Lesson 9 Flashcards
The First Globalisation
What is the definition of globalization?
It is the political, economic, social, and cultural integration characterized by the rapid and easy transfer of goods, capital, knowledge, and people. It is not spontaneous and relies on technology and political choices, making it reversible.
What are the four pillars of globalization during the first phase (1850-1914)?
Economic integration
Transport and communication
Trade policies
Gold standard
What is the difference between ‘soft’ and ‘hard’ globalization?
Soft globalization refers to the initial connection of the Old World with the Americas in 1571, focusing on trade and exchange of goods and ideas, but slow due to limited technology.
Hard globalization refers to the 19th-century integration of markets across space, with faster transport, communication, and reduced trade barriers.
What were the key advancements in transport and communication during the first phase of globalization?
The telegraph (1840), transatlantic cables (1860), telephone (1870), trains, steam navigation, the Suez Canal (1859-69), and the Panama Canal (1881), which reduced transport costs and created international markets.
How did economic integration affect price fluctuations in a globalized world?
In a globalized world, price fluctuations propagated more rapidly and became cyclical, influenced by trade and demand fluctuations rather than just local factors like droughts or famines.
What was the ‘Golden Age of Global Capitalism’ and when did it occur?
The period from 1896 to 1914 is labeled so and is characterized by increased capital flows, higher returns on foreign investments, and the rise of multinational corporations.
What was the Cobden-Chevalier Treaty (1860), and why was it important for trade policies?
The treaty was an Anglo-French agreement that lifted trade restrictions, reduced tariffs, and included a most-favored-nation clause, increasing international trade by 10% per year and promoting efficiency.
What was the Gold Standard, and how did it stabilize international trade?
It was a monetary system where the currency value was tied to gold. It stabilized exchange rates, minimized risk in international trade, and supported price stability over long periods.
What were some of the risks associated with the Gold Standard?
The risks included unequal experiences between core and peripheral countries, periodic financial crises, resource costs tied to gold, inadequate gold supplies causing deflation, and transmission of economic shocks through fixed exchange rates.
How did migration relate to globalization during this period?
It increased due to population growth, lower mortality rates, and improved sea transport. It alleviated labor market congestion in departure countries, slowed wage decreases, and boosted the purchasing power of emigrant families through remittances.
What role did imperialism play in the first phase of globalization?
It was driven by the search for markets, raw materials, and outlets for industrial production. It also had political and ideological motivations, reinforcing national identity and demonstrating European power and superiority.
What was the impact of the Suez and Panama Canals on global trade?
They drastically reduced transport times and costs, connecting markets more efficiently and facilitating the expansion of international trade and commerce.
How did the Gold Standard work as an automatic exchange rate rebalancing system?
It adjusted imbalances in the balance of payments. If a country had a trade surplus, it accumulated gold, increasing its money supply, raising prices, reducing competitiveness, and eventually eliminating the trade surplus.
What caused the ‘Great Deflation’ of the late 19th century?
It was caused by overproduction, increasing international competition, and an influx of non-European primary goods into European markets, leading to price drops and a demand for protectionist policies.
What were the benefits of the migration waves during the first phase of globalization?
It relieved demographic pressure in emigration countries, slowed wage decreases in these countries, raised wages in destination countries, and boosted the balance of payments through remittances sent back to families.
