3. The Making of a Global
World
1. The Pre-Modern World
Introduction
Globalisation is often
associated with the modern world, but the process of connecting different parts
of the world began thousands of years ago. Trade, migration, cultural exchange,
and the movement of people, goods, ideas, and diseases gradually linked societies
across continents.
Key Features of the Pre-Modern
World
1. Early Global Connections
- Human societies became increasingly
interconnected over time.
- Traders, travellers, priests, and pilgrims
travelled long distances for:
- Trade and employment
- Knowledge and learning
- Religious purposes
- Escape from persecution
- They carried:
- Goods and money
- Skills and ideas
- Inventions and technologies
- Diseases and germs
Important Fact
- Around 3000 BCE, the Indus Valley
Civilization had active coastal trade links with West Asia.
- Cowries (seashells) from the Maldives were
used as currency and reached China and East Africa.
- Disease-causing germs spread across regions
and became significant by the 13th century.
1.1
Silk Routes: Linking the World
Meaning of Silk Routes
The Silk Routes were ancient trade
routes connecting Asia, Europe, and North Africa through land and sea.
Importance
- Named after Chinese silk traded along these
routes.
- Existed before the Christian Era and
flourished until the 15th century.
- Connected vast regions of Asia with Europe and
Africa.
Goods Traded
|
From Asia |
From Europe |
|
Silk |
Gold |
|
Spices |
Silver |
|
Textiles |
Precious Metals |
|
Chinese Pottery |
Cultural Exchange Through Silk
Routes
- Spread of religions:
- Buddhism from India
- Christianity through missionaries
- Islam through Muslim preachers
- Exchange of ideas, traditions, and knowledge.
Exam Point
Trade and cultural exchange
always went hand in hand along the Silk Routes.
1.2
Food Travels: Spaghetti and Potato
Long-Distance Food Exchange
Trade and travel helped spread
crops and food habits across the world.
Spaghetti and Noodles
- It is believed that noodles travelled from
China to Europe and became spaghetti.
- Some historians believe Arab traders
introduced pasta to Sicily.
- Similar foods existed in India and Japan.
Discovery of America
- About 500 years ago, many foods common today
were unknown in Europe and Asia.
- After the discovery of America by Christopher
Columbus, several new crops spread worldwide.
Crops Introduced from America
- Potato
- Maize
- Tomato
- Chilli
- Sweet Potato
- Groundnut
- Soya
Impact of Potato
- Improved nutrition in Europe.
- Helped poor people live longer and healthier
lives.
Irish Potato Famine (1840s)
- Potato crop failure caused by disease.
- Hundreds of thousands died due to starvation
in Ireland.
Exam Point
Many foods commonly consumed
today originally came from the Americas.
1.3
Conquest, Disease and Trade
Expansion of Trade in the 16th
Century
- European sailors discovered:
- A sea route to Asia.
- A route across the Atlantic Ocean to America.
- This increased global trade and connected
distant regions.
Importance of the Indian Ocean
- A major centre of trade before European
arrival.
- Goods, people, customs, and knowledge moved
across its waters.
- India occupied a central position in these
trade networks.
Transformation of America
Wealth and Resources
America possessed:
- Vast lands
- Rich mineral resources
- Valuable crops
Silver Trade
- Silver mines in present-day Peru and Mexico
enriched Europe.
- European trade with Asia was financed using
American silver.
El Dorado
- Europeans believed in the legend of El
Dorado, the "City of Gold".
- Many expeditions searched for this mythical
city.
European Conquest of America
Reasons for Success
European conquest was not only
due to military strength.
Role of Diseases
- Europeans carried diseases such as smallpox.
- Native Americans had no immunity to these
diseases.
- Smallpox spread rapidly and killed large
populations.
- This weakened resistance and made conquest
easier.
Important Point
Smallpox was one of the most
powerful weapons of European conquerors.
Migration from Europe to
America
Problems in Europe
Until the 19th century:
- Poverty was widespread.
- Hunger was common.
- Cities were overcrowded.
- Diseases were frequent.
- Religious conflicts existed.
Result
Thousands migrated from Europe
to America in search of a better life.
Plantation Economy
- Large plantations in America produced:
- Cotton
- Sugar
- These plantations used slaves brought from
Africa.
Shift in the Centre of World
Trade
India and China
- Until the 18th century, India and China were
among the world's richest nations.
- They dominated Asian trade.
Changes
- China reduced overseas contacts after the 15th
century.
- The Americas gained importance.
- Trade routes shifted westward.
Result
Europe emerged as the new
centre of world trade.
Important
Terms
Globalisation
The process by which countries
become connected through trade, migration, culture, and communication.
Silk Routes
Ancient trade routes linking
Asia, Europe, and Africa.
Cowries
Seashells used as a form of
currency.
Colonisation
The process by which one
country establishes control over another region and its people.
Dissenter
A person who refuses to accept
established beliefs or practices.
2. The
Nineteenth Century (1815–1914)
Introduction
The nineteenth century
witnessed major economic, political, social, and technological changes.
Different regions of the world became increasingly connected through trade,
migration, and investment, leading to the growth of a global economy.
Three
Major Flows in the World Economy
Economists identify three
important flows:
1. Flow of Trade
- Exchange of goods such as cloth, wheat,
cotton, etc.
- Increased international commerce.
2. Flow of Labour
- Migration of people in search of employment.
- Millions moved across continents.
3. Flow of Capital
- Investment of money in businesses,
plantations, railways, and industries.
- Capital moved from developed countries to
developing regions.
Exam Point
Trade, labour, and capital
flows were interconnected and shaped the nineteenth-century global economy.
2.1 A
World Economy Takes Shape
Corn Laws in Britain
What were the Corn Laws?
- Laws that restricted the import of food grains
into Britain.
- Supported by wealthy landowners to protect
British agriculture.
Why were they abolished?
- Population growth increased food demand.
- Food prices became very high.
- Industrialists and urban workers opposed
expensive food.
- Corn Laws were abolished to allow cheaper
imports.
Effects
- Cheap imported food entered Britain.
- British agriculture suffered.
- Many agricultural workers lost jobs.
- Large-scale migration to cities and overseas
began.
Growth of Global Agriculture
Rising Demand
- Industrial growth increased incomes.
- Demand for food imports increased.
Expansion of Agriculture
New agricultural lands were
developed in:
- America
- Australia
- Russia
- Eastern Europe
Infrastructure Development
To transport food:
- Railways were built.
- Harbours were expanded.
- New settlements were created.
Role of Capital and Labour
- Capital came mainly from London.
- Labour shortages encouraged migration.
Mass Migration
Important Facts
- Nearly 50 million Europeans migrated to
America and Australia.
- Around 150 million people worldwide
migrated in search of better opportunities.
Result
A Global Agricultural
Economy emerged by 1890.
Characteristics
- Food travelled thousands of miles.
- Large farms replaced traditional farming.
- Railways and steamships connected producers
and consumers.
Canal Colonies in Punjab
Features
- British government built irrigation canals in
West Punjab.
- Semi-desert areas were converted into fertile
farmland.
- Wheat and cotton were grown for export.
- Farmers from other parts of Punjab settled
there.
Growth of World Trade
Specialisation
Different regions specialised
in producing specific commodities.
Examples
- Cotton for British textile mills.
- Rubber for industries.
- Wheat for European markets.
Important Fact
Between 1820 and 1914,
world trade increased 25–40 times.
Primary Products
About 60% of world trade
consisted of:
- Agricultural products (wheat, cotton)
- Minerals (coal)
2.2
Role of Technology
Important Technologies
Railways
- Connected farms, mines, and ports.
- Reduced transportation costs.
Steamships
- Faster and cheaper sea transport.
Telegraph
- Improved communication across countries.
Refrigerated Ships
Earlier Situation
- Live animals were transported from America to
Europe.
- Many animals died or lost weight during
voyages.
- Meat remained expensive.
New Technology
- Refrigerated ships transported frozen meat.
Benefits
- Lower shipping costs.
- Cheaper meat prices.
- Better diets for Europeans.
- Improved living standards.
Exam Point
Refrigerated ships
revolutionised the international meat trade.
2.3
Late Nineteenth-Century Colonialism
Expansion of Colonial Rule
European countries expanded
their colonies in:
- Africa
- Asia
- Other parts of the world
Berlin Conference (1885)
- European powers divided Africa among
themselves.
- Borders were drawn without considering local
communities.
New Colonial Powers
- Britain
- France
- Germany
- Belgium
- United States
Effects of Colonialism
Positive for Colonisers
- Access to raw materials.
- New markets.
- Increased profits.
Negative for Colonised People
- Loss of land.
- Economic exploitation.
- Destruction of traditional livelihoods.
- Social and ecological changes.
2.4
Rinderpest (Cattle Plague)
What was Rinderpest?
A deadly cattle disease that
spread across Africa in the 1890s.
Origin
- Brought by infected cattle from British Asia.
- Imported for Italian soldiers in Eritrea.
Impact
- Killed about 90% of African cattle.
- Destroyed African livelihoods.
- Led to famine and hardship.
Consequences
Economic Effects
- Loss of livestock.
- Collapse of local economies.
Political Effects
- Europeans gained greater control over Africa.
- Africans became dependent on wage labour.
Labour Recruitment
Colonial governments:
- Imposed heavy taxes.
- Changed inheritance laws.
- Forced Africans into plantations and mines.
Exam Point
Rinderpest helped strengthen
European colonial control in Africa.
2.5
Indentured Labour Migration from India
Meaning
Indentured labourers were
workers hired under contracts for a fixed period, usually five years.
Main Regions of Origin
- Eastern Uttar Pradesh
- Bihar
- Central India
- Tamil Nadu
Reasons for Migration
- Poverty
- Rising land rents
- Decline of cottage industries
- Debt and unemployment
Major Destinations
Overseas
- Trinidad
- Guyana
- Surinam
- Mauritius
- Fiji
Nearby Regions
- Ceylon (Sri Lanka)
- Malaya (Malaysia)
- Assam tea plantations
Recruitment Process
Agents
- Recruited labourers on behalf of employers.
- Often gave false information.
- Sometimes used force and deception.
Conditions
- Harsh working conditions.
- Few legal rights.
- Low wages.
Why Called a New System of
Slavery?
- Workers had little freedom.
- Employers exercised strict control.
Cultural Contributions
Indian migrants created new
cultural traditions:
Examples
- Hosay Festival in Trinidad
- Rastafarian influences
- Chutney Music
Result
Mixing of cultures created new
identities and traditions.
End of Indenture System
Opposition
Indian nationalists criticised
the system as cruel and exploitative.
Abolition
- Indentured labour system ended in 1921.
2.6 Indian
Entrepreneurs Abroad
Indian Bankers and Traders
Important Groups
- Shikaripuri Shroffs
- Nattukottai Chettiars
Role
- Financed agriculture and trade.
- Provided loans.
- Transferred money across regions.
Indian Traders in Africa and
Asia
Activities
- Followed colonial expansion.
- Opened trading centres.
- Sold imported and local goods.
Hyderabadi Sindhis
- Established emporia in international ports.
- Benefited from growing tourism.
2.7
Indian Trade, Colonialism and the Global System
Decline of Indian Textiles
Before Industrialisation
- Indian cotton textiles were famous worldwide.
- Large exports to Europe.
British Policies
- Tariffs imposed on Indian cloth.
- Protection given to British industries.
Result
Indian textile exports
declined sharply:
- 30% in 1800
- 15% in 1815
- Less than 3% by the 1870s
Growth of Raw Material Exports
Major Exports
- Raw cotton
- Indigo
- Opium
Opium Trade
- Britain grew opium in India.
- Exported it to China.
- Used profits to buy Chinese tea.
British Trade Surplus
Meaning
Britain exported more goods to
India than it imported from India.
Benefits to Britain
The surplus helped:
- Pay debts to other countries.
- Finance imports.
- Pay salaries and pensions of British
officials.
Home Charges Included
- Remittances by British officials.
- Interest on India's debt.
- Pensions of British employees.
Important
Terms
Corn Laws
Laws restricting the import of
food grains into Britain.
Indentured Labour
Workers employed under a
fixed-term contract.
Colonialism
Political and economic control
of one country over another.
Rinderpest
A deadly cattle disease that
spread in Africa during the 1890s.
Trade Surplus
When a country's exports
exceed its imports.
Home Charges
Payments made by India to
Britain for administration, pensions, and debts.
3. The Inter-War Economy (1914–1939)
Introduction
The period between the two World
Wars is called the Inter-War
Period. The First World War (1914–1918) caused severe economic and
political instability across the world. The effects of the war led to economic
crises, unemployment, and eventually the Great Depression (1929–1935).
3.1 Wartime Transformations
First World War (1914–1918)
Opposing Blocs
|
Allies |
Central
Powers |
|
Britain |
Germany |
|
France |
Austria-Hungary |
|
Russia |
Ottoman Turkey |
|
USA (later) |
Features of the War
·
First
modern industrial war.
·
Lasted
more than four years.
·
Used
modern weapons:
o Machine guns
o Tanks
o Aircraft
o Chemical weapons
Scale of Destruction
·
About
9 million soldiers
killed.
·
About
20 million injured.
·
Most
victims were working-age men.
Impact on Society
·
Workforce
declined.
·
Household
incomes fell.
·
Industries
shifted to war production.
·
Women
entered jobs previously done by men.
Economic Effects of the War
Britain
·
Borrowed
heavily from the USA.
·
Faced
huge debts after the war.
United States
·
Became
the world's leading creditor nation.
·
Owned
more overseas assets than foreigners owned in America.
Exam Point
The First World War transformed the USA
from an international debtor into an international creditor.
3.2 Post-War Recovery
Problems Faced by Britain
Loss of Economic Dominance
During the war:
·
Industries
developed in India and Japan.
·
Britain
lost many markets.
Heavy Debts
·
Britain
had borrowed large amounts from the USA.
·
Faced
a serious financial burden after the war.
Rising Unemployment
·
Wartime
demand ended.
·
Production
declined.
·
Government
cut spending.
Important Fact
By 1921, one out of every five British workers was
unemployed.
Agricultural Crisis
Wheat Production
During the war:
·
Canada
·
America
·
Australia
increased wheat production.
After the War
·
Eastern
European production recovered.
·
Excess
wheat flooded markets.
·
Prices
fell sharply.
Effects
·
Farmers'
incomes declined.
·
Debt
increased.
·
Rural
economies suffered.
3.3 Rise of Mass Production and
Consumption
Recovery of the USA
The American economy recovered
rapidly in the 1920s.
Mass Production
Meaning
Producing large quantities of goods
at low cost using machines and assembly lines.
Henry Ford and the Assembly Line
Contributions
·
Introduced
assembly-line production in car manufacturing.
·
Workers
performed one repetitive task.
Advantages
·
Faster
production.
·
Lower
costs.
·
Cheaper
products.
T-Model Ford
·
First
mass-produced car in the world.
Wage Increase
In 1914:
·
Henry
Ford doubled daily wages to $5
per day.
·
Reduced
worker turnover.
Growth of Consumer Culture
Increased Production
Car production rose:
·
From
2 million (1919)
·
To
5 million (1929)
Popular Consumer Goods
·
Cars
·
Refrigerators
·
Radios
·
Washing
machines
·
Gramophones
Hire Purchase System
People bought goods:
·
On
credit
·
Paid
in monthly instalments
Result
·
Increased
demand
·
Higher
employment
·
Economic
prosperity
USA as Global Lender
From 1923
·
USA
exported capital worldwide.
·
Became
the largest overseas lender.
Effects
·
Helped
European recovery.
·
Increased
world trade.
3.4 The Great Depression (1929–1935)
Meaning
A period of severe global economic
crisis marked by:
·
Falling
production
·
Falling
trade
·
Massive
unemployment
·
Falling
incomes
Duration
Approximately 1929 to mid-1930s.
Causes of the Great Depression
1. Agricultural Overproduction
·
Excess
production led to falling prices.
·
Farmers
produced even more to maintain income.
·
Market
glut worsened.
Result
·
Prices
collapsed further.
·
Farm
produce remained unsold.
2. Dependence on US Loans
Many countries depended on American
loans.
Problem
·
US
lenders withdrew money after signs of economic trouble.
·
Investments
stopped.
Effects
·
Financial
crises spread globally.
·
Banks
failed.
·
Currencies
weakened.
3. Decline in World Trade
The USA:
·
Increased
import duties.
·
Reduced
international trade.
Result
Global trade shrank dramatically.
Impact on the USA
Economic Collapse
·
Businesses
failed.
·
Farms
became bankrupt.
·
People
lost homes and savings.
Bank Failures
By 1933:
·
More
than 4,000 banks closed.
Company Closures
Between 1929 and 1932:
·
About
110,000 companies
collapsed.
Unemployment
Millions searched desperately for
work.
Recovery
By 1935:
·
Slow
recovery began in many industrial nations.
Exam Point
The Great Depression was the worst
economic crisis in modern history.
3.5 India and the Great Depression
Impact on Trade
Decline in Imports and Exports
Between 1928 and 1934:
·
India's
imports and exports nearly halved.
Fall in Prices
·
Wheat
prices fell by about 50%.
Impact on Peasants
Why Were They Worst Affected?
·
Agricultural
prices collapsed.
·
Land
revenue remained unchanged.
·
Debts
increased.
Bengal Jute Growers
·
Demand
for jute bags declined.
·
Raw
jute prices fell by over 60%.
·
Farmers
suffered huge losses.
Growing Indebtedness
To survive, peasants:
·
Used
savings.
·
Mortgaged
land.
·
Sold
jewellery and gold.
Gold Exports
India became a major exporter of
gold during the depression years.
Political Impact
Civil Disobedience Movement
·
Economic
hardship increased public anger.
·
Rural
unrest spread.
Important Fact
Mahatma Gandhi launched the Civil
Disobedience Movement in 1931 during the Great Depression.
Impact on Urban India
Better Situation for Urban Groups
People with fixed incomes benefited
because:
·
Prices
of goods declined.
·
Cost
of living became lower.
Industrial Growth
·
Government
provided tariff protection.
·
Indian
industries expanded.
Important Terms
Mass Production
Large-scale production of goods
using machines and assembly lines.
Assembly Line
A production system where workers
perform one specific task repeatedly.
Hire Purchase
Buying goods on credit and paying in
instalments.
Great Depression
Worldwide economic crisis from 1929
to the mid-1930s.
Creditor Nation
A country that lends money to other
countries.
Debtor Nation
A country that borrows money from
other countries.
4. Rebuilding a World Economy: The
Post-War Era
Introduction
The Second World War (1939–1945) began just 20 years after the First
World War. It was fought between:
|
Axis
Powers |
Allies |
|
Germany |
Britain |
|
Italy |
France |
|
Japan |
Soviet Union |
|
USA |
Impact of the War
·
Lasted
for 6 years.
·
Fought
on land, sea, and air.
·
Around
60 million people died.
·
Millions
were injured.
·
Large
parts of Europe and Asia were destroyed.
·
Massive
economic and social disruption occurred.
Two Major Powers After the War
1.
United
States (USA) –
became the dominant economic and military power.
2.
Soviet
Union (USSR) –
emerged as a major world power after defeating Nazi Germany.
4.1 Post-War Settlement and the Bretton
Woods Institutions
Lessons Learned from the Inter-War
Period
Lesson 1: Need for Government
Intervention
·
Mass
production requires mass consumption.
·
Mass
consumption requires stable incomes.
·
Stable
incomes require full employment.
·
Markets
alone cannot guarantee employment.
·
Governments
must regulate the economy.
Lesson 2: Control Over International
Economic Relations
Governments needed control over:
·
Trade
·
Capital
flows
·
Labour
movement
Aim
To ensure:
·
Economic
stability
·
Full
employment
·
Growth
of world trade
Bretton Woods Conference (1944)
Location
Bretton Woods, New Hampshire, USA
Purpose
To create a stable post-war
international economic system.
Bretton Woods Institutions
1. International Monetary Fund (IMF)
Functions
·
Maintains
international monetary cooperation.
·
Helps
countries facing balance of payment problems.
·
Deals
with trade deficits and surpluses.
2. World Bank
Full Name:
International Bank for
Reconstruction and Development (IBRD)
Functions
·
Finances
reconstruction after the war.
·
Provides
development loans.
Important Point
The IMF and World Bank are called
the Bretton Woods Twins.
Bretton Woods System
Fixed Exchange Rate System
Features
·
National
currencies were linked to the US dollar.
·
The
US dollar was linked to gold.
Gold Standard
·
1
ounce of gold = $35
Example
·
Indian
Rupee was fixed against the US Dollar.
4.2 The Early Post-War Years
Golden Age of Economic Growth
(1950–1970)
Growth of World Trade
·
Increased
by more than 8%
annually.
Growth of Income
·
Increased
by about 5%
annually.
Unemployment
·
Remained
below 5% in most industrial countries.
Characteristics
·
Rapid
industrial growth.
·
Stable
economic conditions.
·
Rising
living standards.
Spread of Technology
Developing Countries
Wanted to catch up with industrial
nations by:
·
Importing
machines
·
Buying
modern technology
·
Investing
heavily in industries
Result
Industrialisation expanded across
many regions.
4.3 Decolonisation and Independence
End of Colonial Rule
After World War II:
·
Many
Asian and African countries became independent.
·
European
empires gradually collapsed.
Challenges Faced by New Nations
·
Poverty
·
Lack
of resources
·
Weak
industries
·
Underdeveloped
economies
Role of IMF and World Bank
Initially:
·
Focused
mainly on industrial countries.
Later:
·
Shifted
attention towards developing countries from the late 1950s.
Continued Influence of Former Colonial
Powers
Even after independence:
·
Foreign
companies controlled resources.
·
Minerals
and land remained under foreign influence.
·
Developing
nations remained economically dependent.
Formation of G-77
Why was it formed?
Developing countries demanded:
·
Fair
treatment in world trade.
·
Better
economic opportunities.
Objectives
·
Control
over natural resources.
·
More
development assistance.
·
Fair
prices for raw materials.
·
Better
access to international markets.
New International Economic Order
(NIEO)
A demand for:
·
Greater
economic equality.
·
Fairer
global trade relations.
4.4 End of Bretton Woods and
Beginning of Globalisation
Collapse of the Bretton Woods System
Reasons
·
Rising
military and overseas expenditures of the USA.
·
Declining
confidence in the US dollar.
·
Dollar
could no longer maintain its value against gold.
Result
The fixed exchange rate system
ended.
Floating Exchange Rate System
Meaning
Currency values are determined by
market forces of demand and supply.
Difference
|
Fixed
Exchange Rate |
Floating
Exchange Rate |
|
Government controlled |
Market controlled |
|
Stable rates |
Changing rates |
Changes in International Finance
Before the 1970s
Developing countries borrowed mainly
from:
·
IMF
·
World
Bank
After the 1970s
They borrowed from:
·
Commercial
banks
·
Private
lenders
Consequences
·
Debt
crises
·
Increased
poverty
·
Economic
instability
Rise of Multinational Corporations
(MNCs)
From the Late 1970s
MNCs shifted industries to:
·
China
·
India
·
Other
Asian countries
Reasons
·
Cheap
labour
·
Low
production costs
Effects
·
Increased
investment
·
Growth
of exports
·
Expansion
of world trade
China's Economic Transformation
Earlier
·
Isolated
after the 1949 Revolution.
Later
·
Introduced
economic reforms.
·
Opened
its economy to foreign investment.
Advantages
·
Low
wages attracted MNCs.
·
Became
a major manufacturing centre.
Examples of Chinese Products
·
Mobile
phones
·
Toys
·
Televisions
·
Electronics
Globalisation
Meaning
The increasing integration of
economies through:
·
Trade
·
Investment
·
Technology
·
Movement
of goods and services
Result
Countries like:
·
India
·
China
·
Brazil
experienced rapid economic growth.
Important Terms
Bretton Woods Conference
International conference held in
1944 to create a stable post-war economic system.
IMF
International Monetary Fund; helps
countries manage balance of payments and financial stability.
World Bank
Provides loans for reconstruction
and development.
Fixed Exchange Rate
A currency value fixed against
another currency or gold.
Floating Exchange Rate
A currency value determined by
market demand and supply.
Decolonisation
The process by which colonies gained
independence.
G-77
A group of developing countries
demanding a fair international economic system.
Globalisation
The growing integration of world
economies through trade, investment, and technology.
**********
EXERCISE
1. Two examples of global
exchanges before the 17th century
Asia
- The Silk Routes connected Asia with
Europe and Africa.
- Chinese silk, Indian spices, textiles, and
ideas travelled through these routes.
Americas
- Crops such as potatoes, maize, tomatoes,
and chillies spread from the Americas to Europe and Asia after the
voyages of Christopher Columbus.
2. How did disease help in the
colonisation of the Americas?
- Europeans carried diseases such as smallpox
to America.
- Native Americans had no immunity against these
diseases.
- Smallpox killed large numbers of indigenous
people.
- This weakened local communities and
resistance.
- As a result, European powers found it easier
to conquer and colonise America.
3. Effects of the Following
(a) Abolition of the Corn Laws
- Allowed cheap food imports into Britain.
- Food prices fell.
- British agriculture suffered.
- Many farmers lost jobs and migrated to cities
or abroad.
- Increased international trade in food grains.
(b) Coming of Rinderpest to
Africa
- Killed nearly 90% of African cattle.
- Destroyed livelihoods of farmers and herders.
- Led to famine and poverty.
- Helped Europeans gain control over African
societies.
(c) Death of Working-Age Men
During World War I
- Reduced Europe's workforce.
- Family incomes declined.
- Women entered jobs previously done by men.
- Production and economic growth were affected.
(d) Great Depression on Indian
Economy
- Exports and imports declined sharply.
- Agricultural prices fell drastically.
- Farmers became heavily indebted.
- Many peasants sold land, jewellery, and gold.
- Rural poverty increased.
(e) Relocation of MNCs to
Asian Countries
- Increased industrial growth in Asia.
- Generated employment opportunities.
- Boosted exports and foreign investment.
- Countries like China and India experienced
rapid economic growth.
4. Two Examples Showing Impact
of Technology on Food Availability
Example 1: Railways and
Steamships
- Helped transport food over long distances
quickly and cheaply.
- Increased food availability in international
markets.
Example 2: Refrigerated Ships
- Enabled transportation of frozen meat from
America, Australia, and New Zealand to Europe.
- Reduced meat prices and improved diets.
5. What is the Bretton Woods
Agreement?
The Bretton Woods Agreement
was signed in 1944 at Bretton Woods, USA.
Main Features:
- Established the International Monetary Fund
(IMF).
- Established the World Bank (IBRD).
- Introduced a fixed exchange rate system.
- Linked world currencies to the US dollar and
gold.
- Aimed to ensure economic stability, full
employment, and growth of international trade after World War II.
Importance:
- Helped rebuild war-torn economies.
- Promoted international economic cooperation.
- Laid the foundation for the post-war global
economy.
6. Letter from an Indentured
Indian Labourer in the Caribbean
Dear Family,
I hope all of you are well. I
reached the Caribbean after a long and difficult sea journey. The work on the
plantation is very hard and the conditions are not as good as the agents had
promised. We work for long hours and receive low wages. Life is difficult, but
I continue to work in the hope of earning enough money to improve our future.
Many labourers here are from
different parts of India. We support one another and celebrate our festivals
together. Though I miss my home and family deeply, I try to remain hopeful.
Please do not worry about me. I pray that one day I will return to see all of
you again.
Yours lovingly,
An Indentured Labourer
7. Three Types of Movements in
International Economic Exchange
1. Flow of Trade
- Movement of goods between countries.
- Example: Export of cotton, indigo, and opium
from India.
2. Flow of Labour
- Movement of people in search of work.
- Example: Indian indentured labourers migrated
to Mauritius, Fiji, Trinidad, and Guyana.
3. Flow of Capital
- Movement of money for investment.
- Example: Indian bankers such as the
Nattukottai Chettiars financed trade and plantations in Southeast Asia.
8. Causes of the Great
Depression
1. Agricultural Overproduction
- Excess production led to falling prices.
- Farmers earned less income.
2. Dependence on US Loans
- Many countries depended on American loans.
- Withdrawal of loans created financial crises.
3. Fall in World Trade
- The USA increased import duties.
- International trade declined sharply.
4. Banking Crisis
- Banks failed and stopped lending money.
- Businesses and farms collapsed.
5. Falling Demand
- Unemployment increased.
- People reduced spending, worsening the
economic crisis.
9. What is G-77? How was it a
Reaction to the Bretton Woods Twins?
G-77
The Group of 77 (G-77)
is an organisation of developing countries formed to promote their economic
interests.
Why Was It Formed?
Developing countries felt that
the IMF and World Bank mainly served the interests of developed nations.
Demands of G-77
- Control over natural resources.
- Fair prices for raw materials.
- More development assistance.
- Better access to world markets.
- A New International Economic Order (NIEO).
Relation with Bretton Woods
Twins
- IMF and World Bank were dominated by developed
countries.
- Developing nations felt neglected.
- G-77 emerged to demand a more fair and
balanced global economic system.
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