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Globalisation means the integration of markets in the global economy, leading to increased interconnectedness of national economies. It is a market where globalisation is particularly significant to include financial markets such as capital market, money and credit market, commodity market (including oil, coffee gold etc), and insurance market.
The making of a global world mind map
The Making of a Global World Notes
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The Pre-Modern World
Human societies have steadily become more interlinked. From ancient times, travelers, traders, priests and pilgrims traveled vast distances for various reasons, like
- to gain knowledge
- for more opportunities
- for religious or spiritual fulfillment
- to escape from ill-treatment
They carry with them goods, money, ideas, skills, values, inventions, and even germs and diseases. By the 13th century, a strong link was established between the countries.
An active coastal trade linked the Indus Valley Civilizations with West Asia in the early 3000 BC. For more than a millennia, Cowries (sea shells) were used as a form of currency from the Maldives to China and East Africa.
Silk Routes Link the World
Silk routes existed since before the Christian era and flourished till the 15th century. The silk routes are good examples of pre-modern trade and cultural links between the distant parts of the world, i.e. linking Asia with Europe and North Africa. Along the silk routes, silk cargoes from China, Indian spices and textiles, and gold and silver from Europe were carried to different parts of the world.
The Buddhist preachers, Christian missionaries, and later on, Muslim preachers traveled along these routes. These routes proved to be a great source of trade and cultural links between distant parts of the world.
Food Travels : New Crops Introduced
Traders and travelers introduced new crops to the land they visited. Foods like potatoes, soya, groundnuts, maize, tomatoes, chilies, and sweet potatoes were introduced in Europe and Asia after America was discovered by Christopher Columbus.
Noodles traveled West from China and became spaghetti. Europe’s poor began to eat better and live longer after the introduction of potatoes. Arab traders took pasta to Sicily, an island in Italy.
Ireland’s poor peasants depended upon the potatoes and when the Irish potato famine occurred around 1 million people died of starvation in Ireland and many had migrated in search of work.
Conquest, Disease and Trade
The pre-modern world shrank after European sailors found a sea route to Asia and America in the 16th century. The Indian subcontinent was central to the trade, but the entry of Europeans helped to expand this trade towards Europe.
Precious metal, silver, found in the mines of Peru and Mexico enhanced Europe’s wealth and financed its trade with Asia. Many expeditions were taken in search of El Dorado, the fabled city of gold in South America.
The Spanish and Portuguese were the first Europeans to conquer America in mid-16th century. The conquest of America was possible through the deadly disease smallpox that the Spanish conquerors carried on their person.
America’s original inhabitants had no immunity against this disease. As a result, thousands of European moved to America and slaves captured in Africa worked in plantation2 of cotton and sugar for European market.
India and China until 18th century were among the world’s richest countries and the main centres of world trade. However, with Indian’s colonisation and China’s restriction of overseas contacts, Europe emerged as the centre of world trade.
The 19th Century (1815-1914)
In the 19th century, economic, political, social, cultural and technological factors interacted in complex ways. It changed the society and reshaped its external relations immensely.
Economists identify three types of movement or flows within international economic exchanges
- The flow of trade in goods (especially cloth and wheat).
- The flow of labour due to migration of people in search of employment.
- The movement of capital for short-term or long-term investments over long distances.
All these flows affected people’s lives significantly.
A World Economy Takes Shape
In the late 18th century industrialisation and population growth had increased the demand for foodgrains in Britain. This situation resulted in the increase in food grain prices. Corn Laws and its Effects
Due to the pressure from the landowners, the government restricted the import of corn. These laws were commonly known as Corn Laws.
After the introduction of the Corn Laws, food prices became exorbitant (unreasonably high). Industrialists and peopleliving in towns were unhappy with high food prices. They forced the British Government to abolish the Corn Laws. After the abolition of the Corn Laws, food could be imported into Britain at much cheaper rate than before.
British agriculture was unable to compete with imports. Vast areas of land were uncultivated and thousands of people lost their livelihood. They came to the cities in search of works or migrated overseas. The effects of abolition of Corn Laws were
- Food could be imported into Britain more cheaply than it could be produced in Britain.
- As food prices fell, consumption in Britain increased.
- From the mid-19th century, faster industrial growth in Britain led to higher incomes and more demand for food.
- Around the world in Eastern Europe, Russia, America and Australia, land was cleared to cultivate more foodgrains to meet the increasing demand of Britain.
- New railways and harbours were needed to export agricultural products.
- An increasing number of workers needed more homes and settlements.
- Due to the demand for labour, millions of people migrated from Europe to America and Australia in the 19th century in search of a better life.
- Capital flowed from financial centres such as London.
- By 1890, a global agricultural economy had developed.
- Sometimes, food came from thousands of miles away by railways or ships.
- The effects of the abolition of corn laws also affected India as some changes occured in West Punjab. In India, the British rulers transformed Punjab into fertile agricultural land by developing an irrigation system for growing wheat and cotton for export.
Regional commodities developed so fast that between 1820 and 1914, world trade had multiplied 25 to 40 times. About, 60% of this trade comprised primary products i.e. agricultural products like wheat and cotton and minerals like coal.
Role of Technology in 19th Century World
Technology or new inventions like railways, steamships and the telegraph had a great impact on the transformation of 19th century world.
Faster railways, lighter wagons and larger ships helped to move food more cheaply and quickly from far away farms in America, Australia or New Zealand to final markets of Europe.
Role of Technology in Meat Transportation
Till the 1870s animals were shipped live from America to Europe and then slaughtered when they arrived there. Live animals took up a lot of space in ship and many animals also died in voyages, fell ill and became unfit to eat.
The development of refrigerated ships greatly helped to transport perishable food items over long distances. Frozen meat was exported from America, Australia, New Zealand to different European countries.
The role of technology in meat transportation decreased the price of meat in the European market and the cost of shipping. Meat (sometimes butter and egg) became a daily diet for the poor. This better living conditions created social peace within the country and support for imperialism in the colonies.
Colonialism in the Late 19th Century
Trade flourished and markets expanded in the late
19th century. The European conquest in 19th century led to many painful economic, social and ecological changes in the colonized countries.
In many parts of the world, the expansion of trade led to the loss of freedoms and livelihood. Britain, France, Germany, Belgium and later the USA became colonial powers.
Rinderpest or the CattlePlague
In Africa, a fast-spreading disease of cattle plague or rinderpest destroyed a large number of cattle in the 1890s. The disease spread like ‘forest fire’ in the whole of Africa and killed 90 per cent of the cattle.
Indentured Labour Migration from India
Indentured labor means a bonded laborer under contract to work for an employer for a specific amount of time, to pay off his passage to a new country or home. In the 19th century, lakhs of Indian and Chinese indentured laborers went to work on plantations, in mines and in different construction projects around the world. Most Indian indentured workers came from the present-day regions of Eastern Uttar Pradesh, Bihar, Central India, and Tamil Nadu.
In the mid-19th century, these regions of India experienced many social changes cottage industries declined, land rents rose and lands were cleared for mines and plantations. All these forced the poor to migrate in search of work.
Destinations of Indian Indentured Migrants
The main destinations of Indian indentured migrants were the Caribbean Islands mainly Trinidad, Guyana, Surinam, Mauritius and Fiji besides other places near home. Tamil migrants went to Ceylon and Malaya. Some indentured workers were recruited in Assam’s tea plantations.
Condition of Indentured Labourer
Recruitment of indentured laborers was done by agents engaged by employers and paid a small commission.
Agents recruited indentured laborers by promising them better-living conditions, more money, and other benefits. However, when they arrived at the plantations, laborers found harsh conditions.
Changes in Cultural Scene in 19th Century
19th-century indenture has been described as a ‘new system of slavery’. Although, living and working conditions were harsh, workers discovered their own ways of surviving. They developed new forms of festivals and other forms of entertainment by combining their different cultural forms.
Riotous Carnival (Hosay) in Trinidad, the protest religion of Rastafarianism, which was made famous by Jamaican singer Bob Marley, Chutney music of Trinidad and Guyana are all examples of cultural fusion.
Descendants of Indentured Labourers
Many indentured labourers permanently settled in the countries where they had gone after their contracts ended. So, there are large communities of people of Indian descent in these countries.
For example, Nobel Prize winner writers like VS Naipaul, etc. are descended from indentured laborers from India. The system of indentured labor was abolished in 1921.
Indian Entrepreneurs Abroad
Indian bankers were among the many groups of bankers and traders, who financed export agriculture in Central and
South-East Asia. Shikaripuri Shroffs, and Nattukottai Chettiars were some famous Indian bankers.
Indian traders and moneylenders also followed European colonizers into Africa. Hyderabadi Sindhi traders developed flourishing trades at busy ports worldwide. They usually sold local and imported curios (rare objects) to tourists.
Indian Trade, Colonialism, and the Global System
Fine cottons from India were exported all over Europe. With industrialization, British cotton manufacturers began to expand. The industrialists pressurised the government to restrict cotton imports from India and protect local industries. Due to this, the flow of fine Indian cotton in Britain began to decline.
Indian Trade and Colonialism
The British Government introduced high tariffs5 on import of cotton cloth. From the early 19th century, British manufacturers also began to seek overseas markets for their cloth. As a result, the Indian textile industry was adversely affected. Indian textile faced stiff competition in other international markets. Consequently, India’s share in International cotton textiles exports declined from 30% in 1800 to 3% in 1870.
As the exports of manufactures declined rapidly, export of raw materials increased equally fast. Between 1812 to 1871, the share of raw cotton exports increased from 5% to 35%.
British forced the farmers of India to produce indigo and opium. Indigo used for dyeing cloth was exported to Britain. Opium grown (from the 1820) in India was exported to China. The money earned through opium sale was used by Britain to finance its tea and other imports from China.
Trade Relationship Between India and Britain
Over the 19th century, the British manufactures were available in large numbers in the Indian market. Foodgrains and raw material which were exported from India to Britain increased.
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 and used this surplus to balance its tradedeficits with other countries. This trade surplus of Britain helped to pay the home charges i.e. private remittances6 of British officials, traders, interest payments on external debt and pensions of British officials in India.
The Inter-War Economy
The First World War (1914-18) was mainly fought in Europe but it had impact on whole world. It was fought between two power blocs. On one side were the Allies7 – Britain, France, Russia (later joined by the US) and on the opposite side were the Central Powers – Germany, Austria-Hungary and Ottoman Turkey. World’s leading industrial nations joined the war and tried to do the greatest possible destruction on their enemies.
The First World War was the first modern industrial war. For the first time, modern weapons like machine guns, tanks, aircraft, chemical weapons etc were used on a massive scale.
Impacts of the First World War
- During the war, 9 million were dead and 20 million were injured.
- Household incomes also declined due to the death or injury of the earning members of the family and women had to take the jobs.
- Britain borrowed large sums of money from US banks as well as the US public. This made the USA an international creditor from an international debtor.
The post-war recovery was difficult. After the war, Britain found it difficult to recapture its earlier position of dominance in the Indian market and to compete with Japan Internationally. Britain faced an economic crisis and was burdened with huge external debts. This led to many British workers being out of work in 1921.
The wheat exports from Eastern Europe were disrupted during the war, as a result wheat production in Canada, America and Australia expanded.
After the war, production in Eastern Europe revived
and created a glut8 in wheat output. Grain prices fell, rural incomes declined and farmers fell deeper into debt.
Rise of Mass Production and Consumption
After a short period of economic trouble, the US economy resumed its strength in the early 1920s. During that period, mass production became a characteristic feature of industrial production in USA.
First Mass Production of Cars
Car manufacturer Henry Ford adapted the ‘assembly line’ method of a Chicago slaughter house to his new car plant in Detroit. He realised that this method would allow a faster and cheaper way of producing vehicles. This assembly line method forced the worker to repeat a single task mechanically and continuously which is dictated by the conveyor belt.
As a result, Henry Ford’s cars came off the assembly line at three-minute intervals. The T-Model Ford was the world’s first mass-produced car. Ford paid high wages to the workers to do monotonous tasks, but recovered this cost through faster production. Car production in the US hike from 2 million in 1919 to more than 5 million in 1929.
Mass production lowered cost and prices of engineered goods like refrigerators, washing machines, radios, gramophone players etc. The housing and consumer increase created scope of large number of employment and incomes in the US and as a result, it became the largest overseas lender.
The Great Depression
The Great Depression began around 1929 and lasted till the mid-1930s. During this period, most of the countries of the world experienced catastrophic declines in production, employment, income and trade. The agricultural sector, in general, was the worst affected.
Factors Responsible for Depression
A combination of several factors was responsible for the depression
- Agricultural overproduction remained a problem. This decreased the prices of agricultural products. Farmers tried to expand production by bringing a larger volume of produce to the market to maintain their overall income. But, this further decreased the prices of agricultural products in the market.
- In the mid-1920s, many countries financed their investment through the loans they got from the USA. American capitalists stopped all loans to European countries.
Effects of Great Depression
- In Europe, the depression led to the failure of some major banks and the collapse of currencies like the Sterling.
- The US was severely affected by the depression, as the banks had cut domestic lending and called back loans.
- Farms could not sell their harvests, households were ruined and businesses collapsed.
- The US banking system collapsed because the banks could not recover investments, collect loans and repay depositors.
- The US attempted to protect its economy in the depression by doubling the import duties, which hit the world trade badly.
India and the Great Depression
Due to the Great Depression, India’s export and imports declined to half (50 percent) and prices of primary products like wheat and jute fell sharply between 1928 and 1934. The colonial government refused to reduce revenue demands, so the peasants became the worst suffers.
During this period India became an exporter of precious metals, especially gold. It promoted global economic recovery and helped to speed up Britain’s recovery but did not help the Indian peasants to improve their conditions.
Across India, peasants’ condition became worst. People having fixed incomes faced less problem due to the price fall. In 1931, Mahatma Gandhi launched the Civil Disobedience Movement as a result of depression.
The Making of Global World Class 10 notes
Rebuilding a World Economy :
The Post-War Era
The Second World War resulted in immense devastation in human and economic terms. It broke out after two decades of the First World War (1939-45). It was fought between the Axis Powers (Nazi Germany, Japan and Italy) and the Allies (Britain, France, Soviet Union and USA).
At least 60 million (about 3 per cent of the world’s 1939 population) people were killed and millions were injured in this war.
Vast parts of Europe and Asia were devastated and several cities were destroyed by the war, therefore reconstruction became long and difficult task.
Two crucial influences shaped post-war reconstruction
(i) The US emerged as the world’s dominant political economic and military power in the Western world.
(ii) Soviet Union became super power. It defeated Nazi Germany. It transformed itself from an agricultural country into a world power. As a leader of the Communist bloc, Soviet Union posed a great threat to the Capitalist economy.
Post-War Settlement and the Bretton Woods Institutions
From inter-war economic experiences, two key lessons were drawn by the economists and politicians. These were
(i) The first lesson was that an industrial society based on mass production needed mass consumption. Mass consumption needed high and stable income. Stable income required steady and full employment, for which government should take necessary steps.
(ii) The second lesson was related to a country’s economic links with other countries. The target of full employment could be achieved only if government had the power to control flows of goods, capital and labour.
It was supported by the United Nations Monetary and Financial Conference held in July, 1944 at Bretton Woods in New Hampshire, USA.
Establishment of IMF and World Bank
The Bretton Woods Conference established the International Monetary Fund (IMF) to deal with external surpluses anddeficits of its member nations. The International Bank for Reconstruction and Development (known as World Bank) was set up to finance post-war reconstruction.
The IMF and World Bank are referred as the Bretton Woods Institutions or Bretton Woods twins. They commanded financial operations in 1947 and the decision making in these Constitutions were mostly controlled by the Western Industrial powers.
The International Monetary System is the system linking national currencies and monetary system. Under this system, the national currencies followed the fixed exchange rates11 and were fixed to the US dollar.
The Early Post-War Years
The Bretton Woods System inaugurated an era of stable growth of trade and income for the Western industrial nations and Japan.
World trade grew annually at over 8% between 1950-1970 and incomes at nearly 5%. The unemployment rate of this period was averaged less than 5% in most industrial countries. Developing countries were in hurry to catch up with the advanced industrial countries.
Decolonisation and Independence
When the Second World War ended, many countries were still under European colonial rule. Over the next two decades, most colonies in Asia and Africa became free and emerged as independent nations. But independence did not bring freedom from poverty or a lack of resources to these countries. Their economies and societies suffered a lot by long periods of colonial rule.
The IMF and the World Bank were designed to meet the financial needs of the industrial countries. But as Europe and Japan rapidly rebuilt their economies, they grew less dependent on the IMF and the World Bank. Therefore, from the late 1950s, the Bretton Woods Institutions began to shift their attention more towards developing countries.
Condition of Developing Nations
Newly independent countries were trying to lift their population out of poverty. But after many years of decolonisation, they are still controlled by the international agencies which are dominated by the former colonial powers like US and France.
Most developing countries did not benefit from fast growth like the Western economies in the 1950s and 1960s. Thus, they organised themselves as a group, the Group of 77 (or G-77) countries 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
- better access for their manufactured goods in developed countries’ markets
End of Bretton Woods and the Beginning of ‘Globalisation’
From the 1960s, the rising cost of US’s overseas involvements weakened its finances and competitive strength. The US dollar could not maintain its value in relation to gold.
This eventually led to the collapse of the system of fixed exchange rates12 and the introduction of a system of
floating exchange rates
Change in International Financial System
From the mid-1970s, the international financial system changed. The developing countries were then forced to borrow from Western commercial banks and private lending institutions. This change led to periodic debt crises, unemployment i.e., lower incomes and increased poverty in Africa, Latin America and also in the industrial world.
From the late 1970s, MNCs also began to shift production operations to low-wage Asian countries.
New Economic Policy in China
China had been cut off from the post-war world economy since its revolution in 1949. But new economic policies in China and the collapse of the Soviet Union and Soviet-style communism in Eastern Europe brought many countries back in the world economy.
Wages were comparatively low in countries like China. Thus, they became attractive destinations for investment by Foreign MNCs. In the last two decades, countries like China, India and Brazil have achieved rapid economic development.
The Pre-Modern World and the Nineteenth Century
The Pre-Modern World
- Globalisation refers to an Economic System that has emerged since the last 50 years.
- From ancient times, travellers, traders, priests and pilgrims travelled vast distances for knowledge, opportunity, spiritual fulfilment or to escape persecution.
- The Silk Routes are a good example of pre-modern trade and cultural links between distant parts of the world.
- The name ‘Silk Routes’ points to the importance of West-bound Chinese silk cargoes along this route.
- Trade and cultural exchange always went hand in hand.
- Traders and travellers introduced new crops to the lands that they travelled.
- Europe’s poor began to eat better and live longer with the introduction of 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.
- European sailors found a sea route to Asia and also successfully crossed the western ocean to America.
- Precious metals, particularly silver, from mines located in present day Peru and Mexico also enhanced Europe’s wealth and financed its trade with Asia.
- The Portuguese and Spanish conquest and Colonisation of America was decisively underway by the mid sixteenth century.
The Making of a Global World Important Terms
Globalisation: Globalisation is generally associated with the economy as the free movement of capital, goods, technology, ideas and people across the globe. Globalization in a broader sense also includes cultural exchanges between different countries of the world.
Silk Route: The route taken by traders to carry silk cargoes from China to the West, which affected cultures of China, Central Asia and the West.
Cowrie: A Hindi word meaning ‘Sea shells’. These were used in the ancient world as a form of currency.
Coolies: Indian indentured labourers were referred to as coolies in the Caribbean Islands.
Corn Laws: British laws which imposed restrictions on the Import of Corn.
Dissenter: One who refuses to accept established beliefs and practices.
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 or home.
Industrial War: Economic activities concerned with the processing of raw materials and manufacture of goods in factories, e.g., the use of Machine guns, Tanks, Aircraft, Chemical weapons, etc.
Hire Purchase: A system by which a buyer pays for a thing in regular instalments while enjoying the use of it.
The Great Depression: A drastic decline in the world economy resulting in mass unemployment and widespread poverty that began around 1929 and lasted till the mid-1930s.
Bank Loan: An amount of money loaned at interest by a Bank to a borrower, usually on collateral security, for a certain period of time.
Allies: Before the First World War, Britain, France and Russia later joined by U.S.A. formed an alliance and fought together in the First World War.
Central Powers: An alliance formed by Germany, Austria, Hungary and Ottoman Turkey, who fought together in the First World War.
Axis Powers: Germany, Italy and Japan were known as Axis Powers during the Second World War.
El Dorado: The fabled city of gold.
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.
The Making of a Global World Notes Important Dates
- 3000 BCE: An active coastal trade linked the Indus Valley Civilization with present day West Asia.
- 15th Century: Existence of Silk Routes.
- Mid 16th Century: Portuguese and Spanish conquest and Colonisation of America.
- 1845 – 1849: Potato Famine in Ireland. During this famine, around 1,000,000 people died of starvation in Ireland.
- 1885: The big European powers met in Berlin to complete the carving up of Africa between them.
- 1890: Global agricultural economy took shape.
- 1890s: Rinderpest (Cattle Plague) had a terrifying impact on livelihoods of the African people and the local economy.
- 1892: Rinderpest reached Africa’s Atlantic coast.
- 1900s: Indian nationalist leaders began opposing the system of Indentured Labour Migration as abusive and cruel.
- 1914-1918: The First World War was fought.
- 1921: Indentured labour was abolished.
- 1923: America resumed exporting capital to the rest of the world and became the largest Overseas Lender.
- 1929-1935: The Great Depression.
- 1939-1945: The Second World War was fought.
- July, 1944: The United Nations Monetary and Financial Conference was held at Bretton Woods in New Hampshire, USA.
- 1947: The IMF and the World Bank commenced financial operations.
- 1949: The Chinese Revolution.
- The Late 1970s: MNCs began to shift production operations to low-wage Asian countries
The making of a global world Quick Revision Notes
- All through history, human societies have become steadily more interlinked. From ancient tones, travellers, traders, priests and pilgrims traveled vast distances for knowledge, opportunity and spiritual fulfillment, or to escape persecution.
- They carried goods, money, values, skills ideas, inventions, and even germs and diseases.
- The silk routes are an excellent example of pre-modern trade and cultural links between distant parts of the world.
- Several silk routes helped in linking Asia with Europe and northern Africa.
- Traders and travellers introduced new crops to the lands they travelled to.
- The pre-modern world greatly shrank in the 16th century after European sailors found a sea route to Asia and also crossed the western ocean to America successively.
- The European conquest of America was not just a result of superior firepower. In fact, it was the germs such as those of smallpox that they carried on their person that killed America’s original inhabitants on a large scale.
- Three types of movement or ‘flows’ were identified by the economists within international economic exchanges – Flow of trade — Flow of labour —Movement of capital.
- The demand for food grains in Britain had increased due to the increase in population from the late 18th century.
- When the Corn Laws were scrapped, food could be imported into Britain more cheaply than it could be produced within the country.
- Important inventions like the railways, steamships and the telegraph triggered the economic growth in the nineteenth century.
- Railways were needed to link the agricultural regions to the ports.
- In the 19th century, about 50 million people emigrated from Europe to America and Australia in search of better future.
- Trade flourished and markets expanded in the late nineteenth century. Britain and France made vast additions to their overseas territories in the late nineteenth century. Belgium and Germany became new colonial powers and also the US in the late 1890s.
- In the 1890s, Rinderpest, a fast-spreading disease of cattle plague, in Africa, had a terrifying impact on people’s livelihoods and the local economy.
- In the late 19th century, Europeans were attracted to Africa because of its vast resources of land and minerals.
- Rinderpest began in East Africa and soon spread to the other parts of the continent.
- In the nineteenth century, thousands of Indian and Chinese laborers migrated to work on plantations, in mines, and in roads and railway construction projects around the world.
- In India, indentured laborers were hired on contracts. Nineteenth-century indenture has been described as a ‘new system of slavery.
- Shikaripuri Shroffs and Nattukotai Chettiars were among the many groups of bankers and traders who financed export agriculture in Central and South east Asia.
- Due to the British economic policy imposing tariffs on cloth imports into Britain, the inflow of fine Indian cotton began to decline and the British manufacturers flooded the Indian market with British cloth.
- Export of foodgrains and raw material from India to Britain and the rest of the world increased. Thus, Britain had a trade surplus with India.
- The First World War (1914-18) was mainly fought in Europe. During this period, the world experienced widespread economic and political instability, and another catastrophic war.
- The impact of the First World War was widespread. This war was the modern industrial war. It witnesse the use of machine guns, tanks, aircrafts, chemical weapons, etc.
- After the war, Britain found it difficult to recapture its earlier position of dominance in the Indian market, and to compete with Japan internationally.
- Recovery was quicker in the US. The war helped boost the US economy. One important feature of the US economy of the 1920s was mass production.
- The Great Depression started from 1929 and lasted till the mid-1930.
- The impact of the Great Depression on India was widespread. Indian trade immediately got affected due to the Great Depression.
- The Bretton Woods System opened an era of unique growth of trade and incomes for the Western industrial nations and Japan. World trade growth was stable without large fluctuations.
- After the Second World War, many parts of the world were still under European colonial rule, and it took over the two decades for the colonies in Asia and Africa to become free independent nations.
- As most developing countries were not much benefited from the fast growth, therefore, they formed a group called—the Group of 77 (or G-77).
- The relocation of industry to low-wage countries (India and China) stimulated world trade and capital flows.
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