Globalization’s Long History

  • Globalization is not just a recent phenomenon. It started centuries ago through trade, migration, and the movement of goods, money, and ideas.
  • From ancient times, people like travellers, traders, priests, and pilgrims traveled vast distances for various reasons such as knowledge, spiritual fulfilment, or escaping persecution.
  • They spread goods, skills, ideas, germs, and diseases.

Early Trade Connections

  • As early as 3000 BCE, there was a coastal trade linking the Indus Valley (modern-day Pakistan) with West Asia (Middle East). This is one of the first examples of long-distance trade.
  • Cowries (seashells) used as currency in ancient India reached China and East Africa for over 1,000 years.
  • The Silk Routes (land and sea routes) are important examples of long-distance trade that connected China, India, Europe, and Northern Africa.

Silk Routes

  • The Silk Routes existed before the Christian Era and lasted until the fifteenth century.
  • These routes were used to trade silk from China, pottery, textiles, spices from India, and precious metals like gold and silver from Europe to Asia.
  • Christian missionaries and Muslim preachers traveled these routes to spread their religions, while Buddhism spread across Asia through the Silk Routes.

Cultural Exchange through Food

  • Many common foods today, such as spaghetti, potatoes, chillies, tomatoes, and sweet potatoes, were introduced from the Americas after Christopher Columbus discovered the continent.
  • Spaghetti might have come from China or via Arab traders to Sicily in the fifth century.
  • Potatoes were so important in Ireland that their crop failure in the mid-1840s led to starvation and emigration.

Conquest and Disease

  • In the sixteenth century, Europeans found sea routes to Asia and the Americas, shrinking the world by connecting previously isolated regions.
  • America had been isolated for millions of years before the European conquest. Europeans brought new crops, minerals (like silver), and devastating diseases (such as smallpox) to America.
  • The disease smallpox killed many native Americans, easing the way for Spanish and Portuguese conquest.
  • The legend of El Dorado (the mythical city of gold) led many Europeans to South America in search of riches.

Impact of European Colonization

  • The Spanish and Portuguese colonized parts of South America by the mid-1500s. Along with their military strength, diseases played a major role in the conquest.
  • Diseases like smallpox were deadly because native Americans had no immunity to them, wiping out many indigenous populations.
  • European settlers used African slaves on plantations to grow crops like sugar and cotton.

China and India’s Decline in Power

  • Before the 15th century, China and India were the richest countries and central to Asian trade. However, by the 15th century, China became more isolated from the rest of the world, and Europe started dominating global trade.
  • The Americas gradually took over as the center of world trade, with Europe exploiting its resources.

The Nineteenth Century (1815-1914)

  • In the 19th century, economic, political, social, cultural, and technological changes transformed the world.
  • Three major “flows” of exchange emerged:
    1. Trade: The movement of goods (like cloth and wheat).
    2. Labour: Migration of people searching for work.
    3. Capital: Investment of money in different regions, both short-term and long-term.

Britain’s Shift to Global Trade

  • In 19th century Britain, food production was a big issue. The population increase led to higher demand for food grains, but self-sufficiency in food led to higher prices and social conflict.
  • The Corn Laws were passed to prevent cheap grain imports. This caused a crisis for industrialists and urban dwellers, leading to the abolition of the laws.
  • Once the laws were repealed, food could be imported at cheaper rates, leading to cheap food and a rise in consumption.
  • Agricultural production expanded worldwide to meet Britain’s demand, with countries like Eastern Europe, Russia, and America involved.
  • The expansion of railways and ports was necessary for transporting agricultural products.

Migration Patterns

  • Migration patterns were significantly affected by changes in agriculture. In the 19th century, around 50 million Europeans migrated to America and Australia to find better opportunities. In total, about 150 million people migrated globally in search of better lives.

British Colonial Agriculture

  • In West Punjab (now in Pakistan), the British built irrigation canals to convert semi-desert land into fertile agricultural fields for cotton and wheat production.
  • This model was also seen in America, where slaves worked on plantations to grow crops like cotton and sugar for European markets.

Agricultural Economy

  • By 1890, the world saw a shift towards a global agricultural economy.
  • Food was no longer produced locally but imported from faraway places, and railways and ships were crucial in transporting it.
  • Globalization led to the rise of plantations worked by low-paid migrants, often from Southern Europe, Asia, Africa, and the Caribbean.

Key Concepts and Their Competitive Exam Relevance:

  1. Silk Routes: Early trade networks that connected Asia, Europe, and Africa. Useful for understanding cultural diffusion and historical trade routes.
  2. Colonization and Disease: The role of diseases (like smallpox) in European conquest, which played a significant role in the demographic collapse of indigenous populations.
  3. Global Economy: The emergence of a global agricultural economy during the 19th century influenced international trade and migration, relevant for economics and geography questions in competitive exams.
  4. Impact of New Foods: Introduction of crops from America (like potatoes) changed global food production and impacted economies.
  5. Migration: The flow of people, especially from Europe to the Americas and Australia, influenced demographics and labor movements.

Role of Technology and Colonialism in the 19th Century-

1. Technological Advances and their Impact:

  • The railways, steamships, and telegraph were key technological innovations of the 19th century that helped transform the world.
  • Technology was often shaped by social, political, and economic factors. For instance, colonization increased investment in transport technologies like faster railways, lighter wagons, and larger ships, which made transporting food faster and cheaper.

2. Example of Technological Change – Meat Trade:

  • Before refrigerated ships, live animals were transported from America to Europe, where they were slaughtered. However, transporting live animals was costly and inefficient.
  • The invention of refrigerated ships allowed animals to be slaughtered in the source country and shipped as frozen meat, lowering costs and making meat more accessible to European consumers, including the poor. This also helped stabilize society and promote imperialism.

3. Late 19th Century Colonialism:

  • The late 19th century saw a period of increasing trade and prosperity, but also a dark side where many societies were exploited by colonial powers. European countries carved up Africa (e.g., at the Berlin Conference in 1885) for their resources, which led to economic and social disruptions for the colonized.

4. European Explorers and Imperialism:

  • Sir Henry Morton Stanley, a journalist and explorer, was involved in explorations that helped establish European control over Africa. These explorations were not driven purely by scientific curiosity, but were closely linked to imperial goals.

5. Impact of Rinderpest (Cattle Plague) in Africa:

  • Rinderpest, a disease that killed 90% of cattle in Africa in the late 19th century, had a devastating impact on African economies. Cattle were central to African livelihoods, and the loss of livestock pushed many people into forced labor under colonial control. This helped colonial powers tighten their grip on African resources and labor.

6. Indentured Labour Migration:

  • Many Indians and Chinese were taken as indentured laborers to work on plantations, mines, and infrastructure projects around the world in the 19th century. These laborers were promised return travel after completing their contracts, but often found harsh working conditions instead.
  • Indian laborers, mostly from eastern Uttar Pradesh, Bihar, and Tamil Nadu, were driven by poverty and debt. Their migration took them to places like Caribbean islands, Mauritius, and Fiji. This system of labor was sometimes described as a “new form of slavery”.
  • While the conditions were harsh, indentured laborers found ways to survive and adapt, blending their cultural traditions with those of other migrants. For instance, in Trinidad, they created a new form of carnival (Hosay) and Rastafarianism in the Caribbean was influenced by Indian migrants’ experience.

7. Cultural and Social Changes:

  • As a result of this migration, large communities of Indian descent grew in regions where indentured laborers worked. For example, the West Indies cricketers Shivnarine Chanderpaul and Ramnaresh Sarwan are of Indian descent, as their ancestors were indentured workers.
  • The indentured labor system was abolished in 1921 due to growing opposition from Indian nationalist leaders. However, the descendants of indentured laborers continued to face social alienation in some countries.

Additional Information:

  • Colonialism and Economic Exploitation: During the late 19th century, European powers dominated global trade through imperial control, exploiting both natural resources and human labor.
  • Economic Impact of Technology: Technological advances such as refrigeration and faster transport created global trade networks, which helped connect distant economies, but often at the cost of local industries and indigenous peoples.

Key Concepts:

  • Indentured Labor: Laborers under contract who worked for a specific period, often to pay off the cost of their journey to a new land.
  • Refrigerated Ships: A technological advance that allowed the transport of perishable goods (like meat) over long distances.
  • Rinderpest: A cattle disease that severely affected African economies and helped enforce colonial control.

Understanding Competitive Exam Concepts:

  1. Technology and Economy: Advances in technology like railways, steamships, and telegraphs were central to the Industrial Revolution, making trade more efficient and increasing global interdependence.
  2. Colonialism: European imperial powers expanded their control over vast parts of the world by exploiting resources and using forced labor (including indentured migration).
  3. Social and Cultural Transformation: The forced migration of laborers led to the creation of new cultural identities and traditions that blended local and foreign influences, a significant concept in globalization studies.

Indian Entrepreneurs Abroad

  • Need for Capital: To grow crops for global markets, large plantations had access to capital via banks. But small farmers lacked this option.
  • Indian Bankers and Traders: The Shikaripuri Shroffs and Nattukottai Chettiars were among the Indian traders and bankers who funded agricultural exports in Southeast Asia, using their funds or borrowed money from European banks. They had a sophisticated system for transferring money across distances and even developed unique corporate structures.
  • Indian Traders in Africa: Indian moneylenders and traders followed European colonizers into Africa, but Hyderabadi Sindhi traders went beyond colonial territories. From the 1860s, they set up businesses at busy global ports, selling local and imported goods to tourists, thanks to the advent of passenger ships.

Indian Trade, Colonialism, and the Global System

  • Decline of Cotton Exports: In the 19th century, fine Indian cotton was heavily exported to Europe. However, British manufacturers started producing their own cotton goods, leading to tariffs on imported Indian cotton, thus reducing India’s share in European markets.
  • Shift to Raw Materials: As the export of finished goods from India declined, exports of raw materials like cotton and indigo grew. By the 1870s, raw cotton became a significant export.
  • Opium Trade: India also became a major exporter of opium, which Britain grew and sent to China, financing the import of tea and other goods from China.
  • Economic Impact of British Trade: The British trade surplus in India helped them balance deficits with other countries and covered expenses like pensions for British officials and India’s external debt. This made India a crucial part of the global economy.

The Inter-war Economy

  • First World War: The First World War (1914-1918) was fought mainly in Europe but had global consequences. It was the first modern industrial war, using advanced technology like tanks, aircraft, and machine guns.
  • Economic Disruptions: The war drastically reduced Europe’s workforce, as many men were killed or injured, leading to economic hardships. Many industries shifted focus to war production.
  • US Economic Role: Britain borrowed heavily from US banks, which led to the US becoming a major international creditor after the war.

Post-war Recovery and Challenges

  • Britain’s Struggles: After the war, Britain faced difficulty reclaiming its market dominance due to the rise of industries in India and Japan. The country was also burdened with large war debts to the US.
  • The 1920s Recovery in the US: The US economy recovered more quickly, with mass production being a key feature. Henry Ford revolutionized car manufacturing using the assembly line technique, making cars more affordable and increasing workers’ wages.
  • Consumer Boom: The 1920s saw a rise in consumer goods such as refrigerators and radios, largely fueled by easy credit and loans. This created a cycle of rising employment and consumption.

The Great Depression

  • Global Economic Collapse (1929): The Great Depression started in 1929 and affected the global economy, leading to a huge decline in production, employment, and trade. Agricultural regions suffered the most as commodity prices collapsed.
  • Agricultural Overproduction: In many regions, including Eastern Europe, overproduction led to lower prices. Farmers expanded production to offset falling prices, but this worsened the situation.
  • Impact of US Loan Withdrawals: Many countries were reliant on loans from the US. When these loans were suddenly recalled, economies around the world plunged into crisis, causing bank failures and an economic slump.

India and the Great Depression

  • India’s Integration into the Global Economy: India’s exports and imports were severely impacted by the depression. Prices of agricultural goods, like wheat, dropped significantly.
  • Impact on Indian Farmers: Indian peasants, especially those growing jute in Bengal, faced huge losses as global demand dropped and prices fell.
  • Peasants’ Hardships: Farmers were burdened with debts, and many sold their jewelry and land to cope. India, during this period, became an exporter of gold to pay for imports.
  • Rural vs Urban Impact: While rural India suffered greatly, urban areas saw some benefits due to falling prices, which improved the living standards of people with fixed incomes.

Rebuilding a World Economy: The Post-war Era

  • Second World War: The Second World War (1939-1945) broke out between the Axis powers (Germany, Italy, Japan) and the Allied powers (US, UK, USSR, etc.), causing widespread destruction and killing millions. The war devastated large parts of Europe and Asia.
  • Post-war Reconstruction: After the war, the US became the dominant global economic power, and the Soviet Union emerged as a major force. This marked the beginning of the Cold War era.

Key Takeaways and Competitive Exam Insights:

  1. Indian Entrepreneurship: Understanding how Indian bankers, traders, and moneylenders played key roles in global markets can help with questions about India’s economic history.
  2. Impact of Colonialism: The shift from exports of manufactured goods to raw materials and the role of opium in trade highlight the exploitative nature of colonial economies.
  3. Industrialization and War: The World Wars brought economic shifts, with the US emerging as a dominant global power after the First World War and massive industrial advancements, like mass production and the assembly line, that shaped modern economies.
  4. Economic Cycles: Understanding the causes and effects of the Great Depression helps in answering questions about economic crises, agricultural overproduction, and the global financial system.
  5. Post-War Era: After the destruction of the Second World War, the US and Soviet Union influenced global politics and economies.

. Post-War Economic Lessons and the Need for Government Intervention:

  • Two Key Lessons:
    1. Mass Consumption Requires Mass Production: For an industrial society to function, it needs a broad consumer base. To have mass consumption, stable and high incomes are needed.
    2. Full Employment for Stable Incomes: Incomes cannot remain stable without steady, full employment. Markets alone cannot guarantee full employment, so governments must step in to manage economic stability.
  • Governments were expected to manage the economy, reducing price fluctuations, and ensuring steady growth and employment.

2. The Bretton Woods Conference and Institutions:

  • Bretton Woods Conference (1944): The meeting in New Hampshire aimed at creating a stable post-war economic order. This led to the establishment of two key institutions:
    1. International Monetary Fund (IMF): Designed to manage external surpluses and deficits.
    2. World Bank (International Bank for Reconstruction and Development): Created to finance post-war reconstruction.
  • These institutions were controlled by Western industrial nations, with the US holding significant influence over decisions.
  • Bretton Woods System:
    • Based on fixed exchange rates, where national currencies were pegged to the US dollar, which was tied to gold.
    • This system lasted until the 1970s when the dollar could no longer maintain its value against gold.

3. Economic Growth Post-War (1950-1970):

  • Western industrial nations and Japan saw unprecedented growth in trade and income during this period, with stable growth and low unemployment.
  • Technological Spread: Developing countries worked hard to catch up by importing modern technology and equipment.

4. Decolonization and Challenges of Former Colonies:

  • After WWII, many countries in Asia and Africa gained independence but faced poverty due to colonial rule.
  • IMF and World Bank’s Focus: Initially focused on the financial needs of industrialized nations, but by the late 1950s, attention shifted towards helping developing countries.
  • Challenges of Developing Nations:
    • Former colonies remained dependent on Western powers for natural resources, and multinational corporations (MNCs) often controlled these resources at low costs.
    • Group of 77 (G-77): A group of developing countries that demanded a fairer international economic order, including better control over natural resources and improved access to markets.

5. Multinational Corporations (MNCs):

  • MNCs are large companies operating in multiple countries. They grew rapidly in the 1950s and 1960s due to tariffs and the spread of Western industry.
  • These companies often shifted production to low-wage countries in the 1970s.

6. End of Bretton Woods and Beginning of Globalization:

  • Collapse of Fixed Exchange Rates (1970s): The Bretton Woods system ended due to rising costs in the US and the weakening of the US dollar.
  • Floating Exchange Rates: After the collapse, exchange rates were allowed to fluctuate based on demand and supply.
  • Debt Crises in Developing Countries: Countries began borrowing from Western commercial banks, leading to debt crises in the 1970s and 1980s.
  • Shift to Low-Wage Countries: MNCs began shifting production to countries with low wages, particularly China.
    • China’s Economic Rise: China, with its low labor costs, became a major destination for MNCs, leading to global trade growth.

7. Impact of Technology on Global Trade:

  • The rise of low-wage production countries like China and India has transformed global economic geography, making them key players in world trade.

Key Terms:

  • Tariffs: Taxes on imports to protect local industries.
  • MNCs (Multinational Corporations): Companies that operate in multiple countries.
  • Bretton Woods Agreement: The 1944 agreement establishing the IMF and World Bank and the fixed exchange rate system.
  • Exchange Rates: The value of one currency compared to another. They can be fixed or floating (determined by market forces).
  • Floating Exchange Rate: A system where currency values fluctuate based on market supply and demand.

Extra Knowledge and Insights for Competitive Exams:

  • IMF’s Role: The IMF provides financial assistance to countries facing balance of payment problems and sets economic guidelines. It is often criticized for imposing austerity measures on struggling economies.
  • World Bank’s Focus: While the World Bank aids in development, especially in infrastructure, it is often seen as a tool of Western powers.
  • Impact of Bretton Woods Institutions on Global Politics: The Bretton Woods institutions have often been criticized for favoring developed nations. Developing countries pushed for reforms in the 1970s and 1980s under the banner of the New International Economic Order (NIEO).
  • Understanding Globalization: Globalization is the increasing interconnectedness of world economies. It leads to more trade, investment, and cultural exchange but also raises concerns about inequality, exploitation, and environmental impact.

THESE ALL ARE THE NOTES OF CHAPTER 1 HISTORY. AND AFTER SOME TIME YOU GET IMPORTANT QUESTIONS HERE. *#THANKS FOR VISITING, VISIT AGAIN#* 😊