Chapter Notes and Summary• Pre-Modern World movement of people, goods and services across nations has been termed as globalisation.
1. From ancient times, people have moved or migrated from one nation to another.
(a) As travellers to discover new routes or countries
(b) As priests and pilgrims
(c) As traders
(d) To escape persecution
(e) To spread religion
(f) To obtain knowledge
(g) For better employment opportunities
• Silk Routes Link World silk routes are known to have existed since before Christian Era and thrived almost till 15th Century.
• Importance of Silk Routes
1. silk routes are good examples of vibrant pre-moderns trade and cultural links between distant parts of world.
2. These routes were used by traders to trade goods from one country to another.
3. These routes were used by Chinese traders to export silk to other countries.
4. Trade and cultural exchange always went hand in hand.
5. Buddhism emerged from Eastern India and spread in several directions through intersecting points in silk routes.
• Food Travels : Spaghetti and Potato
1. Until five centuries ago, many of our common foods such as potatoes, soya, groundnuts, maize and tomatoes were not known to our ancestors.
2. These food items reached our country through travellers.
3. It is believed that noodles travelled West from China to become spaghetti.
4. Arab traders took pasta to 5th century Sicily, an island in Italy.
5. Many of our common foods came from America’s original inhabitants as that continent was discovered by Columbus who came from spain.
• Conquest, Disease and Trade
1. Indian ocean was known for its bustling trade with goods, people, knowledge, customs, etc crisscrossing its waters.
2. traders and travellers started transferring rich resources of America everywhere.
3. Precious metals, particularly silver, from mines located in present day Peru enhanced Europe’s wealth and financed its trade with Asia.
4. Many expeditions set off in search of EI Dorado, fabled city of gold.
• Migration of Europeans to America
1. European powers started controlling parts of America in mid-sixteenth century.
2. Portugal and Spain were dominating countries.
3. These countries had a strong firepower and army.
4. But along with these they also used germs and viruses for conquering parts of America.
5. As America was isolated, original inhabitants had no immunity against these germs and viruses.
6. Smallpox proved a deadly killer.
7. These germs were more dangerous as compared to guns and firearms because guns could bought or captured but there was no escape from these germs.
8. Poverty and hunger were common in Europe until the
9. Cities were crowded and deadly diseases were widespread.
10. Religious conflicts were common, and religious dissenters were persecuted.
11. Until well into eighteenth century, China and India were among world’s richest countries.
• 19th Century (1815-1914)
1. world changed profoundly in 19th century as economic, political, social, cultural and technological factors, interacted in complex ways to transform societies and reshape external relations.
2. Economists of 19th century identify three types of movements or ‘flows’ within international economic exchanges
(a) Flow of Trade flow of trade refers to large trade in goods, e.g., England started exporting machine made cotton pieces to Asian countries,
especially to India.
(b) Flow of Labour Migration of workers in search of employment refers to flow of labour. This flow also included indentured labourers who were employed in plantations, mines and in road or railway construction projects.
(c) Flow of Capital This includes movement of capital for short term or long term investments over long distances. All three flows were closely inter-connected and affected people’s lives more deeply now than ever before.
• A World Economy Takes Shape
1. Population growth had increased demand for food gsrains in Britain.
2. As urban centres expanded and industry grew, demand for agricultural products went up, pushing up agricultural prices.
3. laws allowing government to restrict import of corn were popularly known as ‘Corn Laws’.
• Scrapping of Corn Laws
1. There was a very poor harvest in 1816. This caused food prices to increase rapidly.
2. Industrial workers started demanding higher wages due to higher food prices.
3. There were food riots all over Britain.
• Impact of Scrapping Corn Laws
1. After abolition of corn laws, food could be imported into Britain more cheaply than it could be produced within country. British agriculturists were unable to compete with imports.
2. Vast areas of land were now left uncultivated and thousands of men and women were thrown out of work.
They flocked to cities or migrated overseas.
3. Due to a fall in prices, consumption of foodgrains in Britain rose.
4. Many countries of world like Russia, America and Australia and some Eastern European countries started exporting foodgrains to Britain.
• Impact of Trade on England
1. New harbours were built and old ones expanded to ship new cargoes.
2. Capital flowed from financial centres such as London.
3. Nearly 50 million people left Europe for America and Australia in nineteenth century.
4. By 1890, a global agricultural economy had taken shape.
5. food and other products were being transported by railways, built for that very purpose, and by ships.
6. British Indian Government built a network of irrigation canals to transform semi-desert wastes into fertile agricultural lands.
7. canal colonies, as areas irrigated by new canals were called, were settled by peasants from other parts of Punjab.
8. Nearly 60% of trade comprised of ‘primary products’
i.e., agricultural products and minerals.
• Role of Technology
1. Railway, steamengine, ships, telegraph were important inventions.
2. Colonisation stimulated new investments and improvements in transport.
The invention of refrigerated ship had following advantages
• This reduced shipping costs and lowered meat prices in Europe.
• poor in Europe could now consume a more varied diet.
• To monotony of bread and potatoes, now many, though not all, could add meat, butter and eggs to their diet.
• Better living conditions promoted social peace.
• Late-nineteenth Century Colonialism process of globalisation was responsible for colonialism.
Impact of Colonialism
1. Most of colonies lost their political freedom.
2. continent of Africa was divided on paper in conference halls in Europe.
3. It brought about many painful economic, social and ecological changes.
4. Belgium and Germany become new colonial powers.
• Rinderpest or Cattle Plague
1. In Africa, in 1890’s Rinderpest, a fast spreading disease of cattle plague, transformed people’s life. When Europeans arrived in Africa they found that people were not ready to work as labourers because
(a) Africa had abundant land and a relatively small population.
(b) In late 19th century Africa, there were few consumer goods that wages could buy.
Foreigners used following methods to recruit and retain labour
• Heavy taxes were imposed which could be paid only by working for wages on plantations and mines.
• Inheritance laws were changed so that peasants were displaced from land.
• Mine workers were enclosed in compounds and not allowed to move about freely.
• Spreading of Rinderpest and its Impact
1. Rinderpest arrived in Africa in late 1880s.
2. This disease killed 90% of cattle which were main wealth of African people.
3. Planters, mine owners and colonial governments now successfully monopolised control over scarce resource of cattle. This enabled European colonisers to conquer and subdue Africa.
• Indentured Labour Migration from India
1. example of indentured labour migration from India also illustrates two-sided nature of 19th century world.
2. Hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines and in roads and railway construction.
3. Most of indentured workers came from present day regions of Eastern Uttar Pradesh, Bihar, Central India and dry districts of Tamil Nadu.
4. In mid-19th century due to arrival of Britishers these regions experienced many changes which forced people to migrate in search of work.
(a) Due to industrialisation cottage industries had declined.
(b) Due to commercialisation of agriculture, land rents rose.
(c) There was shortage of land as lands were cleared for mines and pantations.
5. Most of indentured workers migrated in hope of a bright future but they were exploited by recruiting agents and by employers.
(a) They had to pay a commission to recruiting agent.
(b) agents used to provide false information.
(c) Sometimes agents even forcibly abducted less willing migrants.
6. In 19th century, indenture had been described as a
‘new system of slavery’ because of following reasons
(a) Living and working conditions were harsh.
(b) Workers had no legal rights.
(c) They were paid less wages.
(d) They were treated as slaves.
7. Workers discovered their own ways for surviving
(a) Many of indentured labourers escaped into jungles.
(b) They started celebrating festivals like ‘Hosay’ (for Iman Hussain).
(c) Many of migrants joined or became part of Rastafarianism.
(d) They started creating their own way of enjoyment like chutney music.
(e) They developed a new culture which was a blend of local culture with their native culture.
• Indian Entrepreneurs Abroad
1. small entrepreneurs looked for local finances.
2. Shi Karipuri Shroffs and Nattukottai Chettians were amongst many groups of such entrepreneurs.
• Indian Trade, Colonialism and Global System British industrialisation had a double impact on Indian textile industry.
1. Due to high rate of tariffs, inflow of Indian textiles into Britain began to decline.
2. British machine made textile products.
• Importance of Indian Trade for Britishers
1. Britain had a trade surplus with India.
2. Britains trade surplus in India also helped to pay so-called ‘home-charges’.
The First World War and Inter War Economy
• First World War was fought from 1914-1918.
• On one side were Allies-Britain, France and Russia.
• On other side were central European powers of Germany, Australia-Hungary and Ottoman Turkey.
• Major Characteristics of War
1. A World War fighting involved world’s leading industrial nations, who now harnessed vast powers of modern industry.
2. Modern Industrial War It saw use of machine guns,
tanks, aircrafts, submarines, chemical weapons, etc.
3. Reduction in Workforce These deaths and injuries reduced able-bodies workforce in Europe.
4. New Social Setup war was responsible for reorganising whole society and economy.
5. Emergence of America as a Super World Power
American companies and American people had floated huge loans to Allies during war.
• Post-war Recovery Post war recovery proved difficult as heavy expenditure on World War I weakened British economy. There were many factors due to which post war recovery proved difficult for Britain
1. While Britain was preoccupied with war, industries in India and Japan got a chance to develop. So, after war Britain had to face competition from these countries,
especially from Japan.
2. To finance war expenditure, Britain had borrowed liberally from USA.
3. war had led to an economic boom, i.e., to a large increase in demand, production, prices and employment.
When war boom ended, production contracted and unemployment increased.
4. After war government also controlled its expenditure which further led to fall in production.
5. All these developments led to a huge loss of jobs and low income for workers.
6. war had an adverse impact on agricultural economies also.
• Rise of Mass Production and Consumption war gave a big blow to economy of Britain but it boosted US economy.
1. One important feature of US economy of 1920’s was mass production i.e., production of goods on large scale by an automated mechanical process which had begun in late nineteenth century. However, in 1920’s it became a characteristic feature of industrial production in US.
2. A well-known pioneer of mass production was car manufacturer Henry Ford, founder of Ford Motor Company.
3. He adapted assembly line approach of Chicago slaughterhouse (in which slaughtered animals were picked apart by butchers as they came down a conveyor belt) to his new car plant in Detroit.
4. assembly line method allowed a faster and cheaper way of producing vehicles.
• Assembly Line had Following Advantages
1. It increased output per worker by speeding up pace of work.
2. It led to mass production i.e., a car came off assembly line at three minutes intervals.
3. Under this, a worker could not afford to delay work because his work was linked to all other workers.
4. It helped in job specialisation.
5. Now workers were getting higher wages i.e., $ 5 per day.
• Great Depression
1. By economic depression, it is meant that economic condition when a country records an immense decline in production.
2. This state of economic depression started in United States of America in 1929 and engulfed entire world;
hence it is known as great depression.
• Causes of Economic Depression following are major causes of economic depression
1. Conditions Created by War
(a) There was an immense industrial expansion in view of increased demands of goods related to army during First World War.
(b) After war industries produced at same speed.
(c) However, sharp decrease in demand for military and war products gave birth to economic depression.
2. Overproduction in Agriculture
(a) Agricultural overproduction was another major factor responsible for depression.
(b) As prices slumped and agricultural income declined, farmers tried to expand production and bring a larger, volume of produce to market to maintain their overall income.
(c) This worsened glut in market, pushing down prices even further. farm produce rotted for lack of buyers.
3. Shortage of Loans
(a) In mid-1920’s many countries financed their investments through loans from USA.
(b) While it was often very easy to raise loans in US during boom period, US overseas lenders panicked at first sign of trouble.
4. Multiple Effect
(a) withdrawal of lenders from market had a multiple effect.
(b) In Europe, it led to failure of some major banks and collapse of currencies such as British pound sterling.
(c) US attempt to protect its economy in depression by doubling import duties also deal another severe blow to world trade.
• Impact of Great Depression on USA
1. With fall in prices and prospect of a depression, US banks also slashed domestic lending and called back loans.
2. Farmers were unable to sell their harvest.
3. Faced with falling income, many households in US could not repay what they had borrowed, and were forced to give up their homes, cars, and other consumer durables.
4. Industrial production registered a fall of 35%.
5. number of unemployed started rising and in 1933
it touched 17 million.
• India and Great Depression
1. During that period, India had become an exporter of agricultural goods and importer of manufactures.
2. depression immediately affected Indian trade. India’s exports and imports nearly halved between 1928 and 1934.
3. As international prices crashed, prices in India plunged.
Between 1928 and 1934, wheat prices in India fell by 50%.
4. fall in prices had a big impact on poor farmers.
Though agricultural prices fell sharply, colonial government refused to give any relief to farmers in taxes.
5. Peasants producing for world market were worst hit.
• Impact of Great Depression on Indian Farmers
1. Their indebtedness increased.
2. They were forced to sell or mortgage their land.
3. People were forced to sell their assets like gold and silver.
4. Indian jute producers were worst affected.
5. Industrial investment also grew as government extended tariff protection to industries, under pressure of nationalist opinion.
• Second World War
1. First World War came to an end in 1918.
2. Just after two decades world fell into cauldron of fire of Second World War, which proved to be ever more destructive than First World War.
3. Second World War was a ‘Total war’.
4. It was a war waged for six years on many fronts, in many places, over land, on sea and in air.
• Consequences of War
1. Death and Destruction More than 60 million people, or about 3% of world’s population, are believed to have been killed, directly or indirectly, as a result of war.
Millions more were injured. Many big cities were reduced to ashes.
2. Use of Atomic Bomb for Destruction atomic bombing of Hiroshima and Nagasaki alone is estimated to have killed between 150,000 and 250,000 men, women and children.
The radiation effects of these nuclear weapons not only brought death for millions, but also caused damage to kidney, ovary, nervous system, brain, muscles, skin to remaining population of these Japanese cities. Radiation also caused diseases like cancer, blindness and sterility.
3. Damage to Agriculture, Trade and Industries World War II caused a great damage to agriculture, trade and commerce. terrible battles fought in different countries during war made large tracts of land infertile.
4. Increase in Soviet Russia’s Power and Prestige Second World War boosted power and prestige of Soviet Union.
5. USA becomes a Super Power
(a) World War II made USA supreme power of world.
(b) By dropping atom bombs on Hiroshima and Nagasaki,
it created a terror of its military power in world.
(c) After war, no European country was either as powerful or as prosperous as United States of America.
(d) emergence of USA and Soviet Russia as new super powers influenced post war reconstruction.
• Post War Settlement and Bretton-Woods Institutions
Economists and politicians learned two lessons from interwar economic experiences.
1. Full Employment
(a) An industrial society based on mass production cannot be sustained without mass consumption.
(b) To ensure mass consumption, there was a need for a high and stable income.
(c) Income could not be stable if employment was unstable.
(d) Thus, a stable income also required a steady and full employment.
2. Intervention of Government
(a) Before Second World War most of economists believed capitalist economies or markets are self-sustaining i.e., there is no need for government intervention.
(b) But interwar period proved that markets alone could not guarantee full employment.
(c) Therefore, government would have to step in to minimise fluctuations of price, output and employment.
(d) Economic stability could be ensured only through intervention of government.
• Bretton-Woods Institutions
1. Bretton Woods Conference took place in July of 1944
at Bretton Woods in New Hampshire USA.
2. Under this system, International Monetary Fund (IMF)
and International Bank of Reconstruction and Development, later on called as World Bank(WB), were established.
3. IMF was developed as a permanent international body.
4. World Bank was created to speed up postwar reconstruction, to aid political stability and to foster peace.
• Main Terms of this Agreement were
1. To establish monetary co-operation amongst various member countries.
2. To promote international trade by removing all obstacles.
3. Bretton Woods system was based on fixed exchange rates. Under this system, national currencies were pegged to dollar at a fixed exchange rate.
4. It was decided to establish International Bank for Reconstruction and Development (World Bank) and International Monetary Fund.
5. All member countries were required to subscribe to IMF’s capital.
Fixed Exchange Rate Flexible or Floating Exchange Rate
When exchange rates of a currency are fixed. When exchange rate of a currency depends on its demand and supply or is decided by market.
Under this government intervenes to prevent fluctuations in exchange rates of currency. Under this government does not intervene and allows currency to fluctuate.
This system was followed under Bretton Woods system. This system is followed now-a-days.
34. Early Post Ware Years Bretton Woods system worked smoothly for some years after war.
1. Bretton Woods system ushered in an era of unprecedented growth of trade and income for Western industrial nations and Japan.
2. It provided a big boost to world trade.
3. growth was also mostly stable, without large fluctuations.
4. system also controlled unemployment which averaged less than 5% in most industrial countries.
5. These years also saw worldwide spread of technology and enterprise.
• Decolonisation and Independence
1. Second World War provided a new impetus to freedom movements in Asia and Africa.
2. Over next two decades, most of Asian and African colonies emerged as free and independent nations.
3. But these newly independent countries were overburdened by poverty and a lack of resources, as their economies were handicapped by long periods of colonial rule.
4. IMF and World Bank were asked to meet financial needs of industrial countries.
5. Europe and Japan rapidly rebuilt their economies. They grew less dependent on IMF and World Bank.
6. Thus, from late 1950s, Bretton Woods institutions
i.e., IMF and World Bank, began to shift their attention more towards developing countries.
• End of Bretton Wood and Beginning of Globalisation
After collapse of fixed exchange rate system, it was replaced by system of floating exchange rates.
1. Decline of US Currency After 1960s, USA was no longer dominant economic power as it had been for more than two decades.
2. Rise of Western Commercial Banks Developing countries could turn to international institutions for loans and development assistance.
3. New Powers European Economic Community (EEC)
and Japan had become international economic powers.
4. Rise of China and Soviet Union China had been cut off from postwar world economy since its revolution in 1949.
5. Low Cost Structure in China Wages were low in China.
6. Problem of Unemployment unemployment that began rising from mid 1970’s remained high until early 1990’s.
10 History Chapter 1 Making of a Global World
Chapter Notes and Summary• Pre-Modern World movement of people, goods and services across nations has been termed as globalisation.