The Making of a Global World

1. Asia (The Silk Routes):
The most famous example of pre-modern global exchange is the Silk Route. It linked the vast regions of Asia with Europe and northern Africa.

• Exports: Chinese silk and pottery, and spices from India and Southeast Asia travelled to Europe.
• Imports: In return, gold and silver flowed from Europe to Asia.

2. The Americas (Food):
Before the discovery of the Americas, the world did not know about foods like potatoes, maize, tomatoes, chillies, and groundnuts.

• Impact: After Christopher Columbus discovered the Americas, these crops were introduced to Europe and Asia. The humble potato became so vital in Europe that when the crop failed in Ireland in the mid-1840s, hundreds of thousands died of starvation (The Irish Potato Famine).

The European conquest of the Americas was not just a result of superior firepower but also of biological warfare.

• Isolation: Because of their long isolation, America’s original inhabitants had no immunity against diseases that came from Europe.
• Smallpox: Smallpox proved to be a deadly killer. Once introduced, it spread deep into the continent, ahead of the actual Europeans, killing and decimating whole communities.
• Conquest: Guns could be bought or captured, but diseases could not be fought. This paved the way for conquest as the invaders (Europeans) were mostly immune.

(a) Abolition of Corn Laws: The laws restricting corn imports were scrapped.

• Cheaper Food: Food could be imported into Britain more cheaply than it could be produced.
• Impact on Farmers: British agriculture could not compete with imports. Vast lands were left uncultivated, and thousands of men and women lost their jobs.
• Migration: They flocked to cities or migrated overseas.

(b) Rinderpest in Africa (1890s): A fast-spreading cattle plague.

• Loss of Livelihood: It killed 90% of the cattle. Africans relied heavily on cattle for their livelihood and social status.
• Forced Labour: The loss of cattle destroyed the African livelihood system, forcing them into the labour market to work for European colonizers in mines and plantations.
• Colonization: It allowed Europeans to colonize and subdue Africa easily.

(c) Death of Working Age Men (WWI):

• Workforce Reduction: The war killed 9 million and injured 20 million, mostly men of working age. This reduced the able-bodied workforce in Europe.
• Women in Workforce: With men at the front, women stepped in to undertake jobs that earlier only men were expected to do.
• Income Decline: Household incomes declined after the war due to the loss of breadwinners.

(d) Great Depression on India:

• Trade Crash: India’s exports and imports nearly halved between 1928 and 1934.
• Peasant Suffering: Wheat prices fell by 50%. Peasants suffered more than urban dwellers because the colonial government refused to reduce revenue demands.
• Gold Drain: Distressed peasants sold their jewelry and precious metals. India became an exporter of gold, which helped global economic recovery but drained India’s wealth.

(e) MNCs relocating to Asia:

• Cheap Labour: From the late 1970s, MNCs shifted production to low-wage Asian countries like China.
• Economic Growth: This stimulated world trade and capital flows. It created huge employment opportunities in developing countries and made consumer goods cheaper globally.

Technology had a profound impact on the availability and affordability of food in the 19th century:

• 1. Faster Railways & Larger Ships: These allowed food to be moved more quickly and cheaply from faraway farms to final markets. This lowered the cost of grain in Europe.
• 2. Refrigerated Ships: Before refrigeration, animals were shipped live from America to Europe, which was expensive and risky (many died or lost weight).
  Impact: Refrigeration allowed animals to be slaughtered at the starting point (America/Australia) and transported as frozen meat. This reduced shipping costs and lowered meat prices in Europe, allowing the poor to consume a more varied diet (meat/butter/eggs).

The Bretton Woods Agreement was signed in July 1944 at Mount Washington Hotel in Bretton Woods, USA. Its main aim was to preserve economic stability and full employment in the industrial world.

• Institutions: It established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations, and the World Bank (IBRD) to finance post-war reconstruction.
• Fixed Exchange Rates: The system was based on fixed exchange rates. National currencies (like the Rupee) were pegged to the US Dollar at a fixed rate. The Dollar was anchored to Gold ($35 per ounce).

“Dearest Family,

Life here in Trinidad is nothing like what the agent promised. He told me I would have an easy life, but the reality is harsh. I work from dawn to dusk in the sugar plantations under the scorching sun. The plantation owners are cruel; if we work slowly or try to run away, we are punished severely. Legally, I am bound here for five years, and I cannot return home.”

“However, not everything is dark. I have met people from many different parts of India here. We have created our own world. We celebrate ‘Hosay’ (Muharram) as a carnival where all of us—Hindus and Muslims—join in. We also listen to ‘Chutney music’, which reminds me of our folk songs but with a new beat. This new culture is our only comfort in this strange land. I miss you all.”

Economists identify three types of movement or ‘flows’:

The Great Depression (1929) was caused by a combination of factors:

G-77: It is a group of developing countries (organized in the 1960s) that demanded a New International Economic Order (NIEO). They wanted real control over their natural resources, fairer prices for raw materials, and better access for their manufactured goods in developed markets.

Reaction to Bretton Woods:
The Bretton Woods twins (IMF and World Bank) were dominated by the Western industrial powers (USA and Europe). They were designed to meet the financial needs of industrial countries, not the developing ones (former colonies).
Therefore, G-77 was a reaction to this dominance, aiming to gain a voice in the international financial system and address the poverty and lack of development in their own nations.