Chapter 3 The Making of a Global World

Textbook Questions

1. Give two examples of different types of global exchanges which took place before the seventeenth century, choosing one example from Asia and one from the Americas.
   Answer: Examples of various types of global exchanges that occurred prior to the seventeenth century include:
   The silk routes are an excellent example of cross-cultural trade and global connectivity.
   Historians have identified several silk routes, both overland and by sea, that connect Asia to Europe and northern Africa.
   These trade routes carried Chinese pottery, textiles, and spices from India and Southeast Asia. In exchange, precious metals such as gold and silver were transported from Europe to Asia.’
   Many of our foodstuffs, such as potatoes, soya, groundnuts, maize, tomatoes, and chilies, originated with America’s first inhabitants, the American Indians. America was widely available in food and minerals. After Christopher Columbus accidentally discovered America, common foods such as potatoes, tomatoes, chilies, soya, maize, groundnuts, and so on made their way to Europe and then Asia.
2. Explain how the global transfer of disease in the pre-modern world helped in the colonization of the Americas.
   Answer: The pre-modern world’s global spread of disease helped in the colonization of the Americas. The reason for this was that Native Americans were not immune to the diseases brought by Europeans.  For millions of years prior to the discovery of America, it had been cut off from the rest of the world.  Europeans were immune to the effects of diseases like smallpox, Because of centuries of exposure, but native Americans had no such immunity because they were isolated from diseases native to the old world.
3. Write a note to explain the effects of the following:
   a) The British government’s decision to abolish the Corn Laws.
   b) The coming of rinderpest to Africa.
   c) The death of men of working age in Europe because of the World War.
   d) The Great Depression on the Indian economy.
   e) The decision of MNCs to relocate production to Asian countries.
   Answer:
   The British government’s decision to abolish the Corn Laws resulted in an influx of cheaper crops from America and Australia. Agriculture in the United Kingdom was unable to compete with imports. Many English farmers abandoned their farms and moved to towns and cities. Some went abroad. This indirectly resulted in global agriculture and rapid urbanization, both of which are required for industrial growth.
   Rinderpest (a rapidly spreading cattle plague disease) arrived in Africa in the late 1880s. It had a horrific impact on people’s livelihoods and the local economy. It killed roughly 90% of the cattle. It was spread by infected cattle imported from British Asia to feed Italian troops invading Eritrea in East Africa. Taking advantage of this situation, colonizing nations conquered and subdued Africa by monopolizing scarce cattle resources in order to force Africans into the labour market. Due to the loss of their livelihood due to the effects of Rinderpest, Africans were forced to work for a wage.
   The death of men of working age in Europe as a result of the World War reduced the able-bodied workforce in Europe; as a result, women stepped in to do jobs that previously only men were expected to do. It increased women’s roles, resulting in a demand for equal status in society. It enhanced the feminist movement.
   In the nineteenth century, colonial India had become an exporter of agricultural goods and an importer of manufactured goods. As international prices fell, so did Indian prices. Between 1928 and 1934, wheat prices in India fell by half. The Great Depression resulted in a loss of revenue for Indian farmers as export prices fell dramatically. As  the government did not reduce taxes, peasant indebtedness increased throughout India.
   Wages in Asian countries were relatively low. As a result, they became attractive investment destinations for foreign MNCs. Because of the relocation of manufacturing to Asian countries, Asian economies expanded significantly and employment increased. It boosted global trade and increased capital inflows into Asian countries
4. Give two examples from history to show the impact of technology on food availability.
   Answer:

A faster and safer deliveryof the foods to the markets was made possible by improved transportation infrastructure. Food could be transported inexpensively and rapidly from distant farms to final markets due to faster rails, lighter carriages, and larger ships.
Perishable items could be shipped across large distances aboard refrigerated ships. Additionally, frozen meat from America and Australia was shipped to Europe. This brought down European meat prices and lowered transportation expenses.

5. What is meant by the Bretton Woods Agreement?

Answer: The Bretton Woods Agreement established a system for establishing a fixed currency exchange rate using gold as the universal standard. The Bretton Woods Agreement was signed in July 1944 at Bretton Woods in New Hampshire, USA, by the world powers. The agreement, which involved representatives from 44 countries, resulted in the establishment of the International Monetary Fund (IMF) and the World Bank.
According to the agreement, currencies would be pegged Western industrial powers were given decision-making authority. The United States was granted veto power over key IMF and World Bank decisions. Fixed exchange rates were the foundation of the Bretton Woods system. The Bretton Woods system ushered in an era of unprecedented trade and income growth for the Western industrial nations and Japan.

6. Imagine that you are an indentured Indian laborer in the Caribbean. Drawing from the details in this chapter, write a letter to your family describing your life and feelings.
   Answer: Self-explanatory. Answer the question in your own words.
7. Explain the three types of movements or flows within the international economic exchange. Find one example of each type of flow that involved India and Indians, and write a short account of it.
   Answer: Within the international economic exchange, there are three types of movements or flows:
   1)Trade Flow
   2)Human Capital Flows
   3)Capital Flows
   1)Trade Flow: Since ancient times, India has been involved in trade relations. In the pre-modern world, India was a trade hub, exporting textiles and spices in exchange for gold and silver from Europe.
   2)Human Capital Flows: Thousands of Indian labourers went to work on plantations, mines, and road and railway construction projects all over the world in the nineteenth century. The labourers’ living conditions were harsh, and they had few legal rights. Indentured labourers were hired under contracts that guaranteed their return to India after five years of service on the plantation.
   3)Capital Flows: Britain borrowed a lot from the United States to finance the World War. Because India was under British rule, the effects of these loan debts were felt there as well. The stock exchanges crashed in 1929, causing panic among investors and depositors who lost money and began to accumulate wealth. The British government raised taxes and interest rates while lowering the prices of goods purchased from the colony. This had a significant impact on the Indian economy.
8. Explain the causes of the Great Depression.
   Answer: The Great Depression was caused by a number of factors, which are listed below:
   Bank failure: The withdrawal of US loans had a negative impact on the money investment systems. In Europe, it resulted in the failure of the majority of the major banks. Some of the banks were listed on the stock exchange when the market crashed in 1929. It caused investors and depositors to panic. They stopped investing and depositing.
   Overproduction in agriculture was a major issue. As a result, agricultural prices have dropped. Agricultural income fell as prices fell. This increased the market’s volume of goods. Due to a lack of buyers, farm produce began to rot.
   In the 1920s, economic growth in the United States created a cycle of enhanced employment and income which results in increased consumption and demand. More investment and employment created speculation tendencies, which led to the Great Depression of 1929 until the mid-1930s.
9. Explain what is referred to as the G-77 countries. In what ways can G-77 be seen as a reaction to the activities of the Bretton Woods twins?
   Answer: A new International Economic Order was demanded by the G-77 group of developing nations NIEO). They described the NIEO as a system that would offer them full sovereignty over their natural resources, more equitable raw material prices, and better access for their produced commodities to markets in the industrialized nations.

The United Nations Group of 77 (G77) is an alliance of 134 developing nations created to advance the economic interests of all of its members. The International Monetary Fund and the World Bank were created with the express purpose of serving the financial requirements of primarily industrialized and developed nations, and the G-77 was a response to these organizations’ actions…