1. Economic Growth and Globalization since 1850

3. The Age of Globalization
Exponential change

4. I. Introduction: A. Global time line
Industrialization and growth of international trade
Inter-war years
Liberalization and Acceleration of trade/
Development of Communist Economic Model

5. B. Successive Shifts of Power 19th-21st Centuries
British Hegemony
American Century
Multipolar World

6. II. Stages of Economic Growth
How did the world progressively enter into a system of production of wealth?

7. A. 19th Century Economic Growth since 1850
Since 1850, continual acceleration of technical progress and strong economic growth
Sustained demographic growth
Inequalities in development continue

8. 3 stages of economic growth
Entering a world of intensive growth
Increasing world growth after 1945
Capitalism in Crisis

9. 1st Stage: Intensive Growth
From the 18th Century, western European countries, facing rapid increase in population growth, begin industrializing
Intensive growth = wealth production surpasses basic needs of the population
Capitalism, well-established in the 19th c. in Europe, contributes to this trend
Despite the rise in global population, economic growth enabled improvement in standard of living.

10. 2nd Stage: Increasing world growth after 1945
19th C industrialization accompanied by weak growth rates even for the most advanced countries
a. newest technologies extremely dynamic (e.g. textile, steel, railroads)
b. continued importance of agricultural sector into the 20th c.
c. low domestic consumption

11. After 1945, world growth rate increases
Stimulated by the gradual liberalization of trade
From 1970’s by acceleration of globalization
Between 1945 and 1975, growth originates mostly in the industrialized nations (North America, Western Europe and Japan) = the Triad

12. Change of Paradigm late 20th/early 21st century
Early 21st C. highest economic growth rates in emerging countries
BRIC nations (Brazil, Russia, India, China) + South Africa since 2011
Known for rapid growth of their industrial sectors
Capitalizing on their advantages (e.g. natural resources, labour, infrastructure)
Strong state intervention

13. BRIC nations

14. 3rd Stage: Capitalism in Crisis
Early signs of instability in 1929

15. Lithograph by Otto Bollhagen and Fritz Jacobsen, Krupp Factories in Essen, Germany in 1912

16. Series of financial/economic crises highlight the limits of capitalism and the interdependence of the world
Stock market crash 1929, end of period of strong growth of US economy, warning to speculators
Collapse of 1st economy in the world causes contraction of international trade and massive increase in unemployment around the world

17. Periods of Crisis enable capitalism to adapt and for new powers to emerge.
Slowing down of growth in Europe
Birth of multinational corporations
Progression of international trade
Appearance of new competition in Europe (Germany) and outside of Europe (U.S. / Japan)

18. More Recent Financial Crises and Economic Recessions
Financial crisis in 2008
leads to growing intervention of international regulatory organizations
IMF
G20
Economic recession in

19. Comparison of 1929 and 2008 Crises
GNP Growth (%)
2009
2010
World
-30
-0.6
+4.2
United States
-51
-2.4
+2.7
Germany
-23 -
Euro Zone
-4.1 +1
International Trade
-57 %
-12%
+13.5%
Unemployment rate
1929
1933
2007
3.1
25.2 5 10
9.7 33
7.8
9.8
10.3

20. The Global Power Shift