CLASS
10 HISTORY, CHAPTER 3
THE MAKING OF A GLOBAL WORLD
(THE
PRE – MODERN WORLD)
Globalisation:-
Globalisation is generally
associated with economy as the free movement of capital, goods, technology,
ideas and people across the globe. Globalisation in a broader sense also
includes cultural exchanges between different countries of the world.
Ancient times :-
·
Travellers, traders, priests and pilgrims
travelled vast distances for knowledge, opportunity and spiritual fulfilment,
or to escape persecution.
·
They carried goods, money, values, skills,
ideas, in- ventions, and even germs and diseases.
·
As early as 3000 BCE an active coastal
trade linked the Indus valley civilisations with present-day West Asia.
·
Silk route linked China with West.
·
Food travels from America to Europe to
Asia.
·
Noodles travels from China to Itly and
became Spaghetti.
·
European conquerors carried germs of
smallpox in America. Once introduced, it spread deep into the continent.
Silk routes :-
·
The Silk Route was a historic trade route
that dated from the second century B.C. The ‘silk routes’ points to the
importance of West-bound Chinese silk cargoes along this route. until the 14th
century A.D.
·
It stretched from Asia to the
Mediterranean, traversing China, India, Persia, Arabia, Greece, and Italy .It
was dubbed the Silk Route because of the heavy silk trading that took place
during that period.
Food Travels: Spaghetti
and Potato :-
Traders and travellers
introduced new crops to the lands that they travelled.
Spaghetti :- Noodles
travelled west from China to become spaghetti. Or, perhaps Arab traders took
pasta to fifth-century Sicily, an island now in italy
Food Many of our common
foods such as potatoes, soya, groundnuts, maize, tomatoes, chillies, sweet
potatoes, and so on were not known to our ancestors until about five centuries
ago.
Potato :-
Europe’s poor began better and live longer with introduction the humble
Potato.
Ireland’s poorest peasants
became so dependent on potatoes that when disease destroyed the potato crop in
the mid-1840s, hundreds of thousands died of starvation.
Conquest, Disease and
Trade :-
·
America’s Discover and Precious Metals
·
European sailors found a sea route to Asia
and also successfully crossed the western ocean to America.
·
Before its ‘discovery’, America had been
cut off from regular contact with the rest of the world for millions of years.
·
Precious metals, particularly silver, from
mines located in present day Peru and Mexico also enhanced Europe’s wealth and
financed its trade with Asia.
·
Use of smallpox germs by conquerors (for
victory)
·
The Portuguese and Spanish conquest and
Colonisation of America was decisively underway by the mid- sixteenth century.
·
The most powerful weapon of the Spanish
conquerors was the germs such as those of smallpox that they carried on their
person.
·
Due to their long isolation, America’s
original inhabitants had no immunity against these diseases that came from
Europe. Smallpox, in particular proved to be fatal.
Problems in europe :-
·
Until the 19th century, poverty and hunger
were common in Europe. Cities were crowded and deadly diseases were
widespread.
·
India and China till the eighteenth century
:-
·
In the 18th century, China and India were
among the world’s richest countries. They were also pre-eminent in Asian trade.
·
However, from the 15th century, China is
said to have restricted overseas contacts and retreated into isolation.
·
China’s reduced role and the rising
importance of the America gradually moved the centre of world trade
Westwards.
·
Europe now emerged as the centre of world
trade.
The Nineteenth Century
(1815-1914)
The Nineteenth Century :-
Economic, political,
social, cultural and technological factors interacted in complex ways to
transform societies and reshape external relations.
Economists identify three
types of movement or ‘flows’ within International Economic Exchanges.
The flow of Trade :-
Trade in goods such as grain and cloth.
The flow of Labour :-
Migration of people to new areas in search of work.
The Movement of capital :-
Investment of capital for a short and long period in far off areas.
Let’s look at the UK
economy to understand all three.
A World Economy Takes
Shape :-
·
Due to increase in population from the late
18th century, the demand for food grains in Britain had increased.
·
Since, there was pressure from landed
groups, the government also restricted the import of corn.
·
The laws allowing the government to do this
were commonly known as the ‘Corn Laws’.
·
Railways were needed to link the
agricultural regions to the ports.
·
New harbours had to be built and people had
to settle on the lands which meant building homes and settlements.
·
All these activities in turn required
capital and labour. Capital flowed from financial centres such as London.
·
The demand for labour in places where
labour was in short supply-as in America and Australia, led to more
migration.
·
By 1890, Global Agricultural Economy had
taken shape.
Corn Law :-
The laws allowing the
government (U.K.) to restrict the import of corn were commonly known as the Corn
Laws.
Role of Technology :-
·
The railways, steamships, the telegraph
were important inventions without which we cannot imagine the transformed
nineteenth-century world.
·
Colonisation stimulated new investments and
improvements in transport.
·
1870s, animals were shipped live from
America to Europe and then slaughtered when they arrived there.
·
Better living conditions promoted social
peace within the country and support for imperialism abroad.
·
Trade flourished and markets expanded in
the late nineteenth century.
Late nineteenth-century
Colonialism :-
Britain and France made
vast additions to their overseas territories in the late nineteenth century.
Belgium and Germany became new Colonial Powers.
The US also became a
colonial power in the late 1890s by taking over some colonies earlier held by
Spain.
Rinderpest Plague :-
Rinderpest is a fast
spreading cattle plague which hit Africa in the late 1880s.
Rinderpest, or the Cattle
Plague :-
In the 1880s, a
fast-spreading disease of Cattle Plague or Rinderpest had a terrifying impact
on the African local economy. It was carried by infected cattle imported from
British Asia to feed the Italian soldiers invading Eritrea in East
Africa.
Entering Africa in the
East, Rinderpest moved west ‘like forest fire’. The loss of cattle destroyed
African livelihoods.
Indentured labour :-
A bonded labourer under
contract to work for an employer for a specific amount of time, to pay off his
passage to a new country home.
Indentured Labour
Migration from India :-
·
In the 19th century, hundreds of thousands
of Indian and Chinese labourers went to work on plantations, in mines, and in
road and railway construction projects around the world.
·
In India, indentured labourers were bonded
labourers who were transferable to any country on contract for a specific
amount of wage and time. Most of the labourers were from Uttar Pradesh, Bihar,
Central India and certain districts of Tamil Nadu.
·
The 19th century indenture has been
described as a ‘New System of Slavery’.
·
From the 1900s, India’s nationalist leaders
began opposing the system of Indentured Labour Migration as abusive and cruel.
It was abolished in 1921.
New slave system in 19th
century :-
·
Agents provided false information to
misguide the labourers.
·
Labourers were also kidnapped by the agents.
·
The living and working conditions of new
place were very hard.
·
Wages were very low. The wages were
deducted in terms of work was not done properly.
There were no legal rights
for labourers.
Indian Entrepreneurs
Abroad :-
·
Shikaripuri Shrott and Nattukottai
Chettiyars were amongst the many groups of bankers and traders who Financed
Export Agriculture in Central and South-east Asia.
·
Indian Traders and Moneylenders also
followed European colonisers into Africa. From the 1860s they established flourishing
emporia at busy ports worldwide, selling local and imported curios to tourists
whose numbers were beginning to swell, thanks to the development of safe and
comfortable passenger vessels.
Indian Trade, Colonialism
and the Global System :-
·
With the advent of industrialisation,
British cotton manufacture began to expand and industrialists pressurised the
government to restrict cotton imports and protect local industries.
·
Tariffs were imposed on cloth imports into
Britain. Consequently, the inflow of fine Indian cotton began to decline.
·
Indigo used for dyeing cloth was another
important export for many decades. British manufactures flooded the Indian
Market.
·
The value of British Exports to India was
much higher than the value of British imports from India. Thus, Britain had a
“Trade Surplus’ with India.
·
Britain used this surplus to balance its
trade deficits with other countries that is, with countries from which Britain
was importing more than it was selling to.
The Inter-War and Post-War
Economy
The Inter War Economy :-
The First World War
(1914-18) was mainly fought in Europe but its impact was felt around the world
due to widespread economic and political instability.
Wartime Transformations :-
·
The First World War was fought between two
power blocs. On the one side were the Allies Britain, France and Russia (later
joined by the US); and on the opposite side
were the Central Powers – Germany, Austria-Hungary and Ottoman Turkey.
·
This war was thus, the First Modern
Industrial War. It saw the use of machine guns, tanks, aircraft, chemical
weapons, etc., on a massive scale.
·
Most of the killed and maimed were men of
working age and these deaths and injuries reduced the able-bodied workforce in
Europe.
·
Britain borrowed large sums of money from
the US Banks as well as the US public which transformed the US from being an
“International Debtor to an International Creditor”.
The impact of first world
war on the economy of Britain :-
·
Hard to maintain the top position of
Britain in Indian market.
·
After first world war Britain had to
compete with Japan.
·
Debt taken by America during First world
war.
·
Fall in demand of goods due to the end of
war caused fall in production and increase in unemployment.
·
The heavy taxes imposed by the government
to fulfill the losses of war which causes great fall in employment.
Post-war Recovery :-
·
After the war, Britain found it difficult
to recapture its earlier position of dominance in the Indian Market and to
compete with Japan internationally.
·
The war had led to an economic boom, that is,
to a large increase in demand, production and employment.
·
Before the war, Eastern Europe was a major
supplier of wheat in the world market but during the war its supply disrupted
and wheat production in Canada, America and Australia expanded immensely.
·
But after the war, production in Eastern
Europe revived and created a glut in wheat output. Grain prices fell, rural
incomes declined and Farmers fell deeper into debt.
Rise of Mass Production
and Consumption :-
·
One important feature of the US economy of
the 1920s was Mass Production. A well-known pioneer of mass production was the
Car Manufacturer, Henry Ford.
·
The T-Model Ford was the world’s first
mass-produced car.
·
Mass production lowered costs and prices of
engineered goods and there was an increase in the purchase of refrigerators,
washing machines, radios, gramophone players, all through a system of ‘hire
purchase’.
·
Large investments in housing and household
goods seemed to create a cycle of higher employment and incomes, rising
consumption demand, more investment and yet, more employment and incomes.
The Great Depression :-
·
By 1929 the world plunged into a depression
called -The Great Depression of 1929.
·
During this period most parts of the world
experienced catastrophic declines in production, employment, incomes and
trade.
·
The depression was caused by a combination
of several facts of agricultural overproduction.
·
Many countries financed their investments
through loans from the US. The withdrawal of the US loans affected much of the
rest of the world.
·
With the fall in prices and the prospect of
a depression the US Banks had also slashed domestic lending and called back
loans.
·
The Great Depression’s wider effects on
society, politics and international relations, and on peoples’ minds, proved more
enduring.
Causes of Great Depression
:-
·
Post-World War, economy of the world was
fragile. Agricultural over production was a problem. As prices slumped, farm
produce rotted.
·
Many countries financed loans from the
US.
·
US overseas lenders panicked at the sign of
financial crisis.
·
Thus, banks were bankrupt and were forced
to close down in Europe and in the US because they were unable to recover
investments, collect loans and repay depositors.
·
American capitalists stopped all loans.
India and the Great Depression
:-
·
Since Colonial India had become an exporter
of agricultural goods and importer of manufactures, the depression immediately
affected Indian trade.
·
Peasants and farmers suffered more than
urban dwellers though agricultural prices fell sharply, the Colonial Government
refused to reduce revenue demands.
·
This resulted in the increase of
indebtedness of the Indian peasants who used up their savings, mortgaged lands,
and sold whatever jewellery and precious metals they had to meet their
expenses.
·
The famous economist John Maynard Keynes
thought that Indian gold exports promoted global economic recovery.
Rebuilding a World
Economy: The Post-war Era
The Post War Era :-
·
The Second World War broke out merely after
two decades of the First World War and brought enormous death and destruction.
·
It was fought between the Axis powers
(mainly Nazi Germany, Japan and Italy) and the Allies (Britain, France, the
Soviet Union and the US).
·
The war caused an immense amount of
economic devastation and social disruption.
·
There were two impacts that influenced
post-war reconstruction. The first was the US’s Emergence as the dominant
economic, political and military power in the Western world and the second was
the dominance of the Soviet Union.
The Bretton Woods institutions
:-
The International Monetary
Fund (IMF), and the World Bank were created to bring about orderly development
of the world economy in the post-World War Il era.
Bretton Woods agreement :-
Bretton Woods :-
Bretton Woods is the name
of Hotel in USA where the National Monetary and Financial conference held in
1944 to ensure the stable economy.
Establishment of IMF and
World Bank.
Bretton Woods system was
based on fixed exchange rate.
Decolonisation and
Independence :-
·
Most developing countries did not benefit
from the fast growth that the Western economies experienced in 1950s and 1960s
therefore, they organized themselves as a group-the Group of 77 (or G-77)-to
demand a New International Economic Order (NIEO).
·
By the NIEO they meant a system that would
give them real control over their natural resources, more development
assistance, fairer prices for raw materials and better access for their
manufactured goods in developed countries’ markets.
End of Bretton Woods and
the Beginning of “Globalisation’ :-
·
The Industrial World was hit by
unemployment that began rising from the mid-1970s and remained high until the
early 1990s.
·
From the late 1970s., MNCS also began to
shift production operations to low-wage Asian countries, China being one of
them.
·
China became an attractive destination for
investment by foreign MNCS, competing to capture world markets.
·
The relocation of industries to low-wage
countries stimulated world trade and capital flows.
Exchange Rates :- They
link national currencies for the purposes of International trade. There are
broadly two kinds of exchange rates, namely, fixed exchange rate and floating
exchange rate.
Fixed Exchange Rates :- The
rates which are officially fixed by the government and do not vary with change
in demand and supply of Foreign Currency.
Flexible or Floating
Exchange Rates :- These rates fluctuate depending on demand
and supply of Foreign Currencies in Foreign Exchanges Markets, in principle
without interference by governments.
Tariff :- Tax
imposed on a country’s imports from the rest of the world. Tariffs are levied
at the point of entry, i.e., at the Border or at the Airport.
Hosay :- A
riotous carnival in Trinidad (for Imam Hussain) where workers of all races and
religions joined to celebrate.
Plantation :- Estate
for cultivation of cash crops such as tea, coffee, cotton, tobacco, sugarcane,
etc.
MNCS :- Multinational
Corporations (MNCS) are large companies that operate in several countries at
the same time.
IMF :- It
is also termed as International Monetary Fund, The Bretton Woods Institution.
It was established to deal with external surpluses and deficits of its member
nations.
IBRD :- It
is abbreviated as the International Bank for Reconstruction and Development
(popularly known as the World Bank). It was set up to finance Post-war
reconstruction.
G-77 :- G-77
or Group of 77 refers to the seventy seven developing countries that did not
benefit from the fast growth western economies experienced in 1950s and 1960s.
Veto :- A
constitutional right to reject a decision or proposal made by a law making
body.
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