The Making of a Global World

• 1. The Pre-Modern World

  • Silk Routes Link the World

    • Connected vast regions of Asia, Europe, and Northern Africa.
    • Traded goods: Chinese silk, pottery, Indian spices, and textiles.
    • Returned with: Gold and silver from Europe.
    • Spread of religions: Buddhism, Christianity, and Islam traveled along these routes.

  • Food Travels

    • Traders and travelers introduced new crops to new areas.
    • Spaghetti and Noodles: Believed to have traveled from China to Italy.
    • Common Foods: Potatoes, soya, groundnuts, maize, tomatoes, and chillies introduced to Europe and Asia after Christopher Columbus discovered America.
    • Irish Potato Famine (1845-1849): Destruction of potato crop led to starvation and death of nearly 1 million Irish people.

  • Conquest, Disease, and Trade

    • 16th Century: European sailors found sea routes to Asia and America.
    • Biological Warfare: Spanish conquerors used Smallpox germs to conquer America; native Americans had no immunity.
    • Precious Metals: Silver from mines of Peru and Mexico financed European trade with Asia.
    • Shift of World Trade: Till the 18th century, India and China were the richest, but power shifted westward to Europe.

• 2. The Nineteenth Century (1815–1914)

  • Three Flows in International Economic Exchange

    • Flow of Trade: Trade in goods (e.g., cloth or wheat).
    • Flow of Labour: Migration of people in search of employment.
    • Flow of Capital: Short-term or long-term investments over long distances.

  • A World Economy Takes Shape

    • Abolition of Corn Laws in Britain: Allowed cheap food imports, leading to cheaper food but rendering British agriculture uncompetitive.
    • Shift to Industrialization: British peasants migrated to cities or overseas; global agricultural lands cleared in Eastern Europe, Russia, America, and Australia to feed Britain.

  • Role of Technology

    • Key inventions: Railways, steamships, and the telegraph.
    • Refrigerated Ships: Enabled transport of perishable meat over long distances (from America/Australia to Europe), lowering meat prices for the European poor.

  • Late 19th-Century Colonialism

    • European powers carved up Africa at the Berlin Conference (1885).
    • Rinderpest (Cattle Plague):
      • Devastating cattle disease arrived in Africa in the late 1880s.
      • Killed 90% of African cattle, destroying local livelihoods and forcing Africans into the colonial labor market.

  • Indentured Labour Migration

    • Often described as a "New System of Slavery".
    • Millions of Indian and Chinese laborers hired under contracts to work on plantations and mines worldwide.
    • Main destinations for Indians: Caribbean islands (Trinidad, Guyana), Mauritius, Fiji, Ceylon, and Malaya.
    • Cultural fusion: Hosay (Muharram carnival in Trinidad) and Chutney music.
    • Abolished in 1921 due to pressure from Indian nationalist leaders.

  • Indian Entrepreneurs Abroad

    • Shikaripuri Shroffs and Nattukottai Chettiars: Financed export agriculture in Central and Southeast Asia.
    • Hyderabadi Sindhi traders: Established emporia at busy ports worldwide.

  • Indian Trade, Colonialism, and the Global System

    • British industrialization led to tariffs on Indian cotton textiles.
    • India became an exporter of raw materials (cotton, indigo, opium) and importer of British manufactured goods.
    • Trade Surplus: Britain maintained a trade surplus with India, using it to pay for its trade deficits with other countries and to cover Home Charges (salaries, pensions of British officials).

• 3. The Inter-War Economy (1914–1939)

  • Wartime Transformations (First World War)

    • Fought between Allies (Britain, France, Russia, US) and Central Powers (Germany, Austria-Hungary, Ottoman Empire).
    • First modern industrial war: Use of machine guns, tanks, aircraft, and chemical weapons.
    • Economic shift: US transformed from an international debtor to an international creditor.

  • Post-War Recovery

    • Britain struggled to regain its dominant economic position.
    • Agricultural crisis: Overproduction of wheat led to a crash in grain prices.

  • Rise of Mass Production and Consumption

    • Henry Ford: Introduced the Assembly Line method for manufacturing cars (T-Model Ford).
    • Mass production lowered costs, leading to a consumer boom in the US (refrigerators, washing machines, radios purchased on hire-purchase systems).

  • The Great Depression (1929–mid-1930s)

    • Causes:
      • Agricultural overproduction leading to falling prices.
      • Withdrawal of US loans to European countries.
    • Impact on US: Banks collapsed, factories closed, and unemployment skyrocketed.
    • Impact on India:
      • Exports and imports halved between 1928 and 1934.
      • Agricultural prices fell by 50%, causing severe distress to peasants.
      • India became an exporter of gold (which helped global economic recovery).
      • Triggered Mahatma Gandhi's Civil Disobedience Movement (1930).

• 4. Rebuilding a World Economy: Post-War Era

  • Second World War (1939–1945)

    • Fought between Axis powers (Germany, Italy, Japan) and Allies (Britain, France, Soviet Union, US).
    • Caused massive destruction and led to the rise of two superpowers: USA and Soviet Union (USSR).

  • Post-War Settlement and Bretton Woods Institutions

    • Bretton Woods Conference (July 1944, New Hampshire, USA).
    • Established the "Bretton Woods Twins":
      • IMF (International Monetary Fund): To deal with external surpluses and deficits of member nations.
      • World Bank (IBRD): To finance post-war reconstruction.
    • System based on fixed exchange rates pegged to the US Dollar.

  • Decolonisation and the Rise of G-77

    • Former colonies in Asia and Africa gained independence but faced poverty and lack of resources.
    • G-77 (Group of 77): Developing nations organized themselves to demand a New International Economic Order (NIEO).
    • NIEO Goals: Real control over natural resources, fairer prices for raw materials, and better access for manufactured goods in developed markets.

  • Beginning of Globalization

    • Late 1970s: Collapse of the fixed exchange rate system; introduction of floating exchange rates.
    • Rise of MNCs (Multinational Corporations).
    • Shifting of manufacturing jobs to low-wage Asian countries, especially China, due to cheap labor and low production costs.