The Great Convergence and Globalization: How Former Colonies Became the World Economic Locomotives

Abstract

Quite paradoxically, retrospectively one can trace the beginning of the process of the Great Convergence already in the nineteenth century when the European and Western domination seemed to have become overwhelming. The main reason of such a change was the necessity to support the Western industrial output and export of goods. However, this change caused a demand for the increase of the export of capital and technologies to the non-European countries. As a result, these encouraged both the growth of national movements for political and economic independence and the rise of a stratum of entrepreneurs with new business ethics. In the late nineteenth and early twentieth centuries, the increasing export of British and European capital also marked the start of the formation of the contemporary World System. The chapter traces the development of a number of colonial and dependent countries, the impacts of the two world wars on this process, as well as the collapse of the colonial system. The authors describe in detail the various factors that contributed to the process of convergence.If the task was to define the most important reason (or rather a set of reasons) then, in the authors’ opinion, it would consist of the fact that the process of the growing connectedness of different countries aimed at supporting further innovative development sooner or later would demand equalization (at least to a certain level) of the developmental levels of different regions of the world. One can call this a “law of communicative vessels” in the global economy. Up to a certain moment this law did not work to its full extent as there were some social and cultural, and technological and political impediments required for its implementation. The authors also offer a detailed analysis of the development of views on this convergence and explain why Western economists actually overlooked it.