Lecture 04 - webnotes - Introduction Background...

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Lecture 4: The first wave of globalization, 1820 to 1913 AD Introduction Background developments Causes Trends The HO model of trade
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Introduction Emerging from shambles, European nations renew trade contacts with one another and the rest of the world from 1820. This is the “first wave of globalization”. What we’ll explore in this lecture its course, causes, and consequences.
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Background developments But first, need to chart two developments which straddle the turn of the 19 th century: 1.) the “French Wars” from 1793 to 1815.
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Background developments Powerful effects on the volume of trade, especially outside of Britain and after 1806.
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Background developments Likewise, big movements in commodity prices and, thus, factor prices. The relative price of imports was raised by 100 to 200% for countries in Europe and the Americas.
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Background developments Apart from these disruptive effects, also need to think of the French Wars in terms of developments later in the century. The wars coincided with the collapse of the New World empires of Spain and Portugal.
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Background developments Second, the war proved the undoing of many of the chartered trading companies. This allowed for the monopoly on European trade with Asia to be broken. The VOC is dismantled in 1806, likewise the EIC in 1813.
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Background developments Third, Napoleon made a number of internal reforms to the economies of his empire. The most important of these were prohibitions on the craft guilds and the dismantling of internal customs barriers.
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Background developments Finally, the defeat of the French forces at Waterloo in 1815 ushered in a new era. The struggle for supremacy in Europe which had been waged for over 300 years was over.
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Background developments 2.) Also need to make note of simultaneous developments within Britain itself. Period from 1770 to 1820 gave rise to the British Industrial Revolution. Causes still debated, but a clear role for the “global economy” of the time (slaves, cotton, and textiles).
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Background developments Also a clear role for the Industrial Revolution in the growth of trade in the 19 th century. First, there is the application of industrial revolution technology to other fields.
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Probably as important were the effects of the industrial revolution on prices and incomes.
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Lecture 04 - webnotes - Introduction Background...

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