Chapter 3: The Making of a Global World (History)

• Asia: the silk routes. These land and sea routes linked China with Central Asia, West Asia and Europe from before the Christian era until about the fifteenth century. Chinese silk, pottery, textiles and spices from India and Southeast Asia travelled west, while precious metals such as gold and silver flowed east. Religious ideas also travelled: Buddhism spread from eastern India in several directions, and Christian missionaries and later Muslim preachers used these routes.
• The Americas: food crops. Many common foods, such as potatoes, soya, groundnuts, maize, tomatoes, chillies and sweet potatoes, came to Europe and Asia only after Christopher Columbus reached the Americas in 1492. The potato, for example, changed the lives of the poor in Europe: they began to eat better and live longer. (Precious metals, especially silver from mines in Peru and Mexico, also flowed from America to Europe and financed its trade with Asia.)

The silk routes linking China with West Asia and Europe (trade in silk, spices, metals and ideas), and the transfer of American food crops such as potatoes, maize and tomatoes to the rest of the world.

• In the sixteenth century, the Spanish and Portuguese conquest of America was won mainly by germs such as those of smallpox, not by conventional military weapons.
• America's original inhabitants had been isolated from the rest of the world for millions of years and had no immunity against diseases from Europe.
• Smallpox, in particular, proved a deadly killer. Once introduced, it spread deep into the continent, ahead of any European reached, and wiped out whole communities.
• This made conquest easy: the Europeans could be attacked by gun-fire, but not by germs, and the native populations, weakened and greatly reduced, could not resist.

Native Americans had no immunity to European diseases like smallpox, which spread rapidly and killed vast numbers of them, so the Spanish and Portuguese conquered them easily.

(a) Abolition of the Corn Laws (1846):

• Food could now be imported into Britain more cheaply than it could be produced within the country.
• British agriculture could not compete; vast areas of land were left uncultivated, and thousands of men and women were thrown out of work. They flocked to the cities or migrated overseas.
• Food prices fell, consumption in Britain rose, and countries such as Russia, America and Australia expanded their food production to meet the British demand, clearing forests and building railways and ports, which drew in capital and labour from around the world.

(b) Rinderpest in Africa (1890s):

• Rinderpest, a fast-spreading cattle plague, arrived in Africa through infected cattle imported from British Asia to feed Italian soldiers invading Eritrea.
• It moved like a forest fire, reaching Africa's Atlantic coast in five years and killing 90 per cent of the cattle.
• The loss of cattle destroyed African livelihoods. Planters, mine-owners and colonial governments then monopolised the scarce cattle resources and used this to strengthen their power, forcing Africans into the labour market as wage workers.

(c) Death of working-age men in Europe (First World War):

• Most of those killed and maimed were men of working age, so the able-bodied workforce in Europe shrank.
• With fewer members within the family, household incomes declined after the war.
• Women stepped in to take up jobs that earlier only men did.

(d) The Great Depression on the Indian economy:

• India's exports and imports nearly halved between 1928 and 1934.
• Agricultural prices fell sharply (wheat prices fell by 50 per cent between 1928 and 1934), but the colonial government refused to reduce revenue demands. Peasants producing for the world market were the worst hit; jute growers of Bengal, for example, fell deep into debt.
• Peasants used up their savings, mortgaged lands and sold their jewellery and precious metals; India became an exporter of gold, which helped Britain recover.
• Urban India was less affected: fixed-income groups such as town landowners and salaried employees found themselves better off as prices fell. Rural unrest grew, and the Civil Disobedience Movement began at the height of the depression in 1931.

(e) MNCs relocating production to Asian countries:

• Since the 1970s, MNCs shifted production to Asian countries, especially China, because of low wages.
• This stimulated world trade and capital flows. Countries such as China, India and Brazil underwent rapid economic transformation, and new jobs were created there.
• At the same time, unemployment rose in the industrialised countries, and cheap Asian exports, such as Chinese TVs, mobile phones and toys, spread across the world.

See the five notes above.

• Railways and steamships: faster railways, lighter wagons and larger ships helped move food more cheaply and quickly from farms in America, Russia and Australia to the final markets in Britain and Europe. Food became cheaper and more plentiful.
• Refrigerated ships: until the 1870s, live animals were shipped to Europe and slaughtered there, which was costly. Refrigeration allowed meat to be transported as frozen meat from America, Australia and New Zealand. This reduced shipping costs, lowered meat prices in Europe, and let the poor add meat (and butter and eggs) to their diet.

Railways and steamships brought cheap food from distant farms to Europe, and refrigerated ships made frozen meat from America and Australia cheap enough for ordinary Europeans.

• In July 1944, the United Nations Monetary and Financial Conference was held at Bretton Woods in New Hampshire, USA, to preserve economic stability and full employment in the industrial world after the Second World War.
• It established the International Monetary Fund (IMF), to deal with the external surpluses and deficits of member nations, and the International Bank for Reconstruction and Development (World Bank), to finance post-war reconstruction. They are called the Bretton Woods twins.
• The system was based on fixed exchange rates: national currencies were pegged to the dollar at a fixed rate, and the dollar was anchored to gold at $35 per ounce.
• Western industrial powers controlled decision-making; the USA had an effective right of veto over key decisions.

An agreement of 1944 that set up the IMF and the World Bank and a system of fixed exchange rates (currencies pegged to the dollar, the dollar to gold) to keep the post-war world economy stable.

Port of Spain, Trinidad

Dear Ma and Bapu,

I hope you are all well. It has been many months since our ship left Calcutta. The agent in our village had promised good work and wages, and told us the place was near. He did not tell us that the journey would take so long, or that we would be bound to a planter for five years under a contract.

Life on the sugar plantation is very hard. We work from early morning till dark, and the wages are much less than we were promised. If we are slow or fall ill, money is cut from our pay, and the overseers beat those who complain. We live in crowded huts and have few legal rights; we cannot leave the estate without a pass. Many here call this system a "new system of slavery".

Yet we try to keep our spirit alive. We celebrate our festivals together; at Muharram we have the Hosay, a carnival in which Africans and others also join. We sing our songs and tell old stories, and we have made friends with labourers from many places. Some talk of saving money and buying a little land when the contract ends.

I miss you all, the fields and the river at home. Please do not worry about me. I will send money when I can, and I hope to come back to you one day.

Your loving son

A letter describing hard work, low wages, harsh contracts with few rights, and loneliness, but also new friendships and festivals like Hosay that kept the labourers' culture alive.

Trade (goods, e.g. Indian cotton and wheat exports), labour (people, e.g. indentured Indian workers in the Caribbean) and capital (money, e.g. loans by Indian bankers like the Chettiars in Southeast Asia).

The Great Depression began around 1929 and lasted till the mid-1930s. Its causes:

• Agricultural overproduction: farm prices were falling, and as they fell, farmers tried to expand production to maintain their incomes, which pushed prices down further. Farm produce rotted for lack of buyers.
• Dependence on US loans: in the mid-1920s, many countries financed their investments through loans from the US. When US overseas lending fell sharply after 1928, countries that depended on these loans faced an acute crisis. In Europe this led to the failure of major banks and the collapse of currencies such as the British pound sterling.
• US measures: the US doubled import duties, which further shrank world trade. In the US itself, banks recalled loans; farms could not sell their harvests, households were ruined and businesses collapsed. Thousands of banks went bankrupt.

These problems spread through the linked world economy, and the depression became worldwide.

Agricultural overproduction with falling prices, the sudden withdrawal of US loans from 1928 that led to bank failures, and higher US import duties that shrank world trade.

G-77: a group of 77 developing countries (newly independent countries of Asia, Africa and Latin America) that organised themselves to demand a New International Economic Order (NIEO).

Reaction to the Bretton Woods twins:

• 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 former colonies.
• Most developing countries did not benefit from the fast growth that the Western economies enjoyed in the 1950s and 1960s.
• Even after independence, many of them were still dominated by former colonial powers, and their natural resources (minerals, land) were controlled by powerful multinational corporations.
• So the G-77 demanded 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 the markets of developed countries.

G-77 is a group of developing countries that demanded a New International Economic Order, because the IMF and World Bank served the rich industrial nations and did not help former colonies gain control over their resources or fair trade.

Here is an outline for the project.

• Discovery: diamonds were found at Kimberley in 1867, and gold on the Witwatersrand (around Johannesburg) in 1886. South Africa became the world's leading producer of both.
• Who controlled them: the mines were owned and controlled by European (mainly British) capitalists. Cecil Rhodes's De Beers company came to dominate diamond mining; mining houses such as those of the "Randlords" (e.g. Alfred Beit, Barney Barnato) controlled gold. They were backed by British capital and the colonial state.
• Who the miners were: most of the labour was done by Black African migrant workers, many from rural areas and neighbouring territories, recruited on contracts. Skilled jobs and supervisory posts went to white workers.
• Their lives: low wages, long hours and dangerous work deep underground; workers lived in closed, guarded compounds, were searched for diamonds, and were controlled through pass laws. Taxes on Africans and the loss of cattle (rinderpest) and land pushed them into this work.

The mines were controlled by European capitalists (e.g. Cecil Rhodes's De Beers); the miners were mostly Black African migrants who worked in dangerous conditions for low wages and lived in closed compounds under strict control.