WEEK 2 Flashcards
What is the Organizing Principle?
Trade is what happens when consumption occurs in a different place than production
What are “phases” by definition of trade?
Goods produced in one place, and consumed in another
What are the FOUR phases?
- Humanising the Globe
- Localising the World Economy
- Rise of Trade
- Rise of North-South Offshoring
What are the FOUR transition phases?
- Climate
- Agricultural Revolution
- Steam Revolution
- ITC Revolution
What happened in Phase Transition: Climate Change?
- Modern humans evolved in climate similar to today’s
- 2 “Out-of-Africa” migrations
What happened in Phase 1: Humanising the Globe?
- 185-200 millennia
- Hunter-gatherers hunted and gathered their way around the world
- Consumption moves to production
- Trade is an exotic phenomenon
Phase Transition: Agricultural Revolution
- Domestication of plants and animals
- Fertile Crescent
- Result: Production BUNDLES with Consumption
- Result: Population booms, cities and civilizations emerge
Phase 2: Localising the World Economy/FIRST “Bundling”
- 12 000 BCE - 1820
- First “bundling” - Production moves back to consumers
- Trade is regular, but not significant
- Agriculture allows production to be brought to consumption > concept of civilization
- 3 Stages
First Stage of Phase 2
Rise of Asia (12 000 BCE - 200 BCE)
Key Events: Rise of Asia
- Villages, cities, and civilizations
- Asia/Egypt dominate global economy for 2 millennia
- Asia (Mesopotamia, Egypt, India, and China) dominated the world economy up to 1820
- Largely populated the world
- Long distance trade regularized - elite goods
- Bronze Age Trade - Mesopotamia the “hub”
Second Stage of Phase 2
Eurasian Integration (200 BCE - 1350 CE)
Key Events: Eurasian Integration
- Silk Road connected same basic production/consumption clusters for 17 centuries - East, West, and South of the Tibetan Plateau
- Silk Road - Rare trades
- Voyages of Admiral Zhang He (1405-1433)
Third Stage of Phase 2
Proto-Globalization (1450-1776)
Proto-Globalization
- Anthony Gerald Hopkins
- 3 Key Elements
- Proto-Globalization: Renaissance, Reformation, and Enlightenment - Renaissance
- 1300-1600s
- Revival of Middle Eastern knowledge and rise of humanism
- Commercial Revolution
- Proto-Globalization: Renaissance, Reformation, and Enlightenment - Reformation
- 1518
- Radical ideas in 16th C
- Printing Press
- Proto-Globalization: Renaissance, Reformation, and Enlightenment - Enlightmentment
- 1600-1700s
- Reason, logic, scientific revolution
- Proto-Globalization: Why Europe?
- Place where marriage of capitalism, science, and empire occurred
- 1750-1850 - centre of global power
- Explore and conquest attitude
- Proto-Globalization: Age of Discovery
- Reversal of Asian dominance
- Cape of Good Hope (1488)
- Camel transportation
- Major political integration of production/consumption clusters (up until 1350)
- Rise of Europe
- Proto-Globalization: Age of Discovery - Rise of Europe
- 1350 CE - 1850 CE
- Black Death (1347) rebooting Ancient World
- European Radical Population Decline
- World Historic Shift
- Black Death impact on British incomes
- Silk Road shut down (15th C)
- Proto-Globalization: Colombian Exchange
- Started to import food crops from America
- Raised Euro pop. density
- European disease de-populated the New World
- Differences between New World and Old World trades
- European population increase; American population decrease > Americas rapidly repopulated with European immigrants
- Proto-Globalization: Colombian Exchange - European-Asia Trade
- 16th Century
- Europeans dominated - “King of the Hill”
- 1700s - Europeans mapped the world > navigate seas
Impact of Proto-Globalization
Europe breaks out of the Malthusian trap
What is the Malthusian Trap?
- Robert Malthus
- Ensures that gains in income per person through technological advances are inevitably lost through subsequent population growth
- Health, longevity, quality of life, survival rate increases
- Causes population to increase over generations > food per person to fall back until equilibrium level of subsistence
- Population is trapped into a subsistence level of life
What was the pre-industrial revolutionary thinking about international trade?
- Doctrine of Universal Economy
2. Mercantilism
What is the Doctrine of Universal Economy?
God created the sea, geographic separation, and diversity in endowments in order to promise interactions through trade between the various people of the earth
What is Mercantilism?
- 16-18th C thinking
- Viewed exports as good, imports as bad
- Land was a main source of national wealth
- Trade was viewed as a zero-sum game
- Strong regulations of int’l trade
- National trade surplus > nation’s gold stock increases > wealth rises; everyone else’s falls
Summary
- A7 declined while G7 increased
- Consumption and Production became largely bundled geographically
- Trade; but low volume
- Growth stagnation for A7
- Per capita income gap opened up b/w Atlantic economies and Asia during the Proto-Globalization period
- Asia’s economic dominance con’t (60% of world GDP) - population outweighed Atlantic income advantage
