NCERT Class 10 History Chapter 4: The Making of a Global World YouTube Lecture Handouts

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  • History of trade, migration, work & capital movement

  • Travelers, traders and priests carried goods, money, value, skills, idea and innovation along with diseases (spread from 7th century)

  • 3000 BCE – active trade linked Indus valley with West Asia. Cowries (seashells as currency) from Maldives to China and East Africa

Silk Route

  • West bound Chinese silk cargo – knitting regions of Asia, linking to Europe and North Africa

  • Chinese pottery travelled same route as textiles and species from India & SE Asia

  • In return – gold and silver flowed from Europe to Asia

  • Christion missionaries travelled this route to Asia & Buddhism also spread from here to several directions

Image of Silk Route

Image of Silk Route

Image of Silk Route

Food

  • Noodles travelled from west to China & became spaghetti

  • Arab traders took pasta to 5th century Sicily

  • Foods like potatoes, soya, groundnuts, maize, tomatoes, chilies, sweet potatoes were not known to our ancestors five centuries ago – introduced after Columbus accidently discovered Americas (many common food came from America)

  • Ireland’s poorest peasants, dependent on potatoes that with famine of mid-1840s many died of starvation (10 lakh people died)

Conquest, Disease and Trade

  • Pre-modern world shrank in 16th century after European sailors found sea route to Asia & reached America (before this America was cut off from rest of the world)

  • India subcontinent was central to flow and crucial point in networks

  • Silver from Peru & Mexico enhanced Europe’s wealth

  • 17th century Europe – South America’s wealth – search to El Dorado (fabled city of gold)

  • Portuguese and Spanish conquest and colonization of America – under by mid-16th century – conquest not by firepower but by germs of smallpox (due to long isolation, America’s inhabitants had no immunity against European germs) & it proved to be a deadly killer. Once introduced it spread into continent even before Europeans reached and paved way for conquest

  • In Europe - Poverty and hunger was common, crowded cities and widespread diseases with religious conflicts and dissenters (those who refuse to accept) & many fled to America. Plantations worked by slaves captured in Africa were growing cotton & sugar for European markets

  • Till 18th century – China and India were world’s richest countries & were preeminent in Asian trade

  • From 15th century – China restricted overseas contacts and retreated into isolation. China’s reduced role and rising importance of America moved center of world trade westwards & Europe became center of world trade

19th Century (1815-1914)

  • 3 trade – flow of trade, labor and movement of capital for short term and long term investments – affected people more deeply (labor migration was restricted than goods and capital flows)

  • Traditionally self-sufficiency in food was liked but in 19th century – for Britain it meant lower living standards and social conflicts

  • Population increased – led to increase in demand and rise in food prices, restriction on import of corn by government (Corn Laws). Industrialists forced abolition of Corn Laws as they were unhappy with high food prices

  • Now, food import became cheaper that local manufacturing – leading to vast uncultivated land and men and women out of work. They flocked to cities and migrated overseas

  • As food prices declined, consumption rose. After mid 19th century – faster industrial growth with higher incomes and more food imports. In Eastern Europe, Russia, America and Australia – lands were cleared and food production expanded to meet British demand

  • Railways required to link agriculture to ports, built new harbors, expand old ones, build homes and settlement that required capital (from financial centers like London) and labor (migration – 50 million people emigrated from Europe to America & Australia in 19th century)

  • Food started to come from long distances, not grown by peasants tilling the own land but from workers who came to farm from a forest. Role of transportation increased

  • In West Punjab – irrigation canals were built to transform semiarid areas into fertile belt that could grow wheat and cotton for export. Canal colonies (area irrigated by new canals) – settled by peasants from other parts of Punjab

  • This happened also for cotton in British textile mills or rubber

  • Between 1820 and 1914 world trade is estimated to have multiplied 25 to 40 times. Nearly 60% of this trade comprised ‘primary products’ – agricultural products such as wheat and cotton, and minerals such as coal.

Role of Technology

  • Inventions – railways, steamships and telegraph – new investment & improved transport (fast railways, lighter wagons and larger ships)

  • Trade in meat – till 1870s animals were shipped live from America to Europe & then slaughtered – took lot of space, many lost weight, ill health and died or became unfit to eat & hence was expensive luxury. Refrigerated ships enabled transport of perishable foods over long distances (now animals were slaughtered at the starting point in America, Australia or New Zealand and then transported as frozen meat) – it reduced shipping cost and meat prices in Europe & people (even poor) could add meat along with bread and potatoes

  • Cattle were traded at fairs, brought by farmers for sale. One of the oldest livestock markets in London was at Smithfield.

Late 19th Century – Colonialism

  • Trade flourished and market expanded – it meant loss of freedom and livelihoods.

  • European conquests produced many painful economic, social and ecological changes

  • In 1885 - big European powers met in Berlin to complete the carving up of Africa between them (mainly Britain and France); new colonial powers were Belgium and Germany. US became colonial power in 1890s by taking colonies earlier held by Spain

  • Stanley (journalist and explorer sent by New York Herald to found missionary Livingston) went with arms, mobilized local hunters, warriors and laborers to help him, fought with local tribes, investigated African terrains, and mapped different regions

Map of colonial Africa at the end of the nineteenth century

Map of Colonial Africa at the End of the Nineteenth Century

Map of colonial Africa at the end of the nineteenth century

Rinderpest (Cattle Plague)

  • In 1890s – rinderpest affected people – is example of European imperial impact on colonized societies

  • Historically, Africa had abundant land & small population and people worked for wage. If African had land and livestock – there was no reason to work for wages

  • Late 19th century – Europeans were attracted to Africa due to vast land and mineral resources with hope to establish plantation and mines to produce crops (but there was shortage of labor willing to work for wages)

  • Employers tried many methods like heavy taxes that could only be paid by working for wages on plantation; changes in inheritance law so that only 1 member could inherit land and push others into labor market; confine mineworkers to compounds and not allow them to move freely

  • Rinderpest in 1880s – from infected cattle imported from British Asia to feed Italian soldiers invading Eriteria in East Africa. It moved like forest fire and reached Africa’s Atlantic coast in 1892 & Cape 5 years later and killed 90% cattle

  • Planters, mine owners and colonial governments now successfully monopolized what scarce cattle resources remained, to strengthen their power and to force Africans into the labor market

Indentured Labor Migration from India

  • Indentured labor (bonded laborer under contract to work for an employer for a specific amount of time, to pay off his passage to a new country or home)

  • Faster economic growth with great misery – mixed with higher income and poverty and technological advances

  • 19th century – Indian and Chinese labor in plantation, mines and construction sites. Indentured labor where promised return travel to India after they worked 5 years on employer’s plantation. They came mainly from east UP, Bihar, Central India and dry regions of Tamil Nadu

  • In Mid-19th century – regions of India mentioned above experienced cottage industries decline, increased land rent and clearing land for mines and plantation – these affected lives of poor as they failed to pay rent, became indebted and were forced to migrate mainly to Caribbean islands (mainly Trinidad, Guyana and Surinam), Mauritius and Fiji. Tamils went to closer Ceylon & Malaya. Some to tea plantations in Assam.

  • Recruitment was done by agent who got commission. Agents gave false information about final destination and tempted migrants by false information.

  • 19th century indenture were new system of slavery – harsh living conditions with few legal rights – workers found their way as some escaped to wilds & others followed collective self-expression

  • In Trinidad, annual Muharram procession was transformed into riotous carnival called ‘Hosay’ (for Imam Hussain) in which workers of all races and religions joined.

  • 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.

  • ‘Chutney music’, popular in Trinidad and Guyana, is another creative contemporary expression of the post-indenture experience – things from different places got mixed, lose original characteristics and became new.

  • VS Naipaul (Nobel Prize winner), cricketer Shivnarine Chanderpaul and Ramnaresh Sarwan were descendants of indentured laborers migrated from India

  • Nationalists leaders started to oppose this system and was abolished in 1921. Descendants of Indian indentured workers as coolies remained uneasy minority in Caribbean. Novels of Naipaul capture sense of loss and alienation.

Entrepreneurs

  • Shikaripuri Shroffs and Nattukottai Chettiars bankers and traders who financed export agriculture in Central & SE Asia by own funds or that borrowed from European banks by sophisticated system of transfer of money over long distances

  • Hyderabadi Sindhi traders from 1860s established flourishing emporia at busy ports worldwide, selling local and imported curios to tourists

Trade & Global System

  • Initially fine cotton from India was exported to Europe but with industrialization British cotton expanded. There was need to protect local industries and restrict cotton imports & tariff imposed on imported cloth from Britain.

  • Indian textile faced stiffed competition in other international markets as well – cotton declined from 30% in 1800 to 15% in 1815 & 3% in 1870s

  • Export of raw material increased from 5% to 37% between 1812 and 1871, indigo was exported, opium shipments to China (India was single largest exporter)

  • British goods flooded Indian markets; foodgrains and raw material export from India to Britain increased

  • Value of Britain exports were higher than Britain imports and Britain had a trade surplus – this surplus was used to balance deficit in other nations from where imports were higher – this is how multilateral settlement works and it allows one country’s deficit with another country to be settled by its surplus with a third country

  • Trade surplus helped pay - private remittances home by British officials and traders, interest payments on India’s external debt, and pensions of British officials in India

Map of trade routes that linked india to the world at the end of the seventeenth century

Trade Routes at the End of the Seventeenth Century

Map of trade routes that linked india to the world at the end of the seventeenth century

Inter-War Economy

  • 1st WW was mainly fought in Europe but impacts felt across the world – lasted for over 4 years, started in 1914

  • War was Allies (Britain, France and Russia, later joined by the US) versus Central Powers (Germany, Austria-Hungary and Ottoman Turkey)

  • It involved world’s leading industrialist nations & was considered first modern industrial war with use of machine guns, tanks, aircrafts and chemical weapons – many soldiers were recruited – total 9 million deaths and 20 million were injured – many of those were the men of working age

  • Abled bodied workforce reduced with fewer numbers in family, household income declined after war

  • Industries were restructured to make war related goods

  • Britain borrowed large sums of money from US banks and public and US transformed from international debtor to creditor while Britain was under external debt

  • Britain was world’s leading economy in the pre-war period but due to preoccupation in war, industries developed in India and Japan. Britain found hard to recapture the earlier position and compete with Japan internationally

  • After war, production contracted and unemployment increased – led to job losses (in 1921 – one of every five worker was out of work)

  • Before war, Eastern Europe was supplier of wheat to world but was disrupted during war and wheat production in Canada, America and Australia expanded

  • After war, Eastern Europe revived but grain prices fell, rural income declined and farmers were into debt

Rise of Mass Production & Consumption

  • In US recovery was quicker with strong growth in 1920s was due to mass production

  • Henry Ford adapted the assembly line of a Chicago slaughterhouse to new car plant in Detroit (faster and cheaper production) – workers were to repeat single task mechanically and continuously & led to increased output per worker. Cars came off at 3 minutes interval.

  • T-Model Ford was the world’s first mass-produced car

  • Initially workers could not take the stress at assembly line and so they quit in large number but Ford doubled the wages and banned trade unions to operate in his plants – he recovered cost of wages by speeding assembly line and forcing them to work harder & was described as “best cost cutting decision”

  • It spread in Europe with lower cost and prices and more workers could now afford to purchase durable consumer goods like cars (production-increased form 2 million in 1919 to 5 million in 1929)

  • Rise in 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)

  • Housing and consumer boom of the 1920s created the basis of prosperity in the US

  • In 1923, the US resumed exporting capital to the rest of the world and became the largest overseas lender

Great Depression

  • Began around 1929 and lasted till mid 1930s

  • Decline in production, employment, incomes and trade

  • Agricultural economies were worst affected, agricultural income declined and farmers tried to expand production, this brought large volume of produce to market which reduced prices further

  • In 1st half of 1928 – overseas loans in US was $1 billion, year later it was $0.25 billion – countries dependent on US loan faced acute crisis – this led to failure of banks in Europe and collapse of currencies like British pound and sterling

  • US doubled import duties which was again blow to world trade

  • US banks also slashed domestic lending and called back loans. Farms could not sell their harvests, households were ruined, and businesses collapsed – with falling income people were forced to give up home, consumer durables and cars; unemployment soared and US banking system collapsed & bankruptcy was declared by many banks - by 1933 over 4,000 banks had closed and between 1929 and 1932 about 110, 000 companies had collapsed

  • By 1935 – modest economic recovery started

India and Great Depression

  • India’s export and imports halved between 1928 and 1934 & wheat prices fell by 50%

  • Peasants, framers suffered more, agricultural prices fell, and colonial government refused to reduce revenue demands – peasants producing for world market were worst hit

  • Jute in Bengal – grew raw jute in Bengal for exports as gunny bags; as gunny bags export collapsed prices fell by 60% for raw jute – peasants who borrowed went into greater debt – savings was used, land was mortgaged and jewelry was sold

  • During this time, Indian export for gold increased and economist Keynes believed that Indian gold export promoted global economic recovery

  • Urban people in India with fixed income and salaries found themselves at better off position

  • 2nd WW – after 2 decades of WW I – between Axis powers (mainly Nazi Germany, Japan and Italy) and the Allies (Britain, France, the Soviet Union and the US) for 6 years on land, sea and air – 60 million people were killed (3% of world population) – many civilians died due to war related causes - cities destroyed, economic devastation and social disruption occurred

Two crucial influences shaped post-war reconstruction.

  • US’s emergence as the dominant economic, political and military power in the Western world.

  • Dominance of the Soviet Union - It had made huge sacrifices to defeat Nazi Germany, and transformed itself from a backward agricultural country into a world power

Lessons from inter-war period

  • Industrial society based on mass production cannot survive unless there is mass consumption (which requires high and stable income and stable employment)

  • Government must step in to minimize fluctuations in price, output and employment

  • Goal of full employment could only be achieved if governments had power to control flows of goods, capital and labor.

Idea was to preserve economic stability and full employment – its framework was agreed by United Nations Monetary and Financial Conference held in July 1944 at Bretton Woods in New Hampshire, USA

Bretton Woods Institutions

  • Bretton Woods Conference established IMF – to deal with external surplus and deficit of member nations

  • International Bank for Reconstruction and Development (or World Bank as was known) was set up to finance postwar reconstruction

  • IMF & World Bank were called Bretton Woods Twins – both commenced financial operations in 1947 – decisions controlled by western industrial nations. US has an effective right of veto over key IMF and World Bank decisions

  • The post-war international economic system is also often described as the Bretton Woods system

  • The international monetary system is the system linking national currencies and monetary system.

  • 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 dollar itself was anchored to gold at a fixed price of $35 per ounce of gold.

  • It led to growth of trade and income for Western nations and Japan – trade grew by 8% between 1950 and 1970 and incomes at nearly 5% & unemployment was less than 5%

  • Worldwide spread of technology and enterprise – investment in capital, import of industrial plant and equipment was done

  • When colonies of Asia and Africa liberated – poverty & lack of resources. IMF & World Bank were meant to meet financial needs of industrialized nations. 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

  • New independent countries faced issues of coming out of poverty – even after decolonization their economies were controlled by colonial powers. Large corporations like US managed to exploit resources of developing nations cheaply

  • Developing nations organized themselves into group of 77 nations or G-77 for New International Economic Order (NIEO) –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

  • MNCs – companies that operate in many nations at a time – 1st established in 1920s – spread worldwide in 1950s and 60s - high import tariffs imposed by different governments forced MNCs to locate their manufacturing operations and become ‘domestic producers’ in as many countries as possible

End of Bretton Woods

  • From the 1960s the rising costs of its overseas involvements weakened the US’s finances and competitive strength

  • US dollar was no longer a principal currency – fixed exchange rate system (government intervene to prevent movement) ended and floating exchange rate (based on demand and supply of currency in international market) started

  • Earlier, developing countries could turn to international institutions for loans and development assistance. But now they were forced to borrow from Western commercial banks and private lending institutions. This led to periodic debt crises in the developing world, and lower incomes and increased poverty, especially in Africa and Latin America.

  • Unemployment started to rise from 1970s and rose till 1990s – MNCs started to shift production to low wage Asian nations

  • China – cutoff from post war economy since 1949; new economic policies in China and collapse of Soviet Union & communism in East Europe brought backfold into economy

  • Low wages in China made it destination for investment – stimulated world trade and capital flows