  We study the combined effects of relaxation, tidal heating and binary heating
on globular cluster evolution, exploring the physical consequences of external
effects and examining evolutionary trends in the Milky Way population. Our
analysis demonstrates that heating on circular and low-eccentricity orbits can
dominate cluster evolution. The results also predict rapid evolution on
eccentric orbits either due to strong relaxation caused by the high densities
needed for tidal limitation or due to efficient bulge shocking of low density
clusters.
  The combination of effects leads to strong evolution of the population as a
whole. For example, within the solar circle, tidally-limited 10^5 M_sun
clusters lose at least 40% of their mass in 10 Gyr. At high eccentricity most
of these clusters evaporate completely. Bulge shocking disrupts clusters within
40 kpc which have less than 80% of their mass within their pericentric inner
Lagrange point. Our results are consistent with suggestions that the shape of
the cluster luminosity function results from evaporation and disruption of low
mass clusters; they further predict that the net velocity dispersion of the
cluster system in the inner Galaxy has decreased with time. Preliminary
constraints on formation models are also discussed. We conclude that the
observed cluster system has largely been shaped by dynamical selection.
