The Making of a Global World
- Revision Notes
- Important Symbols
- Important Personalities
- Important Dates
- Important Terms
- Intext Questions
- NCERT Solution
- 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
- Globalisation: Globalisation is generally associated with economy as the free movement of capital, goods, technology, ideas and people across the globe. Globalisation 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 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 most powerful weapon of the Spanish conquerors was the germs such as those of smallpox that they carried on their person.
- Due to their long isolation, America’s original inhabitants had no immunity against these diseases that came from Europe. Smallpox, in particular proved to be fatal.
- Until the 19th century, poverty and hunger were common in Europe. Cities were crowded and deadly diseases were widespread.
- In the 18th century, China and India were among the world’s richest countries. They were also pre-eminent in Asian trade.
- However, from the 15th century, China is said to have restricted overseas contacts and retreated into isolation.
- China’s reduced role and the rising importance of the America gradually moved the centre of world trade Westwards.
- Europe now emerged as the centre of world trade.
The Nineteenth Century:
- Economic, political, social, cultural and technological factors interacted in complex ways to transform societies and reshape external relations.
- Economists identify three types of movement or ‘flows’ within International Economic Exchanges.
- The flow of Trade.
- The flow of Labour.
- The Movement of capital .
- Due to increase in population from the late 18th century, the demand for food grains in Britain had increased.
- Since, there was pressure from landed groups, the government also restricted the import of corn.
- The laws allowing the government to do this were commonly known as the ‘Corn Laws’.
- Railways were needed to link the agricultural regions to the ports.
- New harbours had to be built and people had to settle on the lands which meant building homes and settlements.
- All these activities in turn required capital and labour. Capital flowed from financial centres such as London.
- The demand for labour in places where labour was in short supply—as in America and Australia, led to more migration.
- By 1890, a Global Agricultural Economy had taken shape.
- The British Indian Government built a network of irrigation canals to transform semi-desert wastes into fertile agricultural lands that could grow wheat and cotton for export. The railways, steamships, the telegraph were important inventions without which we cannot imagine the transformed nineteenth-century world.
- Colonisation stimulated new investments and improvements in transport.
- The trade in meat offers a good example of this connected process. Till the 1870s, animals were shipped live from America to Europe and then slaughtered when they arrived there.
- Better living conditions promoted social peace within the country and support for imperialism abroad.
- 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.
- In the 1880s, a fast-spreading disease of Cattle Plague or Rinderpest had a terrifying impact on the African local economy. It was carried by infected cattle imported from British Asia to feed the Italian soldiers invading Eritrea in East Africa. Entering Africa in the East, Rinderpest moved west ‘like forest fire’. The loss of cattle destroyed African livelihoods.
- In the late 19th century, Europeans were attracted to Africa due to its vast resources of land and minerals. But there was a shortage of labour willing to work for wages.
- Employers used many methods to recruit and retain labour.
- Heavy taxes were imposed which could be paid only by working for wages on plantations and mines.
- In the 19th century, hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines, and in road and railway construction projects around the world.
- In India, indentured labourers were bonded labourers who were transferable to any country on contract for a specific amount of wage and time. Most of the labourers were from Uttar Pradesh, Bihar, Central India and certain districts of Tamil Nadu.
- The 19th century indenture has been described as a ‘New System of Slavery’.
- From the 1900s, India’s nationalist leaders began opposing the system of Indentured Labour Migration as abusive and cruel. It was abolished in 1921.
- Shikaripuri Shrott and Nattukottai Chettiyars were amongst the many groups of bankers and traders who Financed Export Agriculture in Central and South-east Asia.
- Indian Traders and Moneylenders also followed European colonisers into Africa.
- With the advent of industrialisation, British cotton manufacture began to expand and industrialists pressurised the government to restrict cotton imports and protect local industries.
- Tariffs were imposed on cloth imports into Britain. Consequently, the inflow of fine Indian cotton began to decline.
- Indigo used for dyeing cloth was another important export for many decades. British manufactures flooded the Indian Market.
- 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.
- Britain used this surplus to balance its trade deficits with other countries – that is, with countries from which Britain was importing more than it was selling to.
The Inter-War and Post-War Economy
The Inter War Economy:
- The First World War (1914-18) was mainly fought in Europe but its impact was felt around the world due to widespread economic and political instability.
- This war was thus, the First Modern Industrial War. It saw the use of machine guns, tanks, aircraft, chemical weapons, etc., on a massive scale.
- Most of the killed and maimed were men of working age and these deaths and injuries reduced the able-bodied workforce in Europe.
- Britain borrowed large sums of money from the US Banks as well as the US public which transformed the US from being an “International Debtor to an International Creditor”.
- Britain was the world’s leading economy in the pre-war period but had to face a prolonged crisis. In the meanwhile, industries had developed in India and Japan.
- After the war, Britain found it difficult to recapture its earlier position of dominance in the Indian Market and to compete with Japan internationally.
- The war had led to an economic boom, that is, to a large increase in demand, production and employment.
- Before the war, Eastern Europe was a major supplier of wheat in the world market but during the war its supply disrupted and wheat production in Canada, America and Australia expanded immensely.
- But after the war, production in Eastern Europe revived and created a glut in wheat output. Grain prices fell, rural incomes declined and Farmers fell deeper into debt.
- One important feature of the US economy of the 1920s was Mass Production. A well-known pioneer of mass production was the Car Manufacturer, Henry Ford.
- The T-Model Ford was the world’s first mass-produced car.
- Mass production lowered costs and prices of engineered goods and there was an increase in the purchase of refrigerators, washing machines, radios, gramophone players, all through a system of ‘hire purchase’.
- Large investments in housing and household goods seemed to create a cycle of higher employment and incomes, rising consumption demand, more investment and yet, more employment and incomes.
The Great Depression:
- By 1929 the world plunged into a depression called -The Great Depression of 1929.
- During this period most parts of the world experienced catastrophic declines in production, employment, incomes and trade.
- The depression was caused by a combination of several facts of agricultural overproduction.
- Many countries financed their investments through loans from the US. The withdrawal of the US loans affected much of the rest of the world.
- With the fall in prices and the prospect of a depression the US Banks had also slashed domestic lending and called back loans.
- The Great Depression’s wider effects on society, politics and international relations, and on peoples’ minds, proved more enduring.
- Since Colonial India had become an exporter of agricultural goods and importer of manufactures, the depression immediately affected Indian trade.
- Peasants and farmers suffered more than urban dwellers though agricultural prices fell sharply, the Colonial Government refused to reduce revenue demands.
- This resulted in the increase of indebtedness of the Indian peasants who used up their savings, mortgaged lands, and sold whatever jewellery and precious metals they had to meet their expenses.
- The famous economist John Maynard Keynes thought that Indian gold exports promoted global economic recovery.
The Post War Era:
- The Second World War broke out merely after two decades of the First World War and brought enormous death and destruction.
- It was fought between the Axis powers (mainly Nazi Germany, Japan and Italy) and the Allies (Britain, France, the Soviet Union and the US).
- The war caused an immense amount of economic devastation and social disruption.
- There were two impacts that influenced post-war reconstruction. The first was the US’s Emergence as the dominant economic, political and military power in the Western world and the second was the dominance of the Soviet Union.
- Economists and politicians drew two key lessons from Inter-war economic experiences:
(i) An Industrial Society based on mass production cannot be sustained without mass consumption.
(ii) The second lesson related to a country’s economic links with the outside world.
- The main aim of the Post-war International Economic System was to preserve economic stability and full employment in the Industrial World.
- The Bretton Woods conference established:
(i) The International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations.
(ii) The International Bank for Reconstruction and Development (popularly known as the World Bank) was set up to finance post-war reconstruction.
- The Post-War International Economic System is also often described as the Bretton Woods system which inaugurated an era of unprecedented growth of trade and incomes for the Western Industrial Nations and Japan.
- When the Second World War ended, large parts of the world were still under European colonial rule but in the next two decades most colonies in Asia and Africa emerged as Free, Independent Nations.
- The IMF and the World Bank were designed to meet the financial needs of the Industrial Countries.
- Most developing countries did not benefit from the fast growth that the Western economies experienced in the 1950s and 1960s therefore, they organized themselves as a group—the Group of 77 (or G-77)—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 and better access for their manufactured goods in developed countries’ markets.
- The Industrial World was hit by unemployment that began rising from the mid-1970s and remained high until the early 1990s.
- From the late 1970s., MNCs also began to shift production operations to low-wage Asian countries, China being one of them.
- China became an attractive destination for investment by foreign MNCs, competing to capture world markets.
- The relocation of industries to low-wage countries stimulated world trade and capital flows.
Question.1. Explain what we mean when we say that the world ‘shrank’ in the 1500s.
- The word ‘Shrank’ stands for increased interaction among the people of various continents of the world.
- Before 1500 s there was not much inter connectedness, trade and commerce among the residents of various containments.
- But after 1500s the commercial cultural exchange of ideas and people increased in the continents of the world that stretched from America to the Asia through Europe and Africa.
Question.2. Prepare a flow chart to show how Britain’s decision to import food led to increased migration to America and Australia.
Question.3. Imagine that you are an agricultural worker who has arrived in America from Ireland. Write a paragraph on why you chose to come and how you are earning your living.
Ans. Hi! I am mack , I am from Ireland. I have come to America. I was a peasant in Ireland. But I had to migrate to America. The main reason behind this was the unemployment of peasants in Ireland. This occurred due to the import of chapter food items in our country. Thus, we were out berated by the imported food grain and became unemployed. Then I decided to migrate to America, as here peasants were required to work on large farms, and I got employment. In America I live near my employer’s farm. I work in his field and grow crops. In this way I earn my living.
Question.4. Discuss the importance of language and popular traditions in the creation of national identity.
- A person is identified by his language and traditional practices because the language that he speaks belongs to a nation, his motherland. It is the nation which is important than an individual.
- Also the language and traditional practices of a land or territory develop in a long time, thus get firmly established.
- People are born and die but language and traditions stay. They are always alive.
- They give an identity to an Individual wherever he goes.
Therefore, the language and popular traditions are important in creating national identity of an Individual.
Question.5. Who profits from jute cultivation according to the jute growers’ lament? Explain.
Ans. The jute growers’ lament was that only the traders and moneylenders profited from jute cultivation, not the growers. Peasants of Bengal cultivated raw jute which was processed in factories for export in the form of gunny bags.
They grew raw jute hoping that a better time would come and there would be increase in-exports. But this did not happen as gunny exports collapsed due to the depression. Due to glut in the local market, the price of raw jute crashed by more than 60 per cent and so, they fell into heavy debt. Thus, only the traders and moneylenders profited from jute cultivation, not the farmers.
Question.6. Briefly summarize the two lessons learnt by economists and politicians from the inter-war economic experience?
Ans. The inter-war economic experience was very bad
- Most of the countries were devastated and cities were destroyed.
- The economists and politicians learned that they had to ensure economic stability of the industrial countries.
- Also they understood the interdependence of national economies all over the world.
Hence, they drew up an internationally accepted framework to recover and consolidate the world economy.
Question.1. Give two examples of different types of global exchanges which took place before the seventeenth century, choosing one example from Asia and one from the Americas.
- Asia : Caravans carried items such as precious stones and metals, gold, ivory, and glass to China until around the fifth century C.E. From China, the Parthians and other merchants carried silk, furs, ceramics, jade, bronze objects, lacquer and iron. Silk was mostly demanded in Rome.
- America : In the sixteenth century, precious metals like silver from the mines of Peru and Mexico were taken to Europe. This in turn financed European trade with Asia.
Question.2. Explain how the global transfer of disease in the pre-modern world helped in the colonisation of the Americas.
Ans. A virus called small pox, which was brought from Europe to the America, decimated much of the native communities around the mid-sixteenth century. The original inhabitants had no immunity against such diseases and they were unable to resist the coloniser’s superior weapons. The Making of a Global World
Question.3. Write a note to explain the effects of the following:
(a) The British government’s decision to abolish the Corn Laws.
Ans. The immediate effect of the British government’s decision to abolish the Corn Laws was the inflow of cheaper agricultural crops from America and Australia. Many English farmers left their profession and migrated to towns and cities. Some went overseas. This indirectly led to global agriculture and rapid urbanisation, a prerequisite of industrial growth.
(b) The coming of rinderpest to Africa.
Ans. Rinderpest was a cattle epidemic that came to Africa with the infected the meat imported from British Asia to feed the Italian soldiers invading Eritrea in East Africa. It killed more than 90 per cent of the livestocks in Africa, making them dependent on Europeans for food and turned them subservient.
(c) The death of men of working-age in Europe because of the World War.
Ans. Most of the victims of world war belonged to young generations of working men. As a result, it reduced the workforce in Europe, thereby reducing household income. The role of women increased and led to demand for more equality of status. It made the feminist movement stronger. Women started working alongside men in every field. Women and youngsters became more independent and free with long-term effects.
(d) The Great Depression on the Indian economy.
Ans. The impact of the Great Depression in India was felt especially in the agricultural sector. It was evident that Indian economy was closely becoming integrated to global economy. India was a British colony and exported agricultural goods and imported manufactured goods. The fall in agricultural price led to reduction of farmers’ income and agricultural export. The government did not decrease their tax and so, many farmers and landlords became more indebted to moneylenders and corrupt officials. It led to a great rural unrest in India.
(e) The decision of MNCs to relocate production to Asian countries.
Ans. US business expanded worldwide through the MNCs. In recent years, they have tried to relocate production to Asian countries for the following reasons:
(i) Partly to locate their manufacturing operations and become domestic producers to avoid high tariff rates imposed by different countries.
(ii) It is also because Asian countries are attractive destinations for investment, trying to capture world markets with its large population and globalisation.
(iii) The economic transformation of countries like India, China and Brazil also stimulated world trade and capital flows.
Question.4. Give two examples from history to show the impact of technology on food availability.
Ans. The nineteenth century witnessed a high rate of growth in industrial and agricultural products.
(i) The technological development was accelerated by the industrial growth and increasing world trade. Colonies also provided the resources and markets which sustained the industrial growth. Thus, railways were needed to link agricultural regions to the ports from where the goods were transported, thereby increasing food availability to more destinations.
(ii) Shipbuilding also became an important industry and countries competed to control trade routes on seas. Technology helped in the larger social, political and economic factors. For example, steamships and railways helped in carrying large volume of trading materials between long and inaccessible distance.
Question.5. What is meant by the Bretton Woods Agreement?
Ans. The main aim of the post-war international economic system was to preserve economic stability and full employment in the industrial world. The United Nations Monetary and Financial Conference held in July 1944 at Bretton Woods in New Hampshire in the USA agreed upon its framework. The Bretton Woods Conference established the following institutions:
International Monetary Fund: Its aim was to deal with external surpluses and deficits of its member nations The International Bank for Reconstruction and Development or World Bank was set up to finance post-war reconstruction. The above institutions are known as The Bretton Woods institutions or Bretton Woods twins. The post-war international economic system is also often described as the Bretton Woods system. It was based on fixed exchange rates. National currencies were pegged to the dollar at a fixed exchange rate. The dollar itself was anchored to gold at a fixed price of $ 35 per ounce of gold. The decision-making in these institutions is controlled by the western industrial powers. The US has an effective right of veto over key IMF and World Bank decisions.
Question.6. Imagine that you are an indentured Indian laborer in the Caribbean. Drawing from the details in this chapter, write a letter to your family describing your life and feelings.
Ans. Do it yourself
Question.7. Explain the three types of movements or flows within international economic exchange. Find one example of each type of flow which involved India and Indians, and write a short account of it.
Ans. Economy of the nineteenth century are identified into three types or flows by the economist. They are based on the international exchange of goods and capital. They are:
(i) Trade flow of goods, e.g. cloth or wheat, in which goods are exchanged at long and short distances. Indians traded with the rest of the world as early as the Indus Valley civilisation. For example, Indus people had trade relations with Mesopotamia.
(ii) Labour flow, e.g. the migration of people for employment, in which industrial countries actively create conditions favourable for employment and services. Many Indian labourers worked in plantations at South America and other colonies.
(iii) Movement of capital for short-term or long-term investment. In this, movement of resources from one country to another takes place through loans or business investments. The British transferred a lot of capital from India to England before independence.
All three are closely associated and affected the lives of people in the nineteenth century.
Question.8. Explain the causes of the Great Depression.
Ans. The Great Depression was caused by several factors:
(i) Prosperity in the USA during the 1920s created a cycle of higher employment and incomes. It led to rise in consumption and demands. More investment and more employment created tendencies of speculations which led to the Great Depression of 1929
upto the mid-1930s.
(ii) Stock market crashed in 1929. It created panic among investors and depositors who stopped investing and depositing. As a result, it created a cycle of depreciation.
(iii) Failure of the banks. Some of the banks closed down when people withdrew all their assets, leaving them unable to invest. Some banks called back loans taken from them at the same dollar rate inspite of the falling value of dollar. It was worsened by British change in policy to value pound at the pre-war value.
Question.9. Explain what is referred to as the G-77 countries. In what ways can G-77 be seen as a reaction to the activities of the Bretton Woods twins?
Ans. The IMF and the World Bank or the Bretton Woods twins served in the reconstruction of these nations. In the process, large corporations of powerful nations like the USA often managed to secure economic and other extra-territorial rights over weaker nations. The economic advances made by the West and Japan in the 1950s and 1960s did not benefit most of the developing countries. As a reaction to the activities of the Bretton Woods twins, they organised themselves into a group known as the Group of 77 or G-77 in order to demand a new international economic order (NIEO). The NIEO stood for a system that would give these nations real control over their natural resources, more development assistance, fairer prices for raw materials, and better access for manufactured goods in their markets.