Chapter 9 Foundations of Economic Globalization

1. Chapter 9Foundations of Economic Globalization How did 20th-Century World Events Shape contemporary Economic Globalization?

2. Defining Economic Globalization • The spread of trade, transportation, and communication systems around the world in the interest of promoting worldwide commerce • See page 216

3. READ PAGES 216-218 • Identify two perspectives on economic globalization. • Those that do not support the positive economic aspects of globalization do so by providing what arguments? • Those that do support the positive economic aspects of globalization do so by providing what arguments?

4. Position 1 Positive • Creates healthy interdependence that will lead to prosperity for everyone • Reduces barriers between countries • Reduced costs • Opportunities to share knowledge • Position 2 Negative • Does not benefit all • Builds fences between people • Shuts some people out of the basic necessities (schools, hospitals, workplaces)

5. WORLD WAR I • World War I destroyed Europe and forced countries to borrow more than $7 billion from the United States • Canada’s interest payments on the war debt were $164 million per year, soldiers’ pensions another $76 million per year • Income tax became permanent feature of Canadian life

6. Little known fact Artist Len Smith crept behind enemy lines during the First World War to draw sketches of German positions

7. Treaty of Versailles • Imposed harsh conditions on Germany: forced to pay reparations and give up colonies • Keynes and other delegates warned conditions too severe and would lead to another war

8. The Russian Revolution - 1917 • Russia ruled by Czar Nicholas II who was an absolute monarch • Workers and peasants rebelled against food and fuel shortages, demanding better wages and working conditions • Economy destroyed by revolution and civil war, many people starved to death • Conditions that led to rev.

9. Communist Russia • Under Communist system, land and other property were to belong to everyone • Soviet Union became a one-party state, dictatorship • Joseph Stalin transformed the country’s economy, made Russia into industrial and military giant - the people suffered and starved

12. The Great Depression: “The Dirty Thirties” • During the “Roaring Twenties” Canada and other countries experienced an economic boom, which they believed would last • Tuesday, October 29, 1929 stock market crash began as investors sold stocks: Black Tuesday • Led to economic depression as unemployment rose, people could not pay loans or bills • To protect own economy many countries increased tariffs and trade barriers = decline in international trade, more lost jobs

13. Great Depression: Canada • Canadian exports decreased by half • In 1933 more than a quarter of Canadians were unemployed • Prairies suffered greatly: price of grain fell, drought, topsoil blew away, grasshopper infestations

14. World War II: Hitler and Nazi Germany • Great Depression and reparation payments led to people electing Hitler and Nazi Party, who promised to make changes • Germany began conquest of European countries, invasion of Poland led to war • Death tolls extremely large for countries involved: Germany 3.5 million; China 1.3 to 10 million; USSR 7 to 9 million • 10 to 26 million people died in German death camps

15. World War II: Canada • Second World War had positive impact on Canada’s economy • Government spending increased, unemployment decreased – less than one percent at end of War • More than a million women joined workforce

16. Bretton Woods Conference

17. Bretton Woods Four Achievements: • Reconstruction of Europe after the war • Establish a global money and trade system • Creation of the World Bank • Creation of the IMF • http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm (what is trade where does the WTO fit in?)

18. Benefits & Drawbacks of Economic Globalization... • See page 217