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Topic 2 – The Global Economy

Topic 2 – The Global Economy. A – Genesis of the Global Economy B – International Trade and Transportation C – Multinational Corporations. Towards a Global World: Major Phases of Socioeconomic Change. A – Genesis of the Global Economy. The Agricultural Revolution Trade in Ancient Times

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Topic 2 – The Global Economy

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  1. Topic 2 – The Global Economy A – Genesis of the Global Economy B – International Trade and Transportation C – Multinational Corporations

  2. Towards a Global World: Major Phases of Socioeconomic Change

  3. A – Genesis of the Global Economy The Agricultural Revolution Trade in Ancient Times Mercantilism and Colonialism The Industrial Revolution

  4. The Agricultural Revolution (Neolithic Revolution), 10,000 BC Mesopotamia (6,500 B.C.) Huang He (4,500 B.C.) (“The land between rivers”) Indus (4,700 B.C.) Ganges (4,700 B.C.) Nile (5,000 B.C.) Domestification (crops & animals) Sedentary lifestyle (property) Irrigated agriculture (collective effort) Agricultural surpluses (specialization) Governments (states / stratification) Metallurgy (weapons, instruments) Wheel (transportation) Pottery (storage) Writing and numbers (taxation) World’s population (5-10 million mostly nomadic)

  5. The Agricultural Revolution • The Feudal society • A system of bonds and obligations: • Power in land ownership. • Administrative/legal (Lord) and religious (Church) control. • Rent/Royalties from the serf to the lord (in kind or labor). • Fixation of the productive forces (tools and labor) in agricultural production. • Little socioeconomic changes over centuries. • Economy: • Small local markets (fairs). • Low levels of productivity (subsistence level). • Profits taken away by the lord/church, inhibiting any increases in agricultural productivity. • 80 to 90% of the population was in agriculture while the other share were artisans and landowners. • Different types of feudal societies (China, Japan, Europe).

  6. Ancient Trade Issues

  7. The Silk Road and Arab Sea Routes (8th to 14th Centuries)

  8. Mercantilism • The European origin of the global economy • The fifteenth century marked the beginning of an expansion of European control throughout the world. • Europe progressively assured the development of the global economy by an extension of its hegemony: • Mercantilism was the first phase. • The industrial revolution was the second. • Over three centuries (1500-1800): • The setting of capitalistic systems. • Limits of the world were pushed away. • A world where borders are drawn; a delimited world. • Establishment of vast colonial empires. • Waves of innovations and socio-economic transformations.

  9. The Pillars of Mercantilism

  10. Early European Maritime Expeditions, 1492-1522 Exploration (inventory of territories and resources). Setting of colonial empires (control of territories). Setting of a global trade network.

  11. The Eastern and Western Maritime Routes to Asia

  12. Density of Ship Log Entries, 1750-1810

  13. Major Oceanic Gyres

  14. Mercantilism and Colonialism • Colonialism • Quest for riches and profit • The most important factor. • Early colonialism was a capitalist venture. • Religious and racist drive: • A moral justification. • Support of the church. • Military technology advantages: • Better guns. • Better ships (artillery). • Two waves of colonialism: • First wave: Mercantilism (1415 – 1815); independence of the Americas. • Second wave: Industrial revolution (1815-1969).

  15. Spanish and Portuguese Empires (1581-1640) The Treaty of Tordesillas (1494) Between Spain and Portugal (1,770 km west of Cape Verde). Separate the newly discovered lands (and those to be discovered) by a demarcation. Treaty of Zaragoza (1529) Specified the anti-meridian to the line of demarcation in the Treaty of Tordesillas. To sort the ownership of the “spice islands”.

  16. Mercantilism • Trade • Changes in the nature of trade: • More than 90% of the population was agricultural. • Growing consideration to the “mass market”. • Luxury goods were no longer the bulk of what was being exchanged (spices, silk, etc.). • “Consumer goods” such as grain, wine, salt, wool, cloths and metals. • Changes in the relationships between Europe and the rest of the world: • From intermediaries (e.g. Venice, Arabs) to direct involvement. • Control of the “global supply chain”. • Transformation of foreign societies (colonialism, plantations, new products).

  17. Dutch East India Company, Trade Network, 17th Century

  18. Colonial Trade Pattern, North Atlantic, 18th Century

  19. The Industrial Revolution • Nature • Started at the end of the eighteenth century (1750-1780). • Economic and social transformations first observed in England. • Demographic transition of the population: • Fast growth rate. • Improvements in sanitary conditions and hygiene. • A “revolution” in the industry • Why speak of “revolution” for a process occurring over on more than 150 years? • At the scale of the world’s economic history, the industrial revolution radically changed the foundations of economic systems. • It established the foundations of the global of the economy. • Most of the technical innovations that modified the way to produce and to transport took place on a short period, mainly between 1760 and 1800.

  20. The European Origins of The Industrial Revolution

  21. The European Origins of The Industrial Revolution

  22. The Industrial Revolution • Technological innovations • New methods of production by trials and errors: • New materials (steel, iron, chemicals). • Substitution of machines to human and animal labor. • Usage of thermal energy to produce mechanical energy. • Changes in the nature production and consumption: • Textiles. • Steam engine. • Iron founding. • Production (factory): • The first factories appeared after 1740. • Division of labor. • Increased productivity within a factory system of production. • Location (initially waterfalls and then coal fields).

  23. Major Technological Innovations of the Industrial Revolution

  24. Major Inventors of the Industrial Revolution

  25. Annual Energy Consumption in England and Wales, 1560s to 1850s (MJ)

  26. Power Generated by Steam Machines (in thousands of horsepower)

  27. Turnpikes in Great Britain, Late 18th and Early 19th Century

  28. American Rail Network, 1861

  29. Global Telegraph System, c1901 (the Victorian Internet)

  30. Impacts of Maury’s Navigation Charts on Sailing Time, 1850s

  31. Cargo Carried by Steamship by Port City, 1890-1925

  32. The Industrial Revolution • Agriculture • A second agricultural revolution. • Introduction of new food sources: • The potato could account for 22% of the post-1700 increase in population growth. • Crop rotation, selective breeding, and seed drill technology. • Less agricultural population. • Growth of the production of food. • Mechanization and fertilizers: • Combine (McCormick, 1831). • Scientific and commercial agriculture (crop rotation). • Declining food prices.

  33. The Industrial Revolution • Social changes • Significant urbanization: • Migration from the countryside to cities. • A shift from the dominance of Asian cities (e.g. China and India) to Western Europe and North America. • By 1870 more of the half of the population of the first industrial nations was no longer in the agricultural sector. • England had reached this stage since 1820. • By1901, 75% of the English population lived in cities. • Creation of a labor class: • Exchange of labor for a wage. • Development of the Marxist ideology.

  34. Share of the Population in Agriculture, Early Industrial Countries, 1820-1910

  35. World’s Largest Cities, 1850

  36. The Industrial Revolution • Industrial revolution and globalization • Setting of unequal trade relations: • Between colonial powers and their colonies. • Between industrial nations and developing countries (e.g. Latin America). • Setting of high capacity maritime and rail transport systems. • Consolidation of colonialism in late 19th century: • First Opium War in 1839; occupation of coastal Chinese cities. • Opening of Japan in 1853. • Consolidation of the British Raj in 1858. • “The Scramble for Africa” in the 1890s.

  37. Impacts of Colonialism

  38. Colonies Controlled by Main Colonial Powers, 1500-2000

  39. Colonies by Main World Region, 1500-2000

  40. Territories that Belonged to a Colonial Empire Belgian British Danish Dutch French Italian Portuguese Russian Spanish

  41. European Control of the World, 1500-1950 1800 (37%) 1878 (67%) 1913 (84%)

  42. Decolonization

  43. Fordist and Post-Fordist Production Structure

  44. Major Phases of Demographic Change • Agricultural Revolution • Feudal society. • Wealth from agriculture and land ownership. • Slow demographic growth. • Industrial Revolution • Wage labor society. • Wealth from industry and capital ownership. • Fast demographic growth. • Post-Industrial Revolution • Information society. • Wealth from technological development. • Slow demographic growth. Agricultural Revolution 12,000 years Industrial Revolution 200 years Post-Industrial Revolution

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