The Making of A Global World

The making of the global world has a long history – of trade, of migration, of
people in search of work, the movement of capital, and much else. In this
chapter we will discuss the phases through which this world in which we live
has emerged.

I ) The Pre-Modern World

# Silk Routes Link the World: :

- The name ‘silk routes’ points to the importance of West-bound Chinese
silk cargoes along this route.
- The silk routes are a good example of vibrant pre-modern trade and
cultural links between distant parts of the world. Linking Asia with
Europe and North Africa
- Trade and cultural exchange always went hand in hand- The Buddhist
Preachers, Christian missionaries and Muslim preachers travelled along
these routes.

# Food Travels: Spaghetti and Potato:

- Traders and travellers introduced new crops to the lands they travelled.
- Many of our common foods such as potatoes, soya, groundnuts, maize,
tomatoes, chillies, sweet potatoes, and so on were not known to our
ancestors until about five centuries ago. These foods were only
introduced in Europe and Asia after Christopher Columbus discovered
America.
- It is believed that noodles travelled west from China to become
spaghetti.

# Conquest, Disease and Trade:

- European sailors found a sea route to Asia and discovered America.
- Goods, people, customs and knowledge were the few things due to which
the Indian subcontinent was famous for in trading.
- A transformation followed after the discovery of America, due to its
abundant lands, minerals and vast land.
- In Peru and Mexico–precious metals were found, especially silver which
helped Europe in financing its trade.
- Portuguese and Spanish conquest and colonisation of America followed
and the weapon used by them was smallpox.
- It spread deep into the continent, ahead even of any Europeans
reaching there. It killed and decimated whole communities, paving way
for conquest.

II ) The Nineteenth Century (1815-1914)

- The world changed profoundly in 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 first is the flow of trade which in the nineteenth century
referred largely to trade in goods (e.g., cloth or wheat)
- The second is the flow of labour – the migration of people in
search of employment
- The third is the movement of capital for short-term or long-term
investments over long distances.

#The World Economy Takes Shape:

- Due to an 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'.

#Corn Laws:
- The laws allowing the government (U.K.) to restrict the import of corn were
commonly known as the Corn Laws.
- After the introduction of this law, food prices became too high which
turned industrialists and town people unhappy.
- They forced the British Government to abolish the corn laws. And after
the abolition, food could be imported into Britain at a much cheaper
rate than before.
- British agriculture was unable to compete with imports and vast areas of
land were left uncultivated. So, thousands of men and women flocked to
the cities or migrated overseas.
- Effects of abolition of Corn Laws:
- In Britain, food prices fell and in the mid-nineteenth century,
industrial growth led to higher incomes and more food imports.
- In order to fulfil British demand, in Eastern Europe, Russia, America
and Australia, lands were cleared to expand food production.
- In order to manage linking of railways to agricultural fields and
building homes for people required capital and labour.
- By 1890, a global agricultural economy had taken shape, adapting
complex changes in labour movement patterns, capital flows,
ecologies and technology.

#Role of Technology in 19th Century:

- Some of the important inventions in the field of technology are the
railways, steamships, the telegraph, which transformed the
nineteenth-century world
- Development of refrigerated ships helped in transportation of frozen
meat from America, Australia, New Zealand to different European Market.
- Britain and France made vast additions to their overseas territories in
the late nineteenth century. Belgium and Germany became new Colonial
Powers.
- The US also became a colonial power in the late 1890s by taking over
some colonies earlier held by Spain.
 - Rinderpest is a fast spreading cattle plague which hit Africa in the late
1880s.
- Entering Africa in the East, Rinderpest moved west 'like forest fire'. The
loss of cattle destroyed African livelihoods.
- 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.
- Indian Entrepreneurs abroad- 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 Trade, Colonialism and the Global System:

- Cottons from India were exported to Europe.
- In Britain, tariffs were imposed on cloth imports. 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.

III ) The Inter-war Economy

The First World War (1914-18) was fought in Europe, but its impact was felt
around the world due to widespread economic and political instability.

#Wartime Transformations:
- The First World War was fought between the Allies – Britain, France and
Russia (later joined by the US); and the Central Powers – Germany,
Austria-Hungary and Ottoman Turkey.
- The war lasted for more than four years which involved the world’s
leading industrial nations.
- It was considered as the first modern industrial war which 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".
- This was impacted the economy of Britain, Fall in demand of goods due
to the end of war caused fall in production and increase in
unemployment.
#Rise of Mass Production and Consumption
- The US economy recovered quicker and resumed its strong growth in the
early 1920s. Mass production is one of the important features of the US
economy which began in the late nineteenth century.
- 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 a
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:

- The period of The Great Depression began around 1929 and lasted till
the mid1930s.
- 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.
- Also, many countries financed their investments through loans from the
US. The withdrawal of the US loans affected much of the rest of the world.
- Unfortunately, the US banking system collapsed as thousands of banks
went bankrupt and were forced to close.
#India and the Great Depression:
- India trade was severely affected by the depression.
- The prices of agriculture fell sharply but still, the colonial government
refused to reduce revenue demands
- In those depression years, India became an exporter of precious metals,
notably gold.

IV ) Rebuilding a World Economy: The Post-war Era:

The Second World War created immense devastation in human (Deaths) and
economic terms. It was fought between the Axis powers (mainly Nazi Germany,
Japan and Italy) and the Allies (Britain, France, the Soviet Union and the US).

Post-war reconstruction was shaped by two crucial influences:

1. The US emerged as the dominant economic, political and military power
in the Western world.
2. The dominance of the Soviet Union.

#Post-war Settlement and the Bretton Woods Institutions:

- 2 lessons were drawn from inter-war economic experience:
 - Mass production cannot be sustained without mass
communication.
- The second lesson related to a country’s economic links with the
outside world.

- The Bretton Woods(It is the name of a hotel in the USA) conference

established the International Monetary Fund (IMF) to deal with external
surpluses and deficits of its member nations.
- The International Bank for Reconstruction and Development (popularly
known as the World Bank) was set up to finance postwar reconstruction.
- The IMF and the World Bank commenced financial operations in 1947.

#Decolonisation and Independence:

- After the second world war, many countries were still under European
colonial rule.
- 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 1950s and 1960s therefore, they
organised 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.