The History of Global Trade

1. The History of Global Trade • Began 500 years ago: • previously, world regions were relatively isolated • 2 stages • 1500s – 1950s • European expansion • Global trade networks • 1950s - today • Development of global market

2. The History of Global Trade 1500s – 1950s: • European domination • many small countries • Extremely outnumbered…how’d they do it • Highly developed military technology • Guns, iron weapons, armor, horses • Vs. stone tools in Africa & the Americas • Advancements in ship design • Naval warfare • Maritime mercantile empires

3. The History of Global Trade Conquest of the Americas: • 1492 • Columbus some gold, plantations, ranches • 1519 • Spanish land on Mexican coast • 1521 The Aztec empire falls • Wealth of gold and silver • 1532- The Incan empire falls • Peruvian wealth goes to Spain • 1600 • Spanish conquer every major Native American state

4. The History of Global Trade Spread European: • Technology • Crops and livestock • economic systems • mines, plantations, fur trade, etc. • political systems • dissolved tribes and chiefdoms • religious systems • missionaries, churches not temples • Diseases!!!

5. The History of Global Trade Old World Diseases: • Malaria, smallpox, syphilis, measles, influenza, etc… • Killed Millions of Native Americans • Estimates as high as 95% of native pop. • Mexico alone ~ 20,000,000 Why so devastating? • Lacked immunities to new pathogens • Created labor shortage • African Slave Trade

6. The History of Global Trade Sub-Saharan Africa- • 1445 • Portugal begins trade networks in Gold Coast • Gold, Ivory, Slaves • 1488 • Cape of Good Hope, S. Africa • Vital for Asian trade networks • Slave trade becomes a lucrative market • Extermination of American labor force • Greater demand for slaves • Global market integration • Competition with other colonial powers

7. The History of Global TradeSub-Saharan Africa- The slave trade • Started raiding villages to keep up with demand • At least 10,000,000 Africans sent to the Americas • Slaves for guns program • Psychological manipulation • hunter or the hunted

8. The History of Global Trade Europe meets their match- - - Asia • Late 15th centuryAsia reached by sea • Asian advantage • naval warfare • Surpassed in population size, development, technology • Economically self-sufficient • Limited interest in trade • Export a lot, import a little • Little impact on economic, political, religious, and social institutions

9. Era of the industrialist ~1750 and 1850 • The industrial revolution in England: • Protestant work ethic • Growth in population • Increase supply of capital (tied to gold) • Increase in demand for goods (foreign & domestic) • Trade supported by nation-state • Rise of the merchant class • Increase in efficiency • Technological inventions (steam engine) • New/faster communication- railroad, telegraph

10. Economic Depression (1873-1895) • Revealed level of global economic integration • failure of banks in Germany & Austria • domino effect across the globe • Revealed problems of perpetual growth • needs ready supply of raw materials • needs increased in demand for goods • Ways to invest profits and capital • The Solution? - Imperialism

11. Imperialism • policy of exerting control or authority over foreign entities • direct territorial conquest, settlement, or… • Indirect influence or control of politics &/or economy • Imperialism • Expanded markets • Increased investment opportunities • Ensured supply of raw materials & markets • Motivated by Gold, Glory, and Gospel • Legitimized by ethnocentrism & ideology of superiority

12. Age of imperialism • Cecil Rhodes • Quintessential imperialist • Colonized “Rhodesia” • Modern day Zambia & Zimbabwe • Founded De Beers diamond company: • Prior to 1870 diamonds were rare • 1870, many tons discovered in Orange River of S. Africa • At one time controlled ~ 90% of the world’s diamonds • British financiers threatened by new supply • formed De Beers Consolidated Mine to limit supply

13. Age of imperialism • Merger = artificial scarcity • Kept prices high • repercussions for Sierra Leone • Supply only half the equation • keeping demand high • engagement rings “created” by De Beers • “A diamond is forever”(1947) • effective advertising • De Beers currently controls ~ 60%

14. Rise of the Corporation:Beginning of Neo-colonialism • Pre-1950s • European colonial powers monopolized markets • 1950-today • End of colonialism & political barriers to trade • Before WWII- ~60 countries, currently ~200 independent nations • International finance • source of lending for developing countries • limitations on use of loans • Neocolonialism: • dominance of strong nations over weak • not direct political control • economic & cultural influence

15. corporate profits • Stable political climate • Stable global currency • Few or no government restrictions • Few restraints on int’l trade • Freedom to employ people at the lowest possible wage • No/few benefits (healthcare, retirement, etc.) • Unrestricted access to natural resources

16. Corporate Libertarianism • Free markets • unrestrained by governments • The government provides infrastructure • advance commerce • enforce the rule of law • property rights and contracts • Privatization • functions & assets move • from governments to private sector

17. Ideology of corporate libertarianism • Economic globalization • Free flow of goods & money anywhere in world • Achieved by removing trade barriers • spurs competition • increases economic efficiency • creates jobs • lowers consumer prices • increases customer choice • increases economic growth

18. Corporations • 1886 - 14th amendment • Supreme Court ruled private corporation as a natural person. • Rights of Natural Person • rights as individuals • Can use wealth to dominate public thought & discourse • Lobby government in their interests • Lobby for legislation that favors the accumulation of wealth • Can conflict with interests of the consumers • Often conflicts with interests of the laborers

19. Corporations • Lobby • to reduce liability for injury/death • (700,000 deaths 1888-1908) • against min wage laws • against limiting # of hours a person could work • against minimum age requirements for workers • Driven by profit • enormous economic & political power • Non-democratic institutions (anonymity of investors) • No constituency, only accountable to shareholders

20. Constructing the laborer? • Privatization of land • abolish communal ownership • Land could now be owned • Take away the means of production • land, raw materials, tools, even knowledge • Institute taxes • Create debt • Create fear • Create consumerism