The Making of a Global World
- 1600: Establishment of the East India Company.
- 1730: The earliest factories in England came up.
- 1764: James Hargreaves invented the Spinning Jenny.
- 1771: Richard Arkwright created the first cotton mill.
1776: A.D. Crompton invented ‘Mule’. It was a combination of Spinning Jenny and cotton mill.
- 1781: James Watt patented the Steam Engine.
- 1781: Mathew Boulton manufactured the new model of the steam engine.
- 1830-1840s: Dwarkanath Tagore set up six joint stock companies in Bengal.
- 1854: The first cotton mill was set up in Bombay.
- 1855: The first jute mill was established in Bengal.
- 1856: The first cotton mill in Bombay started production.
- 1863: London Underground Railway started operation.
- 1874: The first spinning and weaving mill of Madras began its production.
- 1900: Music publisher E.T. Paull produced a music book.
- 1912: J.N. Tata set up the first iron and steel plant in India at Jamshedpur.
- 1917: Seth Hukumchand, a Marwari businessman, set up the first Indian jute mill in Calcutta
- Fuller: A person who ‘fulls’ i.e., gathers cloth by pleating.
- Stapler: A person who ‘staples’ or sorts wool according to its fibre.
- Sepoy: An Indian soldier in the service of the British.
- Dyer: A person who dyes fabrics.
- Jobber: A person employed by the industrialists to get new recruits for the mills.
- Carding: The process in which fibres, such as cotton or wool are prepared prior to spinning.
- Entrepreneurs: A person, who makes money by starting or running businesses, especially when this involves taking financial risks.
- Guild: An association of craftsmen or merchants following the same craft. These guilds protected the interests of the members and supervised the quality of the product and work.
- Metropolis: A large, densely populated city of a country or a state, often the capital of the region.
- Vagrant: A person who has no home or jobs, especially one who begs.
- Fly Shuttle: It is a mechanical device used for weaving, moved by means of ropes and pulleys. It places the horizontal threads (called the weft) into the vertical threads (called the warp).
- Industrialization: Industrialization is the process by which an economy is transformed from primarily agricultural to one based on the manufacturing of goods.
- Proto-industrialization: Period before or beginning of industrialization.
- Revolution: The revolution that replaced the cottage industry by the factories.
- Spinning Jenny: This machine was invented by James Hargreaves in 1764. It sped up the spinning process and reduced labour demand.
- Gomasthas: They were the paid servants who were appointed by the East India Company to supervise weavers, collect supplies and examine the quality of cloth.
Industrialization in Britain
- Proto-industrialisation was the stage when large scale industrial production took place in the absence of modern factories for international market.
- Acquisition of colonies and expansion of trade in the 16th and 17th centuries led to greater demands for goods.
- In 1900, a popular music publisher E.T. Paull produced a music book that had a picture on the cover page, which shows a goddess like figure bearing the flag of the new century, standing on a wheel with wings to symbolise time and her flight is taking her into the future. Floating about, behind her, are the signs of progress: railway, camera, machines, printing press and factory.
- The history of industrialization is a story of development, and the modern age is the time of technological developments.
Before the factories were started in England and Europe, there was a large scale industrial production for an international market. This was not based on factories. Many historians now refer to this phase of industrialization as proto-industrialization.
This proto-industrial system was controlled by merchants and the goods were produced by a vast number of producers working within their family farms, not in factories.
After the Industrial Revolution, the new machines and steam power were used in place of animal and manual power for producing the things. The revolution replaced the cottage industry by factories.
The earliest factories in England were set up in 1730.
Richard Arkwright created the cotton mill. The most dynamic industries in Britain were cotton and metals.
Growing at a rapid pace, cotton was the leading sector in the first phase of industrialisation upto the 1840s.
The industrial workers were known as factory workers.
The worker in the mid-nineteenth century was a traditional craftsperson and labourer.
Textiles was a dynamic sector, but a large portion of the output was produced not within factories, but outside, within domestic units.
Before the introduction of machines in industries, silk and cotton goods from India dominated the international market in textiles.
The process of industrialisation was rapid. It is evident due to the following reasons:
Cotton was the leading sector in the first phase of industrialization.
Textile was a dynamic sector.
Ordinary and small innovations were the basis of growth in many non-mechanised sectors such as food processing, building, pottery, glass work, tanning, furniture making, and production of implements.
Technological changes occurred slowly. They did not spread dramatically across the industrial landscape.
In Victorian Britain there was no shortage of human labour. So industrialists had no problem of labour shortage or high wage costs.
During this period, the upper classes—the aristocrats and the bourgeoisie – preferred things produced by hand.
In countries with labour shortage, industrialists were keen on using mechanical power so that the need for human labour can be minimised.
The abundance of labour in the market affected the lives of workers.
Seasonality of work in many industries meant prolonged periods without work.
The fear of unemployment made workers hostile to the introduction of new technology.
When the Spinning Jenny was introduced to the woollen industry, women who survived on hand spinning began attacking the new machines.
Silk and cotton goods from India dominated the international market in textiles much before the advent of machine industries.
A variety of Indian merchants and bankers were involved in the network of export trade – financing production, carrying goods and supplying exporters.
By the 1750s, the Indian merchants lost their control on exports and the European companies gradually gained power by two ways:
By securing a variety of concessions from local courts.
Through the monopoly rights to trade.
The trading ports of Surat and Hoogly declined and Bombay and Calcutta emerged as new ports which indicated the growth of colonial power.
In order to have regular supplies of goods for export, the East India Company first established political power so that it could assert a monopoly right to trade.
In order to eliminate the existing traders and brokers connected with the cloth trade, to develop a system of management and control that would eliminate competition, control costs, and ensure regular supplies of cotton and silk goods, the East India Company took two steps–
They appointed a paid servant called the Gomastha to supervise weavers, collect supplies, and examine the quality of cloth.
It prevented Company weavers from dealing with other buyers by making it compulsory for those who took loans that they had to handover the cloth they produced to the Gomastha.
Due to the development of cotton industries in England, the industrial groups worried about the imports from the other countries and thus pressurised the government to impose import duties on cotton textiles.
The industrialists also persuaded the East India Company to sell British manufactures in Indian markets as well.
Cotton weavers in India faced two problems at the same time :
Their export market collapsed, and
The local market shrank due to Manchester imports.
When Civil War broke out, cotton supplies were cut off from US and thus Britain turned towards India.
The raw cotton exports from India increased which led to the inflation of prices which affected the weavers who were starved of supplies and were forced to buy raw cotton at exorbitant prices.
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.