4. The making of a Global World:

INTRODUCTION 
Globalisation is a phenomenon of developing international relations has emerged since the last 50 years or so. Although the process has started much earlier. This topic deals with the various events of the history which have led to the development of Globalisation. This topic deals with various routes, products and events which have led to the formation of the Global world in the ancient history in ninteenth century. The interwar economy and the post-war era has shown that how it has progressed before the industrial revolution, during the industrial revolution, the industrialisation in the colonies, the events at the time of decolonisation and the begining of independence. 

Important Terms
Flow-Learning

Words that Matter
Silk Route : The route taken by traders to carry silk cargos from China to the West.
Dissenter : One who refuses to accept established beliefs and practices.
Indentured labour : A bonded labourer under contract to work for an employer for a specific amount of time, to pay off his-passage to a new country or home.
Tariff : Tax imposed on a country’s imports from the rest of the world. Tariffs are levied at the point of entry, i.e. at the border or at the airport.
Fixed exchange rates : When exchange rates are fixed and the governments intervene to prevent movements in them.
Floating exchange rate : These rates fluctuate depending on demand and supply of currencies in foreign exchange markets, in principle without interference by governments.
Coolies: Indian indentured labourers were referred to as coolies in the Caribbean islands.

PRE-MODERN WORLD
The pre-modern World
The making of the global world has a long history - of trade,  of migration, of people in search of work, the movement of capital, and much more.
 From ancient times, travellers, traders, priests and pilgrims travelled vast distances for knowledge, opportunity and spiritual fulfilment, or to escape persecution. They carried goods, money, values, skills, ideas, inventions, and even germs and diseases. As early as 3000 BC an active coastal trade linked the Indus valley civilisations with present-day West Asia. For more than a millenniam, comes (the Hindi cowdi or seashells, used as a form of currency) from the Maldives found their way to China and East Africa.

Silk routes link the World
The name silk routes points to the importance of West-bound Chinese silk cargoes along this route. Historians have identified several silk routes, over land and by sea, knitting together vast regions of Asia, and linking Asia with Europe and northern Africa. They are known to have existed since before the Christian Era and thrieved almost till the fifteenth century.

Food Travel: Spaghetti and Potato
It is believed that noodles travelled west from China to become spaghetti. Or, perhaps Arab traders took pasta in fifth-century to Sicily, an island now in Italy.
Similar foods were also known in India and Japan.    Many of our common foods such as potatoes, soya, groundnuts, maize, tomatoes, chillies, sweet potatoes, and so on were not known to our ancestors until about five centuries ago.
These foods were only introduced in Europe and Asia after Christopher Columbus accidentally discovered the vast continent. 
Sometimes the new crops could make the difference between life and death. The European poor began to eat better and live longer with the introduction of the humble potato. Ireland’s poorest peasants became so dependent on potatoes that when disease destroyed the potato crops in the mid-1840s, hundreds of thousands died of starvation.

Conquest, Disease and Trade
Before its ‘discovery’, America had been cut off from regular contact with the rest of the world for millions of years. But from the sixteenth century, its vast lands and abundant crops and minerals began to transform trade and lives everywhere.
Precious metals, particularly silver, from mines located in present-day Peru and Mexico also enhanced Europe’s wealth and financed its trade with Asia.    
Tranfer of Disease helped in colonisalion of America.
The most powerful weapon of the Spanish conquerors was not a conventional military weapon at all. It was the germs such as those of smallpox that they carried on their person.
    1.    Because of their long isolation, America’s original inhabitants had no immunity against these diseases that came from Europe. 
    2.    Smallpox in particular proved a deadly killer. Once introduced, it spread deep into the continent, ahead even of any Europeans reaching there. It killed and decimated whole communities, paving the way for conquest.

Europe in 19th Century
    1.    Until the nineteenth century, poverty and hunger were common in Europe. 
    2.    Cities were crowded and deadly diseases were widespread. 
    3.    Religious conflicts were common, and religious dissenters were persecuted. 
    4.    Thousands therefore fled Europe for America. Here, by the eighteenth century, plantations worked by slaves captured in Africa were growing cotton and sugar for European markets.
However, from the fifteenth century, China is said to have restricted overseas contacts and retreated into isolation. China’s reduced role and the rising importance of the Americas gradually moved the centre of world trade westwards. Europe now emerged as the centre of world trade.

Illustration 1
    Which factors have contributed towards the making of the global world?
Solution
    (i) Trade                (ii) Migration
    (iii) People in search of jobs        (iv) movement of capital etc.

Illustration 2
    What things travellers carried with them when they moved in search of knowledge, opportunities, spritual fulfillment or to escape perscecution?
Solution
    They carried goods, money, values, skills, ideas, inventions and even germs and diseases.

Illustration 3
    Which routes were linked by silk route?
Solution
    Silk routes connected Asia with Europe and north Africa.

Illustration 4
    Which commodities were traded through silk routes?
Solution
    Chinese pottery, textiles and spices from India and in return gold and silver flowed from Europe to Asia.

INTRODUCTION 
Globalisation is a phenomenon of developing international relations has emerged since the last 50 years or so. Although the process has started much earlier. This topic deals with the various events of the history which have led to the development of Globalisation. This topic deals with various routes, products and events which have led to the formation of the Global world in the ancient history in ninteenth century. The interwar economy and the post-war era has shown that how it has progressed before the industrial revolution, during the industrial revolution, the industrialisation in the colonies, the events at the time of decolonisation and the begining of independence. 

Important Terms
Flow-Learning

Words that Matter
Silk Route : The route taken by traders to carry silk cargos from China to the West.
Dissenter : One who refuses to accept established beliefs and practices.
Indentured labour : A bonded labourer under contract to work for an employer for a specific amount of time, to pay off his-passage to a new country or home.
Tariff : Tax imposed on a country’s imports from the rest of the world. Tariffs are levied at the point of entry, i.e. at the border or at the airport.
Fixed exchange rates : When exchange rates are fixed and the governments intervene to prevent movements in them.
Floating exchange rate : These rates fluctuate depending on demand and supply of currencies in foreign exchange markets, in principle without interference by governments.
Coolies: Indian indentured labourers were referred to as coolies in the Caribbean islands.

PRE-MODERN WORLD
The pre-modern World
The making of the global world has a long history - of trade,  of migration, of people in search of work, the movement of capital, and much more.
 From ancient times, travellers, traders, priests and pilgrims travelled vast distances for knowledge, opportunity and spiritual fulfilment, or to escape persecution. They carried goods, money, values, skills, ideas, inventions, and even germs and diseases. As early as 3000 BC an active coastal trade linked the Indus valley civilisations with present-day West Asia. For more than a millenniam, comes (the Hindi cowdi or seashells, used as a form of currency) from the Maldives found their way to China and East Africa.

Silk routes link the World
The name silk routes points to the importance of West-bound Chinese silk cargoes along this route. Historians have identified several silk routes, over land and by sea, knitting together vast regions of Asia, and linking Asia with Europe and northern Africa. They are known to have existed since before the Christian Era and thrieved almost till the fifteenth century.

Food Travel: Spaghetti and Potato
It is believed that noodles travelled west from China to become spaghetti. Or, perhaps Arab traders took pasta in fifth-century to Sicily, an island now in Italy.
Similar foods were also known in India and Japan.    Many of our common foods such as potatoes, soya, groundnuts, maize, tomatoes, chillies, sweet potatoes, and so on were not known to our ancestors until about five centuries ago.
These foods were only introduced in Europe and Asia after Christopher Columbus accidentally discovered the vast continent. 
Sometimes the new crops could make the difference between life and death. The European poor began to eat better and live longer with the introduction of the humble potato. Ireland’s poorest peasants became so dependent on potatoes that when disease destroyed the potato crops in the mid-1840s, hundreds of thousands died of starvation.

Conquest, Disease and Trade
Before its ‘discovery’, America had been cut off from regular contact with the rest of the world for millions of years. But from the sixteenth century, its vast lands and abundant crops and minerals began to transform trade and lives everywhere.
Precious metals, particularly silver, from mines located in present-day Peru and Mexico also enhanced Europe’s wealth and financed its trade with Asia.    
Tranfer of Disease helped in colonisalion of America.
The most powerful weapon of the Spanish conquerors was not a conventional military weapon at all. It was the germs such as those of smallpox that they carried on their person.
    1.    Because of their long isolation, America’s original inhabitants had no immunity against these diseases that came from Europe. 
    2.    Smallpox in particular proved a deadly killer. Once introduced, it spread deep into the continent, ahead even of any Europeans reaching there. It killed and decimated whole communities, paving the way for conquest.

Europe in 19th Century
    1.    Until the nineteenth century, poverty and hunger were common in Europe. 
    2.    Cities were crowded and deadly diseases were widespread. 
    3.    Religious conflicts were common, and religious dissenters were persecuted. 
    4.    Thousands therefore fled Europe for America. Here, by the eighteenth century, plantations worked by slaves captured in Africa were growing cotton and sugar for European markets.
However, from the fifteenth century, China is said to have restricted overseas contacts and retreated into isolation. China’s reduced role and the rising importance of the Americas gradually moved the centre of world trade westwards. Europe now emerged as the centre of world trade.

Illustration 1
    Which factors have contributed towards the making of the global world?
Solution
    (i) Trade                (ii) Migration
    (iii) People in search of jobs        (iv) movement of capital etc.

Illustration 2
    What things travellers carried with them when they moved in search of knowledge, opportunities, spritual fulfillment or to escape perscecution?
Solution
    They carried goods, money, values, skills, ideas, inventions and even germs and diseases.

Illustration 3
    Which routes were linked by silk route?
Solution
    Silk routes connected Asia with Europe and north Africa.

Illustration 4
    Which commodities were traded through silk routes?
Solution
    Chinese pottery, textiles and spices from India and in return gold and silver flowed from Europe to Asia.

INTRODUCTION 
Globalisation is a phenomenon of developing international relations has emerged since the last 50 years or so. Although the process has started much earlier. This topic deals with the various events of the history which have led to the development of Globalisation. This topic deals with various routes, products and events which have led to the formation of the Global world in the ancient history in ninteenth century. The interwar economy and the post-war era has shown that how it has progressed before the industrial revolution, during the industrial revolution, the industrialisation in the colonies, the events at the time of decolonisation and the begining of independence. 

Important Terms
Flow-Learning

Words that Matter
Silk Route : The route taken by traders to carry silk cargos from China to the West.
Dissenter : One who refuses to accept established beliefs and practices.
Indentured labour : A bonded labourer under contract to work for an employer for a specific amount of time, to pay off his-passage to a new country or home.
Tariff : Tax imposed on a country’s imports from the rest of the world. Tariffs are levied at the point of entry, i.e. at the border or at the airport.
Fixed exchange rates : When exchange rates are fixed and the governments intervene to prevent movements in them.
Floating exchange rate : These rates fluctuate depending on demand and supply of currencies in foreign exchange markets, in principle without interference by governments.
Coolies: Indian indentured labourers were referred to as coolies in the Caribbean islands.

PRE-MODERN WORLD
The pre-modern World
The making of the global world has a long history - of trade,  of migration, of people in search of work, the movement of capital, and much more.
 From ancient times, travellers, traders, priests and pilgrims travelled vast distances for knowledge, opportunity and spiritual fulfilment, or to escape persecution. They carried goods, money, values, skills, ideas, inventions, and even germs and diseases. As early as 3000 BC an active coastal trade linked the Indus valley civilisations with present-day West Asia. For more than a millenniam, comes (the Hindi cowdi or seashells, used as a form of currency) from the Maldives found their way to China and East Africa.

Silk routes link the World
The name silk routes points to the importance of West-bound Chinese silk cargoes along this route. Historians have identified several silk routes, over land and by sea, knitting together vast regions of Asia, and linking Asia with Europe and northern Africa. They are known to have existed since before the Christian Era and thrieved almost till the fifteenth century.

Food Travel: Spaghetti and Potato
It is believed that noodles travelled west from China to become spaghetti. Or, perhaps Arab traders took pasta in fifth-century to Sicily, an island now in Italy.
Similar foods were also known in India and Japan.    Many of our common foods such as potatoes, soya, groundnuts, maize, tomatoes, chillies, sweet potatoes, and so on were not known to our ancestors until about five centuries ago.
These foods were only introduced in Europe and Asia after Christopher Columbus accidentally discovered the vast continent. 
Sometimes the new crops could make the difference between life and death. The European poor began to eat better and live longer with the introduction of the humble potato. Ireland’s poorest peasants became so dependent on potatoes that when disease destroyed the potato crops in the mid-1840s, hundreds of thousands died of starvation.

Conquest, Disease and Trade
Before its ‘discovery’, America had been cut off from regular contact with the rest of the world for millions of years. But from the sixteenth century, its vast lands and abundant crops and minerals began to transform trade and lives everywhere.
Precious metals, particularly silver, from mines located in present-day Peru and Mexico also enhanced Europe’s wealth and financed its trade with Asia.    
Tranfer of Disease helped in colonisalion of America.
The most powerful weapon of the Spanish conquerors was not a conventional military weapon at all. It was the germs such as those of smallpox that they carried on their person.
    1.    Because of their long isolation, America’s original inhabitants had no immunity against these diseases that came from Europe. 
    2.    Smallpox in particular proved a deadly killer. Once introduced, it spread deep into the continent, ahead even of any Europeans reaching there. It killed and decimated whole communities, paving the way for conquest.

Europe in 19th Century
    1.    Until the nineteenth century, poverty and hunger were common in Europe. 
    2.    Cities were crowded and deadly diseases were widespread. 
    3.    Religious conflicts were common, and religious dissenters were persecuted. 
    4.    Thousands therefore fled Europe for America. Here, by the eighteenth century, plantations worked by slaves captured in Africa were growing cotton and sugar for European markets.
However, from the fifteenth century, China is said to have restricted overseas contacts and retreated into isolation. China’s reduced role and the rising importance of the Americas gradually moved the centre of world trade westwards. Europe now emerged as the centre of world trade.

Illustration 1
    Which factors have contributed towards the making of the global world?
Solution
    (i) Trade                (ii) Migration
    (iii) People in search of jobs        (iv) movement of capital etc.

Illustration 2
    What things travellers carried with them when they moved in search of knowledge, opportunities, spritual fulfillment or to escape perscecution?
Solution
    They carried goods, money, values, skills, ideas, inventions and even germs and diseases.

Illustration 3
    Which routes were linked by silk route?
Solution
    Silk routes connected Asia with Europe and north Africa.

Illustration 4
    Which commodities were traded through silk routes?
Solution
    Chinese pottery, textiles and spices from India and in return gold and silver flowed from Europe to Asia.

INTRODUCTION 
Globalisation is a phenomenon of developing international relations has emerged since the last 50 years or so. Although the process has started much earlier. This topic deals with the various events of the history which have led to the development of Globalisation. This topic deals with various routes, products and events which have led to the formation of the Global world in the ancient history in ninteenth century. The interwar economy and the post-war era has shown that how it has progressed before the industrial revolution, during the industrial revolution, the industrialisation in the colonies, the events at the time of decolonisation and the begining of independence. 

Important Terms
Flow-Learning

Words that Matter
Silk Route : The route taken by traders to carry silk cargos from China to the West.
Dissenter : One who refuses to accept established beliefs and practices.
Indentured labour : A bonded labourer under contract to work for an employer for a specific amount of time, to pay off his-passage to a new country or home.
Tariff : Tax imposed on a country’s imports from the rest of the world. Tariffs are levied at the point of entry, i.e. at the border or at the airport.
Fixed exchange rates : When exchange rates are fixed and the governments intervene to prevent movements in them.
Floating exchange rate : These rates fluctuate depending on demand and supply of currencies in foreign exchange markets, in principle without interference by governments.
Coolies: Indian indentured labourers were referred to as coolies in the Caribbean islands.

PRE-MODERN WORLD
The pre-modern World
The making of the global world has a long history - of trade,  of migration, of people in search of work, the movement of capital, and much more.
 From ancient times, travellers, traders, priests and pilgrims travelled vast distances for knowledge, opportunity and spiritual fulfilment, or to escape persecution. They carried goods, money, values, skills, ideas, inventions, and even germs and diseases. As early as 3000 BC an active coastal trade linked the Indus valley civilisations with present-day West Asia. For more than a millenniam, comes (the Hindi cowdi or seashells, used as a form of currency) from the Maldives found their way to China and East Africa.

Silk routes link the World
The name silk routes points to the importance of West-bound Chinese silk cargoes along this route. Historians have identified several silk routes, over land and by sea, knitting together vast regions of Asia, and linking Asia with Europe and northern Africa. They are known to have existed since before the Christian Era and thrieved almost till the fifteenth century.

Food Travel: Spaghetti and Potato
It is believed that noodles travelled west from China to become spaghetti. Or, perhaps Arab traders took pasta in fifth-century to Sicily, an island now in Italy.
Similar foods were also known in India and Japan.    Many of our common foods such as potatoes, soya, groundnuts, maize, tomatoes, chillies, sweet potatoes, and so on were not known to our ancestors until about five centuries ago.
These foods were only introduced in Europe and Asia after Christopher Columbus accidentally discovered the vast continent. 
Sometimes the new crops could make the difference between life and death. The European poor began to eat better and live longer with the introduction of the humble potato. Ireland’s poorest peasants became so dependent on potatoes that when disease destroyed the potato crops in the mid-1840s, hundreds of thousands died of starvation.

Conquest, Disease and Trade
Before its ‘discovery’, America had been cut off from regular contact with the rest of the world for millions of years. But from the sixteenth century, its vast lands and abundant crops and minerals began to transform trade and lives everywhere.
Precious metals, particularly silver, from mines located in present-day Peru and Mexico also enhanced Europe’s wealth and financed its trade with Asia.    
Tranfer of Disease helped in colonisalion of America.
The most powerful weapon of the Spanish conquerors was not a conventional military weapon at all. It was the germs such as those of smallpox that they carried on their person.
    1.    Because of their long isolation, America’s original inhabitants had no immunity against these diseases that came from Europe. 
    2.    Smallpox in particular proved a deadly killer. Once introduced, it spread deep into the continent, ahead even of any Europeans reaching there. It killed and decimated whole communities, paving the way for conquest.

Europe in 19th Century
    1.    Until the nineteenth century, poverty and hunger were common in Europe. 
    2.    Cities were crowded and deadly diseases were widespread. 
    3.    Religious conflicts were common, and religious dissenters were persecuted. 
    4.    Thousands therefore fled Europe for America. Here, by the eighteenth century, plantations worked by slaves captured in Africa were growing cotton and sugar for European markets.
However, from the fifteenth century, China is said to have restricted overseas contacts and retreated into isolation. China’s reduced role and the rising importance of the Americas gradually moved the centre of world trade westwards. Europe now emerged as the centre of world trade.

Illustration 1
    Which factors have contributed towards the making of the global world?
Solution
    (i) Trade                (ii) Migration
    (iii) People in search of jobs        (iv) movement of capital etc.

Illustration 2
    What things travellers carried with them when they moved in search of knowledge, opportunities, spritual fulfillment or to escape perscecution?
Solution
    They carried goods, money, values, skills, ideas, inventions and even germs and diseases.

Illustration 3
    Which routes were linked by silk route?
Solution
    Silk routes connected Asia with Europe and north Africa.

Illustration 4
    Which commodities were traded through silk routes?
Solution
    Chinese pottery, textiles and spices from India and in return gold and silver flowed from Europe to Asia.

INTRODUCTION 
Globalisation is a phenomenon of developing international relations has emerged since the last 50 years or so. Although the process has started much earlier. This topic deals with the various events of the history which have led to the development of Globalisation. This topic deals with various routes, products and events which have led to the formation of the Global world in the ancient history in ninteenth century. The interwar economy and the post-war era has shown that how it has progressed before the industrial revolution, during the industrial revolution, the industrialisation in the colonies, the events at the time of decolonisation and the begining of independence. 

Important Terms
Flow-Learning

Words that Matter
Silk Route : The route taken by traders to carry silk cargos from China to the West.
Dissenter : One who refuses to accept established beliefs and practices.
Indentured labour : A bonded labourer under contract to work for an employer for a specific amount of time, to pay off his-passage to a new country or home.
Tariff : Tax imposed on a country’s imports from the rest of the world. Tariffs are levied at the point of entry, i.e. at the border or at the airport.
Fixed exchange rates : When exchange rates are fixed and the governments intervene to prevent movements in them.
Floating exchange rate : These rates fluctuate depending on demand and supply of currencies in foreign exchange markets, in principle without interference by governments.
Coolies: Indian indentured labourers were referred to as coolies in the Caribbean islands.

PRE-MODERN WORLD
The pre-modern World
The making of the global world has a long history - of trade,  of migration, of people in search of work, the movement of capital, and much more.
 From ancient times, travellers, traders, priests and pilgrims travelled vast distances for knowledge, opportunity and spiritual fulfilment, or to escape persecution. They carried goods, money, values, skills, ideas, inventions, and even germs and diseases. As early as 3000 BC an active coastal trade linked the Indus valley civilisations with present-day West Asia. For more than a millenniam, comes (the Hindi cowdi or seashells, used as a form of currency) from the Maldives found their way to China and East Africa.

Silk routes link the World
The name silk routes points to the importance of West-bound Chinese silk cargoes along this route. Historians have identified several silk routes, over land and by sea, knitting together vast regions of Asia, and linking Asia with Europe and northern Africa. They are known to have existed since before the Christian Era and thrieved almost till the fifteenth century.

Food Travel: Spaghetti and Potato
It is believed that noodles travelled west from China to become spaghetti. Or, perhaps Arab traders took pasta in fifth-century to Sicily, an island now in Italy.
Similar foods were also known in India and Japan.    Many of our common foods such as potatoes, soya, groundnuts, maize, tomatoes, chillies, sweet potatoes, and so on were not known to our ancestors until about five centuries ago.
These foods were only introduced in Europe and Asia after Christopher Columbus accidentally discovered the vast continent. 
Sometimes the new crops could make the difference between life and death. The European poor began to eat better and live longer with the introduction of the humble potato. Ireland’s poorest peasants became so dependent on potatoes that when disease destroyed the potato crops in the mid-1840s, hundreds of thousands died of starvation.

Conquest, Disease and Trade
Before its ‘discovery’, America had been cut off from regular contact with the rest of the world for millions of years. But from the sixteenth century, its vast lands and abundant crops and minerals began to transform trade and lives everywhere.
Precious metals, particularly silver, from mines located in present-day Peru and Mexico also enhanced Europe’s wealth and financed its trade with Asia.    
Tranfer of Disease helped in colonisalion of America.
The most powerful weapon of the Spanish conquerors was not a conventional military weapon at all. It was the germs such as those of smallpox that they carried on their person.
    1.    Because of their long isolation, America’s original inhabitants had no immunity against these diseases that came from Europe. 
    2.    Smallpox in particular proved a deadly killer. Once introduced, it spread deep into the continent, ahead even of any Europeans reaching there. It killed and decimated whole communities, paving the way for conquest.

Europe in 19th Century
    1.    Until the nineteenth century, poverty and hunger were common in Europe. 
    2.    Cities were crowded and deadly diseases were widespread. 
    3.    Religious conflicts were common, and religious dissenters were persecuted. 
    4.    Thousands therefore fled Europe for America. Here, by the eighteenth century, plantations worked by slaves captured in Africa were growing cotton and sugar for European markets.
However, from the fifteenth century, China is said to have restricted overseas contacts and retreated into isolation. China’s reduced role and the rising importance of the Americas gradually moved the centre of world trade westwards. Europe now emerged as the centre of world trade.

Illustration 1
    Which factors have contributed towards the making of the global world?
Solution
    (i) Trade                (ii) Migration
    (iii) People in search of jobs        (iv) movement of capital etc.

Illustration 2
    What things travellers carried with them when they moved in search of knowledge, opportunities, spritual fulfillment or to escape perscecution?
Solution
    They carried goods, money, values, skills, ideas, inventions and even germs and diseases.

Illustration 3
    Which routes were linked by silk route?
Solution
    Silk routes connected Asia with Europe and north Africa.

Illustration 4
    Which commodities were traded through silk routes?
Solution
    Chinese pottery, textiles and spices from India and in return gold and silver flowed from Europe to Asia.

INTRODUCTION 
Globalisation is a phenomenon of developing international relations has emerged since the last 50 years or so. Although the process has started much earlier. This topic deals with the various events of the history which have led to the development of Globalisation. This topic deals with various routes, products and events which have led to the formation of the Global world in the ancient history in ninteenth century. The interwar economy and the post-war era has shown that how it has progressed before the industrial revolution, during the industrial revolution, the industrialisation in the colonies, the events at the time of decolonisation and the begining of independence. 

Important Terms
Flow-Learning

Words that Matter
Silk Route : The route taken by traders to carry silk cargos from China to the West.
Dissenter : One who refuses to accept established beliefs and practices.
Indentured labour : A bonded labourer under contract to work for an employer for a specific amount of time, to pay off his-passage to a new country or home.
Tariff : Tax imposed on a country’s imports from the rest of the world. Tariffs are levied at the point of entry, i.e. at the border or at the airport.
Fixed exchange rates : When exchange rates are fixed and the governments intervene to prevent movements in them.
Floating exchange rate : These rates fluctuate depending on demand and supply of currencies in foreign exchange markets, in principle without interference by governments.
Coolies: Indian indentured labourers were referred to as coolies in the Caribbean islands.

PRE-MODERN WORLD
The pre-modern World
The making of the global world has a long history - of trade,  of migration, of people in search of work, the movement of capital, and much more.
 From ancient times, travellers, traders, priests and pilgrims travelled vast distances for knowledge, opportunity and spiritual fulfilment, or to escape persecution. They carried goods, money, values, skills, ideas, inventions, and even germs and diseases. As early as 3000 BC an active coastal trade linked the Indus valley civilisations with present-day West Asia. For more than a millenniam, comes (the Hindi cowdi or seashells, used as a form of currency) from the Maldives found their way to China and East Africa.

Silk routes link the World
The name silk routes points to the importance of West-bound Chinese silk cargoes along this route. Historians have identified several silk routes, over land and by sea, knitting together vast regions of Asia, and linking Asia with Europe and northern Africa. They are known to have existed since before the Christian Era and thrieved almost till the fifteenth century.

Food Travel: Spaghetti and Potato
It is believed that noodles travelled west from China to become spaghetti. Or, perhaps Arab traders took pasta in fifth-century to Sicily, an island now in Italy.
Similar foods were also known in India and Japan.    Many of our common foods such as potatoes, soya, groundnuts, maize, tomatoes, chillies, sweet potatoes, and so on were not known to our ancestors until about five centuries ago.
These foods were only introduced in Europe and Asia after Christopher Columbus accidentally discovered the vast continent. 
Sometimes the new crops could make the difference between life and death. The European poor began to eat better and live longer with the introduction of the humble potato. Ireland’s poorest peasants became so dependent on potatoes that when disease destroyed the potato crops in the mid-1840s, hundreds of thousands died of starvation.

Conquest, Disease and Trade
Before its ‘discovery’, America had been cut off from regular contact with the rest of the world for millions of years. But from the sixteenth century, its vast lands and abundant crops and minerals began to transform trade and lives everywhere.
Precious metals, particularly silver, from mines located in present-day Peru and Mexico also enhanced Europe’s wealth and financed its trade with Asia.    
Tranfer of Disease helped in colonisalion of America.
The most powerful weapon of the Spanish conquerors was not a conventional military weapon at all. It was the germs such as those of smallpox that they carried on their person.
    1.    Because of their long isolation, America’s original inhabitants had no immunity against these diseases that came from Europe. 
    2.    Smallpox in particular proved a deadly killer. Once introduced, it spread deep into the continent, ahead even of any Europeans reaching there. It killed and decimated whole communities, paving the way for conquest.

Europe in 19th Century
    1.    Until the nineteenth century, poverty and hunger were common in Europe. 
    2.    Cities were crowded and deadly diseases were widespread. 
    3.    Religious conflicts were common, and religious dissenters were persecuted. 
    4.    Thousands therefore fled Europe for America. Here, by the eighteenth century, plantations worked by slaves captured in Africa were growing cotton and sugar for European markets.
However, from the fifteenth century, China is said to have restricted overseas contacts and retreated into isolation. China’s reduced role and the rising importance of the Americas gradually moved the centre of world trade westwards. Europe now emerged as the centre of world trade.

Illustration 1
    Which factors have contributed towards the making of the global world?
Solution
    (i) Trade                (ii) Migration
    (iii) People in search of jobs        (iv) movement of capital etc.

Illustration 2
    What things travellers carried with them when they moved in search of knowledge, opportunities, spritual fulfillment or to escape perscecution?
Solution
    They carried goods, money, values, skills, ideas, inventions and even germs and diseases.

Illustration 3
    Which routes were linked by silk route?
Solution
    Silk routes connected Asia with Europe and north Africa.

Illustration 4
    Which commodities were traded through silk routes?
Solution
    Chinese pottery, textiles and spices from India and in return gold and silver flowed from Europe to Asia.

INTRODUCTION 
Globalisation is a phenomenon of developing international relations has emerged since the last 50 years or so. Although the process has started much earlier. This topic deals with the various events of the history which have led to the development of Globalisation. This topic deals with various routes, products and events which have led to the formation of the Global world in the ancient history in ninteenth century. The interwar economy and the post-war era has shown that how it has progressed before the industrial revolution, during the industrial revolution, the industrialisation in the colonies, the events at the time of decolonisation and the begining of independence. 

Important Terms
Flow-Learning

Words that Matter
Silk Route : The route taken by traders to carry silk cargos from China to the West.
Dissenter : One who refuses to accept established beliefs and practices.
Indentured labour : A bonded labourer under contract to work for an employer for a specific amount of time, to pay off his-passage to a new country or home.
Tariff : Tax imposed on a country’s imports from the rest of the world. Tariffs are levied at the point of entry, i.e. at the border or at the airport.
Fixed exchange rates : When exchange rates are fixed and the governments intervene to prevent movements in them.
Floating exchange rate : These rates fluctuate depending on demand and supply of currencies in foreign exchange markets, in principle without interference by governments.
Coolies: Indian indentured labourers were referred to as coolies in the Caribbean islands.

PRE-MODERN WORLD
The pre-modern World
The making of the global world has a long history - of trade,  of migration, of people in search of work, the movement of capital, and much more.
 From ancient times, travellers, traders, priests and pilgrims travelled vast distances for knowledge, opportunity and spiritual fulfilment, or to escape persecution. They carried goods, money, values, skills, ideas, inventions, and even germs and diseases. As early as 3000 BC an active coastal trade linked the Indus valley civilisations with present-day West Asia. For more than a millenniam, comes (the Hindi cowdi or seashells, used as a form of currency) from the Maldives found their way to China and East Africa.

Silk routes link the World
The name silk routes points to the importance of West-bound Chinese silk cargoes along this route. Historians have identified several silk routes, over land and by sea, knitting together vast regions of Asia, and linking Asia with Europe and northern Africa. They are known to have existed since before the Christian Era and thrieved almost till the fifteenth century.

Food Travel: Spaghetti and Potato
It is believed that noodles travelled west from China to become spaghetti. Or, perhaps Arab traders took pasta in fifth-century to Sicily, an island now in Italy.
Similar foods were also known in India and Japan.    Many of our common foods such as potatoes, soya, groundnuts, maize, tomatoes, chillies, sweet potatoes, and so on were not known to our ancestors until about five centuries ago.
These foods were only introduced in Europe and Asia after Christopher Columbus accidentally discovered the vast continent. 
Sometimes the new crops could make the difference between life and death. The European poor began to eat better and live longer with the introduction of the humble potato. Ireland’s poorest peasants became so dependent on potatoes that when disease destroyed the potato crops in the mid-1840s, hundreds of thousands died of starvation.

Conquest, Disease and Trade
Before its ‘discovery’, America had been cut off from regular contact with the rest of the world for millions of years. But from the sixteenth century, its vast lands and abundant crops and minerals began to transform trade and lives everywhere.
Precious metals, particularly silver, from mines located in present-day Peru and Mexico also enhanced Europe’s wealth and financed its trade with Asia.    
Tranfer of Disease helped in colonisalion of America.
The most powerful weapon of the Spanish conquerors was not a conventional military weapon at all. It was the germs such as those of smallpox that they carried on their person.
    1.    Because of their long isolation, America’s original inhabitants had no immunity against these diseases that came from Europe. 
    2.    Smallpox in particular proved a deadly killer. Once introduced, it spread deep into the continent, ahead even of any Europeans reaching there. It killed and decimated whole communities, paving the way for conquest.

Europe in 19th Century
    1.    Until the nineteenth century, poverty and hunger were common in Europe. 
    2.    Cities were crowded and deadly diseases were widespread. 
    3.    Religious conflicts were common, and religious dissenters were persecuted. 
    4.    Thousands therefore fled Europe for America. Here, by the eighteenth century, plantations worked by slaves captured in Africa were growing cotton and sugar for European markets.
However, from the fifteenth century, China is said to have restricted overseas contacts and retreated into isolation. China’s reduced role and the rising importance of the Americas gradually moved the centre of world trade westwards. Europe now emerged as the centre of world trade.

Illustration 1
    Which factors have contributed towards the making of the global world?
Solution
    (i) Trade                (ii) Migration
    (iii) People in search of jobs        (iv) movement of capital etc.

Illustration 2
    What things travellers carried with them when they moved in search of knowledge, opportunities, spritual fulfillment or to escape perscecution?
Solution
    They carried goods, money, values, skills, ideas, inventions and even germs and diseases.

Illustration 3
    Which routes were linked by silk route?
Solution
    Silk routes connected Asia with Europe and north Africa.

Illustration 4
    Which commodities were traded through silk routes?
Solution
    Chinese pottery, textiles and spices from India and in return gold and silver flowed from Europe to Asia.

The nineteenth century (1815-1914)    
Economists identify three types of movement or ‘flows’ within international economic exchanges. 
    1.    The first is the flow of trade which  nineteenth century referred largely to trade in goods (e.g., cloth or wheat). 
    2.    The second is the flow of labour - the migration of people in search of employment. 
    3.    The third is the movement of capital for short-term or long-term investments over long distances.

 A world economy takes shape
Population growth from the late eighteenth century had increased the demand for food grains in Britain. As urban centres expanded and industry grew, the demand for agricultural products went up, pushing up food grain prices.
Under pressure from land owner groups, the government also restricted the import of corn. The laws allowing the government to do this were commonly known as the ‘Corn Laws’.
    After the Corn Laws were scrapped because of high prices of grains.
    1.    Food could be imported into Britain more cheaply than it could be produced within the country.
    2.    British agriculture was unable to compete with imports. Vast areas of land were now left uncultivated,
    3.    Thousands of men and women were thrown out of work. They flocked to the cities or migrated overseas.
As food prices fell, consumption in Britain rose. From the mid-nineteenth century, faster industrial growth in Britain also led to higher incomes, and therefore more food imports. 
    1.    Railways were needed to link the agricultural regions to the ports.
    2.    New harbours had to be built and old ones expanded to ship the new-cargoes. 
    3.    People had to settle on the lands to bring them under cultivation. This meant building homes and     settlements. 
    4.    All these activities in turn required capital, and labour. Capital flowed from financial centres such as London. 
    5.    The demand for labour in places where labour was in short supply - as in America and 
Australia -led to more migration.

India
In West Punjab the British Indian government built a network of irrigation canals to transform 
semi-desert wastes, into fertile agricultural lands that could grow wheat and cotton for export. The Canal Colonies, as the areas irrigated by the new canals were called, were settled by peasants from other parts of Punjab.
Of course, food is merely an example. A similar story can be told for cotton, the cultivation of which expanded worldwide to feed British textile mills or the crop of rubber. 

Role of technology
Technological advances were the result of larger social, political and economic factors. For example, colonisation stimulated new investments and improvements in transport: faster railways, lighter wagons and larger ships helped move food more cheaply and quickly from far away farms to final markets.
The trade in meat offers a good example of this connected process. Till the 1870s, animals were shipped live from America to Europe and then slaughtered when they arrived there. But live animals took up alot of ship space. Many also died in voyage, fell ill, lost weight, or became unfit to eat. Meat was hence an expensive luxury beyond the reach of the European poor. 

After refregerated ships
Now animals were slaughtered for food at the starting point - in America, Australia or New Zealand - and then transported to Europe as frozen meat. This reduced shipping costs and lowered meat prices in Europe. The poor in Europe could now consume a more varied diet. To the earlier monotony of bread and potatoes many, though not all, could now add meat (and butter and eggs) to their diet. Better living conditions promoted -social peace within the country and support for imperialism abroad.

Late Nineteenth-century colonialism
Darker Side of Economic Expansion
1.    In many parts of the world, the expansion of trade and a closer relationship with the world economy also meant a loss of freedoms and livelihoods. 
2.    Late-nineteenth -century European conquests produced many painful economic, social and ecological changes
3.    Rival European powers in Africa drew up the borders demarcating their respective territories. In 1885 the big Europen powers met in Berlin to                   complete the carving up of Africa between them.
4.    Britain and France made vast additions to their overseas territories in the late nineteenth century. 
5.    Belgium and Germany became new colonial powers. 
6.    The US also became a colonial power in the late 1890s by taking over some colonies earlier held by Spain.

Rinderpest or the cattle plague
In Africa, in the 1890s, a fast-spreading disease of cattle plague or rinderpest had a terrifying impact on people’s livelihood and the local economy.
Historically, Africa had abundant land and a relatively small population. For centuries, land and livestock sustained African livelihoods and people rarely worked for a wage. In late-nineteenth-century Africa there were few consumer goods that wages could buy. 
In the late nineteenth century, Europeans were attracted to Africa due to its vast resources of land and minerals. Europeans came to Africa hoping to establish plantations and mines to produce crops and minerals for export to Europe. But there was an unexpected problem - a shortage of labour willing to work for wages.

Methods to recruit and retain labour. 
1.    Heavy takes were imposed which could be paid only by working for wages on plantations and mines. 
2.    Inheritance laws were changed so that peasants were displaced from land: only one member of a family was allowed to inherit land, as a result of           which the others were pushed into the labour market. 
3.    Mineworkers were also confined in compounds and not allowed to move about freely.
       Rinderpest arrived in Africa spread of rinder pest was carried by infected cattle imported from British Asia to feed the Italian soldiers invading                    Eritrea   in East Africa. Entering Africa in the east, rinderpest moved west ‘like forest fire’, reaching Africa’s Atlantic coast in 1892. It reached the              Cape (Africa’s southernmost tip) five vears later. Along the way rinderpest killed 90 per cent of the cattle. 

 Impact of coming of Rinderpast
1.    The loss of cattle destroyed African livelihoods. 
2.    Planters, mine owners in colonial governments now successfully monopolised what scarce cattle resources remained, to strengthen their power and to force  Africans into the labour market. 
3.    Control over the scarce resource of cattle enabled European colonisers to conquer and subdue Africa.

Indentured labout migration from India
In the nineteenth century, hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines, and in road and railway construction projects around the world. In India, indentured labourers were hired under contracts which promised return travel to India after they had worked five years on their employer’s plantation. 
Most Indian indenture workers came from the present-day regions of eastern Uttar Pradesh, Bihar, central India and the dry districts of Tamil Nadu.

Causes for Migration of Workers 
1.    In the mid-nineteenth century these regions experienced many changes - cottage industries declined, land rents rose, lands were cleared for mines and plantations. 
2.    All this affected the lives of the poor: they failed to pay their rents, became deeply indebted and were forced to migrate in search of work.
3.    Many migrants agreed to take up work hoping to escape poverty or oppression in their home villages.
4.    Agents also tempted the prospective migrants by providing false information about final destinations, modes of travel, the nature of the work living and working conditions. 
5.    Often migrants were not even told that they were to embark on a long sea voyage. Sometimes agents even forcibly abducted less willing migrants. 
The main destinations of Indian indentured migrants were the Caribbean islands (mainly Trinidad, Guyana and Surinam), Mauritius and Fiji. Closer home, to Ceylon and Malaya. 

Ways of surviving by worker. 
1.    Many of them escaped into the wilds, though if caught they faced severe punishment.
2.    Others developed new forms of individual and collective self- expression, blending different cultural forms, old and new. In Trinidad the annual Muharram procession was transformed into a riotous carnival called ‘Hosay’ (for Imam Hussain) in which workers of all races and religions joined. 
3.    Similarly, the protest religion of Rastafarianism (made famous by the Jamaican reggae star Bob Marley) is also said to reflect social and cultural links with Indian migrants to the Caribbean. 
4.    ‘Chutney music’, popular in Trinidad and Guyana, is another creative contemporary expression of the post-indenture experience.

Indian entrepreneurs Abroad
1.    Shikaripuri shroffs and Nattukottai Chettiars. They were amongst the many groups of bankers and traders who financed export agriculture in Central and Southeast Asia, using either their own funds or those borrowed from European banks. They had a sophisticated system to transfer money over large distances, and even developed indigenous forms of corporate organisation.
2.    Hyderabadi Sindhi traders, however, ventured beyond European colonies. From the 1860s they established flourishing emporia at busy ports worldwide, selling local and imported curios to tourists whose numbers were beginning to swell, thanks to the development of safe and comfortable passenger vessels.

Indian trade, colonialsim and the global system
1.    Historically, fine cottons produced in India were exported to Europe. With industrialisation, British cotton manufacture began to expand, and industrialists pressurised the government to restrict cotton, imports and protect local industries. Tariffs were imposed on cloth imports into Britain. Consequently, the inflow of fine Indian cotton began to decline.
2.    From the early nineteenth century, British manufacturers also began to seek overseas markets for their cloth. Excluded from the British market by tariff barriers, Indian textiles now faced stiff competition in other international markets. 

While exports of manufactures declined rapidly, export of raw materials increased equally fast. 
    1.    Between 1812 and 1871, the share of raw cotton exports rose from 5 per cent to 35 per cent 
    2.    Indigo used for dyeing cloth was another important export for many decades.
    3.    Opium shipments to China- grew rapidly from the 1820s to become for a while India’s single largest export. Britain grew opium in India and exported it to China with the money earned through this sale, it financed its other imports from China.
Food grain and raw material exports from India to Britain and  the rest of the world increased. But the value of British exports to India was much higher than the value of British imports from India. 
Thus Britain had a ‘trade surplus’ with India. Britain used this to balance its trade deficits with other countries- that is, with countries from which Britain was importing more than it was selling to.
This is how a multilateral settlement system works it allows one country’s deficit with another country to be settled by its surplus with a third country.
Britain’s trade surplus in India also helped pay the so-called ‘home charges’ that included private remittances home by British officials and traders, interest payments on India’s external debt, and pensions of British officials in India.

Illustration 6
Which were the two groups of I world war name the countries of those groups?
Solution
The two groups of the I world war were the Allies and the central powers.
 The Allies ⟶ Britain, France and Russia (later joined by U.S.)
Central Powers ⟶ Germany, Austria-Hungry and Ottoman Turkey.

Illustration 7
What was the impacts of I world war on the European Economy?
Solution
    (i)     This was used weapons and Ammunition product in industries which increased the weapon industrialisation on modern lines.
    (ii)     It reduced the able bodied workforce in Europe.
    (iii)     Household income declined because of low number of family members.
    (iv)     The position of women improved in economy.
    (v)    Many fighting countries borrowed funds from developed countries.

Illustration 8
What was ‘Assembly line’ adopted by Henry Ford?
Solution
Production of goods by different persons at different points so that they become expert of the job. That enabled the company to produce goods faster.

Illustration 9
What was the time duration of the great depression.
Solution
It began around 1929 and lasted till 1930’s.

The nineteenth century (1815-1914)    
Economists identify three types of movement or ‘flows’ within international economic exchanges. 
    1.    The first is the flow of trade which  nineteenth century referred largely to trade in goods (e.g., cloth or wheat). 
    2.    The second is the flow of labour - the migration of people in search of employment. 
    3.    The third is the movement of capital for short-term or long-term investments over long distances.

 A world economy takes shape
Population growth from the late eighteenth century had increased the demand for food grains in Britain. As urban centres expanded and industry grew, the demand for agricultural products went up, pushing up food grain prices.
Under pressure from land owner groups, the government also restricted the import of corn. The laws allowing the government to do this were commonly known as the ‘Corn Laws’.
    After the Corn Laws were scrapped because of high prices of grains.
    1.    Food could be imported into Britain more cheaply than it could be produced within the country.
    2.    British agriculture was unable to compete with imports. Vast areas of land were now left uncultivated,
    3.    Thousands of men and women were thrown out of work. They flocked to the cities or migrated overseas.
As food prices fell, consumption in Britain rose. From the mid-nineteenth century, faster industrial growth in Britain also led to higher incomes, and therefore more food imports. 
    1.    Railways were needed to link the agricultural regions to the ports.
    2.    New harbours had to be built and old ones expanded to ship the new-cargoes. 
    3.    People had to settle on the lands to bring them under cultivation. This meant building homes and     settlements. 
    4.    All these activities in turn required capital, and labour. Capital flowed from financial centres such as London. 
    5.    The demand for labour in places where labour was in short supply - as in America and 
Australia -led to more migration.

India
In West Punjab the British Indian government built a network of irrigation canals to transform 
semi-desert wastes, into fertile agricultural lands that could grow wheat and cotton for export. The Canal Colonies, as the areas irrigated by the new canals were called, were settled by peasants from other parts of Punjab.
Of course, food is merely an example. A similar story can be told for cotton, the cultivation of which expanded worldwide to feed British textile mills or the crop of rubber. 

Role of technology
Technological advances were the result of larger social, political and economic factors. For example, colonisation stimulated new investments and improvements in transport: faster railways, lighter wagons and larger ships helped move food more cheaply and quickly from far away farms to final markets.
The trade in meat offers a good example of this connected process. Till the 1870s, animals were shipped live from America to Europe and then slaughtered when they arrived there. But live animals took up alot of ship space. Many also died in voyage, fell ill, lost weight, or became unfit to eat. Meat was hence an expensive luxury beyond the reach of the European poor. 

After refregerated ships
Now animals were slaughtered for food at the starting point - in America, Australia or New Zealand - and then transported to Europe as frozen meat. This reduced shipping costs and lowered meat prices in Europe. The poor in Europe could now consume a more varied diet. To the earlier monotony of bread and potatoes many, though not all, could now add meat (and butter and eggs) to their diet. Better living conditions promoted -social peace within the country and support for imperialism abroad.

Late Nineteenth-century colonialism
Darker Side of Economic Expansion
1.    In many parts of the world, the expansion of trade and a closer relationship with the world economy also meant a loss of freedoms and livelihoods. 
2.    Late-nineteenth -century European conquests produced many painful economic, social and ecological changes
3.    Rival European powers in Africa drew up the borders demarcating their respective territories. In 1885 the big Europen powers met in Berlin to                   complete the carving up of Africa between them.
4.    Britain and France made vast additions to their overseas territories in the late nineteenth century. 
5.    Belgium and Germany became new colonial powers. 
6.    The US also became a colonial power in the late 1890s by taking over some colonies earlier held by Spain.

Rinderpest or the cattle plague
In Africa, in the 1890s, a fast-spreading disease of cattle plague or rinderpest had a terrifying impact on people’s livelihood and the local economy.
Historically, Africa had abundant land and a relatively small population. For centuries, land and livestock sustained African livelihoods and people rarely worked for a wage. In late-nineteenth-century Africa there were few consumer goods that wages could buy. 
In the late nineteenth century, Europeans were attracted to Africa due to its vast resources of land and minerals. Europeans came to Africa hoping to establish plantations and mines to produce crops and minerals for export to Europe. But there was an unexpected problem - a shortage of labour willing to work for wages.

Methods to recruit and retain labour. 
1.    Heavy takes were imposed which could be paid only by working for wages on plantations and mines. 
2.    Inheritance laws were changed so that peasants were displaced from land: only one member of a family was allowed to inherit land, as a result of           which the others were pushed into the labour market. 
3.    Mineworkers were also confined in compounds and not allowed to move about freely.
       Rinderpest arrived in Africa spread of rinder pest was carried by infected cattle imported from British Asia to feed the Italian soldiers invading                    Eritrea   in East Africa. Entering Africa in the east, rinderpest moved west ‘like forest fire’, reaching Africa’s Atlantic coast in 1892. It reached the              Cape (Africa’s southernmost tip) five vears later. Along the way rinderpest killed 90 per cent of the cattle. 

 Impact of coming of Rinderpast
1.    The loss of cattle destroyed African livelihoods. 
2.    Planters, mine owners in colonial governments now successfully monopolised what scarce cattle resources remained, to strengthen their power and to force  Africans into the labour market. 
3.    Control over the scarce resource of cattle enabled European colonisers to conquer and subdue Africa.

Indentured labout migration from India
In the nineteenth century, hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines, and in road and railway construction projects around the world. In India, indentured labourers were hired under contracts which promised return travel to India after they had worked five years on their employer’s plantation. 
Most Indian indenture workers came from the present-day regions of eastern Uttar Pradesh, Bihar, central India and the dry districts of Tamil Nadu.

Causes for Migration of Workers 
1.    In the mid-nineteenth century these regions experienced many changes - cottage industries declined, land rents rose, lands were cleared for mines and plantations. 
2.    All this affected the lives of the poor: they failed to pay their rents, became deeply indebted and were forced to migrate in search of work.
3.    Many migrants agreed to take up work hoping to escape poverty or oppression in their home villages.
4.    Agents also tempted the prospective migrants by providing false information about final destinations, modes of travel, the nature of the work living and working conditions. 
5.    Often migrants were not even told that they were to embark on a long sea voyage. Sometimes agents even forcibly abducted less willing migrants. 
The main destinations of Indian indentured migrants were the Caribbean islands (mainly Trinidad, Guyana and Surinam), Mauritius and Fiji. Closer home, to Ceylon and Malaya. 

Ways of surviving by worker. 
1.    Many of them escaped into the wilds, though if caught they faced severe punishment.
2.    Others developed new forms of individual and collective self- expression, blending different cultural forms, old and new. In Trinidad the annual Muharram procession was transformed into a riotous carnival called ‘Hosay’ (for Imam Hussain) in which workers of all races and religions joined. 
3.    Similarly, the protest religion of Rastafarianism (made famous by the Jamaican reggae star Bob Marley) is also said to reflect social and cultural links with Indian migrants to the Caribbean. 
4.    ‘Chutney music’, popular in Trinidad and Guyana, is another creative contemporary expression of the post-indenture experience.

Indian entrepreneurs Abroad
1.    Shikaripuri shroffs and Nattukottai Chettiars. They were amongst the many groups of bankers and traders who financed export agriculture in Central and Southeast Asia, using either their own funds or those borrowed from European banks. They had a sophisticated system to transfer money over large distances, and even developed indigenous forms of corporate organisation.
2.    Hyderabadi Sindhi traders, however, ventured beyond European colonies. From the 1860s they established flourishing emporia at busy ports worldwide, selling local and imported curios to tourists whose numbers were beginning to swell, thanks to the development of safe and comfortable passenger vessels.

Indian trade, colonialsim and the global system
1.    Historically, fine cottons produced in India were exported to Europe. With industrialisation, British cotton manufacture began to expand, and industrialists pressurised the government to restrict cotton, imports and protect local industries. Tariffs were imposed on cloth imports into Britain. Consequently, the inflow of fine Indian cotton began to decline.
2.    From the early nineteenth century, British manufacturers also began to seek overseas markets for their cloth. Excluded from the British market by tariff barriers, Indian textiles now faced stiff competition in other international markets. 

While exports of manufactures declined rapidly, export of raw materials increased equally fast. 
    1.    Between 1812 and 1871, the share of raw cotton exports rose from 5 per cent to 35 per cent 
    2.    Indigo used for dyeing cloth was another important export for many decades.
    3.    Opium shipments to China- grew rapidly from the 1820s to become for a while India’s single largest export. Britain grew opium in India and exported it to China with the money earned through this sale, it financed its other imports from China.
Food grain and raw material exports from India to Britain and  the rest of the world increased. But the value of British exports to India was much higher than the value of British imports from India. 
Thus Britain had a ‘trade surplus’ with India. Britain used this to balance its trade deficits with other countries- that is, with countries from which Britain was importing more than it was selling to.
This is how a multilateral settlement system works it allows one country’s deficit with another country to be settled by its surplus with a third country.
Britain’s trade surplus in India also helped pay the so-called ‘home charges’ that included private remittances home by British officials and traders, interest payments on India’s external debt, and pensions of British officials in India.

Illustration 6
Which were the two groups of I world war name the countries of those groups?
Solution
The two groups of the I world war were the Allies and the central powers.
 The Allies ⟶ Britain, France and Russia (later joined by U.S.)
Central Powers ⟶ Germany, Austria-Hungry and Ottoman Turkey.

Illustration 7
What was the impacts of I world war on the European Economy?
Solution
    (i)     This was used weapons and Ammunition product in industries which increased the weapon industrialisation on modern lines.
    (ii)     It reduced the able bodied workforce in Europe.
    (iii)     Household income declined because of low number of family members.
    (iv)     The position of women improved in economy.
    (v)    Many fighting countries borrowed funds from developed countries.

Illustration 8
What was ‘Assembly line’ adopted by Henry Ford?
Solution
Production of goods by different persons at different points so that they become expert of the job. That enabled the company to produce goods faster.

Illustration 9
What was the time duration of the great depression.
Solution
It began around 1929 and lasted till 1930’s.

The nineteenth century (1815-1914)    
Economists identify three types of movement or ‘flows’ within international economic exchanges. 
    1.    The first is the flow of trade which  nineteenth century referred largely to trade in goods (e.g., cloth or wheat). 
    2.    The second is the flow of labour - the migration of people in search of employment. 
    3.    The third is the movement of capital for short-term or long-term investments over long distances.

 A world economy takes shape
Population growth from the late eighteenth century had increased the demand for food grains in Britain. As urban centres expanded and industry grew, the demand for agricultural products went up, pushing up food grain prices.
Under pressure from land owner groups, the government also restricted the import of corn. The laws allowing the government to do this were commonly known as the ‘Corn Laws’.
    After the Corn Laws were scrapped because of high prices of grains.
    1.    Food could be imported into Britain more cheaply than it could be produced within the country.
    2.    British agriculture was unable to compete with imports. Vast areas of land were now left uncultivated,
    3.    Thousands of men and women were thrown out of work. They flocked to the cities or migrated overseas.
As food prices fell, consumption in Britain rose. From the mid-nineteenth century, faster industrial growth in Britain also led to higher incomes, and therefore more food imports. 
    1.    Railways were needed to link the agricultural regions to the ports.
    2.    New harbours had to be built and old ones expanded to ship the new-cargoes. 
    3.    People had to settle on the lands to bring them under cultivation. This meant building homes and     settlements. 
    4.    All these activities in turn required capital, and labour. Capital flowed from financial centres such as London. 
    5.    The demand for labour in places where labour was in short supply - as in America and 
Australia -led to more migration.

India
In West Punjab the British Indian government built a network of irrigation canals to transform 
semi-desert wastes, into fertile agricultural lands that could grow wheat and cotton for export. The Canal Colonies, as the areas irrigated by the new canals were called, were settled by peasants from other parts of Punjab.
Of course, food is merely an example. A similar story can be told for cotton, the cultivation of which expanded worldwide to feed British textile mills or the crop of rubber. 

Role of technology
Technological advances were the result of larger social, political and economic factors. For example, colonisation stimulated new investments and improvements in transport: faster railways, lighter wagons and larger ships helped move food more cheaply and quickly from far away farms to final markets.
The trade in meat offers a good example of this connected process. Till the 1870s, animals were shipped live from America to Europe and then slaughtered when they arrived there. But live animals took up alot of ship space. Many also died in voyage, fell ill, lost weight, or became unfit to eat. Meat was hence an expensive luxury beyond the reach of the European poor. 

After refregerated ships
Now animals were slaughtered for food at the starting point - in America, Australia or New Zealand - and then transported to Europe as frozen meat. This reduced shipping costs and lowered meat prices in Europe. The poor in Europe could now consume a more varied diet. To the earlier monotony of bread and potatoes many, though not all, could now add meat (and butter and eggs) to their diet. Better living conditions promoted -social peace within the country and support for imperialism abroad.

Late Nineteenth-century colonialism
Darker Side of Economic Expansion
1.    In many parts of the world, the expansion of trade and a closer relationship with the world economy also meant a loss of freedoms and livelihoods. 
2.    Late-nineteenth -century European conquests produced many painful economic, social and ecological changes
3.    Rival European powers in Africa drew up the borders demarcating their respective territories. In 1885 the big Europen powers met in Berlin to                   complete the carving up of Africa between them.
4.    Britain and France made vast additions to their overseas territories in the late nineteenth century. 
5.    Belgium and Germany became new colonial powers. 
6.    The US also became a colonial power in the late 1890s by taking over some colonies earlier held by Spain.

Rinderpest or the cattle plague
In Africa, in the 1890s, a fast-spreading disease of cattle plague or rinderpest had a terrifying impact on people’s livelihood and the local economy.
Historically, Africa had abundant land and a relatively small population. For centuries, land and livestock sustained African livelihoods and people rarely worked for a wage. In late-nineteenth-century Africa there were few consumer goods that wages could buy. 
In the late nineteenth century, Europeans were attracted to Africa due to its vast resources of land and minerals. Europeans came to Africa hoping to establish plantations and mines to produce crops and minerals for export to Europe. But there was an unexpected problem - a shortage of labour willing to work for wages.

Methods to recruit and retain labour. 
1.    Heavy takes were imposed which could be paid only by working for wages on plantations and mines. 
2.    Inheritance laws were changed so that peasants were displaced from land: only one member of a family was allowed to inherit land, as a result of           which the others were pushed into the labour market. 
3.    Mineworkers were also confined in compounds and not allowed to move about freely.
       Rinderpest arrived in Africa spread of rinder pest was carried by infected cattle imported from British Asia to feed the Italian soldiers invading                    Eritrea   in East Africa. Entering Africa in the east, rinderpest moved west ‘like forest fire’, reaching Africa’s Atlantic coast in 1892. It reached the              Cape (Africa’s southernmost tip) five vears later. Along the way rinderpest killed 90 per cent of the cattle. 

 Impact of coming of Rinderpast
1.    The loss of cattle destroyed African livelihoods. 
2.    Planters, mine owners in colonial governments now successfully monopolised what scarce cattle resources remained, to strengthen their power and to force  Africans into the labour market. 
3.    Control over the scarce resource of cattle enabled European colonisers to conquer and subdue Africa.

Indentured labout migration from India
In the nineteenth century, hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines, and in road and railway construction projects around the world. In India, indentured labourers were hired under contracts which promised return travel to India after they had worked five years on their employer’s plantation. 
Most Indian indenture workers came from the present-day regions of eastern Uttar Pradesh, Bihar, central India and the dry districts of Tamil Nadu.

Causes for Migration of Workers 
1.    In the mid-nineteenth century these regions experienced many changes - cottage industries declined, land rents rose, lands were cleared for mines and plantations. 
2.    All this affected the lives of the poor: they failed to pay their rents, became deeply indebted and were forced to migrate in search of work.
3.    Many migrants agreed to take up work hoping to escape poverty or oppression in their home villages.
4.    Agents also tempted the prospective migrants by providing false information about final destinations, modes of travel, the nature of the work living and working conditions. 
5.    Often migrants were not even told that they were to embark on a long sea voyage. Sometimes agents even forcibly abducted less willing migrants. 
The main destinations of Indian indentured migrants were the Caribbean islands (mainly Trinidad, Guyana and Surinam), Mauritius and Fiji. Closer home, to Ceylon and Malaya. 

Ways of surviving by worker. 
1.    Many of them escaped into the wilds, though if caught they faced severe punishment.
2.    Others developed new forms of individual and collective self- expression, blending different cultural forms, old and new. In Trinidad the annual Muharram procession was transformed into a riotous carnival called ‘Hosay’ (for Imam Hussain) in which workers of all races and religions joined. 
3.    Similarly, the protest religion of Rastafarianism (made famous by the Jamaican reggae star Bob Marley) is also said to reflect social and cultural links with Indian migrants to the Caribbean. 
4.    ‘Chutney music’, popular in Trinidad and Guyana, is another creative contemporary expression of the post-indenture experience.

Indian entrepreneurs Abroad
1.    Shikaripuri shroffs and Nattukottai Chettiars. They were amongst the many groups of bankers and traders who financed export agriculture in Central and Southeast Asia, using either their own funds or those borrowed from European banks. They had a sophisticated system to transfer money over large distances, and even developed indigenous forms of corporate organisation.
2.    Hyderabadi Sindhi traders, however, ventured beyond European colonies. From the 1860s they established flourishing emporia at busy ports worldwide, selling local and imported curios to tourists whose numbers were beginning to swell, thanks to the development of safe and comfortable passenger vessels.

Indian trade, colonialsim and the global system
1.    Historically, fine cottons produced in India were exported to Europe. With industrialisation, British cotton manufacture began to expand, and industrialists pressurised the government to restrict cotton, imports and protect local industries. Tariffs were imposed on cloth imports into Britain. Consequently, the inflow of fine Indian cotton began to decline.
2.    From the early nineteenth century, British manufacturers also began to seek overseas markets for their cloth. Excluded from the British market by tariff barriers, Indian textiles now faced stiff competition in other international markets. 

While exports of manufactures declined rapidly, export of raw materials increased equally fast. 
    1.    Between 1812 and 1871, the share of raw cotton exports rose from 5 per cent to 35 per cent 
    2.    Indigo used for dyeing cloth was another important export for many decades.
    3.    Opium shipments to China- grew rapidly from the 1820s to become for a while India’s single largest export. Britain grew opium in India and exported it to China with the money earned through this sale, it financed its other imports from China.
Food grain and raw material exports from India to Britain and  the rest of the world increased. But the value of British exports to India was much higher than the value of British imports from India. 
Thus Britain had a ‘trade surplus’ with India. Britain used this to balance its trade deficits with other countries- that is, with countries from which Britain was importing more than it was selling to.
This is how a multilateral settlement system works it allows one country’s deficit with another country to be settled by its surplus with a third country.
Britain’s trade surplus in India also helped pay the so-called ‘home charges’ that included private remittances home by British officials and traders, interest payments on India’s external debt, and pensions of British officials in India.

Illustration 6
Which were the two groups of I world war name the countries of those groups?
Solution
The two groups of the I world war were the Allies and the central powers.
 The Allies ⟶ Britain, France and Russia (later joined by U.S.)
Central Powers ⟶ Germany, Austria-Hungry and Ottoman Turkey.

Illustration 7
What was the impacts of I world war on the European Economy?
Solution
    (i)     This was used weapons and Ammunition product in industries which increased the weapon industrialisation on modern lines.
    (ii)     It reduced the able bodied workforce in Europe.
    (iii)     Household income declined because of low number of family members.
    (iv)     The position of women improved in economy.
    (v)    Many fighting countries borrowed funds from developed countries.

Illustration 8
What was ‘Assembly line’ adopted by Henry Ford?
Solution
Production of goods by different persons at different points so that they become expert of the job. That enabled the company to produce goods faster.

Illustration 9
What was the time duration of the great depression.
Solution
It began around 1929 and lasted till 1930’s.

The nineteenth century (1815-1914)    
Economists identify three types of movement or ‘flows’ within international economic exchanges. 
    1.    The first is the flow of trade which  nineteenth century referred largely to trade in goods (e.g., cloth or wheat). 
    2.    The second is the flow of labour - the migration of people in search of employment. 
    3.    The third is the movement of capital for short-term or long-term investments over long distances.

 A world economy takes shape
Population growth from the late eighteenth century had increased the demand for food grains in Britain. As urban centres expanded and industry grew, the demand for agricultural products went up, pushing up food grain prices.
Under pressure from land owner groups, the government also restricted the import of corn. The laws allowing the government to do this were commonly known as the ‘Corn Laws’.
    After the Corn Laws were scrapped because of high prices of grains.
    1.    Food could be imported into Britain more cheaply than it could be produced within the country.
    2.    British agriculture was unable to compete with imports. Vast areas of land were now left uncultivated,
    3.    Thousands of men and women were thrown out of work. They flocked to the cities or migrated overseas.
As food prices fell, consumption in Britain rose. From the mid-nineteenth century, faster industrial growth in Britain also led to higher incomes, and therefore more food imports. 
    1.    Railways were needed to link the agricultural regions to the ports.
    2.    New harbours had to be built and old ones expanded to ship the new-cargoes. 
    3.    People had to settle on the lands to bring them under cultivation. This meant building homes and     settlements. 
    4.    All these activities in turn required capital, and labour. Capital flowed from financial centres such as London. 
    5.    The demand for labour in places where labour was in short supply - as in America and 
Australia -led to more migration.

India
In West Punjab the British Indian government built a network of irrigation canals to transform 
semi-desert wastes, into fertile agricultural lands that could grow wheat and cotton for export. The Canal Colonies, as the areas irrigated by the new canals were called, were settled by peasants from other parts of Punjab.
Of course, food is merely an example. A similar story can be told for cotton, the cultivation of which expanded worldwide to feed British textile mills or the crop of rubber. 

Role of technology
Technological advances were the result of larger social, political and economic factors. For example, colonisation stimulated new investments and improvements in transport: faster railways, lighter wagons and larger ships helped move food more cheaply and quickly from far away farms to final markets.
The trade in meat offers a good example of this connected process. Till the 1870s, animals were shipped live from America to Europe and then slaughtered when they arrived there. But live animals took up alot of ship space. Many also died in voyage, fell ill, lost weight, or became unfit to eat. Meat was hence an expensive luxury beyond the reach of the European poor. 

After refregerated ships
Now animals were slaughtered for food at the starting point - in America, Australia or New Zealand - and then transported to Europe as frozen meat. This reduced shipping costs and lowered meat prices in Europe. The poor in Europe could now consume a more varied diet. To the earlier monotony of bread and potatoes many, though not all, could now add meat (and butter and eggs) to their diet. Better living conditions promoted -social peace within the country and support for imperialism abroad.

Late Nineteenth-century colonialism
Darker Side of Economic Expansion
1.    In many parts of the world, the expansion of trade and a closer relationship with the world economy also meant a loss of freedoms and livelihoods. 
2.    Late-nineteenth -century European conquests produced many painful economic, social and ecological changes
3.    Rival European powers in Africa drew up the borders demarcating their respective territories. In 1885 the big Europen powers met in Berlin to                   complete the carving up of Africa between them.
4.    Britain and France made vast additions to their overseas territories in the late nineteenth century. 
5.    Belgium and Germany became new colonial powers. 
6.    The US also became a colonial power in the late 1890s by taking over some colonies earlier held by Spain.

Rinderpest or the cattle plague
In Africa, in the 1890s, a fast-spreading disease of cattle plague or rinderpest had a terrifying impact on people’s livelihood and the local economy.
Historically, Africa had abundant land and a relatively small population. For centuries, land and livestock sustained African livelihoods and people rarely worked for a wage. In late-nineteenth-century Africa there were few consumer goods that wages could buy. 
In the late nineteenth century, Europeans were attracted to Africa due to its vast resources of land and minerals. Europeans came to Africa hoping to establish plantations and mines to produce crops and minerals for export to Europe. But there was an unexpected problem - a shortage of labour willing to work for wages.

Methods to recruit and retain labour. 
1.    Heavy takes were imposed which could be paid only by working for wages on plantations and mines. 
2.    Inheritance laws were changed so that peasants were displaced from land: only one member of a family was allowed to inherit land, as a result of           which the others were pushed into the labour market. 
3.    Mineworkers were also confined in compounds and not allowed to move about freely.
       Rinderpest arrived in Africa spread of rinder pest was carried by infected cattle imported from British Asia to feed the Italian soldiers invading                    Eritrea   in East Africa. Entering Africa in the east, rinderpest moved west ‘like forest fire’, reaching Africa’s Atlantic coast in 1892. It reached the              Cape (Africa’s southernmost tip) five vears later. Along the way rinderpest killed 90 per cent of the cattle. 

 Impact of coming of Rinderpast
1.    The loss of cattle destroyed African livelihoods. 
2.    Planters, mine owners in colonial governments now successfully monopolised what scarce cattle resources remained, to strengthen their power and to force  Africans into the labour market. 
3.    Control over the scarce resource of cattle enabled European colonisers to conquer and subdue Africa.

Indentured labout migration from India
In the nineteenth century, hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines, and in road and railway construction projects around the world. In India, indentured labourers were hired under contracts which promised return travel to India after they had worked five years on their employer’s plantation. 
Most Indian indenture workers came from the present-day regions of eastern Uttar Pradesh, Bihar, central India and the dry districts of Tamil Nadu.

Causes for Migration of Workers 
1.    In the mid-nineteenth century these regions experienced many changes - cottage industries declined, land rents rose, lands were cleared for mines and plantations. 
2.    All this affected the lives of the poor: they failed to pay their rents, became deeply indebted and were forced to migrate in search of work.
3.    Many migrants agreed to take up work hoping to escape poverty or oppression in their home villages.
4.    Agents also tempted the prospective migrants by providing false information about final destinations, modes of travel, the nature of the work living and working conditions. 
5.    Often migrants were not even told that they were to embark on a long sea voyage. Sometimes agents even forcibly abducted less willing migrants. 
The main destinations of Indian indentured migrants were the Caribbean islands (mainly Trinidad, Guyana and Surinam), Mauritius and Fiji. Closer home, to Ceylon and Malaya. 

Ways of surviving by worker. 
1.    Many of them escaped into the wilds, though if caught they faced severe punishment.
2.    Others developed new forms of individual and collective self- expression, blending different cultural forms, old and new. In Trinidad the annual Muharram procession was transformed into a riotous carnival called ‘Hosay’ (for Imam Hussain) in which workers of all races and religions joined. 
3.    Similarly, the protest religion of Rastafarianism (made famous by the Jamaican reggae star Bob Marley) is also said to reflect social and cultural links with Indian migrants to the Caribbean. 
4.    ‘Chutney music’, popular in Trinidad and Guyana, is another creative contemporary expression of the post-indenture experience.

Indian entrepreneurs Abroad
1.    Shikaripuri shroffs and Nattukottai Chettiars. They were amongst the many groups of bankers and traders who financed export agriculture in Central and Southeast Asia, using either their own funds or those borrowed from European banks. They had a sophisticated system to transfer money over large distances, and even developed indigenous forms of corporate organisation.
2.    Hyderabadi Sindhi traders, however, ventured beyond European colonies. From the 1860s they established flourishing emporia at busy ports worldwide, selling local and imported curios to tourists whose numbers were beginning to swell, thanks to the development of safe and comfortable passenger vessels.

Indian trade, colonialsim and the global system
1.    Historically, fine cottons produced in India were exported to Europe. With industrialisation, British cotton manufacture began to expand, and industrialists pressurised the government to restrict cotton, imports and protect local industries. Tariffs were imposed on cloth imports into Britain. Consequently, the inflow of fine Indian cotton began to decline.
2.    From the early nineteenth century, British manufacturers also began to seek overseas markets for their cloth. Excluded from the British market by tariff barriers, Indian textiles now faced stiff competition in other international markets. 

While exports of manufactures declined rapidly, export of raw materials increased equally fast. 
    1.    Between 1812 and 1871, the share of raw cotton exports rose from 5 per cent to 35 per cent 
    2.    Indigo used for dyeing cloth was another important export for many decades.
    3.    Opium shipments to China- grew rapidly from the 1820s to become for a while India’s single largest export. Britain grew opium in India and exported it to China with the money earned through this sale, it financed its other imports from China.
Food grain and raw material exports from India to Britain and  the rest of the world increased. But the value of British exports to India was much higher than the value of British imports from India. 
Thus Britain had a ‘trade surplus’ with India. Britain used this to balance its trade deficits with other countries- that is, with countries from which Britain was importing more than it was selling to.
This is how a multilateral settlement system works it allows one country’s deficit with another country to be settled by its surplus with a third country.
Britain’s trade surplus in India also helped pay the so-called ‘home charges’ that included private remittances home by British officials and traders, interest payments on India’s external debt, and pensions of British officials in India.

Illustration 6
Which were the two groups of I world war name the countries of those groups?
Solution
The two groups of the I world war were the Allies and the central powers.
 The Allies ⟶ Britain, France and Russia (later joined by U.S.)
Central Powers ⟶ Germany, Austria-Hungry and Ottoman Turkey.

Illustration 7
What was the impacts of I world war on the European Economy?
Solution
    (i)     This was used weapons and Ammunition product in industries which increased the weapon industrialisation on modern lines.
    (ii)     It reduced the able bodied workforce in Europe.
    (iii)     Household income declined because of low number of family members.
    (iv)     The position of women improved in economy.
    (v)    Many fighting countries borrowed funds from developed countries.

Illustration 8
What was ‘Assembly line’ adopted by Henry Ford?
Solution
Production of goods by different persons at different points so that they become expert of the job. That enabled the company to produce goods faster.

Illustration 9
What was the time duration of the great depression.
Solution
It began around 1929 and lasted till 1930’s.

The nineteenth century (1815-1914)    
Economists identify three types of movement or ‘flows’ within international economic exchanges. 
    1.    The first is the flow of trade which  nineteenth century referred largely to trade in goods (e.g., cloth or wheat). 
    2.    The second is the flow of labour - the migration of people in search of employment. 
    3.    The third is the movement of capital for short-term or long-term investments over long distances.

 A world economy takes shape
Population growth from the late eighteenth century had increased the demand for food grains in Britain. As urban centres expanded and industry grew, the demand for agricultural products went up, pushing up food grain prices.
Under pressure from land owner groups, the government also restricted the import of corn. The laws allowing the government to do this were commonly known as the ‘Corn Laws’.
    After the Corn Laws were scrapped because of high prices of grains.
    1.    Food could be imported into Britain more cheaply than it could be produced within the country.
    2.    British agriculture was unable to compete with imports. Vast areas of land were now left uncultivated,
    3.    Thousands of men and women were thrown out of work. They flocked to the cities or migrated overseas.
As food prices fell, consumption in Britain rose. From the mid-nineteenth century, faster industrial growth in Britain also led to higher incomes, and therefore more food imports. 
    1.    Railways were needed to link the agricultural regions to the ports.
    2.    New harbours had to be built and old ones expanded to ship the new-cargoes. 
    3.    People had to settle on the lands to bring them under cultivation. This meant building homes and     settlements. 
    4.    All these activities in turn required capital, and labour. Capital flowed from financial centres such as London. 
    5.    The demand for labour in places where labour was in short supply - as in America and 
Australia -led to more migration.

India
In West Punjab the British Indian government built a network of irrigation canals to transform 
semi-desert wastes, into fertile agricultural lands that could grow wheat and cotton for export. The Canal Colonies, as the areas irrigated by the new canals were called, were settled by peasants from other parts of Punjab.
Of course, food is merely an example. A similar story can be told for cotton, the cultivation of which expanded worldwide to feed British textile mills or the crop of rubber. 

Role of technology
Technological advances were the result of larger social, political and economic factors. For example, colonisation stimulated new investments and improvements in transport: faster railways, lighter wagons and larger ships helped move food more cheaply and quickly from far away farms to final markets.
The trade in meat offers a good example of this connected process. Till the 1870s, animals were shipped live from America to Europe and then slaughtered when they arrived there. But live animals took up alot of ship space. Many also died in voyage, fell ill, lost weight, or became unfit to eat. Meat was hence an expensive luxury beyond the reach of the European poor. 

After refregerated ships
Now animals were slaughtered for food at the starting point - in America, Australia or New Zealand - and then transported to Europe as frozen meat. This reduced shipping costs and lowered meat prices in Europe. The poor in Europe could now consume a more varied diet. To the earlier monotony of bread and potatoes many, though not all, could now add meat (and butter and eggs) to their diet. Better living conditions promoted -social peace within the country and support for imperialism abroad.

Late Nineteenth-century colonialism
Darker Side of Economic Expansion
1.    In many parts of the world, the expansion of trade and a closer relationship with the world economy also meant a loss of freedoms and livelihoods. 
2.    Late-nineteenth -century European conquests produced many painful economic, social and ecological changes
3.    Rival European powers in Africa drew up the borders demarcating their respective territories. In 1885 the big Europen powers met in Berlin to                   complete the carving up of Africa between them.
4.    Britain and France made vast additions to their overseas territories in the late nineteenth century. 
5.    Belgium and Germany became new colonial powers. 
6.    The US also became a colonial power in the late 1890s by taking over some colonies earlier held by Spain.

Rinderpest or the cattle plague
In Africa, in the 1890s, a fast-spreading disease of cattle plague or rinderpest had a terrifying impact on people’s livelihood and the local economy.
Historically, Africa had abundant land and a relatively small population. For centuries, land and livestock sustained African livelihoods and people rarely worked for a wage. In late-nineteenth-century Africa there were few consumer goods that wages could buy. 
In the late nineteenth century, Europeans were attracted to Africa due to its vast resources of land and minerals. Europeans came to Africa hoping to establish plantations and mines to produce crops and minerals for export to Europe. But there was an unexpected problem - a shortage of labour willing to work for wages.

Methods to recruit and retain labour. 
1.    Heavy takes were imposed which could be paid only by working for wages on plantations and mines. 
2.    Inheritance laws were changed so that peasants were displaced from land: only one member of a family was allowed to inherit land, as a result of           which the others were pushed into the labour market. 
3.    Mineworkers were also confined in compounds and not allowed to move about freely.
       Rinderpest arrived in Africa spread of rinder pest was carried by infected cattle imported from British Asia to feed the Italian soldiers invading                    Eritrea   in East Africa. Entering Africa in the east, rinderpest moved west ‘like forest fire’, reaching Africa’s Atlantic coast in 1892. It reached the              Cape (Africa’s southernmost tip) five vears later. Along the way rinderpest killed 90 per cent of the cattle. 

 Impact of coming of Rinderpast
1.    The loss of cattle destroyed African livelihoods. 
2.    Planters, mine owners in colonial governments now successfully monopolised what scarce cattle resources remained, to strengthen their power and to force  Africans into the labour market. 
3.    Control over the scarce resource of cattle enabled European colonisers to conquer and subdue Africa.

Indentured labout migration from India
In the nineteenth century, hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines, and in road and railway construction projects around the world. In India, indentured labourers were hired under contracts which promised return travel to India after they had worked five years on their employer’s plantation. 
Most Indian indenture workers came from the present-day regions of eastern Uttar Pradesh, Bihar, central India and the dry districts of Tamil Nadu.

Causes for Migration of Workers 
1.    In the mid-nineteenth century these regions experienced many changes - cottage industries declined, land rents rose, lands were cleared for mines and plantations. 
2.    All this affected the lives of the poor: they failed to pay their rents, became deeply indebted and were forced to migrate in search of work.
3.    Many migrants agreed to take up work hoping to escape poverty or oppression in their home villages.
4.    Agents also tempted the prospective migrants by providing false information about final destinations, modes of travel, the nature of the work living and working conditions. 
5.    Often migrants were not even told that they were to embark on a long sea voyage. Sometimes agents even forcibly abducted less willing migrants. 
The main destinations of Indian indentured migrants were the Caribbean islands (mainly Trinidad, Guyana and Surinam), Mauritius and Fiji. Closer home, to Ceylon and Malaya. 

Ways of surviving by worker. 
1.    Many of them escaped into the wilds, though if caught they faced severe punishment.
2.    Others developed new forms of individual and collective self- expression, blending different cultural forms, old and new. In Trinidad the annual Muharram procession was transformed into a riotous carnival called ‘Hosay’ (for Imam Hussain) in which workers of all races and religions joined. 
3.    Similarly, the protest religion of Rastafarianism (made famous by the Jamaican reggae star Bob Marley) is also said to reflect social and cultural links with Indian migrants to the Caribbean. 
4.    ‘Chutney music’, popular in Trinidad and Guyana, is another creative contemporary expression of the post-indenture experience.

Indian entrepreneurs Abroad
1.    Shikaripuri shroffs and Nattukottai Chettiars. They were amongst the many groups of bankers and traders who financed export agriculture in Central and Southeast Asia, using either their own funds or those borrowed from European banks. They had a sophisticated system to transfer money over large distances, and even developed indigenous forms of corporate organisation.
2.    Hyderabadi Sindhi traders, however, ventured beyond European colonies. From the 1860s they established flourishing emporia at busy ports worldwide, selling local and imported curios to tourists whose numbers were beginning to swell, thanks to the development of safe and comfortable passenger vessels.

Indian trade, colonialsim and the global system
1.    Historically, fine cottons produced in India were exported to Europe. With industrialisation, British cotton manufacture began to expand, and industrialists pressurised the government to restrict cotton, imports and protect local industries. Tariffs were imposed on cloth imports into Britain. Consequently, the inflow of fine Indian cotton began to decline.
2.    From the early nineteenth century, British manufacturers also began to seek overseas markets for their cloth. Excluded from the British market by tariff barriers, Indian textiles now faced stiff competition in other international markets. 

While exports of manufactures declined rapidly, export of raw materials increased equally fast. 
    1.    Between 1812 and 1871, the share of raw cotton exports rose from 5 per cent to 35 per cent 
    2.    Indigo used for dyeing cloth was another important export for many decades.
    3.    Opium shipments to China- grew rapidly from the 1820s to become for a while India’s single largest export. Britain grew opium in India and exported it to China with the money earned through this sale, it financed its other imports from China.
Food grain and raw material exports from India to Britain and  the rest of the world increased. But the value of British exports to India was much higher than the value of British imports from India. 
Thus Britain had a ‘trade surplus’ with India. Britain used this to balance its trade deficits with other countries- that is, with countries from which Britain was importing more than it was selling to.
This is how a multilateral settlement system works it allows one country’s deficit with another country to be settled by its surplus with a third country.
Britain’s trade surplus in India also helped pay the so-called ‘home charges’ that included private remittances home by British officials and traders, interest payments on India’s external debt, and pensions of British officials in India.

Illustration 6
Which were the two groups of I world war name the countries of those groups?
Solution
The two groups of the I world war were the Allies and the central powers.
 The Allies ⟶ Britain, France and Russia (later joined by U.S.)
Central Powers ⟶ Germany, Austria-Hungry and Ottoman Turkey.

Illustration 7
What was the impacts of I world war on the European Economy?
Solution
    (i)     This was used weapons and Ammunition product in industries which increased the weapon industrialisation on modern lines.
    (ii)     It reduced the able bodied workforce in Europe.
    (iii)     Household income declined because of low number of family members.
    (iv)     The position of women improved in economy.
    (v)    Many fighting countries borrowed funds from developed countries.

Illustration 8
What was ‘Assembly line’ adopted by Henry Ford?
Solution
Production of goods by different persons at different points so that they become expert of the job. That enabled the company to produce goods faster.

Illustration 9
What was the time duration of the great depression.
Solution
It began around 1929 and lasted till 1930’s.

The nineteenth century (1815-1914)    
Economists identify three types of movement or ‘flows’ within international economic exchanges. 
    1.    The first is the flow of trade which  nineteenth century referred largely to trade in goods (e.g., cloth or wheat). 
    2.    The second is the flow of labour - the migration of people in search of employment. 
    3.    The third is the movement of capital for short-term or long-term investments over long distances.

 A world economy takes shape
Population growth from the late eighteenth century had increased the demand for food grains in Britain. As urban centres expanded and industry grew, the demand for agricultural products went up, pushing up food grain prices.
Under pressure from land owner groups, the government also restricted the import of corn. The laws allowing the government to do this were commonly known as the ‘Corn Laws’.
    After the Corn Laws were scrapped because of high prices of grains.
    1.    Food could be imported into Britain more cheaply than it could be produced within the country.
    2.    British agriculture was unable to compete with imports. Vast areas of land were now left uncultivated,
    3.    Thousands of men and women were thrown out of work. They flocked to the cities or migrated overseas.
As food prices fell, consumption in Britain rose. From the mid-nineteenth century, faster industrial growth in Britain also led to higher incomes, and therefore more food imports. 
    1.    Railways were needed to link the agricultural regions to the ports.
    2.    New harbours had to be built and old ones expanded to ship the new-cargoes. 
    3.    People had to settle on the lands to bring them under cultivation. This meant building homes and     settlements. 
    4.    All these activities in turn required capital, and labour. Capital flowed from financial centres such as London. 
    5.    The demand for labour in places where labour was in short supply - as in America and 
Australia -led to more migration.

India
In West Punjab the British Indian government built a network of irrigation canals to transform 
semi-desert wastes, into fertile agricultural lands that could grow wheat and cotton for export. The Canal Colonies, as the areas irrigated by the new canals were called, were settled by peasants from other parts of Punjab.
Of course, food is merely an example. A similar story can be told for cotton, the cultivation of which expanded worldwide to feed British textile mills or the crop of rubber. 

Role of technology
Technological advances were the result of larger social, political and economic factors. For example, colonisation stimulated new investments and improvements in transport: faster railways, lighter wagons and larger ships helped move food more cheaply and quickly from far away farms to final markets.
The trade in meat offers a good example of this connected process. Till the 1870s, animals were shipped live from America to Europe and then slaughtered when they arrived there. But live animals took up alot of ship space. Many also died in voyage, fell ill, lost weight, or became unfit to eat. Meat was hence an expensive luxury beyond the reach of the European poor. 

After refregerated ships
Now animals were slaughtered for food at the starting point - in America, Australia or New Zealand - and then transported to Europe as frozen meat. This reduced shipping costs and lowered meat prices in Europe. The poor in Europe could now consume a more varied diet. To the earlier monotony of bread and potatoes many, though not all, could now add meat (and butter and eggs) to their diet. Better living conditions promoted -social peace within the country and support for imperialism abroad.

Late Nineteenth-century colonialism
Darker Side of Economic Expansion
1.    In many parts of the world, the expansion of trade and a closer relationship with the world economy also meant a loss of freedoms and livelihoods. 
2.    Late-nineteenth -century European conquests produced many painful economic, social and ecological changes
3.    Rival European powers in Africa drew up the borders demarcating their respective territories. In 1885 the big Europen powers met in Berlin to                   complete the carving up of Africa between them.
4.    Britain and France made vast additions to their overseas territories in the late nineteenth century. 
5.    Belgium and Germany became new colonial powers. 
6.    The US also became a colonial power in the late 1890s by taking over some colonies earlier held by Spain.

Rinderpest or the cattle plague
In Africa, in the 1890s, a fast-spreading disease of cattle plague or rinderpest had a terrifying impact on people’s livelihood and the local economy.
Historically, Africa had abundant land and a relatively small population. For centuries, land and livestock sustained African livelihoods and people rarely worked for a wage. In late-nineteenth-century Africa there were few consumer goods that wages could buy. 
In the late nineteenth century, Europeans were attracted to Africa due to its vast resources of land and minerals. Europeans came to Africa hoping to establish plantations and mines to produce crops and minerals for export to Europe. But there was an unexpected problem - a shortage of labour willing to work for wages.

Methods to recruit and retain labour. 
1.    Heavy takes were imposed which could be paid only by working for wages on plantations and mines. 
2.    Inheritance laws were changed so that peasants were displaced from land: only one member of a family was allowed to inherit land, as a result of           which the others were pushed into the labour market. 
3.    Mineworkers were also confined in compounds and not allowed to move about freely.
       Rinderpest arrived in Africa spread of rinder pest was carried by infected cattle imported from British Asia to feed the Italian soldiers invading                    Eritrea   in East Africa. Entering Africa in the east, rinderpest moved west ‘like forest fire’, reaching Africa’s Atlantic coast in 1892. It reached the              Cape (Africa’s southernmost tip) five vears later. Along the way rinderpest killed 90 per cent of the cattle. 

 Impact of coming of Rinderpast
1.    The loss of cattle destroyed African livelihoods. 
2.    Planters, mine owners in colonial governments now successfully monopolised what scarce cattle resources remained, to strengthen their power and to force  Africans into the labour market. 
3.    Control over the scarce resource of cattle enabled European colonisers to conquer and subdue Africa.

Indentured labout migration from India
In the nineteenth century, hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines, and in road and railway construction projects around the world. In India, indentured labourers were hired under contracts which promised return travel to India after they had worked five years on their employer’s plantation. 
Most Indian indenture workers came from the present-day regions of eastern Uttar Pradesh, Bihar, central India and the dry districts of Tamil Nadu.

Causes for Migration of Workers 
1.    In the mid-nineteenth century these regions experienced many changes - cottage industries declined, land rents rose, lands were cleared for mines and plantations. 
2.    All this affected the lives of the poor: they failed to pay their rents, became deeply indebted and were forced to migrate in search of work.
3.    Many migrants agreed to take up work hoping to escape poverty or oppression in their home villages.
4.    Agents also tempted the prospective migrants by providing false information about final destinations, modes of travel, the nature of the work living and working conditions. 
5.    Often migrants were not even told that they were to embark on a long sea voyage. Sometimes agents even forcibly abducted less willing migrants. 
The main destinations of Indian indentured migrants were the Caribbean islands (mainly Trinidad, Guyana and Surinam), Mauritius and Fiji. Closer home, to Ceylon and Malaya. 

Ways of surviving by worker. 
1.    Many of them escaped into the wilds, though if caught they faced severe punishment.
2.    Others developed new forms of individual and collective self- expression, blending different cultural forms, old and new. In Trinidad the annual Muharram procession was transformed into a riotous carnival called ‘Hosay’ (for Imam Hussain) in which workers of all races and religions joined. 
3.    Similarly, the protest religion of Rastafarianism (made famous by the Jamaican reggae star Bob Marley) is also said to reflect social and cultural links with Indian migrants to the Caribbean. 
4.    ‘Chutney music’, popular in Trinidad and Guyana, is another creative contemporary expression of the post-indenture experience.

Indian entrepreneurs Abroad
1.    Shikaripuri shroffs and Nattukottai Chettiars. They were amongst the many groups of bankers and traders who financed export agriculture in Central and Southeast Asia, using either their own funds or those borrowed from European banks. They had a sophisticated system to transfer money over large distances, and even developed indigenous forms of corporate organisation.
2.    Hyderabadi Sindhi traders, however, ventured beyond European colonies. From the 1860s they established flourishing emporia at busy ports worldwide, selling local and imported curios to tourists whose numbers were beginning to swell, thanks to the development of safe and comfortable passenger vessels.

Indian trade, colonialsim and the global system
1.    Historically, fine cottons produced in India were exported to Europe. With industrialisation, British cotton manufacture began to expand, and industrialists pressurised the government to restrict cotton, imports and protect local industries. Tariffs were imposed on cloth imports into Britain. Consequently, the inflow of fine Indian cotton began to decline.
2.    From the early nineteenth century, British manufacturers also began to seek overseas markets for their cloth. Excluded from the British market by tariff barriers, Indian textiles now faced stiff competition in other international markets. 

While exports of manufactures declined rapidly, export of raw materials increased equally fast. 
    1.    Between 1812 and 1871, the share of raw cotton exports rose from 5 per cent to 35 per cent 
    2.    Indigo used for dyeing cloth was another important export for many decades.
    3.    Opium shipments to China- grew rapidly from the 1820s to become for a while India’s single largest export. Britain grew opium in India and exported it to China with the money earned through this sale, it financed its other imports from China.
Food grain and raw material exports from India to Britain and  the rest of the world increased. But the value of British exports to India was much higher than the value of British imports from India. 
Thus Britain had a ‘trade surplus’ with India. Britain used this to balance its trade deficits with other countries- that is, with countries from which Britain was importing more than it was selling to.
This is how a multilateral settlement system works it allows one country’s deficit with another country to be settled by its surplus with a third country.
Britain’s trade surplus in India also helped pay the so-called ‘home charges’ that included private remittances home by British officials and traders, interest payments on India’s external debt, and pensions of British officials in India.

Illustration 6
Which were the two groups of I world war name the countries of those groups?
Solution
The two groups of the I world war were the Allies and the central powers.
 The Allies ⟶ Britain, France and Russia (later joined by U.S.)
Central Powers ⟶ Germany, Austria-Hungry and Ottoman Turkey.

Illustration 7
What was the impacts of I world war on the European Economy?
Solution
    (i)     This was used weapons and Ammunition product in industries which increased the weapon industrialisation on modern lines.
    (ii)     It reduced the able bodied workforce in Europe.
    (iii)     Household income declined because of low number of family members.
    (iv)     The position of women improved in economy.
    (v)    Many fighting countries borrowed funds from developed countries.

Illustration 8
What was ‘Assembly line’ adopted by Henry Ford?
Solution
Production of goods by different persons at different points so that they become expert of the job. That enabled the company to produce goods faster.

Illustration 9
What was the time duration of the great depression.
Solution
It began around 1929 and lasted till 1930’s.

The nineteenth century (1815-1914)    
Economists identify three types of movement or ‘flows’ within international economic exchanges. 
    1.    The first is the flow of trade which  nineteenth century referred largely to trade in goods (e.g., cloth or wheat). 
    2.    The second is the flow of labour - the migration of people in search of employment. 
    3.    The third is the movement of capital for short-term or long-term investments over long distances.

 A world economy takes shape
Population growth from the late eighteenth century had increased the demand for food grains in Britain. As urban centres expanded and industry grew, the demand for agricultural products went up, pushing up food grain prices.
Under pressure from land owner groups, the government also restricted the import of corn. The laws allowing the government to do this were commonly known as the ‘Corn Laws’.
    After the Corn Laws were scrapped because of high prices of grains.
    1.    Food could be imported into Britain more cheaply than it could be produced within the country.
    2.    British agriculture was unable to compete with imports. Vast areas of land were now left uncultivated,
    3.    Thousands of men and women were thrown out of work. They flocked to the cities or migrated overseas.
As food prices fell, consumption in Britain rose. From the mid-nineteenth century, faster industrial growth in Britain also led to higher incomes, and therefore more food imports. 
    1.    Railways were needed to link the agricultural regions to the ports.
    2.    New harbours had to be built and old ones expanded to ship the new-cargoes. 
    3.    People had to settle on the lands to bring them under cultivation. This meant building homes and     settlements. 
    4.    All these activities in turn required capital, and labour. Capital flowed from financial centres such as London. 
    5.    The demand for labour in places where labour was in short supply - as in America and 
Australia -led to more migration.

India
In West Punjab the British Indian government built a network of irrigation canals to transform 
semi-desert wastes, into fertile agricultural lands that could grow wheat and cotton for export. The Canal Colonies, as the areas irrigated by the new canals were called, were settled by peasants from other parts of Punjab.
Of course, food is merely an example. A similar story can be told for cotton, the cultivation of which expanded worldwide to feed British textile mills or the crop of rubber. 

Role of technology
Technological advances were the result of larger social, political and economic factors. For example, colonisation stimulated new investments and improvements in transport: faster railways, lighter wagons and larger ships helped move food more cheaply and quickly from far away farms to final markets.
The trade in meat offers a good example of this connected process. Till the 1870s, animals were shipped live from America to Europe and then slaughtered when they arrived there. But live animals took up alot of ship space. Many also died in voyage, fell ill, lost weight, or became unfit to eat. Meat was hence an expensive luxury beyond the reach of the European poor. 

After refregerated ships
Now animals were slaughtered for food at the starting point - in America, Australia or New Zealand - and then transported to Europe as frozen meat. This reduced shipping costs and lowered meat prices in Europe. The poor in Europe could now consume a more varied diet. To the earlier monotony of bread and potatoes many, though not all, could now add meat (and butter and eggs) to their diet. Better living conditions promoted -social peace within the country and support for imperialism abroad.

Late Nineteenth-century colonialism
Darker Side of Economic Expansion
1.    In many parts of the world, the expansion of trade and a closer relationship with the world economy also meant a loss of freedoms and livelihoods. 
2.    Late-nineteenth -century European conquests produced many painful economic, social and ecological changes
3.    Rival European powers in Africa drew up the borders demarcating their respective territories. In 1885 the big Europen powers met in Berlin to                   complete the carving up of Africa between them.
4.    Britain and France made vast additions to their overseas territories in the late nineteenth century. 
5.    Belgium and Germany became new colonial powers. 
6.    The US also became a colonial power in the late 1890s by taking over some colonies earlier held by Spain.

Rinderpest or the cattle plague
In Africa, in the 1890s, a fast-spreading disease of cattle plague or rinderpest had a terrifying impact on people’s livelihood and the local economy.
Historically, Africa had abundant land and a relatively small population. For centuries, land and livestock sustained African livelihoods and people rarely worked for a wage. In late-nineteenth-century Africa there were few consumer goods that wages could buy. 
In the late nineteenth century, Europeans were attracted to Africa due to its vast resources of land and minerals. Europeans came to Africa hoping to establish plantations and mines to produce crops and minerals for export to Europe. But there was an unexpected problem - a shortage of labour willing to work for wages.

Methods to recruit and retain labour. 
1.    Heavy takes were imposed which could be paid only by working for wages on plantations and mines. 
2.    Inheritance laws were changed so that peasants were displaced from land: only one member of a family was allowed to inherit land, as a result of           which the others were pushed into the labour market. 
3.    Mineworkers were also confined in compounds and not allowed to move about freely.
       Rinderpest arrived in Africa spread of rinder pest was carried by infected cattle imported from British Asia to feed the Italian soldiers invading                    Eritrea   in East Africa. Entering Africa in the east, rinderpest moved west ‘like forest fire’, reaching Africa’s Atlantic coast in 1892. It reached the              Cape (Africa’s southernmost tip) five vears later. Along the way rinderpest killed 90 per cent of the cattle. 

 Impact of coming of Rinderpast
1.    The loss of cattle destroyed African livelihoods. 
2.    Planters, mine owners in colonial governments now successfully monopolised what scarce cattle resources remained, to strengthen their power and to force  Africans into the labour market. 
3.    Control over the scarce resource of cattle enabled European colonisers to conquer and subdue Africa.

Indentured labout migration from India
In the nineteenth century, hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines, and in road and railway construction projects around the world. In India, indentured labourers were hired under contracts which promised return travel to India after they had worked five years on their employer’s plantation. 
Most Indian indenture workers came from the present-day regions of eastern Uttar Pradesh, Bihar, central India and the dry districts of Tamil Nadu.

Causes for Migration of Workers 
1.    In the mid-nineteenth century these regions experienced many changes - cottage industries declined, land rents rose, lands were cleared for mines and plantations. 
2.    All this affected the lives of the poor: they failed to pay their rents, became deeply indebted and were forced to migrate in search of work.
3.    Many migrants agreed to take up work hoping to escape poverty or oppression in their home villages.
4.    Agents also tempted the prospective migrants by providing false information about final destinations, modes of travel, the nature of the work living and working conditions. 
5.    Often migrants were not even told that they were to embark on a long sea voyage. Sometimes agents even forcibly abducted less willing migrants. 
The main destinations of Indian indentured migrants were the Caribbean islands (mainly Trinidad, Guyana and Surinam), Mauritius and Fiji. Closer home, to Ceylon and Malaya. 

Ways of surviving by worker. 
1.    Many of them escaped into the wilds, though if caught they faced severe punishment.
2.    Others developed new forms of individual and collective self- expression, blending different cultural forms, old and new. In Trinidad the annual Muharram procession was transformed into a riotous carnival called ‘Hosay’ (for Imam Hussain) in which workers of all races and religions joined. 
3.    Similarly, the protest religion of Rastafarianism (made famous by the Jamaican reggae star Bob Marley) is also said to reflect social and cultural links with Indian migrants to the Caribbean. 
4.    ‘Chutney music’, popular in Trinidad and Guyana, is another creative contemporary expression of the post-indenture experience.

Indian entrepreneurs Abroad
1.    Shikaripuri shroffs and Nattukottai Chettiars. They were amongst the many groups of bankers and traders who financed export agriculture in Central and Southeast Asia, using either their own funds or those borrowed from European banks. They had a sophisticated system to transfer money over large distances, and even developed indigenous forms of corporate organisation.
2.    Hyderabadi Sindhi traders, however, ventured beyond European colonies. From the 1860s they established flourishing emporia at busy ports worldwide, selling local and imported curios to tourists whose numbers were beginning to swell, thanks to the development of safe and comfortable passenger vessels.

Indian trade, colonialsim and the global system
1.    Historically, fine cottons produced in India were exported to Europe. With industrialisation, British cotton manufacture began to expand, and industrialists pressurised the government to restrict cotton, imports and protect local industries. Tariffs were imposed on cloth imports into Britain. Consequently, the inflow of fine Indian cotton began to decline.
2.    From the early nineteenth century, British manufacturers also began to seek overseas markets for their cloth. Excluded from the British market by tariff barriers, Indian textiles now faced stiff competition in other international markets. 

While exports of manufactures declined rapidly, export of raw materials increased equally fast. 
    1.    Between 1812 and 1871, the share of raw cotton exports rose from 5 per cent to 35 per cent 
    2.    Indigo used for dyeing cloth was another important export for many decades.
    3.    Opium shipments to China- grew rapidly from the 1820s to become for a while India’s single largest export. Britain grew opium in India and exported it to China with the money earned through this sale, it financed its other imports from China.
Food grain and raw material exports from India to Britain and  the rest of the world increased. But the value of British exports to India was much higher than the value of British imports from India. 
Thus Britain had a ‘trade surplus’ with India. Britain used this to balance its trade deficits with other countries- that is, with countries from which Britain was importing more than it was selling to.
This is how a multilateral settlement system works it allows one country’s deficit with another country to be settled by its surplus with a third country.
Britain’s trade surplus in India also helped pay the so-called ‘home charges’ that included private remittances home by British officials and traders, interest payments on India’s external debt, and pensions of British officials in India.

Illustration 6
Which were the two groups of I world war name the countries of those groups?
Solution
The two groups of the I world war were the Allies and the central powers.
 The Allies ⟶ Britain, France and Russia (later joined by U.S.)
Central Powers ⟶ Germany, Austria-Hungry and Ottoman Turkey.

Illustration 7
What was the impacts of I world war on the European Economy?
Solution
    (i)     This was used weapons and Ammunition product in industries which increased the weapon industrialisation on modern lines.
    (ii)     It reduced the able bodied workforce in Europe.
    (iii)     Household income declined because of low number of family members.
    (iv)     The position of women improved in economy.
    (v)    Many fighting countries borrowed funds from developed countries.

Illustration 8
What was ‘Assembly line’ adopted by Henry Ford?
Solution
Production of goods by different persons at different points so that they become expert of the job. That enabled the company to produce goods faster.

Illustration 9
What was the time duration of the great depression.
Solution
It began around 1929 and lasted till 1930’s.

The inter-war economy
Wartime transformations
On the one side were the Allies – Britain, France and Russia (later joined by the US); and on the opposite side were the Central Powers – Germany, Austria - Hungary and Ottoman Turkey.
This war was thus the first modern industrial war. It saw the use of machine guns, tanks, aircraft, chemical weapons, etc. on a massive scale. These were all increasingly products of modern large- scale industry. To fight the war, millions of soldiers had to be recruited from around the world and moved to the frontlines on large ships and trains.
1.    These deaths and injuries reduced the able-bodied workforce in Europe.
2.    With fewer numbers within the family, household incomes declined after the war. 
3.    During the war, industries were restructured to produce war-related goods. Entire societies were also reorganised for war - as men went to battle, women stepped in to undertake jobs that earlier only men were expected to do.
4.    The war led to the shapping of  economic links between some of the largest economic powers which were now fighting each other to pay for them. So Britain borrowed large sums from US banks as well as the US public.

Post-war recovery
Britain, which was the world’s leading economy in the pre-war period, in particular faced a prolonged crisis.
1. While Britain was preoccupied with war, industries had developed in India and Japan. After the war Britain found it difficult to recapture its earlier position of dominance in the Indian market, and to compete with Japan internationally. 
2. Moreover, to finance war expenditures Britain had borrowed liberally from the US. This meant that at the end of the war Britain was burdened with huge external debts.
3. The war had led to an economic boom, that is, to a large increase in demand, production and employment. When the war boom ended, production contracted and unemployment increased. At the same time the government reduced bloated war expenditures to bring them into line with peacetime revenues. These developments led to huge job losses.
4. Before the war, eastern Europe was a major supplier of wheat in the world market. When this supply was disrupted during the war, wheat production in Canada, America and Australia expanded dramatically, But once the war was over, production in eastern Europe revived and created a glut in wheat output. Grain prices fell, rural incomes declined, and farmers fell deeper into debt. 

Rise of mass production and consumption
One important feature of the US economy was that 1920s was mass production.
A well-known pioneer of mass production was the car manufacturer Henry Ford. He adapted the assembly line of a Chicago slaughterhouse to his new car plant in Detroit He realised that the ‘assembly line’ method would allow a faster and cheaper way of producing vehicles. 
1.    The assembly line forced workers to repeat a single task mechanically and continuously - such as fitting a particular part to the car - at a pace dictated by the conveyor belt. 
2.    This was a way of increasing the output per worker by speeding up the pace of work. 
3.    Standing in front of a conveyor belt no worker could afford to delay the motions, take a break, or even have a friendly word with a workmate. As a result, Henry Ford’s cars came off the assembly line at three-minute intervals, a speed much faster than that achieved by previous methods. The T-Model Ford was the world’s first mass-produced car.

At first workers at the Ford factory were unable to cope with the stress of working on assembly lines in which they could not control the pace of work. 
1.    So they quit in large numbers. In desperation Ford doubled the daily wage. 
2.    At the same time he banned trade unions from operating in his plants.
3.    Fordist industrial practices was also widely copied in Europe in the 1920s. Mass production lowered costs and prices of engineered goods. Thanks to higher wages, more workers could now afford to purchase durable consumer goods such as cars.
4.    Similarly, there was a spur in the purchase of refrigerators, washing machines, radios, gramophone players, all through a system of hire purchase’ (i.e., on credit repaid in weekly or monthly instalments).
In 1923, the US resumed exporting capital to the rest of the world and became the largest overseas lender. US imports and capital exports also boosted European recovery and world trade and income growth over the next six years.

The Great Depression
The Great Depression began around 1929 and lasted till the mid – 1930s. During this period most parts of the world experienced catastrophic declines in production, employment, incomes and trade.
Agricultural regions and communities were the worst affected. This was because the fall in agricultural prices was greater and more prolonged than that In the prices of industrial goods.

Causes of The great depression
1.    First: agricultural overproduction remained a problem. This was made worse by falling agricultural prices. As prices slumped and agricultural incomes declined, farmers tried to expand production and bring a larger volume of produce to the market to maintain their overall income. This worsened the glut in the market, pushing down prices even further. Farm produce rotted for a lack of buyers.
2.    In the mid-1920s, many countries financed their investments throughloans from the US. While it was often extremely easy to raise loans in the US when the going was good, US overseas lenders panicked at the first sign of trouble. In the first half of 1928, US.overseas loans amounted to over $ 1 billion. A year later it was one quarter of that amount. Countries that depended crucial on US loans now faced an acute crisis.

Impact of great depression
    1.    In Europe it led to the failure of some major banks and the collapse of currencies such as the British pound sterling.
    2.    In Latin America and elsewhere it intensified the slump in agricultural and raw material prices.
    3.    With the fall in prices and the prospect of a depression, US banks had also slashed domestic lending and called back loans. 
    4.    Farms could not sell their harvests, households were ruined, and businesses collapsed.
    5.    Faced with falling incomes, many households in the US could not repay what they had borrowed, and were forced to give up their homes, cars and other consumer durables. 
    6.    The consumerist prosperity of the 1920s now disappeared in a puff of dust. 
    7.    As unemployment soared, people moved long distances looking for any work they could find. Ultimately, the US banking system itself collapsed. 
    8.    Unable to recover investments, collect loans and repay depositors, thousands of banks went bankrupt and were forced to closer.

India and the Great Depression
Impact
The depression immediately affected Indian trade. 
1.    India’s exports imports nearly halved between 1928 and 1934. As international prices crashed, prices in India also plunged. Between 1928 and 1934. As international prices, the prices in India fell by 50 per cent.
2.    Peasants and farmers suffered more than urban dwellers. Though agricultural prices fell sharply, the colonial government refused to reduce revenue demands. Peasants producing for the world market were the worst hit. 
3.    The jute producers of Bengal grew raw jute that was processed in factories for export in the form of gunny bags. But as gunny exports collapsed, the price of raw jute crashed more than 60 per cent. Peasants who borrowed in the hope of better times or to increase output in the hope of higher incomes faced even lower prices, and fell deeper and deeper into debt.
4.    Peasants’ indebtedness increased. They used up their savings, mortgaged lands, and sold whatever jewellery and precious metals they had to meet their expenses.
5.    Because of falling prices, those with fixed incomes - say town-dwelling landowners who received rents and middle-class salaried employees - now found themselves better off. Eventhing cost less.
6.    Industrial investment also grew as the government extended tarrif protection to industries, under the pressure of nationalist opinion.

Rebuilding a world economy: The post-war era
The Second World War broke out a mere two decades after the end of the First World War. It was fought between the Axis powers (mainly Nazi Germany, Japan and Italy) and the Allies (Britain, France, the Soviet Union and the US.
1.    Once again death and destruction was enormous. At least 60 million people, or about 3 per cent of the world’s 1939 population, are believed to have been killed.
2.    Many more civilians than soldiers died from war-related “Casualties Vast parts of Europe and Asia were devastated, and several cities were destroyed by aerial bombardment or relentless artillery attacks. 
3.    The war caused an immense amount of economic devastation and social disruption. Reconstruction promised to be long and difficult.

Two crucial influences shaped post-war reconstruction. 
1.    The first was the US’s emergence as the dominant economic, political and military power in the Western world.
2.    The second was the dominance of the Soviet Union.
Post-war settlement and the bretton woods institution
Lessons from interwar eco - experiences
1.    First, an industrial society based on mass production cannot be sustained without mass consumption. But to ensure mass consumption, there was a need for high and stable incomes. Incomes could not be stable if employment was unstable. Thus stable incomes also required steady, full employment.  
But markets alone could not guarantee full employment. Therefore governments would have to step in to minimise fluctuations of price, output and employment. Economic stability could be ensured only through the intervention of the government.
2.    The second lesson related to a country’s economic links with the outside world. The goal of full employment could only be achieved if governments had power to control flows of goods, capital and Labour.
3.    Thus in brief, the main aim of the post-war international economic system was to preserve economic stability and full employment in the industrial world.
Its framework was agreed upon at the United Nations Monetaryand Financial Conference held in July 1944 at Bretton Woods in New Hampshire, USA.

Bretton Woods Institution
1.    The Bretton Woods conference established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations. The International Bank for Reconstruction and Development (popularly known as the World Bank) was set up to finance postwar reconstruction. 
2.    The IMF and the World Bank are referred to as the Bretton Woods institutions or sometimes the Bretton Woods twins.
3.    Decision-making in these institutions is controlled by the Western industrial powers. The US has an effective right of veto over key IMF and World Bank decisions.
4.    The international monetary system is the system linking national currencies and monetary system. The Bretton Woods system was based on fixed exchange rates. In this system, national currencies, for example the Indian rupee, were pegged to the dollar at a fixed exchange rate.

The early post-war years
The Bretton Woods system inaugurated an era of unprecedented growth of trade and incomes for the Western industrial nations and Japan. World trade grew annually at over 8 per cent between 1950 and 1970 and incomes at nearly 5 per cent.
The growth was also mostly stable, without large fluctuation. For much of this period the unemployment rate, for example, averaged less than 5 per cent in most industrial countries.
These decades also saw the worldwide spread of technology and enterprise. Developing countries were in a hurry to catch up with the advanced industrial countries.

Decolonisation and independence
The IMF and the World Bank were designed to meet the financial needs of the industrial countries. They were not equipped to cope with the challenge of poverty and lack of development in the former colonies. But as Europe and Japan rapidly rebuilt their economies, they grew less dependent on the IMF and the World Bank. Thus from the late 1950s the Bretton Woods institutions began to shift their attention more towards developing countries. 
Ironically, as newly independent countries facing urgent pressures to lift their populations out of poverty, they came under the guidance of international agencies dominated by the former colonial powers. Even after many years of decolonisation, the former colonial powers still, controlled vital resources such as minerals and land in many of their former colonies.
At the same time, most developing countries did not benefit from the fast growth the-Western economies experienced in the 1950s and 1960s. Therefore they organised themselves as a group - the Group of  77 (or G-77) - to demand a new international economic order (NIEO). By the NIEO they meant a system that would give them real control over their natural resources, more development assistance, fairer prices for raw materials, and better access for their manufactured goods in developed countries’ markets.

Illustration 10
    Which were the two opposite groups in II world war?
Solution
II world war was faught between Axis Powers (Germany, Japan and Italy) and Allies (Britain, France, Soviet Union and the U.S.)

Illustration 11
Which new super power blocks emerged in the world after II world war?
Solution
U.S.A. and U.S.S.R.

Illustration 12
Which institutions were called as Bretton woods Institution or Brettonwoods Twins.
Solution
    I.M.F. and World Bank.

Illustration 13
    What do you mean by NIEO?
Solution
New international economic order means a system that would give G-77 the real control over their natural resources, more developed assistance, fair prices raw materials and better access for their manufactured goods in developed country. 

The inter-war economy
Wartime transformations
On the one side were the Allies – Britain, France and Russia (later joined by the US); and on the opposite side were the Central Powers – Germany, Austria - Hungary and Ottoman Turkey.
This war was thus the first modern industrial war. It saw the use of machine guns, tanks, aircraft, chemical weapons, etc. on a massive scale. These were all increasingly products of modern large- scale industry. To fight the war, millions of soldiers had to be recruited from around the world and moved to the frontlines on large ships and trains.
1.    These deaths and injuries reduced the able-bodied workforce in Europe.
2.    With fewer numbers within the family, household incomes declined after the war. 
3.    During the war, industries were restructured to produce war-related goods. Entire societies were also reorganised for war - as men went to battle, women stepped in to undertake jobs that earlier only men were expected to do.
4.    The war led to the shapping of  economic links between some of the largest economic powers which were now fighting each other to pay for them. So Britain borrowed large sums from US banks as well as the US public.

Post-war recovery
Britain, which was the world’s leading economy in the pre-war period, in particular faced a prolonged crisis.
1. While Britain was preoccupied with war, industries had developed in India and Japan. After the war Britain found it difficult to recapture its earlier position of dominance in the Indian market, and to compete with Japan internationally. 
2. Moreover, to finance war expenditures Britain had borrowed liberally from the US. This meant that at the end of the war Britain was burdened with huge external debts.
3. The war had led to an economic boom, that is, to a large increase in demand, production and employment. When the war boom ended, production contracted and unemployment increased. At the same time the government reduced bloated war expenditures to bring them into line with peacetime revenues. These developments led to huge job losses.
4. Before the war, eastern Europe was a major supplier of wheat in the world market. When this supply was disrupted during the war, wheat production in Canada, America and Australia expanded dramatically, But once the war was over, production in eastern Europe revived and created a glut in wheat output. Grain prices fell, rural incomes declined, and farmers fell deeper into debt. 

Rise of mass production and consumption
One important feature of the US economy was that 1920s was mass production.
A well-known pioneer of mass production was the car manufacturer Henry Ford. He adapted the assembly line of a Chicago slaughterhouse to his new car plant in Detroit He realised that the ‘assembly line’ method would allow a faster and cheaper way of producing vehicles. 
1.    The assembly line forced workers to repeat a single task mechanically and continuously - such as fitting a particular part to the car - at a pace dictated by the conveyor belt. 
2.    This was a way of increasing the output per worker by speeding up the pace of work. 
3.    Standing in front of a conveyor belt no worker could afford to delay the motions, take a break, or even have a friendly word with a workmate. As a result, Henry Ford’s cars came off the assembly line at three-minute intervals, a speed much faster than that achieved by previous methods. The T-Model Ford was the world’s first mass-produced car.

At first workers at the Ford factory were unable to cope with the stress of working on assembly lines in which they could not control the pace of work. 
1.    So they quit in large numbers. In desperation Ford doubled the daily wage. 
2.    At the same time he banned trade unions from operating in his plants.
3.    Fordist industrial practices was also widely copied in Europe in the 1920s. Mass production lowered costs and prices of engineered goods. Thanks to higher wages, more workers could now afford to purchase durable consumer goods such as cars.
4.    Similarly, there was a spur in the purchase of refrigerators, washing machines, radios, gramophone players, all through a system of hire purchase’ (i.e., on credit repaid in weekly or monthly instalments).
In 1923, the US resumed exporting capital to the rest of the world and became the largest overseas lender. US imports and capital exports also boosted European recovery and world trade and income growth over the next six years.

The Great Depression
The Great Depression began around 1929 and lasted till the mid – 1930s. During this period most parts of the world experienced catastrophic declines in production, employment, incomes and trade.
Agricultural regions and communities were the worst affected. This was because the fall in agricultural prices was greater and more prolonged than that In the prices of industrial goods.

Causes of The great depression
1.    First: agricultural overproduction remained a problem. This was made worse by falling agricultural prices. As prices slumped and agricultural incomes declined, farmers tried to expand production and bring a larger volume of produce to the market to maintain their overall income. This worsened the glut in the market, pushing down prices even further. Farm produce rotted for a lack of buyers.
2.    In the mid-1920s, many countries financed their investments throughloans from the US. While it was often extremely easy to raise loans in the US when the going was good, US overseas lenders panicked at the first sign of trouble. In the first half of 1928, US.overseas loans amounted to over $ 1 billion. A year later it was one quarter of that amount. Countries that depended crucial on US loans now faced an acute crisis.

Impact of great depression
    1.    In Europe it led to the failure of some major banks and the collapse of currencies such as the British pound sterling.
    2.    In Latin America and elsewhere it intensified the slump in agricultural and raw material prices.
    3.    With the fall in prices and the prospect of a depression, US banks had also slashed domestic lending and called back loans. 
    4.    Farms could not sell their harvests, households were ruined, and businesses collapsed.
    5.    Faced with falling incomes, many households in the US could not repay what they had borrowed, and were forced to give up their homes, cars and other consumer durables. 
    6.    The consumerist prosperity of the 1920s now disappeared in a puff of dust. 
    7.    As unemployment soared, people moved long distances looking for any work they could find. Ultimately, the US banking system itself collapsed. 
    8.    Unable to recover investments, collect loans and repay depositors, thousands of banks went bankrupt and were forced to closer.

India and the Great Depression
Impact
The depression immediately affected Indian trade. 
1.    India’s exports imports nearly halved between 1928 and 1934. As international prices crashed, prices in India also plunged. Between 1928 and 1934. As international prices, the prices in India fell by 50 per cent.
2.    Peasants and farmers suffered more than urban dwellers. Though agricultural prices fell sharply, the colonial government refused to reduce revenue demands. Peasants producing for the world market were the worst hit. 
3.    The jute producers of Bengal grew raw jute that was processed in factories for export in the form of gunny bags. But as gunny exports collapsed, the price of raw jute crashed more than 60 per cent. Peasants who borrowed in the hope of better times or to increase output in the hope of higher incomes faced even lower prices, and fell deeper and deeper into debt.
4.    Peasants’ indebtedness increased. They used up their savings, mortgaged lands, and sold whatever jewellery and precious metals they had to meet their expenses.
5.    Because of falling prices, those with fixed incomes - say town-dwelling landowners who received rents and middle-class salaried employees - now found themselves better off. Eventhing cost less.
6.    Industrial investment also grew as the government extended tarrif protection to industries, under the pressure of nationalist opinion.

Rebuilding a world economy: The post-war era
The Second World War broke out a mere two decades after the end of the First World War. It was fought between the Axis powers (mainly Nazi Germany, Japan and Italy) and the Allies (Britain, France, the Soviet Union and the US.
1.    Once again death and destruction was enormous. At least 60 million people, or about 3 per cent of the world’s 1939 population, are believed to have been killed.
2.    Many more civilians than soldiers died from war-related “Casualties Vast parts of Europe and Asia were devastated, and several cities were destroyed by aerial bombardment or relentless artillery attacks. 
3.    The war caused an immense amount of economic devastation and social disruption. Reconstruction promised to be long and difficult.

Two crucial influences shaped post-war reconstruction. 
1.    The first was the US’s emergence as the dominant economic, political and military power in the Western world.
2.    The second was the dominance of the Soviet Union.
Post-war settlement and the bretton woods institution
Lessons from interwar eco - experiences
1.    First, an industrial society based on mass production cannot be sustained without mass consumption. But to ensure mass consumption, there was a need for high and stable incomes. Incomes could not be stable if employment was unstable. Thus stable incomes also required steady, full employment.  
But markets alone could not guarantee full employment. Therefore governments would have to step in to minimise fluctuations of price, output and employment. Economic stability could be ensured only through the intervention of the government.
2.    The second lesson related to a country’s economic links with the outside world. The goal of full employment could only be achieved if governments had power to control flows of goods, capital and Labour.
3.    Thus in brief, the main aim of the post-war international economic system was to preserve economic stability and full employment in the industrial world.
Its framework was agreed upon at the United Nations Monetaryand Financial Conference held in July 1944 at Bretton Woods in New Hampshire, USA.

Bretton Woods Institution
1.    The Bretton Woods conference established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations. The International Bank for Reconstruction and Development (popularly known as the World Bank) was set up to finance postwar reconstruction. 
2.    The IMF and the World Bank are referred to as the Bretton Woods institutions or sometimes the Bretton Woods twins.
3.    Decision-making in these institutions is controlled by the Western industrial powers. The US has an effective right of veto over key IMF and World Bank decisions.
4.    The international monetary system is the system linking national currencies and monetary system. The Bretton Woods system was based on fixed exchange rates. In this system, national currencies, for example the Indian rupee, were pegged to the dollar at a fixed exchange rate.

The early post-war years
The Bretton Woods system inaugurated an era of unprecedented growth of trade and incomes for the Western industrial nations and Japan. World trade grew annually at over 8 per cent between 1950 and 1970 and incomes at nearly 5 per cent.
The growth was also mostly stable, without large fluctuation. For much of this period the unemployment rate, for example, averaged less than 5 per cent in most industrial countries.
These decades also saw the worldwide spread of technology and enterprise. Developing countries were in a hurry to catch up with the advanced industrial countries.

Decolonisation and independence
The IMF and the World Bank were designed to meet the financial needs of the industrial countries. They were not equipped to cope with the challenge of poverty and lack of development in the former colonies. But as Europe and Japan rapidly rebuilt their economies, they grew less dependent on the IMF and the World Bank. Thus from the late 1950s the Bretton Woods institutions began to shift their attention more towards developing countries. 
Ironically, as newly independent countries facing urgent pressures to lift their populations out of poverty, they came under the guidance of international agencies dominated by the former colonial powers. Even after many years of decolonisation, the former colonial powers still, controlled vital resources such as minerals and land in many of their former colonies.
At the same time, most developing countries did not benefit from the fast growth the-Western economies experienced in the 1950s and 1960s. Therefore they organised themselves as a group - the Group of  77 (or G-77) - to demand a new international economic order (NIEO). By the NIEO they meant a system that would give them real control over their natural resources, more development assistance, fairer prices for raw materials, and better access for their manufactured goods in developed countries’ markets.

Illustration 10
    Which were the two opposite groups in II world war?
Solution
II world war was faught between Axis Powers (Germany, Japan and Italy) and Allies (Britain, France, Soviet Union and the U.S.)

Illustration 11
Which new super power blocks emerged in the world after II world war?
Solution
U.S.A. and U.S.S.R.

Illustration 12
Which institutions were called as Bretton woods Institution or Brettonwoods Twins.
Solution
    I.M.F. and World Bank.

Illustration 13
    What do you mean by NIEO?
Solution
New international economic order means a system that would give G-77 the real control over their natural resources, more developed assistance, fair prices raw materials and better access for their manufactured goods in developed country. 

The inter-war economy
Wartime transformations
On the one side were the Allies – Britain, France and Russia (later joined by the US); and on the opposite side were the Central Powers – Germany, Austria - Hungary and Ottoman Turkey.
This war was thus the first modern industrial war. It saw the use of machine guns, tanks, aircraft, chemical weapons, etc. on a massive scale. These were all increasingly products of modern large- scale industry. To fight the war, millions of soldiers had to be recruited from around the world and moved to the frontlines on large ships and trains.
1.    These deaths and injuries reduced the able-bodied workforce in Europe.
2.    With fewer numbers within the family, household incomes declined after the war. 
3.    During the war, industries were restructured to produce war-related goods. Entire societies were also reorganised for war - as men went to battle, women stepped in to undertake jobs that earlier only men were expected to do.
4.    The war led to the shapping of  economic links between some of the largest economic powers which were now fighting each other to pay for them. So Britain borrowed large sums from US banks as well as the US public.

Post-war recovery
Britain, which was the world’s leading economy in the pre-war period, in particular faced a prolonged crisis.
1. While Britain was preoccupied with war, industries had developed in India and Japan. After the war Britain found it difficult to recapture its earlier position of dominance in the Indian market, and to compete with Japan internationally. 
2. Moreover, to finance war expenditures Britain had borrowed liberally from the US. This meant that at the end of the war Britain was burdened with huge external debts.
3. The war had led to an economic boom, that is, to a large increase in demand, production and employment. When the war boom ended, production contracted and unemployment increased. At the same time the government reduced bloated war expenditures to bring them into line with peacetime revenues. These developments led to huge job losses.
4. Before the war, eastern Europe was a major supplier of wheat in the world market. When this supply was disrupted during the war, wheat production in Canada, America and Australia expanded dramatically, But once the war was over, production in eastern Europe revived and created a glut in wheat output. Grain prices fell, rural incomes declined, and farmers fell deeper into debt. 

Rise of mass production and consumption
One important feature of the US economy was that 1920s was mass production.
A well-known pioneer of mass production was the car manufacturer Henry Ford. He adapted the assembly line of a Chicago slaughterhouse to his new car plant in Detroit He realised that the ‘assembly line’ method would allow a faster and cheaper way of producing vehicles. 
1.    The assembly line forced workers to repeat a single task mechanically and continuously - such as fitting a particular part to the car - at a pace dictated by the conveyor belt. 
2.    This was a way of increasing the output per worker by speeding up the pace of work. 
3.    Standing in front of a conveyor belt no worker could afford to delay the motions, take a break, or even have a friendly word with a workmate. As a result, Henry Ford’s cars came off the assembly line at three-minute intervals, a speed much faster than that achieved by previous methods. The T-Model Ford was the world’s first mass-produced car.

At first workers at the Ford factory were unable to cope with the stress of working on assembly lines in which they could not control the pace of work. 
1.    So they quit in large numbers. In desperation Ford doubled the daily wage. 
2.    At the same time he banned trade unions from operating in his plants.
3.    Fordist industrial practices was also widely copied in Europe in the 1920s. Mass production lowered costs and prices of engineered goods. Thanks to higher wages, more workers could now afford to purchase durable consumer goods such as cars.
4.    Similarly, there was a spur in the purchase of refrigerators, washing machines, radios, gramophone players, all through a system of hire purchase’ (i.e., on credit repaid in weekly or monthly instalments).
In 1923, the US resumed exporting capital to the rest of the world and became the largest overseas lender. US imports and capital exports also boosted European recovery and world trade and income growth over the next six years.

The Great Depression
The Great Depression began around 1929 and lasted till the mid – 1930s. During this period most parts of the world experienced catastrophic declines in production, employment, incomes and trade.
Agricultural regions and communities were the worst affected. This was because the fall in agricultural prices was greater and more prolonged than that In the prices of industrial goods.

Causes of The great depression
1.    First: agricultural overproduction remained a problem. This was made worse by falling agricultural prices. As prices slumped and agricultural incomes declined, farmers tried to expand production and bring a larger volume of produce to the market to maintain their overall income. This worsened the glut in the market, pushing down prices even further. Farm produce rotted for a lack of buyers.
2.    In the mid-1920s, many countries financed their investments throughloans from the US. While it was often extremely easy to raise loans in the US when the going was good, US overseas lenders panicked at the first sign of trouble. In the first half of 1928, US.overseas loans amounted to over $ 1 billion. A year later it was one quarter of that amount. Countries that depended crucial on US loans now faced an acute crisis.

Impact of great depression
    1.    In Europe it led to the failure of some major banks and the collapse of currencies such as the British pound sterling.
    2.    In Latin America and elsewhere it intensified the slump in agricultural and raw material prices.
    3.    With the fall in prices and the prospect of a depression, US banks had also slashed domestic lending and called back loans. 
    4.    Farms could not sell their harvests, households were ruined, and businesses collapsed.
    5.    Faced with falling incomes, many households in the US could not repay what they had borrowed, and were forced to give up their homes, cars and other consumer durables. 
    6.    The consumerist prosperity of the 1920s now disappeared in a puff of dust. 
    7.    As unemployment soared, people moved long distances looking for any work they could find. Ultimately, the US banking system itself collapsed. 
    8.    Unable to recover investments, collect loans and repay depositors, thousands of banks went bankrupt and were forced to closer.

India and the Great Depression
Impact
The depression immediately affected Indian trade. 
1.    India’s exports imports nearly halved between 1928 and 1934. As international prices crashed, prices in India also plunged. Between 1928 and 1934. As international prices, the prices in India fell by 50 per cent.
2.    Peasants and farmers suffered more than urban dwellers. Though agricultural prices fell sharply, the colonial government refused to reduce revenue demands. Peasants producing for the world market were the worst hit. 
3.    The jute producers of Bengal grew raw jute that was processed in factories for export in the form of gunny bags. But as gunny exports collapsed, the price of raw jute crashed more than 60 per cent. Peasants who borrowed in the hope of better times or to increase output in the hope of higher incomes faced even lower prices, and fell deeper and deeper into debt.
4.    Peasants’ indebtedness increased. They used up their savings, mortgaged lands, and sold whatever jewellery and precious metals they had to meet their expenses.
5.    Because of falling prices, those with fixed incomes - say town-dwelling landowners who received rents and middle-class salaried employees - now found themselves better off. Eventhing cost less.
6.    Industrial investment also grew as the government extended tarrif protection to industries, under the pressure of nationalist opinion.

Rebuilding a world economy: The post-war era
The Second World War broke out a mere two decades after the end of the First World War. It was fought between the Axis powers (mainly Nazi Germany, Japan and Italy) and the Allies (Britain, France, the Soviet Union and the US.
1.    Once again death and destruction was enormous. At least 60 million people, or about 3 per cent of the world’s 1939 population, are believed to have been killed.
2.    Many more civilians than soldiers died from war-related “Casualties Vast parts of Europe and Asia were devastated, and several cities were destroyed by aerial bombardment or relentless artillery attacks. 
3.    The war caused an immense amount of economic devastation and social disruption. Reconstruction promised to be long and difficult.

Two crucial influences shaped post-war reconstruction. 
1.    The first was the US’s emergence as the dominant economic, political and military power in the Western world.
2.    The second was the dominance of the Soviet Union.
Post-war settlement and the bretton woods institution
Lessons from interwar eco - experiences
1.    First, an industrial society based on mass production cannot be sustained without mass consumption. But to ensure mass consumption, there was a need for high and stable incomes. Incomes could not be stable if employment was unstable. Thus stable incomes also required steady, full employment.  
But markets alone could not guarantee full employment. Therefore governments would have to step in to minimise fluctuations of price, output and employment. Economic stability could be ensured only through the intervention of the government.
2.    The second lesson related to a country’s economic links with the outside world. The goal of full employment could only be achieved if governments had power to control flows of goods, capital and Labour.
3.    Thus in brief, the main aim of the post-war international economic system was to preserve economic stability and full employment in the industrial world.
Its framework was agreed upon at the United Nations Monetaryand Financial Conference held in July 1944 at Bretton Woods in New Hampshire, USA.

Bretton Woods Institution
1.    The Bretton Woods conference established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations. The International Bank for Reconstruction and Development (popularly known as the World Bank) was set up to finance postwar reconstruction. 
2.    The IMF and the World Bank are referred to as the Bretton Woods institutions or sometimes the Bretton Woods twins.
3.    Decision-making in these institutions is controlled by the Western industrial powers. The US has an effective right of veto over key IMF and World Bank decisions.
4.    The international monetary system is the system linking national currencies and monetary system. The Bretton Woods system was based on fixed exchange rates. In this system, national currencies, for example the Indian rupee, were pegged to the dollar at a fixed exchange rate.

The early post-war years
The Bretton Woods system inaugurated an era of unprecedented growth of trade and incomes for the Western industrial nations and Japan. World trade grew annually at over 8 per cent between 1950 and 1970 and incomes at nearly 5 per cent.
The growth was also mostly stable, without large fluctuation. For much of this period the unemployment rate, for example, averaged less than 5 per cent in most industrial countries.
These decades also saw the worldwide spread of technology and enterprise. Developing countries were in a hurry to catch up with the advanced industrial countries.

Decolonisation and independence
The IMF and the World Bank were designed to meet the financial needs of the industrial countries. They were not equipped to cope with the challenge of poverty and lack of development in the former colonies. But as Europe and Japan rapidly rebuilt their economies, they grew less dependent on the IMF and the World Bank. Thus from the late 1950s the Bretton Woods institutions began to shift their attention more towards developing countries. 
Ironically, as newly independent countries facing urgent pressures to lift their populations out of poverty, they came under the guidance of international agencies dominated by the former colonial powers. Even after many years of decolonisation, the former colonial powers still, controlled vital resources such as minerals and land in many of their former colonies.
At the same time, most developing countries did not benefit from the fast growth the-Western economies experienced in the 1950s and 1960s. Therefore they organised themselves as a group - the Group of  77 (or G-77) - to demand a new international economic order (NIEO). By the NIEO they meant a system that would give them real control over their natural resources, more development assistance, fairer prices for raw materials, and better access for their manufactured goods in developed countries’ markets.

Illustration 10
    Which were the two opposite groups in II world war?
Solution
II world war was faught between Axis Powers (Germany, Japan and Italy) and Allies (Britain, France, Soviet Union and the U.S.)

Illustration 11
Which new super power blocks emerged in the world after II world war?
Solution
U.S.A. and U.S.S.R.

Illustration 12
Which institutions were called as Bretton woods Institution or Brettonwoods Twins.
Solution
    I.M.F. and World Bank.

Illustration 13
    What do you mean by NIEO?
Solution
New international economic order means a system that would give G-77 the real control over their natural resources, more developed assistance, fair prices raw materials and better access for their manufactured goods in developed country. 

The inter-war economy
Wartime transformations
On the one side were the Allies – Britain, France and Russia (later joined by the US); and on the opposite side were the Central Powers – Germany, Austria - Hungary and Ottoman Turkey.
This war was thus the first modern industrial war. It saw the use of machine guns, tanks, aircraft, chemical weapons, etc. on a massive scale. These were all increasingly products of modern large- scale industry. To fight the war, millions of soldiers had to be recruited from around the world and moved to the frontlines on large ships and trains.
1.    These deaths and injuries reduced the able-bodied workforce in Europe.
2.    With fewer numbers within the family, household incomes declined after the war. 
3.    During the war, industries were restructured to produce war-related goods. Entire societies were also reorganised for war - as men went to battle, women stepped in to undertake jobs that earlier only men were expected to do.
4.    The war led to the shapping of  economic links between some of the largest economic powers which were now fighting each other to pay for them. So Britain borrowed large sums from US banks as well as the US public.

Post-war recovery
Britain, which was the world’s leading economy in the pre-war period, in particular faced a prolonged crisis.
1. While Britain was preoccupied with war, industries had developed in India and Japan. After the war Britain found it difficult to recapture its earlier position of dominance in the Indian market, and to compete with Japan internationally. 
2. Moreover, to finance war expenditures Britain had borrowed liberally from the US. This meant that at the end of the war Britain was burdened with huge external debts.
3. The war had led to an economic boom, that is, to a large increase in demand, production and employment. When the war boom ended, production contracted and unemployment increased. At the same time the government reduced bloated war expenditures to bring them into line with peacetime revenues. These developments led to huge job losses.
4. Before the war, eastern Europe was a major supplier of wheat in the world market. When this supply was disrupted during the war, wheat production in Canada, America and Australia expanded dramatically, But once the war was over, production in eastern Europe revived and created a glut in wheat output. Grain prices fell, rural incomes declined, and farmers fell deeper into debt. 

Rise of mass production and consumption
One important feature of the US economy was that 1920s was mass production.
A well-known pioneer of mass production was the car manufacturer Henry Ford. He adapted the assembly line of a Chicago slaughterhouse to his new car plant in Detroit He realised that the ‘assembly line’ method would allow a faster and cheaper way of producing vehicles. 
1.    The assembly line forced workers to repeat a single task mechanically and continuously - such as fitting a particular part to the car - at a pace dictated by the conveyor belt. 
2.    This was a way of increasing the output per worker by speeding up the pace of work. 
3.    Standing in front of a conveyor belt no worker could afford to delay the motions, take a break, or even have a friendly word with a workmate. As a result, Henry Ford’s cars came off the assembly line at three-minute intervals, a speed much faster than that achieved by previous methods. The T-Model Ford was the world’s first mass-produced car.

At first workers at the Ford factory were unable to cope with the stress of working on assembly lines in which they could not control the pace of work. 
1.    So they quit in large numbers. In desperation Ford doubled the daily wage. 
2.    At the same time he banned trade unions from operating in his plants.
3.    Fordist industrial practices was also widely copied in Europe in the 1920s. Mass production lowered costs and prices of engineered goods. Thanks to higher wages, more workers could now afford to purchase durable consumer goods such as cars.
4.    Similarly, there was a spur in the purchase of refrigerators, washing machines, radios, gramophone players, all through a system of hire purchase’ (i.e., on credit repaid in weekly or monthly instalments).
In 1923, the US resumed exporting capital to the rest of the world and became the largest overseas lender. US imports and capital exports also boosted European recovery and world trade and income growth over the next six years.

The Great Depression
The Great Depression began around 1929 and lasted till the mid – 1930s. During this period most parts of the world experienced catastrophic declines in production, employment, incomes and trade.
Agricultural regions and communities were the worst affected. This was because the fall in agricultural prices was greater and more prolonged than that In the prices of industrial goods.

Causes of The great depression
1.    First: agricultural overproduction remained a problem. This was made worse by falling agricultural prices. As prices slumped and agricultural incomes declined, farmers tried to expand production and bring a larger volume of produce to the market to maintain their overall income. This worsened the glut in the market, pushing down prices even further. Farm produce rotted for a lack of buyers.
2.    In the mid-1920s, many countries financed their investments throughloans from the US. While it was often extremely easy to raise loans in the US when the going was good, US overseas lenders panicked at the first sign of trouble. In the first half of 1928, US.overseas loans amounted to over $ 1 billion. A year later it was one quarter of that amount. Countries that depended crucial on US loans now faced an acute crisis.

Impact of great depression
    1.    In Europe it led to the failure of some major banks and the collapse of currencies such as the British pound sterling.
    2.    In Latin America and elsewhere it intensified the slump in agricultural and raw material prices.
    3.    With the fall in prices and the prospect of a depression, US banks had also slashed domestic lending and called back loans. 
    4.    Farms could not sell their harvests, households were ruined, and businesses collapsed.
    5.    Faced with falling incomes, many households in the US could not repay what they had borrowed, and were forced to give up their homes, cars and other consumer durables. 
    6.    The consumerist prosperity of the 1920s now disappeared in a puff of dust. 
    7.    As unemployment soared, people moved long distances looking for any work they could find. Ultimately, the US banking system itself collapsed. 
    8.    Unable to recover investments, collect loans and repay depositors, thousands of banks went bankrupt and were forced to closer.

India and the Great Depression
Impact
The depression immediately affected Indian trade. 
1.    India’s exports imports nearly halved between 1928 and 1934. As international prices crashed, prices in India also plunged. Between 1928 and 1934. As international prices, the prices in India fell by 50 per cent.
2.    Peasants and farmers suffered more than urban dwellers. Though agricultural prices fell sharply, the colonial government refused to reduce revenue demands. Peasants producing for the world market were the worst hit. 
3.    The jute producers of Bengal grew raw jute that was processed in factories for export in the form of gunny bags. But as gunny exports collapsed, the price of raw jute crashed more than 60 per cent. Peasants who borrowed in the hope of better times or to increase output in the hope of higher incomes faced even lower prices, and fell deeper and deeper into debt.
4.    Peasants’ indebtedness increased. They used up their savings, mortgaged lands, and sold whatever jewellery and precious metals they had to meet their expenses.
5.    Because of falling prices, those with fixed incomes - say town-dwelling landowners who received rents and middle-class salaried employees - now found themselves better off. Eventhing cost less.
6.    Industrial investment also grew as the government extended tarrif protection to industries, under the pressure of nationalist opinion.

Rebuilding a world economy: The post-war era
The Second World War broke out a mere two decades after the end of the First World War. It was fought between the Axis powers (mainly Nazi Germany, Japan and Italy) and the Allies (Britain, France, the Soviet Union and the US.
1.    Once again death and destruction was enormous. At least 60 million people, or about 3 per cent of the world’s 1939 population, are believed to have been killed.
2.    Many more civilians than soldiers died from war-related “Casualties Vast parts of Europe and Asia were devastated, and several cities were destroyed by aerial bombardment or relentless artillery attacks. 
3.    The war caused an immense amount of economic devastation and social disruption. Reconstruction promised to be long and difficult.

Two crucial influences shaped post-war reconstruction. 
1.    The first was the US’s emergence as the dominant economic, political and military power in the Western world.
2.    The second was the dominance of the Soviet Union.
Post-war settlement and the bretton woods institution
Lessons from interwar eco - experiences
1.    First, an industrial society based on mass production cannot be sustained without mass consumption. But to ensure mass consumption, there was a need for high and stable incomes. Incomes could not be stable if employment was unstable. Thus stable incomes also required steady, full employment.  
But markets alone could not guarantee full employment. Therefore governments would have to step in to minimise fluctuations of price, output and employment. Economic stability could be ensured only through the intervention of the government.
2.    The second lesson related to a country’s economic links with the outside world. The goal of full employment could only be achieved if governments had power to control flows of goods, capital and Labour.
3.    Thus in brief, the main aim of the post-war international economic system was to preserve economic stability and full employment in the industrial world.
Its framework was agreed upon at the United Nations Monetaryand Financial Conference held in July 1944 at Bretton Woods in New Hampshire, USA.

Bretton Woods Institution
1.    The Bretton Woods conference established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations. The International Bank for Reconstruction and Development (popularly known as the World Bank) was set up to finance postwar reconstruction. 
2.    The IMF and the World Bank are referred to as the Bretton Woods institutions or sometimes the Bretton Woods twins.
3.    Decision-making in these institutions is controlled by the Western industrial powers. The US has an effective right of veto over key IMF and World Bank decisions.
4.    The international monetary system is the system linking national currencies and monetary system. The Bretton Woods system was based on fixed exchange rates. In this system, national currencies, for example the Indian rupee, were pegged to the dollar at a fixed exchange rate.

The early post-war years
The Bretton Woods system inaugurated an era of unprecedented growth of trade and incomes for the Western industrial nations and Japan. World trade grew annually at over 8 per cent between 1950 and 1970 and incomes at nearly 5 per cent.
The growth was also mostly stable, without large fluctuation. For much of this period the unemployment rate, for example, averaged less than 5 per cent in most industrial countries.
These decades also saw the worldwide spread of technology and enterprise. Developing countries were in a hurry to catch up with the advanced industrial countries.

Decolonisation and independence
The IMF and the World Bank were designed to meet the financial needs of the industrial countries. They were not equipped to cope with the challenge of poverty and lack of development in the former colonies. But as Europe and Japan rapidly rebuilt their economies, they grew less dependent on the IMF and the World Bank. Thus from the late 1950s the Bretton Woods institutions began to shift their attention more towards developing countries. 
Ironically, as newly independent countries facing urgent pressures to lift their populations out of poverty, they came under the guidance of international agencies dominated by the former colonial powers. Even after many years of decolonisation, the former colonial powers still, controlled vital resources such as minerals and land in many of their former colonies.
At the same time, most developing countries did not benefit from the fast growth the-Western economies experienced in the 1950s and 1960s. Therefore they organised themselves as a group - the Group of  77 (or G-77) - to demand a new international economic order (NIEO). By the NIEO they meant a system that would give them real control over their natural resources, more development assistance, fairer prices for raw materials, and better access for their manufactured goods in developed countries’ markets.

Illustration 10
    Which were the two opposite groups in II world war?
Solution
II world war was faught between Axis Powers (Germany, Japan and Italy) and Allies (Britain, France, Soviet Union and the U.S.)

Illustration 11
Which new super power blocks emerged in the world after II world war?
Solution
U.S.A. and U.S.S.R.

Illustration 12
Which institutions were called as Bretton woods Institution or Brettonwoods Twins.
Solution
    I.M.F. and World Bank.

Illustration 13
    What do you mean by NIEO?
Solution
New international economic order means a system that would give G-77 the real control over their natural resources, more developed assistance, fair prices raw materials and better access for their manufactured goods in developed country. 

The inter-war economy
Wartime transformations
On the one side were the Allies – Britain, France and Russia (later joined by the US); and on the opposite side were the Central Powers – Germany, Austria - Hungary and Ottoman Turkey.
This war was thus the first modern industrial war. It saw the use of machine guns, tanks, aircraft, chemical weapons, etc. on a massive scale. These were all increasingly products of modern large- scale industry. To fight the war, millions of soldiers had to be recruited from around the world and moved to the frontlines on large ships and trains.
1.    These deaths and injuries reduced the able-bodied workforce in Europe.
2.    With fewer numbers within the family, household incomes declined after the war. 
3.    During the war, industries were restructured to produce war-related goods. Entire societies were also reorganised for war - as men went to battle, women stepped in to undertake jobs that earlier only men were expected to do.
4.    The war led to the shapping of  economic links between some of the largest economic powers which were now fighting each other to pay for them. So Britain borrowed large sums from US banks as well as the US public.

Post-war recovery
Britain, which was the world’s leading economy in the pre-war period, in particular faced a prolonged crisis.
1. While Britain was preoccupied with war, industries had developed in India and Japan. After the war Britain found it difficult to recapture its earlier position of dominance in the Indian market, and to compete with Japan internationally. 
2. Moreover, to finance war expenditures Britain had borrowed liberally from the US. This meant that at the end of the war Britain was burdened with huge external debts.
3. The war had led to an economic boom, that is, to a large increase in demand, production and employment. When the war boom ended, production contracted and unemployment increased. At the same time the government reduced bloated war expenditures to bring them into line with peacetime revenues. These developments led to huge job losses.
4. Before the war, eastern Europe was a major supplier of wheat in the world market. When this supply was disrupted during the war, wheat production in Canada, America and Australia expanded dramatically, But once the war was over, production in eastern Europe revived and created a glut in wheat output. Grain prices fell, rural incomes declined, and farmers fell deeper into debt. 

Rise of mass production and consumption
One important feature of the US economy was that 1920s was mass production.
A well-known pioneer of mass production was the car manufacturer Henry Ford. He adapted the assembly line of a Chicago slaughterhouse to his new car plant in Detroit He realised that the ‘assembly line’ method would allow a faster and cheaper way of producing vehicles. 
1.    The assembly line forced workers to repeat a single task mechanically and continuously - such as fitting a particular part to the car - at a pace dictated by the conveyor belt. 
2.    This was a way of increasing the output per worker by speeding up the pace of work. 
3.    Standing in front of a conveyor belt no worker could afford to delay the motions, take a break, or even have a friendly word with a workmate. As a result, Henry Ford’s cars came off the assembly line at three-minute intervals, a speed much faster than that achieved by previous methods. The T-Model Ford was the world’s first mass-produced car.

At first workers at the Ford factory were unable to cope with the stress of working on assembly lines in which they could not control the pace of work. 
1.    So they quit in large numbers. In desperation Ford doubled the daily wage. 
2.    At the same time he banned trade unions from operating in his plants.
3.    Fordist industrial practices was also widely copied in Europe in the 1920s. Mass production lowered costs and prices of engineered goods. Thanks to higher wages, more workers could now afford to purchase durable consumer goods such as cars.
4.    Similarly, there was a spur in the purchase of refrigerators, washing machines, radios, gramophone players, all through a system of hire purchase’ (i.e., on credit repaid in weekly or monthly instalments).
In 1923, the US resumed exporting capital to the rest of the world and became the largest overseas lender. US imports and capital exports also boosted European recovery and world trade and income growth over the next six years.

The Great Depression
The Great Depression began around 1929 and lasted till the mid – 1930s. During this period most parts of the world experienced catastrophic declines in production, employment, incomes and trade.
Agricultural regions and communities were the worst affected. This was because the fall in agricultural prices was greater and more prolonged than that In the prices of industrial goods.

Causes of The great depression
1.    First: agricultural overproduction remained a problem. This was made worse by falling agricultural prices. As prices slumped and agricultural incomes declined, farmers tried to expand production and bring a larger volume of produce to the market to maintain their overall income. This worsened the glut in the market, pushing down prices even further. Farm produce rotted for a lack of buyers.
2.    In the mid-1920s, many countries financed their investments throughloans from the US. While it was often extremely easy to raise loans in the US when the going was good, US overseas lenders panicked at the first sign of trouble. In the first half of 1928, US.overseas loans amounted to over $ 1 billion. A year later it was one quarter of that amount. Countries that depended crucial on US loans now faced an acute crisis.

Impact of great depression
    1.    In Europe it led to the failure of some major banks and the collapse of currencies such as the British pound sterling.
    2.    In Latin America and elsewhere it intensified the slump in agricultural and raw material prices.
    3.    With the fall in prices and the prospect of a depression, US banks had also slashed domestic lending and called back loans. 
    4.    Farms could not sell their harvests, households were ruined, and businesses collapsed.
    5.    Faced with falling incomes, many households in the US could not repay what they had borrowed, and were forced to give up their homes, cars and other consumer durables. 
    6.    The consumerist prosperity of the 1920s now disappeared in a puff of dust. 
    7.    As unemployment soared, people moved long distances looking for any work they could find. Ultimately, the US banking system itself collapsed. 
    8.    Unable to recover investments, collect loans and repay depositors, thousands of banks went bankrupt and were forced to closer.

India and the Great Depression
Impact
The depression immediately affected Indian trade. 
1.    India’s exports imports nearly halved between 1928 and 1934. As international prices crashed, prices in India also plunged. Between 1928 and 1934. As international prices, the prices in India fell by 50 per cent.
2.    Peasants and farmers suffered more than urban dwellers. Though agricultural prices fell sharply, the colonial government refused to reduce revenue demands. Peasants producing for the world market were the worst hit. 
3.    The jute producers of Bengal grew raw jute that was processed in factories for export in the form of gunny bags. But as gunny exports collapsed, the price of raw jute crashed more than 60 per cent. Peasants who borrowed in the hope of better times or to increase output in the hope of higher incomes faced even lower prices, and fell deeper and deeper into debt.
4.    Peasants’ indebtedness increased. They used up their savings, mortgaged lands, and sold whatever jewellery and precious metals they had to meet their expenses.
5.    Because of falling prices, those with fixed incomes - say town-dwelling landowners who received rents and middle-class salaried employees - now found themselves better off. Eventhing cost less.
6.    Industrial investment also grew as the government extended tarrif protection to industries, under the pressure of nationalist opinion.

Rebuilding a world economy: The post-war era
The Second World War broke out a mere two decades after the end of the First World War. It was fought between the Axis powers (mainly Nazi Germany, Japan and Italy) and the Allies (Britain, France, the Soviet Union and the US.
1.    Once again death and destruction was enormous. At least 60 million people, or about 3 per cent of the world’s 1939 population, are believed to have been killed.
2.    Many more civilians than soldiers died from war-related “Casualties Vast parts of Europe and Asia were devastated, and several cities were destroyed by aerial bombardment or relentless artillery attacks. 
3.    The war caused an immense amount of economic devastation and social disruption. Reconstruction promised to be long and difficult.

Two crucial influences shaped post-war reconstruction. 
1.    The first was the US’s emergence as the dominant economic, political and military power in the Western world.
2.    The second was the dominance of the Soviet Union.
Post-war settlement and the bretton woods institution
Lessons from interwar eco - experiences
1.    First, an industrial society based on mass production cannot be sustained without mass consumption. But to ensure mass consumption, there was a need for high and stable incomes. Incomes could not be stable if employment was unstable. Thus stable incomes also required steady, full employment.  
But markets alone could not guarantee full employment. Therefore governments would have to step in to minimise fluctuations of price, output and employment. Economic stability could be ensured only through the intervention of the government.
2.    The second lesson related to a country’s economic links with the outside world. The goal of full employment could only be achieved if governments had power to control flows of goods, capital and Labour.
3.    Thus in brief, the main aim of the post-war international economic system was to preserve economic stability and full employment in the industrial world.
Its framework was agreed upon at the United Nations Monetaryand Financial Conference held in July 1944 at Bretton Woods in New Hampshire, USA.

Bretton Woods Institution
1.    The Bretton Woods conference established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations. The International Bank for Reconstruction and Development (popularly known as the World Bank) was set up to finance postwar reconstruction. 
2.    The IMF and the World Bank are referred to as the Bretton Woods institutions or sometimes the Bretton Woods twins.
3.    Decision-making in these institutions is controlled by the Western industrial powers. The US has an effective right of veto over key IMF and World Bank decisions.
4.    The international monetary system is the system linking national currencies and monetary system. The Bretton Woods system was based on fixed exchange rates. In this system, national currencies, for example the Indian rupee, were pegged to the dollar at a fixed exchange rate.

The early post-war years
The Bretton Woods system inaugurated an era of unprecedented growth of trade and incomes for the Western industrial nations and Japan. World trade grew annually at over 8 per cent between 1950 and 1970 and incomes at nearly 5 per cent.
The growth was also mostly stable, without large fluctuation. For much of this period the unemployment rate, for example, averaged less than 5 per cent in most industrial countries.
These decades also saw the worldwide spread of technology and enterprise. Developing countries were in a hurry to catch up with the advanced industrial countries.

Decolonisation and independence
The IMF and the World Bank were designed to meet the financial needs of the industrial countries. They were not equipped to cope with the challenge of poverty and lack of development in the former colonies. But as Europe and Japan rapidly rebuilt their economies, they grew less dependent on the IMF and the World Bank. Thus from the late 1950s the Bretton Woods institutions began to shift their attention more towards developing countries. 
Ironically, as newly independent countries facing urgent pressures to lift their populations out of poverty, they came under the guidance of international agencies dominated by the former colonial powers. Even after many years of decolonisation, the former colonial powers still, controlled vital resources such as minerals and land in many of their former colonies.
At the same time, most developing countries did not benefit from the fast growth the-Western economies experienced in the 1950s and 1960s. Therefore they organised themselves as a group - the Group of  77 (or G-77) - to demand a new international economic order (NIEO). By the NIEO they meant a system that would give them real control over their natural resources, more development assistance, fairer prices for raw materials, and better access for their manufactured goods in developed countries’ markets.

Illustration 10
    Which were the two opposite groups in II world war?
Solution
II world war was faught between Axis Powers (Germany, Japan and Italy) and Allies (Britain, France, Soviet Union and the U.S.)

Illustration 11
Which new super power blocks emerged in the world after II world war?
Solution
U.S.A. and U.S.S.R.

Illustration 12
Which institutions were called as Bretton woods Institution or Brettonwoods Twins.
Solution
    I.M.F. and World Bank.

Illustration 13
    What do you mean by NIEO?
Solution
New international economic order means a system that would give G-77 the real control over their natural resources, more developed assistance, fair prices raw materials and better access for their manufactured goods in developed country. 

The inter-war economy
Wartime transformations
On the one side were the Allies – Britain, France and Russia (later joined by the US); and on the opposite side were the Central Powers – Germany, Austria - Hungary and Ottoman Turkey.
This war was thus the first modern industrial war. It saw the use of machine guns, tanks, aircraft, chemical weapons, etc. on a massive scale. These were all increasingly products of modern large- scale industry. To fight the war, millions of soldiers had to be recruited from around the world and moved to the frontlines on large ships and trains.
1.    These deaths and injuries reduced the able-bodied workforce in Europe.
2.    With fewer numbers within the family, household incomes declined after the war. 
3.    During the war, industries were restructured to produce war-related goods. Entire societies were also reorganised for war - as men went to battle, women stepped in to undertake jobs that earlier only men were expected to do.
4.    The war led to the shapping of  economic links between some of the largest economic powers which were now fighting each other to pay for them. So Britain borrowed large sums from US banks as well as the US public.

Post-war recovery
Britain, which was the world’s leading economy in the pre-war period, in particular faced a prolonged crisis.
1. While Britain was preoccupied with war, industries had developed in India and Japan. After the war Britain found it difficult to recapture its earlier position of dominance in the Indian market, and to compete with Japan internationally. 
2. Moreover, to finance war expenditures Britain had borrowed liberally from the US. This meant that at the end of the war Britain was burdened with huge external debts.
3. The war had led to an economic boom, that is, to a large increase in demand, production and employment. When the war boom ended, production contracted and unemployment increased. At the same time the government reduced bloated war expenditures to bring them into line with peacetime revenues. These developments led to huge job losses.
4. Before the war, eastern Europe was a major supplier of wheat in the world market. When this supply was disrupted during the war, wheat production in Canada, America and Australia expanded dramatically, But once the war was over, production in eastern Europe revived and created a glut in wheat output. Grain prices fell, rural incomes declined, and farmers fell deeper into debt. 

Rise of mass production and consumption
One important feature of the US economy was that 1920s was mass production.
A well-known pioneer of mass production was the car manufacturer Henry Ford. He adapted the assembly line of a Chicago slaughterhouse to his new car plant in Detroit He realised that the ‘assembly line’ method would allow a faster and cheaper way of producing vehicles. 
1.    The assembly line forced workers to repeat a single task mechanically and continuously - such as fitting a particular part to the car - at a pace dictated by the conveyor belt. 
2.    This was a way of increasing the output per worker by speeding up the pace of work. 
3.    Standing in front of a conveyor belt no worker could afford to delay the motions, take a break, or even have a friendly word with a workmate. As a result, Henry Ford’s cars came off the assembly line at three-minute intervals, a speed much faster than that achieved by previous methods. The T-Model Ford was the world’s first mass-produced car.

At first workers at the Ford factory were unable to cope with the stress of working on assembly lines in which they could not control the pace of work. 
1.    So they quit in large numbers. In desperation Ford doubled the daily wage. 
2.    At the same time he banned trade unions from operating in his plants.
3.    Fordist industrial practices was also widely copied in Europe in the 1920s. Mass production lowered costs and prices of engineered goods. Thanks to higher wages, more workers could now afford to purchase durable consumer goods such as cars.
4.    Similarly, there was a spur in the purchase of refrigerators, washing machines, radios, gramophone players, all through a system of hire purchase’ (i.e., on credit repaid in weekly or monthly instalments).
In 1923, the US resumed exporting capital to the rest of the world and became the largest overseas lender. US imports and capital exports also boosted European recovery and world trade and income growth over the next six years.

The Great Depression
The Great Depression began around 1929 and lasted till the mid – 1930s. During this period most parts of the world experienced catastrophic declines in production, employment, incomes and trade.
Agricultural regions and communities were the worst affected. This was because the fall in agricultural prices was greater and more prolonged than that In the prices of industrial goods.

Causes of The great depression
1.    First: agricultural overproduction remained a problem. This was made worse by falling agricultural prices. As prices slumped and agricultural incomes declined, farmers tried to expand production and bring a larger volume of produce to the market to maintain their overall income. This worsened the glut in the market, pushing down prices even further. Farm produce rotted for a lack of buyers.
2.    In the mid-1920s, many countries financed their investments throughloans from the US. While it was often extremely easy to raise loans in the US when the going was good, US overseas lenders panicked at the first sign of trouble. In the first half of 1928, US.overseas loans amounted to over $ 1 billion. A year later it was one quarter of that amount. Countries that depended crucial on US loans now faced an acute crisis.

Impact of great depression
    1.    In Europe it led to the failure of some major banks and the collapse of currencies such as the British pound sterling.
    2.    In Latin America and elsewhere it intensified the slump in agricultural and raw material prices.
    3.    With the fall in prices and the prospect of a depression, US banks had also slashed domestic lending and called back loans. 
    4.    Farms could not sell their harvests, households were ruined, and businesses collapsed.
    5.    Faced with falling incomes, many households in the US could not repay what they had borrowed, and were forced to give up their homes, cars and other consumer durables. 
    6.    The consumerist prosperity of the 1920s now disappeared in a puff of dust. 
    7.    As unemployment soared, people moved long distances looking for any work they could find. Ultimately, the US banking system itself collapsed. 
    8.    Unable to recover investments, collect loans and repay depositors, thousands of banks went bankrupt and were forced to closer.

India and the Great Depression
Impact
The depression immediately affected Indian trade. 
1.    India’s exports imports nearly halved between 1928 and 1934. As international prices crashed, prices in India also plunged. Between 1928 and 1934. As international prices, the prices in India fell by 50 per cent.
2.    Peasants and farmers suffered more than urban dwellers. Though agricultural prices fell sharply, the colonial government refused to reduce revenue demands. Peasants producing for the world market were the worst hit. 
3.    The jute producers of Bengal grew raw jute that was processed in factories for export in the form of gunny bags. But as gunny exports collapsed, the price of raw jute crashed more than 60 per cent. Peasants who borrowed in the hope of better times or to increase output in the hope of higher incomes faced even lower prices, and fell deeper and deeper into debt.
4.    Peasants’ indebtedness increased. They used up their savings, mortgaged lands, and sold whatever jewellery and precious metals they had to meet their expenses.
5.    Because of falling prices, those with fixed incomes - say town-dwelling landowners who received rents and middle-class salaried employees - now found themselves better off. Eventhing cost less.
6.    Industrial investment also grew as the government extended tarrif protection to industries, under the pressure of nationalist opinion.

Rebuilding a world economy: The post-war era
The Second World War broke out a mere two decades after the end of the First World War. It was fought between the Axis powers (mainly Nazi Germany, Japan and Italy) and the Allies (Britain, France, the Soviet Union and the US.
1.    Once again death and destruction was enormous. At least 60 million people, or about 3 per cent of the world’s 1939 population, are believed to have been killed.
2.    Many more civilians than soldiers died from war-related “Casualties Vast parts of Europe and Asia were devastated, and several cities were destroyed by aerial bombardment or relentless artillery attacks. 
3.    The war caused an immense amount of economic devastation and social disruption. Reconstruction promised to be long and difficult.

Two crucial influences shaped post-war reconstruction. 
1.    The first was the US’s emergence as the dominant economic, political and military power in the Western world.
2.    The second was the dominance of the Soviet Union.
Post-war settlement and the bretton woods institution
Lessons from interwar eco - experiences
1.    First, an industrial society based on mass production cannot be sustained without mass consumption. But to ensure mass consumption, there was a need for high and stable incomes. Incomes could not be stable if employment was unstable. Thus stable incomes also required steady, full employment.  
But markets alone could not guarantee full employment. Therefore governments would have to step in to minimise fluctuations of price, output and employment. Economic stability could be ensured only through the intervention of the government.
2.    The second lesson related to a country’s economic links with the outside world. The goal of full employment could only be achieved if governments had power to control flows of goods, capital and Labour.
3.    Thus in brief, the main aim of the post-war international economic system was to preserve economic stability and full employment in the industrial world.
Its framework was agreed upon at the United Nations Monetaryand Financial Conference held in July 1944 at Bretton Woods in New Hampshire, USA.

Bretton Woods Institution
1.    The Bretton Woods conference established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations. The International Bank for Reconstruction and Development (popularly known as the World Bank) was set up to finance postwar reconstruction. 
2.    The IMF and the World Bank are referred to as the Bretton Woods institutions or sometimes the Bretton Woods twins.
3.    Decision-making in these institutions is controlled by the Western industrial powers. The US has an effective right of veto over key IMF and World Bank decisions.
4.    The international monetary system is the system linking national currencies and monetary system. The Bretton Woods system was based on fixed exchange rates. In this system, national currencies, for example the Indian rupee, were pegged to the dollar at a fixed exchange rate.

The early post-war years
The Bretton Woods system inaugurated an era of unprecedented growth of trade and incomes for the Western industrial nations and Japan. World trade grew annually at over 8 per cent between 1950 and 1970 and incomes at nearly 5 per cent.
The growth was also mostly stable, without large fluctuation. For much of this period the unemployment rate, for example, averaged less than 5 per cent in most industrial countries.
These decades also saw the worldwide spread of technology and enterprise. Developing countries were in a hurry to catch up with the advanced industrial countries.

Decolonisation and independence
The IMF and the World Bank were designed to meet the financial needs of the industrial countries. They were not equipped to cope with the challenge of poverty and lack of development in the former colonies. But as Europe and Japan rapidly rebuilt their economies, they grew less dependent on the IMF and the World Bank. Thus from the late 1950s the Bretton Woods institutions began to shift their attention more towards developing countries. 
Ironically, as newly independent countries facing urgent pressures to lift their populations out of poverty, they came under the guidance of international agencies dominated by the former colonial powers. Even after many years of decolonisation, the former colonial powers still, controlled vital resources such as minerals and land in many of their former colonies.
At the same time, most developing countries did not benefit from the fast growth the-Western economies experienced in the 1950s and 1960s. Therefore they organised themselves as a group - the Group of  77 (or G-77) - to demand a new international economic order (NIEO). By the NIEO they meant a system that would give them real control over their natural resources, more development assistance, fairer prices for raw materials, and better access for their manufactured goods in developed countries’ markets.

Illustration 10
    Which were the two opposite groups in II world war?
Solution
II world war was faught between Axis Powers (Germany, Japan and Italy) and Allies (Britain, France, Soviet Union and the U.S.)

Illustration 11
Which new super power blocks emerged in the world after II world war?
Solution
U.S.A. and U.S.S.R.

Illustration 12
Which institutions were called as Bretton woods Institution or Brettonwoods Twins.
Solution
    I.M.F. and World Bank.

Illustration 13
    What do you mean by NIEO?
Solution
New international economic order means a system that would give G-77 the real control over their natural resources, more developed assistance, fair prices raw materials and better access for their manufactured goods in developed country. 

The inter-war economy
Wartime transformations
On the one side were the Allies – Britain, France and Russia (later joined by the US); and on the opposite side were the Central Powers – Germany, Austria - Hungary and Ottoman Turkey.
This war was thus the first modern industrial war. It saw the use of machine guns, tanks, aircraft, chemical weapons, etc. on a massive scale. These were all increasingly products of modern large- scale industry. To fight the war, millions of soldiers had to be recruited from around the world and moved to the frontlines on large ships and trains.
1.    These deaths and injuries reduced the able-bodied workforce in Europe.
2.    With fewer numbers within the family, household incomes declined after the war. 
3.    During the war, industries were restructured to produce war-related goods. Entire societies were also reorganised for war - as men went to battle, women stepped in to undertake jobs that earlier only men were expected to do.
4.    The war led to the shapping of  economic links between some of the largest economic powers which were now fighting each other to pay for them. So Britain borrowed large sums from US banks as well as the US public.

Post-war recovery
Britain, which was the world’s leading economy in the pre-war period, in particular faced a prolonged crisis.
1. While Britain was preoccupied with war, industries had developed in India and Japan. After the war Britain found it difficult to recapture its earlier position of dominance in the Indian market, and to compete with Japan internationally. 
2. Moreover, to finance war expenditures Britain had borrowed liberally from the US. This meant that at the end of the war Britain was burdened with huge external debts.
3. The war had led to an economic boom, that is, to a large increase in demand, production and employment. When the war boom ended, production contracted and unemployment increased. At the same time the government reduced bloated war expenditures to bring them into line with peacetime revenues. These developments led to huge job losses.
4. Before the war, eastern Europe was a major supplier of wheat in the world market. When this supply was disrupted during the war, wheat production in Canada, America and Australia expanded dramatically, But once the war was over, production in eastern Europe revived and created a glut in wheat output. Grain prices fell, rural incomes declined, and farmers fell deeper into debt. 

Rise of mass production and consumption
One important feature of the US economy was that 1920s was mass production.
A well-known pioneer of mass production was the car manufacturer Henry Ford. He adapted the assembly line of a Chicago slaughterhouse to his new car plant in Detroit He realised that the ‘assembly line’ method would allow a faster and cheaper way of producing vehicles. 
1.    The assembly line forced workers to repeat a single task mechanically and continuously - such as fitting a particular part to the car - at a pace dictated by the conveyor belt. 
2.    This was a way of increasing the output per worker by speeding up the pace of work. 
3.    Standing in front of a conveyor belt no worker could afford to delay the motions, take a break, or even have a friendly word with a workmate. As a result, Henry Ford’s cars came off the assembly line at three-minute intervals, a speed much faster than that achieved by previous methods. The T-Model Ford was the world’s first mass-produced car.

At first workers at the Ford factory were unable to cope with the stress of working on assembly lines in which they could not control the pace of work. 
1.    So they quit in large numbers. In desperation Ford doubled the daily wage. 
2.    At the same time he banned trade unions from operating in his plants.
3.    Fordist industrial practices was also widely copied in Europe in the 1920s. Mass production lowered costs and prices of engineered goods. Thanks to higher wages, more workers could now afford to purchase durable consumer goods such as cars.
4.    Similarly, there was a spur in the purchase of refrigerators, washing machines, radios, gramophone players, all through a system of hire purchase’ (i.e., on credit repaid in weekly or monthly instalments).
In 1923, the US resumed exporting capital to the rest of the world and became the largest overseas lender. US imports and capital exports also boosted European recovery and world trade and income growth over the next six years.

The Great Depression
The Great Depression began around 1929 and lasted till the mid – 1930s. During this period most parts of the world experienced catastrophic declines in production, employment, incomes and trade.
Agricultural regions and communities were the worst affected. This was because the fall in agricultural prices was greater and more prolonged than that In the prices of industrial goods.

Causes of The great depression
1.    First: agricultural overproduction remained a problem. This was made worse by falling agricultural prices. As prices slumped and agricultural incomes declined, farmers tried to expand production and bring a larger volume of produce to the market to maintain their overall income. This worsened the glut in the market, pushing down prices even further. Farm produce rotted for a lack of buyers.
2.    In the mid-1920s, many countries financed their investments throughloans from the US. While it was often extremely easy to raise loans in the US when the going was good, US overseas lenders panicked at the first sign of trouble. In the first half of 1928, US.overseas loans amounted to over $ 1 billion. A year later it was one quarter of that amount. Countries that depended crucial on US loans now faced an acute crisis.

Impact of great depression
    1.    In Europe it led to the failure of some major banks and the collapse of currencies such as the British pound sterling.
    2.    In Latin America and elsewhere it intensified the slump in agricultural and raw material prices.
    3.    With the fall in prices and the prospect of a depression, US banks had also slashed domestic lending and called back loans. 
    4.    Farms could not sell their harvests, households were ruined, and businesses collapsed.
    5.    Faced with falling incomes, many households in the US could not repay what they had borrowed, and were forced to give up their homes, cars and other consumer durables. 
    6.    The consumerist prosperity of the 1920s now disappeared in a puff of dust. 
    7.    As unemployment soared, people moved long distances looking for any work they could find. Ultimately, the US banking system itself collapsed. 
    8.    Unable to recover investments, collect loans and repay depositors, thousands of banks went bankrupt and were forced to closer.

India and the Great Depression
Impact
The depression immediately affected Indian trade. 
1.    India’s exports imports nearly halved between 1928 and 1934. As international prices crashed, prices in India also plunged. Between 1928 and 1934. As international prices, the prices in India fell by 50 per cent.
2.    Peasants and farmers suffered more than urban dwellers. Though agricultural prices fell sharply, the colonial government refused to reduce revenue demands. Peasants producing for the world market were the worst hit. 
3.    The jute producers of Bengal grew raw jute that was processed in factories for export in the form of gunny bags. But as gunny exports collapsed, the price of raw jute crashed more than 60 per cent. Peasants who borrowed in the hope of better times or to increase output in the hope of higher incomes faced even lower prices, and fell deeper and deeper into debt.
4.    Peasants’ indebtedness increased. They used up their savings, mortgaged lands, and sold whatever jewellery and precious metals they had to meet their expenses.
5.    Because of falling prices, those with fixed incomes - say town-dwelling landowners who received rents and middle-class salaried employees - now found themselves better off. Eventhing cost less.
6.    Industrial investment also grew as the government extended tarrif protection to industries, under the pressure of nationalist opinion.

Rebuilding a world economy: The post-war era
The Second World War broke out a mere two decades after the end of the First World War. It was fought between the Axis powers (mainly Nazi Germany, Japan and Italy) and the Allies (Britain, France, the Soviet Union and the US.
1.    Once again death and destruction was enormous. At least 60 million people, or about 3 per cent of the world’s 1939 population, are believed to have been killed.
2.    Many more civilians than soldiers died from war-related “Casualties Vast parts of Europe and Asia were devastated, and several cities were destroyed by aerial bombardment or relentless artillery attacks. 
3.    The war caused an immense amount of economic devastation and social disruption. Reconstruction promised to be long and difficult.

Two crucial influences shaped post-war reconstruction. 
1.    The first was the US’s emergence as the dominant economic, political and military power in the Western world.
2.    The second was the dominance of the Soviet Union.
Post-war settlement and the bretton woods institution
Lessons from interwar eco - experiences
1.    First, an industrial society based on mass production cannot be sustained without mass consumption. But to ensure mass consumption, there was a need for high and stable incomes. Incomes could not be stable if employment was unstable. Thus stable incomes also required steady, full employment.  
But markets alone could not guarantee full employment. Therefore governments would have to step in to minimise fluctuations of price, output and employment. Economic stability could be ensured only through the intervention of the government.
2.    The second lesson related to a country’s economic links with the outside world. The goal of full employment could only be achieved if governments had power to control flows of goods, capital and Labour.
3.    Thus in brief, the main aim of the post-war international economic system was to preserve economic stability and full employment in the industrial world.
Its framework was agreed upon at the United Nations Monetaryand Financial Conference held in July 1944 at Bretton Woods in New Hampshire, USA.

Bretton Woods Institution
1.    The Bretton Woods conference established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations. The International Bank for Reconstruction and Development (popularly known as the World Bank) was set up to finance postwar reconstruction. 
2.    The IMF and the World Bank are referred to as the Bretton Woods institutions or sometimes the Bretton Woods twins.
3.    Decision-making in these institutions is controlled by the Western industrial powers. The US has an effective right of veto over key IMF and World Bank decisions.
4.    The international monetary system is the system linking national currencies and monetary system. The Bretton Woods system was based on fixed exchange rates. In this system, national currencies, for example the Indian rupee, were pegged to the dollar at a fixed exchange rate.

The early post-war years
The Bretton Woods system inaugurated an era of unprecedented growth of trade and incomes for the Western industrial nations and Japan. World trade grew annually at over 8 per cent between 1950 and 1970 and incomes at nearly 5 per cent.
The growth was also mostly stable, without large fluctuation. For much of this period the unemployment rate, for example, averaged less than 5 per cent in most industrial countries.
These decades also saw the worldwide spread of technology and enterprise. Developing countries were in a hurry to catch up with the advanced industrial countries.

Decolonisation and independence
The IMF and the World Bank were designed to meet the financial needs of the industrial countries. They were not equipped to cope with the challenge of poverty and lack of development in the former colonies. But as Europe and Japan rapidly rebuilt their economies, they grew less dependent on the IMF and the World Bank. Thus from the late 1950s the Bretton Woods institutions began to shift their attention more towards developing countries. 
Ironically, as newly independent countries facing urgent pressures to lift their populations out of poverty, they came under the guidance of international agencies dominated by the former colonial powers. Even after many years of decolonisation, the former colonial powers still, controlled vital resources such as minerals and land in many of their former colonies.
At the same time, most developing countries did not benefit from the fast growth the-Western economies experienced in the 1950s and 1960s. Therefore they organised themselves as a group - the Group of  77 (or G-77) - to demand a new international economic order (NIEO). By the NIEO they meant a system that would give them real control over their natural resources, more development assistance, fairer prices for raw materials, and better access for their manufactured goods in developed countries’ markets.

Illustration 10
    Which were the two opposite groups in II world war?
Solution
II world war was faught between Axis Powers (Germany, Japan and Italy) and Allies (Britain, France, Soviet Union and the U.S.)

Illustration 11
Which new super power blocks emerged in the world after II world war?
Solution
U.S.A. and U.S.S.R.

Illustration 12
Which institutions were called as Bretton woods Institution or Brettonwoods Twins.
Solution
    I.M.F. and World Bank.

Illustration 13
    What do you mean by NIEO?
Solution
New international economic order means a system that would give G-77 the real control over their natural resources, more developed assistance, fair prices raw materials and better access for their manufactured goods in developed country.