Global Capitalism Notes - Defenders of the Global Economy...

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Before WWI economic life experienced internationalization. Standards: commitment to int. openness, protection of property across borders, gold standard, limited gov. intervention in macroeconomy. Intellectual support for the Golden Age: Before 1914 everyone thought int. economic ties more important than domestic business. David Ricardo- comparative advantage idea – countries should product what they make cheapest compared to what else they can product (not what other countries can produce) and obviously free trade is then good b.c that allows everyone to but cheapest stuff. 1850s Great Britain was the breeding ground for these ideas, classical ideas not the direct cause though (adam smith had demolished mercantile thinking 1776) but 1846 repeal of major agr. Tariffs the Corn Laws parked more globalization. Other countries followed but gradually and partially Nathan Mayer Rothschild 1840-1915: Descendant of Amschel Mayer Rothschild who founded House of Rothschild bank in Frankfurt in 1700’s and expanded to other capitals- very important did financial services to British crown during Napoleonic wars. Nathan Mayer- used his position of enforce three major pillars of golden age, int. finance, gold standard, and free trade. – paid close attention to growing US dispatched Frankfurt employee, Belmot to got there and support opening of US to rest of world economy. Encouraged Gold Standard, US had gone off it during civil and war and somewhat reluctant to go back but after congress defeated many attempts, Grant agreed on a lame-duck congress to approve gold s. but commitment weak and challenged esp in 1890’s Had power to help with int. crisis, ex. in 1907 ecouraged coop. with Bank or England and France after American Bankrun scared investors everywhere. Worked to keep global financial markets accessible and stable, Ambitious ventures in S. Africa to bring new investments to world markets. Involved in miner in South Africa (gold) and got into diamonds as well, worked w. De Beers Mining Company. Worked with wealthy miner Cecil Rhodes. Rhodes wanted to bring S. Africa under British Control but obstacles were gov. of Orange free state and the transvall. Rothschilds played difficult role, wanted nice relations w/locals govs to get to mines but also wanted friendlier gov (like Britain) tension led to in flooding of foreign miners, Jameson incident, all culminated in Boer War 1899- B mistreatment of civilians led to outrage and eventual settlement left gov. or Union of South Africa under effective control of Afrikaaner community. –while Rothschild had protected diamond and gold interests large public fallout led to Conservative party losing 1906 gen. elections. The Free Traders:
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Global Capitalism Notes - Defenders of the Global Economy...

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