How did globalization change the world in the early 1990s?

"Globalization" is a process that has been going on for a long time---there has been international trade for as long as there have been nations, and we've found coins from Ancient Rome in China.

But the process of globalization accelerated in the 1990s, largely because of the fall of the Soviet Union. During the Cold War there was resistance to globalization of capitalist markets by the United States due to the counter-pressure of globalized communism led by the Soviet Union; once communism fell apart, the US attained economic and military hegemony, and there was a lot less holding back capitalism from spreading around the world.

What does it actually mean to spread globalized capitalism? Mainly it means that more and more countries were opened up to international trade and investment; where previously tariffs and regulations had kept businesses tied to their own countries, under a globalized regime businesses are much freer to move between countries and set up production and distribution wherever they see fit. In theory this should allow them to produce goods in the most efficient places; in practice it's more complicated than that, but the general trend is still toward improved efficiency and greater economic growth, particularly in the very poorest countries.

Because globalization was led by US hegemony, the language and culture of the US have been spreading around the world. More and more people around the world are speaking English and trying to organize their societies around democracy and free markets.

The consequences of globalization have been enormous, and while it was not uniformly beneficial, the costs have clearly been outweighed by the benefits. Global poverty is now at the lowest level ever measured, as is the death rate due to warfare. These two facts alone are sufficient justification for globalization.

The more rapid shifting of products and businesses across borders may increase economic insecurity, making people's jobs and lives more precarious; but then again most people's jobs and lives were already fairly precarious, and the surge in economic growth due to globalization could actually reduce economic insecurity for most people. A more likely cause of insecurity due to globalization is financial markets, the underregulation of which has triggered a large number of financial crises around the world. The interconnected nature of global financial markets spreads the risk, so the impact on any individual country may be less but the impact on the world as a whole is greater. But this is not a reason to disconnect countries from the global financial market; it's a reason to better regulate the global financial market so that crises don't occur as often and aren't as harmful when they do.

Another potential downside of globalization is the expanded power of multinational corporations, which sometimes engage in "regulatory arbitrage", moving their business from country to country to evade regulations such as labor standards and pollution limits. We need more international cooperation among regulators to ensure this can't happen.

It's often said that globalization is "inevitable", but that isn't true. We could easily reverse the direction of globalization just by establishing a whole bunch of huge trade barriers in major economies such as the US, Europe, and China. What is true is that globalization is worth it; the upsides are much bigger than the downsides. Economists around the world of whatever political views are in almost complete agreement on this point, and we're honestly a bit baffled that most people don't seem to appreciate that.