Economic Globalization Social Studies 10-1

Key Terms economic globalization reparations communism economic depression market economy

Economic Globalization is the increasing interconnectedness of people and places as a result of advances in transport, communication, and information technologies that cause political, economic, and cultural convergence.

William Tabb Globalization is healthy but does not benefit all people economically

Joseph Stiglitz Won the Nobel Prize for Economics in 2001 countries and peoples are more economically integrated today than ever before. Interdependence has happened because communication and transportation costs have been greatly reduced and barriers to the flow of goods, services, capital, and knowledge have been taken down.

Naomi Klein Journalist Economic globalization reaches into every aspect of life, but she believes that it builds fences between people. “These fences of social exclusion can discard an entire industry, and they can also write off an entire country.”

WWI Britain, France, and Russia against Germany and Austria-Hungary. The economic costs of the war were also high. European cities, towns, farms, roads, factories, ports, ships, and railways had been destroyed. Significant decrease in the production of goods Unemployment was to follow…….

Treaty of Versailles was supposed to ensure peace and prevent another global war. Reparation payments were too extreme and eventually lead to feelings of retribution by Germany John Maynard Keynes, a member of the British delegation, said that crippling Germany and Austria with war debts would starve the people and guarantee another major war. The Big 4 

Effects of WWI on Canada $2.5 million a day After the war, interest payments on the country’s war debt totaled $164 million a year and soldiers’ pensions cost another $76 million a year This eventually lead to a period of high unemployment which was compounded by the great depression

Russian Revolution In 1914, Russia was ruled by Czar Nicholas II Russian peasants lived difficult lives under an ancient economic system that allowed them little control over their labour or property THEY WANTED REVOLUTION SO…. Nicholas II was forced to give up his throne in 1917 and he and his family were murdered in 1918 In 1922, the Union of Soviet Socialist Republics emerged out of the former Russia. The USSR, or Soviet Union, was the world’s first communist state under Lenin an ideology would form that would shape the face of 20th century history comparing government control to economic freedom

Communism a new economic and political model that was supposed to get rid of class distinctions. Opposition to Capitalism Under Stalin the Soviet Union became a one party state (dictatorship) This gave way to many restrictions and oppressions on the Soviet people Many historians believe that the people of the Soviet Union were worse off under Stalin than under the czars.

The Great Depression Tuesday, October 29, 1929 Black Tuesday a decrease in stock value caused widespread panic and investors started selling stocks Result – people who lost money could no longer pay bills Gradually, the entire world moved into an economic depression — the Great Depression.

Depression in Canada Between 1929 and 1933, Canadian exports fell by 50 per cent By 1933, 26.6 per cent of Canadians were out of work 1929. In addition, a drought that had started in 1928 continued off and on until 1937

WWII Germany hit hard by depression 1933 Adolf Hitler and the Nazi Party promised to fix things Hitler was popular, and he convinced many Germans that they belonged to a master race that was entitled to rule other people

The United Nations at Bretton Woods In July 1944, representatives of 44 countries met in the small New Hampshire town of Bretton Woods for a conference sponsored by the newly founded United Nations to prevent the economic turmoil that may lead to another war

Keynes Keynes believed that the unrestricted capitalism that had existed before World War I and between the two world wars had failed Keynes believed that the government needs to intervene at times in the economy to create economic stability For Example Governments should set up programs to hire the unemployed Interventionist

Hayek Friedrich Hayek disagreed with Keynes’s views on the economic role of government According to Hayek, a government should protect the market by ensuring that its rules and laws do not interfere with competition between businesses

World Bank and the IMF Monetary Fund, or IMF, were mapped out at the Bretton Woods meetings. These two organizations would be supported by the United Nations and would help expand international trade Why? To Avoid Another War!

Gatt (general agreement on tariffs and trade) GATT members agreed to gradually eliminate tariffs and other trade barriers between themselves Basically Trade Rules!!!

Changed Foundations Capitalism vs Communism Source of a great amount of friction This “Cold War” greatly affected global trade By 1989 the Soviet Union was growing weak and these frictions gradually disappeared and a new economic age would emerge

Hayek and Friedman The Market Economy less government intervention and freer markets would generate economic health and prosperity Freidman’s theories Influenced Margaret Thatcher As a result, Britain and the U.S. began to move toward a market economy

The debate between the two differing economic visions continues to reverberate in the world today.

Journal Entry #9 To what extent did world events shape contemporary economic globalization?