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24 Cards in this Set
- Front
- Back
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Liberal or open trade policies?
Increasing importance of export/imports in national accounts? Management of economies by World Bank, IMF? Increasing corporate power and weakening of the nation state? Privatization of public sectors and services? Americanization/homogenization or diversification of culture? Spreading democratization? Increased migration? A shrinking world? Growth of China? |
What is Globalization
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Broad: international movement of commodities, people,capital, culture, ideas.
Narrow: Economic: market integration; commodity price convergence |
Globalization
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Falling transport costs or trade barriers
- Falling import prices - Commodity Price Convergence - Prices for the same commodity in different markets aprroaching each other; a sign of economic globalization. - Increasing trade volumes |
Integration of international commodity markets:
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Prices for the same commodity in different markets approaching each other; a sign of economic globalization
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Commodity price convergence
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The greenwich meridean
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1884
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-1300 Bubonic plague spread through trading in Europe. The place, Europe, the time 1347, a ship traveling from the Black Sea port of Kaffa docks in Sicily. Aboard this ship was death, though the people did not know it. Over the next 4 years 25 million people or 1/3 of the population of Europe died of this dreaded affliction. The disease was caused by a bacteria known as the Yersinia Pestis. It was transmitted by an insect known as the rat flea. The plague outbreak of 1347 was one of the first signs of an organism’s ability to mutate to another form. A pneumonic version of the plague developed that killed even more quickly and spread more readily.
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The spread of the Black Death
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How do we characterize international trade during the colonial period? It was mercantilistic trade. Merchants who controlled particular lines of trade depended on Crown charters granting them monopolies.
It was not free trade it was _____ trade. They depended on Royal Charters. Mercantilist system trade existed in the past. -Depended on royal charters, being tied to family crowns=more power. Mercantilism (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. - Prominent trading companies owed their success to state-chartered monopolies, to exclusive rights to territories - Trade involved mainly high value-to-volume products - Trade was not free, competitive, capitalistic, or market-based; therefore, it did not lead to market integration, commodity price convergence, or globalization - The economic theory of mercantilism would be consistent with which of the following statements?: a government should seek to direct the economy so as to maximize exports |
Mercantilistic Trade
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The British ______ was founded on the last day of 1600 through a royal charter signed by Queen Elizabeth I. In many ways it failed to achieve its initial aim of trade in spices and other items favored by the English people. British subsequent dominance over the Indian subcontinent came only following the Dutch withdrawal for the more lucrative isles of modern Indonesia.
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East India House, 1808 or Company
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- Colonial-era international trade did not drive
Industrialization or promote globalization - Industrialization, initially resulting from domestic transformations in England, created market imperatives and technologies that changed the character of international trade and investment - Growth of English cotton textile industry led to a broader industrial revolution and set in motion globalizing forces -International trading back then accounted a small percentage.Trade maily involved high value-to vokume products - Spices, silks, precious metals, ivory, porelain, which is economically viable to trade - internationally, militarily, and technologically |
Creation of first Global Economy
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- Enclosure movement
- Market in rents and labor - Agricultural workers driven off the land into factories (or to North America) - Productivity of agriculture to sustain population outside of agriculture - English banking - developed to facilitate trade between London and British agriculture |
Engine of early Industrial Capitalism in England
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Was involved in exporting opium. Traded slaves for sugar or cash. Series turned into economic force through conquest. Had some growth prospects. Local investors investing and innovating.
-England traded received slavery from W. Africa to N. America’s plantation in exchange for sugar or cash. -Hegemony= influence or dominant -English were dominant around the world - Their influence came beyond their control and saw what was best in their interests. |
East India
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Cotton textiles from England drove the growth of international trade and process of globalization on the 19th century. Increasing labor productivity in cotton tectiles was acheived by teh English invention of labor saving devices (automatic spinning devices)
Productivity Increase in Cotton Spinning: - Indian hand-spun textiles 18th century - 50,000 hours per 100 lbs cotton - English mechanized spinning 1825 - 135 hours per 100 lbs cotton Cotton Imports Britain - 1780's 25M lbs -1840's 600M lbs. |
Cotton Textiles Great Britain
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Saw the British decisively defeat a combined French and Spanish fleet on 21 October 1805 in the most significant naval battle of the Napoleonic Wars. A Royal Navy fleet of 27 ships of the line destroyed an allied French and Spanish fleet of 33 ships of the line west of Cape Trafalgar in south-west Spain. The French and Spanish lost 22 ships, while the British lost none. The British commander Admiral Lord Nelson died late in the battle, by which time he had ensured his place as Britain's greatest naval hero.
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The Battle of Trafalgar, 1805
British Royal Navy |
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________________ 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.
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The Congress of Vienna, 1814-15
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- Balance of power established on the
European continent - Britain in possession of near monopoly of naval power on the seas – British Royal Navy as powerful as next three or four navies combined - British “hegemony” |
Geopolitical Effects of Napoleonic Wars
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In the 1830's and 1840's, steamships were regarded as fast, but too expensive to replace sailing ships. They burned a lot of coal, and steamer coal had to be shipped from Britain for refueling anywhere in the world.
-British shaped the First Global Economy. - They were first used for military purposes. -Other tech innovations: propellers, iron hulls, etc brought cost of operating steam ships more affordable. -Gt. Britain had most affordable price and availability in the world, they were the first to get into the coal industry. |
British India Steamship Navigation Company
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- 1850s-1860s – propellers, iron hulls,surface condensers, compound engine
- Decline in coal consumption from 4 kilos per hour to 1.6 kilos per hour - Steamships used for commercial purposes, in addition to military expeditions. - Reduction of time and distance in international trade |
Technological advantages in steamships
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- Completed in 1869
- Dramatically cut distance, time, and thus costs, in shipping products between East and West - Quickened the pace of finance – capital less tied up in transit time; insurance and inventory costs reduced; businesses able to plan better |
Suez Canal
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1)Gave shippers sufficiently fresh information about markets and prices to
place orders and arrange shipping more efficiently 2) Allowed shipping lines to communicate with ships in harbor, providing more flexibility 3) It gave shipping companies flexibility to change routes, cargoes, and destinations |
International Telegraph lines (Three major impacts)
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- Not just luxuries or high value-to-volume
products such as spices, tobacco, sugar,opium, etc. traded internationally - Lower value-to-volume bulk products such as cotton, wheat, jute, coffee, cocoa, lumber, beef, tropical fruits, minerals, nitrates, guano became profitable in international trade for the first time |
Mass trade in Commodities
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Ship owners looking to immigrants. Needed people to come to settle. Irish potato famine. Starving Irish people who looked to U.S. to start a new life. Millions of people migrated.
Population Growth and Urbanization: Between 1750 and 1850 the European population more than doubled from about 140 million to 266 million. - Falling death rates - More food available - But in Ireland overpopulation, rural poverty and a potato blight led to the great famine in the 1840s. In the 19th century only Ireland had a declining population. |
Emmigration from Europe, 1821-1915
- Social Transformations |
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Benefited Britain more than all other nations:
- British had the best coal and controlled most key sources of steamer coal - British shipping lines took the lead in establishing regular cargo service to world ports; created exclusive shipping cartels - British built and financed most railways around the world - British Royal Navy protected shipping lanes and provided “cost-free” insurance - British established control over the Suez Canal region by occupying Egypt in 1882 |
Transportation and Communications Revolution
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Foreign trade, secondary (colonies important, but agriculture, coal, and
mechanization of textiles primary) * 1840s-1850s: - trade had become increasingly central to British industrial capitalism - British political leadership moved away from mercantilism toward “free trade” |
British Industrial Capitalism
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Technological advantage in steamships
- 1850s-1860s – propellers, iron hulls, surface condensers, compound engine - Decline in coal consumption from 4 kilos per hour to 1.6 kilos per hour - Steamships used for commercial purposes, in addition to military expeditions Reduction of time and distance in international trade |
British Dominance of the Sea
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