Global Economics

What is an Economy What is an economy?  An economy is the process of distribution of accessible resources to members within a given community.  This includes resource extraction resource extraction production production the marketplace. the marketplace.  All members of a community take part in its economy.”

The Industrial Revolutions

The First Industrial Revolution  Industrialization: A process that occurs when technological development leads to better machines replacing older methods of production  The first industrial revolution took place between 1760 – 1840 in England and spread throughout Europe  Before that, England’s economy resembled an LDC’s economy

The First Industrial Revolution  Most of the wealth belonged to the aristocracy and most people were poor. England also had great wealth through colonization.  During the industrial Revolution England changed from mostly rural/ agriculture to urban/ industrial

Factors that led to the revolution  New manufacturing materials  New energy sources  New machines  New work methods  This resulted in: increased use of natural resources  A shift to mass production of goods

Effects on English society  Some suffered, others gained  New technology reduced the need for some workers (i.e.: Luddites through the invention of the spinning wheel)  English authorities passed laws controlling domestic production to reduce the chances of competition from other countries Forbade the exportation of machinery, workers and factory plans Forbade the exportation of machinery, workers and factory plans

Second Industrial Revolution-during the 20 th century  Refers to the development of a more industrialized economy over the twentieth century  Saw further changes/ refinements to manufacturing processes  Led by U.S.

Second Industrial Revolution Characteristics  New Materials – The use of plastics, alloys and lighter metals replace iron and steel  New Energy sources – power taken from petroleum and electricity instead of steam  Further automation – use of robots and computer assisted machinery on assembly lines  New transportation – airplanes and electric trains reduced travel time

Second Industrial Revolution Characteristics  Change in ownership – fewer companies owned by independent people; more owned by a large group of investors (corporations)  Greater government intervention – governments took control and offered many social programs like health care, social security

Results?  Greater globalization of economic forces opens trading with countries of he world opens trading with countries of he world  The “gap”  3 rd revolution

3 rd Revolution- Our lifetime  Some economic historians believe we are in the middle of a revolution powered by “thinking machines” (computers)  This trend has, and will have, the following effects on the global workforce: The automatic factory – so loss of jobs The automatic factory – so loss of jobs The high-tech office – so loss of jobs The high-tech office – so loss of jobs The automated farm – so loss of jobs The automated farm – so loss of jobs  These changes will also impact the widening gap between the wealthy and poor nations of the world