International trade, migration and globalised finance are the ingredients of a cocktail named globalisation, the recipe of which we haven’t yet mastered and the taste of which we may, if we’re not careful, find bitter.

Economic globalisation is highly controversial – even more so since the recent global economic crisis. “Pro-globalists” and “anti-globalists” (also known as “alter-globalists”) have hotly debated the issue for a good twenty years. Most of this planet’s inhabitants experience some of the considerable benefits and also the tragic downside of globalisation in their daily lives. It is essential to trace the history of this complex phenomenon and the various forms it takes if we want to tackle the challenges it brings in its wake.

Economic globalisation in the broadest sense is as ancient as commercial trade. It resulted from a combination of dynamic merchants seeking new markets outside their own borders, improved transportation and communication techniques, and political desire to foster foreign trade – all of which occurred to different degrees at different points in time over the centuries.

Despite rivalries between ideological blocs, international trade recovered spectacularly in the post-war era. Western trade liberalisation occurred in a multilateral context which, combined with advances in transportation and communication modes, created an ecosystem favourable to increasingly intertwoven economies. This ecosystem allowed companies to develop their activities beyond borders. Multinationals were very important in helping to shape the face of globalisation.

There was an unprecedented integration of world economies in the 1990s under the combined infl uence of the opening of Communist Bloc countries to the market economy and the ICT revolution. Goods and capital, with a few exceptions, underwent massive globalisation. Services and workers experienced more limited globalisation, despite growth in some areas.

Globalisation first promoted the development of industrialised countries, then, in the past 20 years, that of emerging countries. While some developing countries are following in their footsteps, others have become marginalised or weakened by opening to international markets. Extreme global poverty has diminished, but is still ingrained in certain regions. In many countries, inequalities have deepened. Globalisation can only promote development if certain political conditions are combined.

Even though competition from low-wage countries has some negative effects on employment in OECD countries, the link between globalisation and job losses is less obvious than it first appears. In times of economic shock such as the recent recession, globalisation seems to create more jobs overall than it destroys. Likewise, the total increase in wage inequality of the past two decades seems more linked to technology and legislation than globalisation – which does nevertheless undeniably contribute to increased job insecurity in some cases. The challenge is to help the losers of globalisation stay in the race and seize the new opportunities offered by openness to international trade.

Globalisation helped accentuate the major environmental damages we’re experiencing today, even though it’s only indirectly responsible. Some national, regional and international policies have attenuated the negative effects of globalisation on the environment. Some solutions can also be found in the mechanisms of globalisation itself. But while vital, political regulations and incentives are still lacking compared to the breadth and urgency of the challenges ahead.

The 2007-08 financial crisis affected many countries simultaneously and led to a global economic crisis unseen since the Great Depression. It was triggered by a proliferation of financial products linked to risky mortgage loans. The crisis seriously called into question financial globalisation, which to a certain extent amplified risks linked to banking activities and financial markets and brought about financial imbalances among leading economic powers. The question of what rules should apply to global financial activity is crucial in channelling the risks inherent to globalisation.