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globalisation and geopolitics > week two - The first wave of globalisation, 1870-1913 and deglobalisation, 1914-1945 > Flashcards

week two - The first wave of globalisation, 1870-1913 and deglobalisation, 1914-1945 Flashcards

1
Q

what increased/decreased with internationalisation between 1820-1913

A
  • increase in trade
  • increase in migrations
  • increase in capital flows
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2
Q

what happened in terms of trade and protectionism between 1800-1913

A
  • 1840-1870 higher growth of trade
  • 1870-80 increase in protectionism
  • trade grew at a higher rate than world production
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3
Q

between 1800-1900s where was most of trade located in the world

A

intra-europe, the most important growth of trade was between old and new world countries

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4
Q

what percentage of trade composition were primary goods in early periods of trade

A

63% of primary products

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5
Q

what were some liberalising policies in the UK and France

A
  • Elimination of Corn Laws in 1846 in Great Britain
  • Trade treaties: Cobden-Chevalier treaty (1860) between France and GB and establishment of the most-favoured-nation (MFN) clause in treaties (MFN clauses implied that bilateral trade concessions were automatically generalised to all participants in the treaties)
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6
Q

what are the two biggest factors behind growth trade

A
  • liberalising policies
  • technological change
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7
Q

what innovations changed trade growth

A
  • channels and trains
  • railways
  • refrigeration
  • communication innovation
  • freight reduction (containerisation)
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8
Q

from 1881-1915 how many international immigrants were there roughly per year

A

900,000 (kenwood and Lougheed, 1992)

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9
Q

where were most immigrants from

A

mostly european:
- first half of 19th century: British Isles
- around 1850: Scandinavia
- 1880 onwards: south and eastern europe
- and some asian countries

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10
Q

where are the biggest destination countries

A
  • USA
  • 1880 onwards: Brazil, argentina, australia
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11
Q

what are the eight determinants of emigration

A

1) wage differentials
2) land availability
3) migration aids
4) chinese indentured servitude (railroads)
5) demographic factors
6) income restrictions (cost of emigrating)
7) migration chain
8) migration policy (sending countries)

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12
Q

what is the migration chain

A

the remittances of previous emigrants financing the following emigrants

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13
Q

characteristics of destination countries

A
  • higher wage
  • land abundance
  • countries promoting immigration
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14
Q

characteristics of origin countries

A
  • lower wage
  • labour abundance
  • only UK promoting emigration
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15
Q

what are the main capital-exporting countries

A

UK, france, germany, belgium, netherlands and sweden, but UK as the main capital exporting country

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16
Q

what are the main capital-importing countries

A

europe, and new world countries (e.g. north america, japan, argentina etc.)

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17
Q

what was the capital composition between 1830-1914

A
  • portfolio investments: railway constructions, ports, telegraphs etc.
  • shares
  • bonds
18
Q

what were the reasons to increase foreign investments between 1830-1914

A
  • demand: needs of capital in new world countries, higher returns (more risk), political factors
  • supply: increase in domestic savings, exhaustion of domestic investment opportunities
19
Q

why did the heavily industrialised countries takeover africa, asia and oceania post 1880

A

economic reasons:
- trade
- growing population
- new investment markets (capital imperialism)
political factors:
- military reasons
- strategic raw materials
- defensive imperialism
ideology:
- nationalism

20
Q

what is the heckscher-ohlin theory

A
  • each country exports the commodities which make an intensive use of the factors found in abundance in that country and imports the commodities that make an intensive use of the country’s scarce factors
21
Q

what is meant by the equalisation of prices of goods

A
  • the decrease in transport costs leading to the decrease in the differences in prices in the international markets
22
Q

why was equalisation of prices not uniform across all countries (1869-1914)

A
  • in germany, france and sweden convergence was only modest whereas it was higher in the UK and denmark
  • italys convergence was very slow
  • spain and portugal did not converge
  • the reason for this reaction was because of the difference in reaction to the trade tariffs
23
Q

what were the effects of trade on factor price convergence (rent and wages)

A
  • old world: demand for land decreases, the rent paid for land (R) decreases
  • new world (specialised in agriculture): demand for land increases, the rent paid for land increases
  • Old World: specialised in cotton textiles. The demand for labour increases, wages increase
  • New World: specialised in agriculture. The demand for labour decreases, wages decrease
  • Result:
    – Old World: w/R increases, due to w increasing and R decreasing
    – New World: w/R decreases, due to w decreasing and R increasing
  • As a consequence of specialisation: w/R convergence
    – R being the rent paid for using land, and w being wages
  • Trade was between countries with land abundance and labour abundance
24
Q

what did a decrease in wheat prices do to countries where agriculture had a small weight in the economy (UK/denmark)

A

increase in real wages

25
Q

what were the effects of international trade in countries where agriculture had a greater significance but could diversify production

A

lower demand for labour in agriculture affected nominal wages negatively (france and germany) but they could adapt to changes in the international market towards other agricultural goods

26
Q

what were the effects of international trade in backward or poorer countries

A

the low productivity of agriculture, need for infrastructure, and large population negatively influences the benefits of economic openness

27
Q

how did international trade also contribute to the extension of the welfare state

A
  • it promoted labour regulations (mainly in favour of children and women)
  • trade treaties between european countries established conditions to trade
28
Q

what was the reaction to transport costs reduction in the past

A

protection: tariffs were raised

29
Q

what is the composition of trade in the past vs now

A
  • past: agriculture
  • now: manufacturing and services
30
Q

what were the effects on wage as a result of migration

A

the real wages increased relative to those in destination countries
- convergence in wages in denmark, ireland, norway, sweden, netherlands, italy
- wages fell in belgium, france, spain and portugal
- increase in wages in origin countries
- decrease in wages in receiving countries

31
Q

what were the effects on wage inequality as a result of migration

A
  • origin countries: in unskilled labour abundant countries migration reduces the supply of unskilled labour, reducing wage inequality
  • receiving countries: migration increases the supply of unskilled workers and increases wage inequality
32
Q

before IWW, what was the main factor of convergence

A

international migrations (accounted for about 70% of real wages convergence)

33
Q

did old/new world countries increase of decrease wage inequality

A
  • new world countries: increased inequality
  • old world countries: decreased inequality
34
Q

what does higher integration of the capital markets imply

A

higher interest rate convergence

35
Q

when do capital flows only favour wage convergence

A

when capital flows from rich to poor countries

36
Q

what was the economic growth effect (international capital flows)

A

most of the capital was exported to new world countries (where natural resources can be exploited) and not to asian economies or the poorest areas where labour was cheap

37
Q

were international capital flows a force of convergence or divergence in GDP per capita in relation to developed countries

A

a force of divergence

38
Q

what were the most important investments in the past vs now

A
  • past: portfolio investments
  • now: FDI
39
Q

what were the most important investments in the past vs now

A
  • past: portfolio investments
  • now: FDI
40
Q

what was the reaction to deglobalisation regarding trade

A

protectionism

41
Q

what was the reaction to deglobalisation regarding migration

A

migration restrictions

42
Q

what was the reaction to deglobalisation regarding capital flows

A

they were interrupted by the IWW

globalisation and geopolitics (6 decks)

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