Creation, Interaction and
Expansion of Economic
Systems
Mr. Millhouse
AP World History
Hebron High School
Creation, Interaction and Expansion of
Economic Systems
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This theme includes:
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Agricultural and pastoral production
Trade and commerce
Labor systems
Industrialization
Capitalism and Socialism
Foundations Unit
8000 BCE – 600 CE
Neolithic Revolution
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Traditional Economy
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Hunting and gathering
Sedentary agriculture
developed between 10,000
and 8,000 BCE
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1st developed in
southwestern Asia
Earliest method was slashand-burn agriculture
Subsistence agriculture
Herding animals
(pastoralism)
Slash-and-burn agriculture in
northeast India
Development of Agriculture
Economic Regions
Early Village Economy
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Farming led to the rise of
permanent villages
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Jericho
Village life led to
specialized labor
Development of early
industry
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Pottery, metallurgy, and
textiles
Ancient Civilizations
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Mesopotamia, Egypt, & Indus River Valley
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China
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Regular rains & fertile soil minimized irrigation
Olmec
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Irrigation led to improved agriculture
Development of cities contributed to rise of trade
Develop in rainforest; water control systems
Chavin
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Develop in mountains; complex irrigation
Nile-Indus Corridor
Pre-classical labor systems
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Slavery
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Existed in all early civilizations but was relatively
unimportant
Most slaves gained through military conquest
Egypt
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Used corvée labor to build pyramids & temples
Peasants were bound to the land
Men were organized into labor gangs of 50-100
Pre-classical labor systems
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Mesopotamia
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Large number of slaves due to militaristic nature
of society
Peasants lost their freedom over time
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Rise of debt slavery
China
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Zhou dynasty peasants paid a percentage of their
crops to aristocrats in exchange for protection
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Manorial system
Classical Civilizations
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Han China
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Mauryan India
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Monopolized production of iron, salt, and liquor
Rise of the Silk Road
Ashoka built irrigation systems and roads to
promote trade
Mayans
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Terrace farming improved production of cotton,
maize, and cacao
Classical Civilizations
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Ancient Greece
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Cities, such as Athens, become centers of trade
Economy depended heavily on slavery
Rome
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Latifundia – large landed estates focused on
commercial agriculture (olive oil, wine, wheat)
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North Africa was the major grain producing region
Depended on slave labor
Roman roads promoted trade and linked empire
to Silk Road
The Silk Roads
Cotton
Classical era labor systems
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China
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Free peasants were the backbone of the labor force
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Qin Shi Huangdi ended the manorial system
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“Recruited” labor to build the Great Wall
Silk weaving supplemented farm income
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Peasants ranked just below bureaucrats but above
artisans and merchants
“Men as tiller, woman as weaver”
During the Han dynasty, slaves made up less than
1% of the total population
Classical era labor systems
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Greece & Rome
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Slaves never constituted more than 50% of the
population
Slaves worked as domestic servants, miners, and
farmers
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In Greece, slaves could serve as tutors
In Rome, development of commercial agriculture led to
the rise of slavery
Rome also used slaves as gladiators and chariot racers
Classical era labor systems
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India
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Caste system was based largely on job
classification
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Farmers did not rank high in prestige
Merchants had a higher social standing than they did in
China or the Mediterranean
Slaves played almost no role in the economy
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Sudras (lowest caste) and untouchables took the place
of slaves
Post-Classical Unit
600 – 1450
Arabs
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Did not rely heavily upon agriculture
Abbasid sakk (checks) encouraged trade
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Urbanization: Baghdad
Dar al-Islam facilitated expansion of trade
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Islamic law protected merchants
Revival of the Silk Road
Growth of Indian Ocean trade
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Dhows increase the volume of maritime trade
Indian Ocean trade routes
Chinese junk
East Africa
gold
salt
slaves
Arab dhow
Labor in the Islamic World
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Islamic slaves were viewed as humans rather
than just property (chattel)
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Slavery was seen as a method of conversion
Slaves were acquired from Africa or central
Asia
Abbasid introduced the use of Turkish slavesoldiers
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Mamluks
Janissaries (Ottoman Empire)
Post-Classical Empires
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Byzantine Empire
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Manufactures glassware, jewelry, & silk
Trade a major part of the economy
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Mediterranean Sea, Silk Roads, Russia, etc.
Urbanization: Constantinople
Sudanic Africa (Ghana, Mali, Songhai)
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Trans-Saharan trade
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Use camel caravans to trade gold, slaves, and ivory for
horses, manufactured goods, and salt
Urbanization: Timbuktu
Trans-Saharan trade routes
Post-Classical Empires
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Swahili Coast
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Trade gold and parts of exotic
animals to Islamic and Indian
merchants for products from
Persia, India, and China
Urbanization: Mogadishu,
Kilwa, etc.
Great Zimbabwe
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Supplies gold to the Swahili
coast
Tang/Song China
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Emphasis on internal trade
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Champa rice & terrace
farming
Grand Canal & flying money
Song “pre-Industrial” era
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Commercial economy
focused on the production of
silk, porcelain, & steel
Urbanization: Hangzhou
Post-Classical Empires
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Mongols
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Pastoralists
Promoted trade on Silk Road via Pax Mongolica
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Marco Polo
Japan
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Villages relied on rice cultivation
World’s leader in silver production
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Trade silver to China for manufactured products
Development of feudalism caused peasants to
become serfs
Medieval Europe
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Manorialism
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Self-sufficient agricultural estates
worked by serfs
Three-field system & moldboard
plow
Trade revived after 1000 CE
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Rise of merchant & craft guilds
Crusades led to an increase in
demand for Asian products
Rise of Italian merchants & the
Hanseatic league
Urbanization: Italian cities & Paris
Hanseatic League (1400s-1600s)
Post-Classical Empires
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Aztecs
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Chinampas
Pochteca monopolized longdistance trade
Tribute system
Inca
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Built 9,500 miles of roads to
facilitate trade
Inca socialism
Use terrace farming to grow
potatoes
Mita labor
Early Modern Era
1450 - 1750
Rise of World Trade
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European exploration
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Seeking easier access to Asian luxury products
Columbus discovery of the Americas
Vasco da Gama reached India in 1498
Spain established Manila in 1571
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Manila galleons connect Asian markets to American silver
Trade Empires
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Spain/Portugal in the 16th century
Netherlands (Dutch) in the 17th century
England (Great Britain) in the 18th century
European Colonization
World Trade after 1571
Dutch Trade Empire
Western Europe
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Commercial Revolution
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Rise of a middle class (bourgeoisie) and
proletariat
Mercantilism
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Rise of manufacturing
Encouraged colonization
Joint Stock Companies
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Privately owned with government support
Ex. Dutch East India Co., Royal African Co., Virginia
Company
Economy of New Spain
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Encomiendas
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Manorial system in the New
World
Declined with the death of the
natives
Plantations
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Majority of labor provided by
African slaves
Economy of New Spain
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Mining
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Silver “the Heart of the Empire”
Largest mine was Potosi
Mita labor
Haciendas
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Estates focused on cash crops &
livestock
Africa & the Slave Trade
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Commercial relationship developed between
West African kingdoms & Europe
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Triangle Trade or the Atlantic System
Slavery was common in Africa
Slave Trade
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Trade continued with Muslim merchants
Increase demand caused by sugar plantations
Atlantic slave trade altered traditional African trade
routes
African Slave Trade
Emancipation of Slaves
Ming Dynasty
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Economic Recovery
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“Silver Sink”
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Rebuilt irrigation systems destroyed by the
Mongols
Increased production of silk textiles & porcelain
Single-whip tax system
Chinese demand for silver contributed to rise of
world trade
Limited trade to Macao/Canton
Voyages of Zheng He
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Established tributary relationships
throughout the Indian Ocean
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Exchanged silk & porcelain for other
luxuries
Tokugawa Japan
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Portugal established trade relations in 1543
Trade silver to China in exchange for luxury
products
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Began isolation in 1640s
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2nd in silver exports behind Spain
Allowed Dutch & Chinese to trade at Nagasaki
Urbanization led to rise of a merchant class
Russia
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Peter the Great modernized the economy
focused on mining and metallurgy
Serfdom
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Began under Mongol occupation
Provided cheap labor for Russian agriculture
Could be bought and sold
Mughal Empire
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Continued
manufacturing cotton
textiles
British establish trading
posts at Madras and
Bombay in the early
1600s
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British East India
Company continued to
expand their interests
into the 1700s
The Modern Era
1750-1914
Causes of the Industrial Revolution
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Favorable natural resources
Population Pressure
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Growth of large manufacturing sector
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Abundance of labor
Cottage industry (putting-out system)
Advantages in world trade
Technological innovation
Government support of business
Industrial Technology
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Cottage Industry (putting-out system)
Mechanization of weaving
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Iron smelting
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Bessemer steel process
Energy
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Cotton that took an Indian worker 500 hours to
spin took a machine in England 80 minutes to spin
Steam engine and electricity
Transportation
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Canals, steamboat, railroads
Economic Effects of Industrialization
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Labor changes
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Factory labor was dangerous and toilsome
Initially women & children work in factories
Rise in white collar jobs for new middle class
High unemployment rates
Labor unions were formed to protect workers
Rise of consumer culture
Standard of living increases
Frequent economic depressions
Economic Effects of Industrialization
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New economic theories
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Capitalism
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Direct attack on
mercantilism
Positivism
Socialism
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The Communist
Manifesto by Karl Marx
and Friedrich Engels
Communism
Global Industrialization
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Industrialization turned nations into either
manufacturers of consumer goods or suppliers of
raw materials
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Manufacturers: Western Europe, the United States,
Japan, Russia(?)
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Suppliers: the Ottoman Empire, Egypt, China, India
Africa, Latin America, Southeast Asia, Australia
Spread of Industrialization in Europe
Russian Industrialization
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Caused by Russian defeat in Crimean War
Abolish serfdom in 1861
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Do NOT make major reforms to help peasants
Limited industrialization
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Trans-Siberian railroad
Focus on heavy industry
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2nd in petroleum and 4th in steel production by 1900
Do NOT produce consumer goods
Lower class women move to cities for factory work
Japanese Industrialization
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Ends isolation in 1853
Abolish samurai class
Economic
modernization
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Industrialization
Zaibatsu
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Mitsubishi
Women work in silk
factories
Africa: 1750-1914
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British ended the slave trade in 1807; the
United States in 1808
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England bans slavery in 1833; U.S. in 1863;
Natural resources (gold, ivory, palm oil)
replace slaves in trade with Europe
Muhammad Ali modernizes Egypt
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Forced peasants to grow cotton for export
Built irrigation canals and railroads
Successors build the Suez Canal
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Makes Egypt one of the most strategic places on Earth
The Middle East: 1750-1914
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“Sick Man of Europe”
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Declining agricultural revenues
Large debts to foreign nations
European imports exceed exports
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Caused massive inflation
Reforms
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Creation of a central bank
Factories opened in urban areas
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Relied heavily on European investment and technology
Asia: 1750-1914
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India
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British transform India from supplier of textiles to exporter
of raw cotton
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China
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Opium War ends Canton system
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Opium trade reverses causes silver to flow from China
Southeast Asia
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Also export opium, coffee, and tea
British establish Singapore and colonize other areas to gain
access to raw materials
Indentured Servitude
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Thousands of Indians, Chinese, and Japanese migrated to
the Caribbean to replace slave labor
The Americas: 1750-1914
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Latin America supplied raw materials to the
West in exchange for manufactured goods
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Influence switched from Spain to England
Monroe Doctrine
Indentured servitude & immigration replace
slavery
Mexico and Argentina undergo limited
industrialization in the late 1800s
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Porfirio Diaz
The Twentieth Century
1914 – Present
The West
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Great Depression
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Causes
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German economic depression,
France & England unable to pay
war debt; surplus in agriculture &
industry; U.S. stock market crash
(October 1929); U.S. bank
failures
Effects
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Economic nationalism, expansion
of welfare state (New Deal in
U.S.), increased government
regulation of the economy;
political radicalization
The West: Post-WWII
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Transition from secondary economy (industrial)
to a tertiary economy (service)
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Expansion of the welfare state
Economic cooperation
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Growth of white-collar jobs
European Economic Community (eventually EU)
IMF and World Bank
Multinational corporations
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Volkswagon built cars in Mexico for U.S. consumers
Eastern Europe
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Russia
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New Economic Policy
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Lenin’s response to the Great Depression; minimal impact
Collectivization of agriculture
Five-Year Plans
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Command Economy
Latin America

Export raw materials (crops, rubber, etc.) for
manufactured goods
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Industry dominated by Europe
Great Depression had major impact
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Exports fell by over 65%
Import Substitution Industrialization
Attempts at economic nationalization was
often opposed by the U.S.
NAFTA
Africa

Export raw materials (cocoa, palm oil, gold,
etc.) for manufactured goods

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Colonial rulers often forced Africans to work in
mines or on plantations
Post-Independence
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Debt
Emerging markets
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Low GDP with opportunity for economic growth
Violence over resources
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Conflict diamonds
The Middle East
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Post-Independence
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Often remained dependent upon trade with
Europe
Impact of oil economy

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
OPEC
Allowed nations to gain tremendous wealth
Many countries have used oil wealth to invest in
other industries
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Ford, Citicorp, AIG, etc.
East Asia

Japan, Inc.

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Little Tigers
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Government works closely with business
South Korea – steel, automobiles, etc.
Taiwan – textiles then computers
Hong Kong – textiles then banking
Singapore – shipping
China

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Five-years plans & collectivization under Mao
Four modernizations under Deng Xiaoping

Semi-autonomous regions