29–30). European transatlantic migration peaked in the first 15 years of the
twentieth century when approximately 1.0–1.5 million people left Europe annually
(Livi-Bacci 2012: 53). The total number of emigrants for the period from 1840 to
1932 is estimated at 18 million in Great Britain and Ireland, 11.1 million in Italy, 6.5
million in Spain and Portugal, 5.2 million in Austria-Hungary, 4.9 million in
Germany, 2.9 million in Poland and Russia, and 2.1 million in Sweden and Norway
(ibid.).
About 30% of Europeans emigrating between 1815 and 1914 are estimated to
have returned to their native region (Gould 1979: 609). However, this figure differed
for various donor and recipient countries. Between 1890 and 1914 the general level
of return migration from the USA reached 30%, but varied from nearly one half of
Italian and Spanish migrants to just 5% of Russian migrants. In other New World
countries, the levels of return migration were also high, reaching, for example, 47%
of the whole migration inflow in Argentina (Hatton and Williamson 1994: 5).
Emigration levels were also remarkably different in various European countries.
Thus, about three-quarters of all migrants that left Europe in 1815–1930 originated
from only six countries: 22% from Great Britain, 19% from Italy, 14% from Ireland,
9% from Germany, and 12% from Spain. These figures conceal remarkable
differences of emigration rates within donor countries. Thus, one-third of all the
French population emigrating between 1860 and 1930 originated from a single
province, where emigration rate exceeded 3.5 times the national level of emigration.
A similar situation was observed in Austria-Hungary—one half of all its emigrants
originated from Galicia, where the emigration rate exceeded the national level by
one order of magnitude (Baines 1994: 44).
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The list of main recipients of global migration flows was also rather limited. In
1820–1940, a total of 60 million people migrated to the Americas; 32–34 million of
these migrants went to the USA, six million to Argentina, five million
2
to Canada,
four million to Brazil, almost one million to Cuba, 700,000 to Chile, and nearly
700,000 to Uruguay (Gabaccia 2013: 67; Livi-Bacci 2012: 53). About 3.5 million
migrants traveled to Australia (Baines 1994: 44). The majority of immigrants to all
these countries were of European origin; only about three million people came from
India, China, Japan, and African countries (Gabaccia 2013: 67; McKeown 2004).
The structure of immigration flows to the USA, Canada, Argentina, Brazil, and
Australia in the late nineteenth and early twentieth centuries can be seen by country
of origin in Appendix C (Figs. C.1–C.36).
The largest migration recipient in the world at that time was the USA. Immigra-
tion there reached its peak between 1861 and 1920, when 30 million people entered
(all in all, about 54 million people migrated to the USA between 1820 and 1987)
(Castles et al. 2014: 90). The census of 1920 revealed that 13.9 million US residents
(13.2% of its total population) had been born outside the country (Briggs 1984: 77).
Immigration contributed not only to general population growth in the USA, but also
to a very pronounced increase in the working-age population: 76% of immigrants
entering the country between 1868 and 1910 were aged between 15 and
40 (O’Rourke and Williamson 2001: 123).
Canada is an interesting case. In the late nineteenth century, it was a major
recipient of migrants (from the Old World), but also a significant donor of migrants
(to the USA). In 1871–1881, Canada received about 353,000 migrants; in the next
decade, this number grew to 903,000. At the same time, 438,000 and 1,108,000
people emigrated from Canada during these two decades respectively (McInnis
1994: 139). In 1871–1880, the emigration rate in Canada was 109.3 per 1000
population, higher than in Ireland, where this indicator was the highest in Europe
(ibid.: 141).
The first wave of immigration to Brazil (after the country became independent)
lasted from the 1820s to the 1860s. Brazil’s major migration donors included
Germany, Italy, and Poland, as many people from these countries came to work at
Brazilian coffee plantations. The second wave of immigration to Brazil started in the
1870s. A total of 3.4 million migrants entered the country between 1870 and 1920,
860,000 out of whom returned to Europe or migrated from Brazil to other countries
(Hoerder 2002: 360).
Italy and Spain supplied the major part of migration inflows to Argentina. After
the politically and economically unstable decades of the 1860s–1870s, Argentinian
immigration peaked in the 1880s, especially during the economic boom of
1887–1889. This peak was also partially related to the migration-stimulating policies
of the Argentinian government (which offered to cover the costs of moving to
Argentina). About six million Europeans entered Argentina in 1869–1914, of
whom 2.7 million returned to Europe. The Argentinian population more than
2
Other sources estimate this figure to be closer to 7.2 million (Baines 1994: 44).
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quadrupled during this period, increasing from 1.7 million to 7.9 million. By 1914,
58% of Argentinians had been born abroad or were the children of first-generation
immigrants (ibid.: 359).
Australia was integrated into the economic system of the British Empire as a
supplier of important raw materials, such as wool, wheat, and gold. Great Britain
aspired to provide sufficient labor resources for Australia by forcefully moving there
British prisoners, as well as actively supporting free migration (during 1861–1900,
388,000 out of 767,000 British migrants to Australia received some form of state
support). At first, Britain encouraged Australian employers to seek labor resources
elsewhere, especially in India and China. However, white Australian settlers found
this policy contradictory to their own interests and became increasingly hostile
towards labor migrants from Asia (Castles et al. 2014: 92). Australian migration
policy became increasingly concentrated on attracting whites, while migration from
Asian countries was severely limited by various discriminatory laws. Migrants from
the Mediterranean countries and Eastern Europe were also considered to be “unde-
sirable”(Taylor 1994: 100).
11.3.1.2 Factors in Transatlantic Migration
Research on transatlantic migration shows that both intercountry variations and time
differences in migration rates in the late nineteenth and early twentieth centuries can
largely be explained through a surprisingly limited number of factors:
1. The donor-to-recipient wage ratio had a significant negative effect on migration.
2. Rates of natural population increase in the donor countries had a strong effect on
emigration rates (with a 20-year-long lag), as the classic work by Richard
Easterlin shows (Easterlin 1961).
3. Emigration grew as the proportion of the labor force employed in agriculture
decreased in the donor countries, although the effect of this factor was rather
weak (Hatton and Williamson 1994: 9; see also Livi-Bacci 2012: 49).
Let us now look at the first two factors in greater detail.
Donor-to-recipient wage ratio: In 1870, the wage level in the largest labor-
deficient New World countries (Argentina, Australia, Canada, and the USA) was
136% higher than that in Northern and Western Europe (including such countries as
Ireland, Great Britain, Denmark, Norway, Sweden, Germany, Belgium, the
Netherlands, France, Italy, and Spain). By 1895, the gap had fallen to 100%, and
to 87% by 1913, declining by 49% in 43 years (O’Rourke et al. 1994: 206–208).
Other research estimates the wage gap between the Old and New Worlds at 108% in
1870 and 85% in 1910. It is calculated that in the absence of migration, this gap
would not have declined during this period, but rather would have grown to 128%
(Taylor and Williamson 1997: 41).
Indeed, migration heavily contributed to the contraction of the wage gap between
particular countries of the Old and the New World. Thus, in the absence of migration
the gap between Ireland and the USA would have grown from 134% to 168%, while
in reality it decreased to 86%. The same gap between Italy and the USA would have
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increased from 342% to 374%, while migration actually helped to bring it down to
240% (ibid.: 39–42).
Natural population growth rates in the donor country: In Sect. 8.5 we showed
that Europe experienced a major demographic explosion caused by a decline in
mortality which outpaced a fall in fertility. Easterlin was among the first
researchers to suggest the influence of this factor upon nineteenth-century migra-
tion flows. He hypothesized the presence of a correlation between the migration
outflow rates in European countries over 10-year periods from 1861 to 1910 and
natural population increase rates in these countries (with a 20-year time lag). The
hypothesis was based on the assumption that high natural population growth in
specific years would result in a surge in young labor force entering the labor market
some 20 years later. This surge would in turn result in lowering wages, difficulties
finding employment etc., and, as a consequence, in higher emigration rates. On the
contrary, lower rates of natural population increase would result in lower emigra-
tion rates (with the same 20-year time lag). Empirical tests have supported this
hypothesis (Easterlin 1961).
Apart from these two important factors, one has to keep in mind the role of
innovative technologies in transportation and communications, without which
migration would not have been possible on such a scale even with all the demo-
graphic pressure in Europe and labor deficiency in the New World. Indeed, the
invention and mass spread of steamships made trips to the Americas much easier,
cheaper, and shorter; while in the early eighteenth century a trip from Liverpool to
New York took 5–6 weeks, by the 1880s this had fallen to just 1 week (Livi-Bacci
2012:50–51).
A significant role was also played by migration-stimulating policies in the New
World. Thus, according to the Homestead Act of 1862, all household heads who
were citizens of the USA or had applied for citizenship could receive 160 acres of
land for free in the western parts of the country for farming activities (the only charge
incurred was a $10 registration fee). In 1873, Argentina introduced a set of policies
aimed at attracting new immigrants, including employment offices for immigrants,
partial subsidies of travel costs within the country, and free lodging for migrants
arriving in the Port of Buenos Aires. In 1888, Brazil began subsidizing the cost of
transatlantic trips for its migrants and helped them to obtain land in certain regions of
the country (ibid.: 51–52).
11.3.1.3 Limitations to Migration
In the 1850s and 1860s, migration flows were truly global, as interregional and
intercontinental migration actively involved not only Europeans, but also the
populations of various parts of Asia. Almost 40% of Chinese migrants and 20% of
Indian migrants moved to destinations outside Asia during this period. However,
later on, the situation experienced some radical changes:
Even as global trade and migration intensified in the late nineteenth and early twentieth
centuries, and even as the organization and cycles of migration grew increasingly similar
around the world, the patterns and destinations became increasingly segregated. More
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Africans moved only to Africa, Indians and southern Chinese to Southeast Asia, and
Japanese, Koreans, and north Chinese to northeast Asia. Only the Europeans retained
much of their earlier globe-spanning mobility, although the great bulk still moved to the
Americas. Global integration grew hand in hand with the globalization of borders. These
included not only the national borders that were increasingly sites of regulation and
migration control, but also those macro-borders between East and West, civilized and
uncivilized, First and Third Worlds, or white, black and yellow races that, while much
less concrete than the national borders have had even more potent effects on the social and
cultural organization of the world. (McKeown 2011: 163)
Starting from the 1880s many of the largest recipients of international migration
introduced severe limitations on Asian migrants. In 1882, the US government
adopted the Chinese Exclusion Act that completely prohibited immigration from
China, as well as the naturalization of Chinese who were already living in the USA.
Canada passed the first anti-Chinese immigration act in 1885. This obliged Chinese
migrants to pay $50 tax; by 1903, this sum had increased to $500, which made
migration to Canada virtually impossible for Chinese. In Queensland (Australia) the
naturalization of migrants from Asia and Africa was legally prohibited as early as
1865. A law of 1903 expanded this ban to the whole territory of Australia. Somewhat
later, similar limitations were adopted in Latin American countries. By the early
twentieth century, less than 5% of Chinese migrants and less than 1% of Indian
migrants moved outside Asia (Hoerder 2002: 401–402; McKeown 2013:82–83).
European migrants seem to have had a much wider spectrum of possible migra-
tion destinations than their Asian counterparts. However, European migration flows
were also very unevenly distributed among the most popular destinations. Thus,
Europeans migrating to Latin America mostly originated from the Mediterranean
countries. In 1850–1924, almost three-quarters of all Latin American immigration
came from just three countries: 38% from Italy, 28% from Spain, and 11% from
Portugal. Besides, almost 80% of all migration flows to Latin America headed for
just two countries, Argentina and Brazil (Hoerder 2002: 357). Taylor states that:
[W]e cannot truly speak of “the international labor market”of the late nineteenth century. In
reality, global migration dynamics were characterized by a multiplicity of different streams,
from a range of Old World countries to the various frontiers in the New World. There were,
in effect, multiple international labor markets, as these migrant streams divided on racial,
national and cultural lines, and this market segmentation had significant implications for the
sending and receiving regions. (Taylor 1994: 110)
Thus, we can only speak of the late nineteenth-century global migration network
and global labor market with some conditionality. Although migration flows (when
taken together) formed a network of a truly global scale, the level of “globality,”the
rate of involvement in this network, and the structure of relations therein varied
greatly for different countries (and even different locations within one single
country).
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11.3.2 Colonization of Frontiers
The colonization of new territories formed the basis of the cyclic expansion of the
World-System. The main breakthroughs in this sphere were achieved in the early
modern period when the population of the Afro-Eurasian world-system discovered
and colonized large new territories. The nineteenth century was marked by the
colonization of several vast frontier zones, which were found in the Old World
(Siberia, Manchuria) and in the New World (the Wild West of the USA, some
regions of Canada, and pampa regions in some Latin American countries). Below we
will look at three illuminating examples of nineteenth-century colonization, which
took place in Russia, China, and the USA.
11.3.2.1 Russia
Purposeful colonization of the sparsely populated frontier territories of the Russian
Empire first emerged as an aim of state policy during the reign of Catherine the
Great. Until the last decades of the eighteenth century, this process was largely
spontaneous (Sunderland 2014:55–70). During the seventeenth and eighteenth
centuries, it was mainly the European steppe zones up to the Black and Caspian
Seas that were being colonized and populated. Newly arrived settlers were
encouraged by the idea of farming on the rich black soils of these territories (Kessler
2014: 81). As regards Siberia, mass migration of peasants to its various parts only
really took off in the nineteenth century and intensified in the 1880s due to the
appearance of sufficiently long railways and the launch of centralized state policies
aimed at populating Siberia (ibid.: 82).
Estimates for the number of migrants to Siberia in the nineteenth century some-
what differ in details, but are in general agreement with each other. Thus, the number
of adult males who officially moved to Siberia, the northern regions of Russia, and
the Kazakh steppes between 1678 and 1915 is put at about five million, 3.5 million
of them migrating in less than two decades between 1897 and 1915 (Mironov 2000:
19). According to other estimates, 5.7 million of settlers and exiles moved to Siberia
in 1800–1914 with an “additional”700,000 unregistered migrants, the total number
thus equaling 6.4 million. Other sources provide a somewhat higher figure of seven
million Russian migrants crossing the Urals during the last century of the Tsarist
regime (Treadgold 1957: 13, 33). In 1801–1850, only 375,000 migrants arrived in
Siberia; in 1851–1890, this number increased to 1.1 million, and in 1891–1914
surged to 4.2 million of registered and 700,000 unregistered migrants (Hoerder
2002: 319; Treadgold 1957).
Though general laws regulating migration to Siberia did not appear before the
1880s, some legal provisions in this sphere had existed earlier. Alexander I signed a
decree in 1822 granting all state peasants the right to move to Siberia (under certain
conditions). In 1843, some stimulative measures were introduced for state peasants
coming from particularly land-poor villages. Peasants migrating to Siberia were
entitled to 35 desyatinas (one desyatina ¼1.09 ha) of land per family, as well as
financial support and freedom from all duties, including military duty. While this law
was in force (until the early 1860s) about 350,000 peasants moved to Siberia
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(Treadgold 1957:27–29). In the 1860s, the government began to encourage migra-
tion to the Amurskaya and Primorskaya regions (Okladnikov 1968:25–26).
In the second half of the nineteenth century, migration to Siberia was heavily
influenced by the emancipation of serfs in 1861 (ibid.: 20). After the reform was
passed, the government ceased to obstruct the spontaneous migration of peasants.
However, a true revolution in the state’s view on the colonization of Siberia took
place in the 1880s, when the government turned to actively supporting this process.
Such a change was brought about by the rivalry of the world powers for influence in
the Far East, as well as by the fact that Siberia became Russia’s most important
supplier of bread (Vinokurov 1996: 39). New state priorities in settlement policy
were reflected in a law adopted in 1889. According to this law, state lands in a
number of Siberian regions were to be given to settlers for perpetual use, and settlers
were eligible for certain exemptions from duties and taxes.
A crucially important step in supporting new settlers was taken with the decision
in March 1891 to construct the Trans-Siberian Railway. Construction started in the
same year from the two ends (Chelyabinsk and Vladivostok) simultaneously. By
1917, the railway was 8281 km in length (not taking into account the 1507 km of the
Chinese Eastern Railway running through Manchuria). Already in 1896, when only
some parts of the railway were functioning, it transported more than 150,000 tons of
cargo and 500,000 passengers (Shostak and Nefedov 2008:71–81, 92; Vinokurov
1996: 41). Both government support and the actual settlement process intensified in
the early twentieth century:
A ten-year-long period from 1905 to 1915 was characterized by unprecedented settlement
activity. The whole settlement policy of this period was based on the principle declared by
Petr Stolypin—“To move freely and to settle firmly”. A law on the freedom of moving was
passed at that time. For all those willing to migrate to Siberia preferential railway tariffs were
introduced, which greatly decreased the price of moving to the new place of living. Further
on, as the wave of settlers increased, special trains for settlers were organized.
In the whole of Siberia large settlers’stations with free food and medical services were
organized along the passage of the main flow of settlers, from Chelyabinsk and
Novonikolaevsk further on to Irkutsk and Sretensk. To the regions distant from the Trans-
Siberian railway the newcomers were taken by steamers along the rivers.
Land management works were constantly carried out with the aim to find new agricultural
lands and to settle newly-coming migrants on them. ... Settlers’reference books listing all
the information necessary for the newcomers were massively published and spread free of
charge.
New schools, churches, hospitals were built on the newly cultivated lands at the expense of
public funds of the Resettlement Administration. ... Agronomic departments with experi-
mental stations and fields were created. Settlers received loans on preferential conditions.
(Vinokurov 1996:47–48)
Intensive migration contributed heavily to a spectacular increase in the Siberian
population, from 7.6 million in 1900 to 12.6 million in 1912 (ibid.: 53).
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11.3.2.2 China
Colonization was the most widespread type of migration among the Chinese popu-
lation during the Qing dynasty. At least 12 million people moved to frontier zones
near the Chinese borders between 1680 and 1850; several millions more migrated to
the mountainous regions of Inner China (McKeown 2014: 284). The colonization of
frontier zones significantly intensified in the last decades of the nineteenth century.
From 1891 till the end of the First World War about 25 million migrants left
Northern China for Manchuria (Umeno 2014: 307). About 16.7 million migrants
(nearly two-thirds of the whole migration flow) returned to China (see Fig. 11.5).
The majority of Chinese moving to Manchuria were not settlers but rather labor
migrants who opted to work in mines, factories, and agriculture for a season or
several years. However, in the earlier nineteenth century, the proportion of settlers
seems to have increased in the migration flow to Manchuria (ibid.: 309). The
dynamics of Chinese migration to Manchuria and return migration is presented in
Fig. 11.5.
Chinese migration to Manchuria reached its peaks during the first wave of
Manchurian railway construction (1900–1903); after the fall of the Qing and the
revolution of 1911; during the outbreaks of famine in Shandong and Hebei provinces
(1927–1929); and during the industrialization of Manchukuo (1939–1942). The
peaks or return migration coincided with the biggest conflicts in Manchuria
(Reardon-Anderson 2005: 98).
Economic hardships and sociopolitical instability in China (which was particu-
larly acute in its northern provinces) were among the main “push”factors. In the
mid-nineteenth century, several major rebellions broke out, the largest of which, the
Taiping Rebellion, lasted for more than 14 years with a death toll exceeding
118 million lives (Malkov et al. 2012; Gray 1990; Heath 1994; Spence 1996).
These rebellions destroyed the Chinese system of interregional financial transfers
(wherein the richer provinces in the lower reaches of the Yangtze transferred a part
0
200
400
600
800
1000
1200
1400
1600
1890 1900 1910 1920 1930 1940 1950
MigraƟon from China to Manchuria
Return migraƟon from Manchuria to China
Fig. 11.5 The number of migrants leaving China for Manchuria and the number of return
migrants, in thousands, 1891–1942. Data source: Gottschang and Lary (2000: 169)
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of their income to the poorer northern provinces, including frontier regions), striking
hard at the standard of living of the population in Jilin and Heilongjiang (Reardon-
Anderson 2005:72–73). The collapse of the Qing dynasty and subsequent surge of
sociopolitical instability also encouraged many Chinese to move to Manchuria
(Umeno 2014: 320).
Chinese state policy regarding the settlement of the northeastern frontiers experi-
enced profound changes due to the rebellions and the Opium Wars. First of all, the
state had to discover new sources of income in order to cover sizeable expenses.
These sources included the sale and taxation of lands in Manchuria. Second, the
government recognized the necessity of strengthening its borders and frontier
regions, first and foremost by increasing the number of Chinese population in
those regions (Reardon-Anderson 2005: 71). As a result, a special state program
was launched, based on the I min shih pien principle (strengthening the near-border
zones by settling them with Chinese people) (Lee 1970: 127; Reardon-Anderson
2005: 71). For this program, the province of Heilongjiang, for example, carried out a
survey of virgin lands, dividing them into parcels of six square li; each new
settlement village was granted one parcel of land (Lee 1970: 129). During the last
decade of the Qing dynasty, frontier settling intensified; vast amounts of land were
registered and sold to settlers. All in all, in less than a century from 1820 to 1910, the
population of Jilin Province grew by almost an order of magnitude, while cultivated
lands increased by almost 25 times. Similar dynamics were observed in
Heilongjiang, where the population and cultivated lands increased by 11 and
14 times respectively (Reardon-Anderson 2005: 79, 82).
11.3.2.3 The USA
By the early nineteenth century, the most populated parts of the USA constituted a
triangle with its base lying along the Atlantic Coast and its vertex at the confluence of
the Ohio and Mississippi Rivers. During the second quarter of the century, new
settlers came to occupy the territories to the north and the south of this triangle. By
1850, the eastern part of the continent was largely populated (Billington and Ridge
1982: 289). The second quarter of the nineteenth century saw Texas and Oregon
being colonized. Their populations increased—for example, Texas was home to
142,000 people when it became part of the USA (1845) and as many as 212,000
people by 1850 (ibid.: 449).
During the American Civil War, US farmers were moving rapidly through the
prairies towards the Great Plains. While in 1860 the outer border of civilization in the
mid-West passed northwest of Iowa, western Minnesota, and northern parts of
Wisconsin and Michigan, in just one decade it moved to the edge of the Great
Plains, passing Kansas, Nebraska, and North and South Dakota (Merk 1978: 431).
During the three decades following the end of the Civil War, more and more
migrants crossed the Mississippi, moving towards the west. The first wave of
migrants consisted mainly of miners, who “carried their rough brand of civilization
into the mountainous regions of Colorado and Nevada, across the deserts of Arizona,
over the inland empire of Oregon, Washington, and Idaho, and through the wilds of
Montana to the domed Black Hills of South Dakota. They found a fortune in gold
11.3 Global Migration Network 219
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and silver, and left behind ghost towns and a partly settled country”(Billington and
Ridge 1982: 555). The rapid westward movement of miners worried the govern-
ment, as their island-like settlements far from the civilization of the East Coast could
concentrate instability and become threatening to the security of the rest of the
US. Partly with these considerations in mind, and partly under the pressure of the
proponents of the country’s westward expansion, Congress subsidized a number of
stagecoach lines, telegraph and railway companies so that they would develop
westward, starting in the mid-1850s. The development of transportation and
communications made it possible to open up vast western territories for mass
settlement (ibid.: 573).
The movement of farmers across the Great Plains was previously slowed down
due to the unsuitability of the arid climate and new types of soils to the ways of
agriculture widely accepted in the humid eastern states. However, an obstacle for
farmers turned into an opportunity for ranchers. A large cattle industry emerged in
southern Texas and spread to the Great Plains and further on to Arizona and New
Mexico (ibid.: 611, 620–624).
Gradually, technological development made it possible to adapt the natural
conditions of the Great Plains for farming. One of the biggest obstacles to farming
in this area was a lack of water, both in the form of water sources suitable for human
use and in the form of precipitation necessary for plants. This problem was largely
solved by the “dry farming”technique. Another prominent problem—that of creat-
ing fences for large parcels of land—was solved with the invention of barbed wire,
which was much cheaper than wooden fences (ibid.: 630–633). Of course, a major
contribution to the development of farming in this region was made by the improve-
ment of agricultural machines. These machines became popular after the Civil War
that exacerbated the deficit of labor. Growing prices for American bread stimulated
farmers to introduce mechanization in order to increase production. The new
machines made it possible for farmers to cultivate significantly larger parcels of
land, which compensated for lower yields per acre as compared to the eastern states
(Merk 1978: 433; Billington and Ridge 1982: 630–636). Thus, the Industrial
Revolution set farmers free from a previous limitation on planting no more than
they would be able to collect in a very short period (about 10 days) when wheat was
at its ripest. Before the Revolution started, a farmer could only plant about 7.5 acres
of wheat; by 1890, this amount rocketed to about 135 acres (Billington and Ridge
1982: 636).
An important role in settling the Wild West was played by legal initiatives. In
1862, the USA adopted the Homestead Act, according to which each US citizen who
did not participate in the Civil War against the North and each new settler who had
applied for citizenship could receive 160 acres of land for free for farming in the
western territories (only a registration fee of $10 was required) (Merk 1978: 433).
Another important factor, which made the settlement of the west possible, was the
construction of railroads, which already formed a rather dense network by 1860. Not
only were railway companies interested in creating new settlements (which would
increase passenger and cargo traffic), but they also sold land themselves. These
companies were referred to as “macro-colonizers”of the Great Plains; they
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frequently had agents in European countries whose task was to advertise the benefits
of moving to the western territories of the USA and to help those Europeans who
decide to move (ibid.: 433, 472).
As many obstacles to migration were removed and additional stimuli were
created, millions of farmers rushed to the Great Plains in 1870–1890. During the
last three decades of the nineteenth century, more land was brought under cultivation
than during the whole previous history of the USA. While 407 million acres were
occupied and 189 million acres improved during 1607–1870, in 1870–1900, the
corresponding figures were 430 million and 225 million respectively (Billington and
Ridge 1982: 644).
11.4 Conclusion
The global networks of the late nineteenth and early twentieth centuries
encompassed previously unimaginable amounts of capital and goods, as well as
enormous numbers of people. The figures might seem unimpressive in comparison
to the late twentieth century. However, for the period prior to the First World War
they were all-time historical records. Mass migration, global trade, and foreign
investment in the late nineteenth and early twentieth centuries were, without a
doubt, among the greatest manifestations of globalization, and at the same time
important drivers of globalization processes. The “golden epoch”of globalization
abruptly ended with the beginning of the First World War and only partially renewed
after it ended. It took several decades for some indicators of global connectivity to
get back to the levels seen in the early twentieth century. Humanity was entering a
new period in the history of globalization.
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