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24 Cards in this Set

  • Front
  • Back
Pre-19th Century International Trade
- mercantilist trade
- high value-to-volume goods
- small relative to national economies
- Relationship between international trade and industrialization
- Engine of industrial capitalism in England
- Application of new technology and power to production
- English cotton textiles: spurred industrial revolution and globalization
Industrial Revolution
- geopolitical effects of end of Napoleonic Wars
- British hegemony
Post-1814 Pax Britannica (Latin for the “British Peace”)
- steamships
- Suez Canal (completed 1869)
- international submarine telegraph
- railroads
- mass trade in basic commodities
- mass migration of people
- greatest benefits, initially, accrued to Great Britain
The Transportation and Communications Revolution
- Repeal of the Corn Laws
- Movement against mercantilism in England
- Theory of Comparative Advantage
- Principle of “Most Favored Nation”
- Role of colonies
Free Trade
- Financial innovation
- New forms of equity
Growth of Foreighn Investment
- designed to facilitate international transactions
- reduced financial risks
- stimulated foreign investment
The Gold Standard System
- excluded nations not on gold
- subjected primary commodity exporters to economic shocks
- vicious cycles of boom and bust
- burden adjustment on poor countries and labor
Economic consequences of Gold Standard
- growth in U.S. military and economic power (1870-1914) and
gradual replacement of British hegemony by U.S. hegemony (1914-1945)
- protracted end of the First Era of Globalization, 1914-1940
General Themes (from week 5)
- industrial competition from Europe, Japan, USA
- overproduction
- effects: protectionism; race for colonies; restrictions on immigration
Erosion of British Hegemony
- Allies vs. Central Powers
- relative decline of Great Britain/rise of the United States
- Wilsonian internationalism
World War I (“The Great War”)
- finance and portfolio investment
- FDI – market-oriented and supply-oriented
U.S. Economic Expansion in the 1920s
- internationalism vs. nationalism
- economic
- political
- cultural
Contradictions of the 1920s
- international imbalances
- failed European economic recovery
- abandonment of the gold standard
- division of the world economy into competing blocs/autarky and fascism
Final Collapse – 1930s
standoff between isolationism and internationalism in U.S.A.
The 1930s Reversal of Globalization
- oil resources shaped the origin, conduct, and outcome of the war
- development of technologies vital to late-20th century globalization
- Henry Luce declaration of “American Centur
The Second World War
Bretton Woods System (BWS)
Four pillars: 1) Gold-dollar system; 2) IMF; 3) World Bank; 4) GATT
New World Financial Order
- liberalization of trade, but not finance
- nationally based economic growth
- regional economic integration
- key trade links established between raw material producers and consumers
- late 1940s, BWS poorly equipped to rebuild world economy, but long term
importance as shaper of international trends in production and trade
Keynesian compromise between economic nationalism and internationalism
- Post-WWII crisis
* traditional narrative – Cold War instigated by global threat of communism
* Economic interpretation
- secondary cause of crisis - Soviet expansion
- primary cause of crisis - “Dollar Gap” (struggling European and
Japanese recovery) and U.S. isolationism
The Cold War: Post WWII Crisis
- Truman Doctrine (1947) and Marshall Plan (1948)
- exaggeration of Soviet threat
- importance of Middle East oil
- partial success and failure of these solutions
- renewed crisis in the system in 1949
The Cold War: Attempted Solutions to Dollar Gap
- “military Keynesianism”
- jump-started the reconstruction and reintegration of the global economy
The Cold War: Korean War
a. Currency Convertibility in Europe
- European Economic Community (EEC)
- Growth in U.S. FDI in Europe
b. Trade Liberalization under GATT
c. Transportation and Communication technologies
d. Redirection of Foreign Investment Flows
Prefiguring the Second Global Economy
a. End of the Long Boom and Bretton-Woods System – 1969-1971
b. Oil Shocks – First (1973-1974) and Second (1979)
c. “Reaganomics” and “Volcker Shock”
Launching the Second Global Economy
A. Process 1
- Third World debt crisis and structural adjustment
- Neo-liberal reform forced open highly regulated economies
B. Process 2
- oil price collapse, or “Third” Oil Shock (1985-1986), and end of Cold War
- elimination of alternative development models
The New Era of Globalization