The Economics of Britain and India & The Creation of 2 New Countries

1. The Economics of Britain and India & The Creation of 2 New Countries

2. LEQ’s … • What impact did Britain have on India? • How did Britain take India? • How does specialization encourage trade? • Why is balance in trade important to a country? • How did Hinduism and Islam impact this region after WWII?

3. First we need to know … what is a cottage industry? An industry where the goods or services are produced at home rather than a factory.

4. SPECIALIZATION What does each of these countries SPECIALIZE in? What does each country need? What is the solution?

5. TRADE! England buys cotton India sells Trade with each other … England needs to buy more raw materials India needs a larger market to sell their raw materials

6. However … problem Is EVERY single factory owner going to travel to India, search all of India to find the small cottage industries producing cotton, deal with the various cottage industries to find the cheapest prices, and then travel all the way back to England with the cotton? What do the factories owners need now?

7. Solution … A middle man! Then, sells the cotton to the factory owners in England! He searches all of India to find the best cotton! In India, who was this “middle man”? The East India Company

8. Solution … A middle man! This “middle man” is willing to risk his money, time, and effort in building this new company. Therefore, we could call him an … Entrepreneur

9. Back to the East India Company … … The East India Trading Company began building storage warehouses in order to hold all the goods until they were shipped out. But how to protect their storage warehouses? With soldiers from England!

10. Take 5 … Let’s make sure we are following the money! What is England IMPORTING? What is England EXPORTING? Raw materials Manufactured cloth

11. Take 5 … Let’s make sure we are following the money! What is India EXPORTING? What is India IMPORTING? Raw materials Manufactured cloth

12. Take 5 … Let’s make sure we are following the money! Raw materials Manufactured cloth

13. Back to England and India Remember … trading with India began growing … THEREFORE … the East India Co. was formed … THEREFORE … storage warehouses were built … THEREFORE … the co. needed soldiers to guard their goods … THEREFORE … Britain now had great armies in India … THEREFORE … Britain takes over India … BTW … A bit of reading review … What type of organizational method is used here?

14. Trading “partners” What do you think you need in order to have a successful trading partnership? Raw materials Manufactured cloth Balance of trade!

15. How does a country achieve balance of trade? Raw materials Manufactured cloth A country’s imports and exports are about equal.

16. A country’s imports and exports are about equal. Raw materials Manufactured cloth However … is this what India experienced with England?

17. However … is this what India experienced with England? No! England paid little $ for raw materials But charged BIG $ for cloth! THEREFORE … there was NO balance of trade! THEREFORE … India suffered!

18. Results of this imbalance of trade … • Cottage industries put out of business • People lost jobs / income • Indians now living in poverty • Indians unhappy • Britain’s power increases • Britain’s wealth increases • Britain’s rule increases THEREFORE … Indians began to revolt!

19. British government takes control … • Because of the revolts, British gov. replaces the East India Company • Continues to enforce British law • Indians living under oppression • THEREFORE … Indians begin to fight for independence!

20. Who lead this fight for independence? Mohandas Gandhi

21. His philosophy in gaining independence? • Passive resistance! • No violence! • Examples … • Strikes • Marches • Boycotts • Protests • Civil disobedience

22. The Salt March

23. British had a law … it was illegal for anyone but British to collect, produce, and sell salt. However, salt was invaluable to the people of India so they had to comply with this law. Salt was in great supply so Indians could easily collect the salt for free; however, this was a criminal offense. Therefore, Gandhi chose salt as the motive for civil disobedience. In 1930, Gandhi, with 78 others, marched 241 miles in 24 days on a non-violent march protesting the British Salt Tax. What is civil disobedience? The decision to break specific laws because they are unjust in an attempt to change policy).

24. Gandhi picked up a tiny lump of salt, breaking the law. The Salt March started a series of protests. Within a month, Gandhi was arrested and thrown in a prison already full of fellow protestors. The world embraced Gandhi, his followers and their civil disobedience, eventually enabling India to gain their freedom from Britain.

25. Independence • India final gained their independence from Britain – August 15th, 1947! • However … who would rule? • Hindus (who made up 80% of the population) or Muslims (who made up of 20% of the population) ? • Solution? • Divide the country!

26. Solution – • divide India • India for the Hindus • Pakistan for the Muslims The two countries were formed and granted independence in 1947!

27. India’s government • Established a government that • The central government would share power with the local governments • Government officials would be elected by the people • The government officials would have to obey all laws • Therefore … what type of government did India establish? Federal Republic Limited Democratic

28. Pakistan’s government • Established a government that • The central government would share power with the local governments • Government officials would be elected by the people • The government officials would have to obey all laws • Therefore … what type of government did Pakistan establish? Federal Republic Limited Democratic

29. BTW … Reading Review! What type of organizational method is used here? Britain’s impact on India • Built an extensive railway system … THEREFORE, India now had an established transportation system • Built schools and universities … THEREFORE, India learned about western ideas such as democracy • Learned more modern ways of production … THEREFORE, could produce more

30. One more problem … the question of Kashmir! Still today a disputed territory!

31. Words, people, and places to know … • Cottage industry • Entrepreneur • Specialization • Balance of trade • East India Company • Mohandas Gandhi • Passive resistance • Civil disobedience • boycott • Kashmir • Disputed territory

32. Words, people, and places to know … • Cottage industry – industry where goods and services are produced in home rather than factory • Entrepreneur – one who is willing to risk his money, time, and effort in building a new company … also, one who brings together land, labor, and goods to produce goods and/or services • Specialization – producing a special product, goods, or service • Balance of trade – the difference in value between a country’s exports and imports over a certain period of time • East India Company – company established as a the middle man between England and India • Mohandas Gandhi – leader of India – led India to independence – preached non-violence and passive resistance • Passive resistance – opposition to a government by use of nonviolent means • Civil disobedience – the refusal to obey certain laws in order to force a change in the government or law • boycott - refusal to buy a product in order to force a change • Kashmir – disputed territory in Southern Asia – between Pakistan and India • Disputed territory - a disagreement between 2 or more countries over the possession or control of a territory

33. Got it?Good!