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42 Cards in this Set

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(born Nov. 19, 1805, Versailles, France — died Dec. 7, 1894, La Chenaie, near Guilly) French diplomat, builder of the Suez Canal. A career diplomat, he held posts in Egypt and elsewhere until 1849. In 1854 he was authorized by the viceroy of Egypt to build a canal across the isthmus of the Suez. He organized a company in 1858, with half its capital from French people, and construction began at Port Said in 1859. The Suez Canal was officially inaugurated in 1869. In 1879 Lesseps organized another company to build a Panama canal, but he gave up the project because of political and economic difficulties. He was prosecuted but cleared of charges of misappropriating funds, though French government members were accused of bribe taking.
Ferdinand De Lesseps
Mohammed Said provided the work force of 60,000 Egyptian peasants. As for the terms of the 2nd concession to De Lesseps. 20,000 men at a time worked in six month shifts. At least 25,000 Egyptians died digging the canal because De Lesseps neither supplied them with housing, food or tools. They had to dig with whatever tools were available and there are pictures of them digging with there bare hands. They worked 18 hour days. This unwilling workforce was called Corvée Labor
Corvee Labor
(1819-1892), American merchant, financier, and promoter of the first transatlantic submarine cable. Cyrus Field West was born in Stockbridge, Massachusetts. He amassed a fortune as head of the paper merchandising firm that he founded. Interested in the possibility of transatlantic telegraphy, after 1854 he obtained a charter giving him the exclusive right for 50 years to use the coasts of Newfoundland as a transoceanic cable terminal. He was called Field the Great!
Cyrus Field
The process by which the futures price and the cash price of an underlying asset approach one another as delivery date nears. The futures and cash prices should be equal on the delivery date
Price Convergence
East India Company also called English East India Company , formally (1600–1708) Governor and Company of Merchants of London Trading into the East Indies , or (1708–1873) United Company of Merchants of England Trading to the East Indies English company formed for the exploitation of trade with East and Southeast Asia and India, incorporated by royal charter on Dec. 31, 1600. Starting as a monopolistic trading body, the company became involved in politics and acted as an agent of British imperialism in India from the early 18th century to the mid-19th century.
English East India Company
(1500-1800) involved the economy’s subordination to the needs of the state, especially its need for power. Mercantilist nations strove for protectionism, a positive balance of trade, the accumulation of gold, and a global system in which colonies’ primary job was to supply natural resources to the factories of the home country.
The Congress of Vienna was an international conference that was called in order to remake Europe after the downfall of Napoleon I. Many territorial decisions had to be made in the conference that was held in Vienna, Austria, from September 1814 to June 1815. The main goal of the conference was to create a balance of power that would preserve the peace
Congress of Vienna (1815)
- The Price-specie-Flow Mechanism is a logical mechanism created by David Hume which dispelled the Mercantilist (1700-1776) notion that a nation can have a continuously favorable balance of trade.
Price-Specie Flow Mechanism
The invisible hand is a metaphor coined by the economist Adam Smith. In The Wealth of Nations and other writings, Smith claims that, in capitalism, an individual pursuing his own self-interest tends to also promote the good of his community as a whole through a principle that he called “the invisible hand”. In detail, a free competitive market ensures that those goods and services perceived as most beneficial, efficient, or of highest quality will naturally be those that are most profitable. Thus, self-interest striving for profit has the side-effect of benefiting everyone by increasing standards. The mechanism for this, Smith saw as being the free price system.[1]

Adam Smith originally mentioned the 'invisible hand' specifically only once in each of his three works. The metaphor later gained widespread use.
Adam Smith, Wealth of Nations
The Populist Party (originally the People's Party) was established in 1891 when the Knights of Labor and Farmers' Alliance joined forces. The party advocated the public ownership of the railroads, steamship lines and telephone and telegraph systems. It also supported the free and unlimited coinage of silver, the abolition of national banks, a system of graduated income tax and the direct election of United States Senators.
meaning variegated or multicolored. Chintz is calico cloth printed with flowers and other devices in different colours, originally from India. Chintz was originally a painted or stained calico produced in India and popular for bed covers, quilts, and draperies, popular in Europe in 17th century and 18th century, where it was imported and later produced. Europeans at first produced reproductions of Indian designs, and later added original patterns. A well-known make was toile de Jouy, which was manufactured in Jouy, France between 1700 to 1843.
1732-1792) invented another kind of spinning device, the water frame.
Richard Arkwright
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
14th Amendment
1) The state or quality of being external.
2) Something external; an outward feature.
3) Excessive attention to externals.
4) An external effect, often unforeseen or unintended, accompanying a process or activity: to eliminate externalities such as air pollution through government regulation
The first theoretical case for "free trade" was made in the early 1800s by British economist David Ricardo and his principle of "comparative advantage" - the idea that the interests of overall economic benefit would be best served by each nation specializing in what it does best, and trading with others for other needs (04S1). Obviously this theory was ignored during the globalization of the mid-to-late 19th century, but it was taken to heart during the post-WWII globalization. Ricardo's theory is described and analyzed in greater detail in Section (1-B) [B4]. Altruism has never been more than a superficial justification for globalization anyway. Even during periods of globalization, undercurrents of protection have never been far below the surface. These protectionist sentiments easily broke through to return when the pressures of competition and economic problems weakened the powers of the world's leader. (See discussion, below, of the change of British attitudes on globalization immediately following WW I.)
David Ricardo
Type of investment in which a partner or investor cannot lose more than the amount invested. Thus, the investor or partner is not personally responsible for the debts and obligations of the company in the event that these are not fulfilled.
Limited Liablity
(1875-1900) In American history, the "Gilded Age" refers to the post-Civil War and post-Reconstruction era, from the 1870s to the 1890s, which saw unprecedented economic, industrial, and population expansion. The era overlaps with Reconstruction (which ended in 1877) and includes the Panic of 1873. The era was characterized by an unusually rapid growth of railroads, small factories, banks, stores, mines and other enterprises, together with dramatic expansion into highly fertile western farmlands. There was a great increase in ethnic diversity from immigrants drawn by the promotions of steamship and railroad companies which emphasized the availability of jobs and farmland.
"Gilded Age"
1840 – 1915. He ran the London office of the house of Rothschild. His life encompassed the golden age and he used his influence to reinforce the three major pillars of the golden age international economy: finance, the gold standard, and free trade.
Nathan Mayer Rothschild
Paris, France 1900. It was the largest the world had ever seen. The Eiffel Tower was build to celebrate it. It was the last of a series of seven. It showed the emerging of Germany and Japan.

The Eiffel Tower was built for the International Exhibition of Paris of 1889 commemorating the centenary of the French Revolution. The Prince of Wales, later King Edward VII of England, opened the tower. Of the 700 proposals submitted in a design competition, Gustave Eiffel's was unanimously chosen
Paris Inernational Exhibition
The best known early theoretician of industrialization by protection. List argued that free trade was the ultimate goal but to equalize relation among major powers temporary trade protection was required.
Friedrich List
A country will export goods that make intensive use of the resources it has in abundance.
Countries with lots of land will export agricultural products and will import capital intensive industrial products, countries with lots of capital will export capital intensive products and import agricultural products
Heckscher-Ohlin Trade Theory
Terms refers to colonies where the owners, the customers and the workers had no long term interest in the region and the impact on the local economy was minimal. They extracted whatever resources they could find in self contained enclaves of copper and gold mines or banana and sugar plantations
The colonial power assigned control of an entire promising region to a commercial concessionaire. A private entity whose goal was to maximize profits not to develop the local economy. If commercial success and local economic development went together that was fine but where they conflicted the concessionaires’ responsibility was to the stockholders.
Commercial Concession
(short for Interessen-Gemeinschaft Farbenindustrie AG, "syndicate of dyestuff corporations", and also called I.G. Farbenfabriken) was a German conglomerate of companies formed in 1925 and even earlier during World War I. Farben is German for "paints", "dyes", or "colors", and initially many of these companies produced dyes, but soon began to embrace more advanced chemistry.
This was a firm that has enormous amounts of cash. In 1925 I.G. Farben was the biggest private corporation in Europe.
The founding of IG Farben was a reaction to Germany's defeat in World War I. IG Farben held a near total monopoly on chemical production, later during the National Socialist (Nazi) regime, including manufacturing Zyklon B. This was a poison commonly used at the time for delousing, which became notorious as the lethal agent in the gas chambers of the death camps of Auschwitz and Majdanek. The company was a major user of slave labour. Before the war the dyestuff companies had a near monopoly in the world market which they lost during the conflict. One solution for regaining this position was a large merger.
IG Farben consisted of the following major companies and several smaller ones.
I.G. Farben
East Texas. At one time East Texas could have supplied half the oil consumption in the US. It was so unusual it became known as the “Black Giant”. It had been discovered by Dad Joyner and Doc Lloyd. What Dad Johner did had an enormous impact on the oil business.
Black Giant
The Red Line Agreement is the name given to an agreement signed by partners in the Turkish Petroleum Company (TPC) on July 31, 1928. The aim of the agreement was to formalize the corporate structure of TPC and bind all partners to a self-denial clause that prohibited any of its shareholders from independently seeking oil interests in the ex-Ottoman territory. It marked the creation of an oil monopoly, or cartel, of immense influence, spanning a vast territory. The cartel preceded easily by three decades the birth of another cartel, OPEC, which was formed in 1960.
It is said that Calouste Gulbenkian took out a large map, laid it on the table and drew with a thick red pencil an outline demarking the boundaries of the area where the self-denial clause would be in effect. He said that was the boundary of the Ottoman Empire he knew in 1914. He should know, he added, because he was born in it and lived in it. The other partners looked on attentively and did not object. They had already anticipated such a boundary. (According to some accounts, the “red line” was drawn not by Gulbenkian but by the French.) Excepting Gulbenkian, the partners were the supermajors of today. Within the “red line” was included the entire ex-Ottoman territory in the Middle East, including the Arabian Peninsula (plus Turkey) but excluding Kuwait. Kuwait was excluded, as it was meant to be a preserve for the British.
Red Line Agreement
As-Is Agreement
Agreement establishing a cartel of Western oil companies, 1928.
Price wars among major oil companies in the 1920s, most significantly one in India between Standard Oil of New York and a subsidiary of Royal Dutch Shell, threatened major oil company profits, especially those from relatively high-cost production in the United States. At an August 1928 secret meeting at Achnacarry Castle in the Scottish Highlands, the As-Is Agreement was devised by the leaders of the Anglo-Persian Oil Company (later BP), Royal Dutch Shell, and Standard Oil of New Jersey (later Exxon). Together with the Red Line Agreement, the As-Is Agreement formed the basis of what a U.S. Senate subcommittee in 1952 called "the international petroleum cartel."
As-Is Cartel
(May 1878 – January 9, 1962), was responsible for leading Standard Oil to the forefront of the oil industry and significantly expanding the company's presence in the petrochemical field. Trained at Cornell university in Chemistry.
Walter Teagle
May 8, 1899 in Vienna – March 23, 1992 in Freiburg) was an Austrian-British economist and political philosopher known for his defence of liberal democracy and free-market capitalism against socialist and collectivist thought in the mid-20th century. He is considered to be one of the most important economists and political philosophers of the twentieth century. One of the most influential members of the Austrian School of economics, he also made significant contributions in the fields of jurisprudence and cognitive science. He shared the 1974 Nobel Prize in Economics with ideological rival Gunnar Myrdal "for their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena." He also received the U.S. Presidential Medal of Freedom in 1991.
Friedrich von Hayek
The selling to private corporations or investors of assets or services that are owned and operated by the government. While governments provide services like education, healthcare, and social assistance as a service to citizens, when corporations own these services their main goal is profit.
Effort to shield domestic producers against foreign competition via tariffs, quotas, etc. Widely reduced under global free trade agreements; popular among critics of trade for countering job loss and environmental harm; criticized by economists for ignoring comparative advantage doctrine
To compare economic statistics across countries, the data must first be converted into a common currency. Unlike conventional exchange rates, _____ rates of exchange allow this conversion to take account of price differences between countries. Recently purchasing power parity exchange rates have been calculated comparing the cost of a common basket of commodities in every country. By eliminating differences in national price levels, the method facilitates comparisons of real values for income, poverty, inequality and expenditure patterns
Purchasing Power Parity (PPP)
Theory asserting primacy of states and state interests in international affairs; claims that states act rationally in pursuit of power, international system is "anarchy," and international politics is separate from domestic politics.
Supreme authority within a politically defined territory
The territory occupied by a nation; the government of a politically organized body of people, usually within a single nation.
The list of budgetary and policy changes required by the IMF and World Bank in order for a poor countries to qualify for a loan. This “conditionality” typically includes reducing barriers to trade and capital flows, tax increases, and cuts in government spending. Through SAPs, the IMF and World Bank can force poorer countries to prioritize macroeconomic stability over programs for public well-being. The IMF claims that this is important since countries cannot afford to spend as much money as they were spending. The result has been that governments have greatly cut the amount of money they spend on education, health care and other basic social services. The U.N. estimates that six million children a year die because of policies imposed by the IMF and World Bank.
Structural Adjustment Programs (SAPs)
Holds that sixteenth-century capitalist expansion from European core founded now fully global hierarchy of regions and geographic division of labor, enabling owners of capital, supported by strong states, to profit from control of cheap labor and unequal exchange
World System Theory
group of nations or peoples ruled over by an emperor, empress, or other powerful sovereign or government: usually a territory of greater extent than a kingdom, as the former British Empire, French Empire, Russian Empire, Byzantine Empire, or Roman Empire.
A situation in which the collateral used to secure a loan, or another form of debt, decreases in value. This can be detrimental to the borrower, as it may lead to a restructuring of the loan agreement or even a loan recall.

Also known as "worst deflation" and "collateral deflation
Debt Deflation
was an Austrian bank. The Creditanstalt was based in Vienna, founded 1855 as K. k. priv. Österreichische Credit-Anstalt für Handel und Gewerbe (approximately translated as: Imperial royal privileged Austrian Credit-Institute for Commerce and Industry) by the Rothschild family. Being very successful it became the largest bank of Austria-Hungary. It declared bankruptcy on May 11, 1931, during the Great Depression but was rescued by the Oesterreichische Nationalbank and the Rothschilds and merged with the Wiener Bankverein, thus changing its name to Creditanstalt-Bankverein.

After World War 2 the bank was nationalised, and became mainly a commercial bank and highly involved in Austria's economy, holding stakes in important Austrian companies such as Wienerberger, Steyr-Daimler-Puch, Lenzing AG and Semperit.
22 January 1877 – 3 June 1970) was a German financial expert and Minister of Economics from 1935 until 1937.

He joined the Dresdner Bank in 1903, where he became deputy director from 1908 to 1915. He was then a member of the committee of direction of the German National Bank for the next seven years, until 1922, and after its merger with the Darmstädter und Nationalbank (Danatbank), a member of the Danatbank's committee of direction. In 1905, while on a business trip to the United States with board members of the Dresdner Bank, Schacht met the famous American banker J. P. Morgan, as well as U.S. President Theodore Roosevelt.

During the First World War, Schacht was tasked to serve on the staff of General von Lumm, the Banking Commissioner for Occupied Beligum. Schacht was responsible for organizing the financing of Germany's purchasing policy within the country, and was summarily dismissed by General von Lumm when it was discovered that he had used his previous employer, the Dresdner Bank, to channel the note remittances for nearly 500 million francs of Belgian national bonds destined to pay for the requisitions.

Subsequent to Schacht's dismissal from the public service, he resumed a brief stint at the Dresdner Bank, before moving on to various positions within rival establishments. In 1923, Schacht applied and was rejected for the position of head of the Reichsbank, largely as a result of his dismissal from von Lumm's service.
Hjalmar Schacht
_________ is an index of the price of a country's exports in terms of its imports. The terms of trade are said to improve if that index rises.

- An analogous use is when comparing relative prices. If the cost of agricultural goods in terms of industrial goods goes up, one might say the "terms of trade ... shifted in favor of agricultural.
Terms of Trade