Class 10 Social Science Chapter 15 The Making of a Global World Notes in English

When people talk about “globalisation” today, they usually mean an economic system that has grown over the last fifty years or so. But the making of a global world is a much longer story: of trade, of migration, of people moving in search of work, and of capital moving across borders. This chapter traces that story through four stages: the pre-modern world, the nineteenth century, the years between the two World Wars, and the rebuilding of the world economy after 1945.

1The Pre-modern World

Human societies have always been linked by travellers, traders, priests and pilgrims who carried goods, money, values, skills, ideas and even diseases across great distances. As early as 3000 BCE, coastal trade connected the Indus valley civilisation with West Asia. For over a thousand years, cowrie shells from the Maldives travelled as currency all the way to China and East Africa.

1.1 Silk Routes Link the World

The Silk Routes are the clearest example of pre-modern trade and cultural exchange. Historians have traced many such routes, over land and by sea, that existed from before the Christian Era until almost the fifteenth century, linking Asia with Europe and northern Africa.

1.2 Food Travels: Spaghetti and Potato

Food shows how far cultural exchange reached even before modern times. One theory holds that noodles travelled from China and became spaghetti in Italy, perhaps carried by Arab traders to fifth-century Sicily, though similar foods were also known in India and Japan, so the truth about their origins may never be known.

Far more certain is the effect of foods that reached Europe and Asia only after Christopher Columbus’s accidental “discovery” of the Americas about five hundred years ago: potatoes, soya, groundnuts, maize, tomatoes, chillies and sweet potatoes were unknown before this. Many of these foods came originally from the American Indians, America’s original inhabitants.

1.3 Conquest, Disease and Trade

The pre-modern world shrank dramatically in the sixteenth century, once European sailors found a sea route to Asia and crossed the Atlantic to America. The Indian Ocean had already known centuries of bustling trade, and the Indian subcontinent was central to this network, but the arrival of Europeans redirected many of these flows towards Europe. Precious metals, especially silver from mines in present-day Peru and Mexico, financed Europe’s trade with Asia and fed legends of El Dorado, the fabled city of gold.

Until the nineteenth century, poverty, hunger, overcrowded cities and religious persecution of dissenters were common in Europe, driving thousands to flee to America. By the eighteenth century, plantations worked by slaves captured in Africa were growing cotton and sugar for European markets. China and India remained among the world’s richest countries and were pre-eminent in Asian trade well into the eighteenth century. But from the fifteenth century, China is said to have restricted overseas contacts and retreated into isolation, and as its role shrank and the Americas grew more important, the centre of world trade shifted west, until Europe itself became the centre of world trade.

2The Nineteenth Century (1815-1914)

The world changed profoundly in the nineteenth century, as economic, political, social, cultural and technological factors reshaped societies and the relations between them. Economists describe this change through three types of movement, or “flows,” within the international economy.

All three flows were closely interwoven, though labour migration was usually more restricted than the movement of goods or capital.

2.1 A World Economy Takes Shape

Britain’s population grew fast from the late eighteenth century, pushing up the demand, and the prices, of food grain. Under pressure from landowners, the government restricted the import of corn through laws known as the Corn Laws. High food prices then angered industrialists and urban dwellers, who forced the government to abolish the Corn Laws.

By 1890 a global agricultural economy had taken shape. Food no longer came from a nearby village; it was grown by hired agricultural workers on distant farms, carried by railway and by ship, and about 60% of all this trade was in “primary products”: agricultural goods like wheat and cotton, and minerals like coal. A smaller, similar story unfolded closer home: the British Indian government built the Canal Colonies in west Punjab, irrigating semi-desert land to grow wheat and cotton for export, and settling it with peasants from elsewhere in Punjab.

2.2 Role of Technology

Railways, steamships and the telegraph made the transformed nineteenth-century world possible, but technological advances were often the result of larger social, political and economic factors. The trade in meat is a good example.

Better living conditions from cheaper food helped keep social peace at home, and built support for imperialism abroad.

2.3 Late Nineteenth-century Colonialism

Trade and markets expanded rapidly in the late nineteenth century, but this had a darker side: for many colonised societies, it meant a loss of freedom and livelihood. In 1885, the major European powers met at the Berlin Conference to complete the carving up of Africa between themselves, drawing some borders so straight that they look as if they were drawn with a ruler. Britain and France made vast new colonial gains; Belgium and Germany became new colonial powers; and by the late 1890s the US had also become one, taking over colonies earlier held by Spain.

2.4 Rinderpest, or the Cattle Plague

For centuries, land and livestock, both abundant, sustained African livelihoods, so Africans had little reason to work for wages. But late-nineteenth-century Europeans wanted African land, minerals and labour for their plantations and mines. To force people into wage labour, colonisers imposed heavy taxes, changed inheritance laws so only one family member could inherit land, and confined mineworkers to compounds.

Then came Rinderpest, a devastating cattle disease carried into East Africa in the late 1880s by cattle imported from British Asia to feed Italian soldiers invading Eritrea. It spread west “like forest fire,” reaching Africa’s Atlantic coast in 1892 and the Cape five years later, killing 90 per cent of the cattle along the way.

2.5 Indentured Labour Migration from India

The story of indentured labour shows the nineteenth-century world’s two faces at once: faster growth alongside great misery, higher incomes for some and poverty for others. In the nineteenth century, hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines, and in road and railway construction projects around the world; this section follows the Indian case. In India, indentured labourers were hired under contracts which promised return travel to India after they had worked five years on their employer’s plantation.

Most Indian indentured workers came from eastern Uttar Pradesh, Bihar, central India and the dry districts of Tamil Nadu: regions where cottage industries were declining, land rents were rising, and the poor were falling into debt. Agents recruited migrants with false promises about work and living conditions, and sometimes by force.

Nineteenth-century indenture has been called a “new system of slavery”: conditions on plantations were harsh, and legal rights were few. Yet workers built their own forms of survival and expression: in Trinidad, the Muharram procession was transformed into the carnival called “Hosay”; Rastafarianism (made famous by Bob Marley) is also said to reflect cultural links with Indian migrants; and “Chutney music” in Trinidad and Guyana grew out of the post-indenture experience. Most workers stayed on after their contracts ended, which is why large communities of Indian descent exist in these countries today. The Nobel Prize-winning writer V.S. Naipaul and West Indies cricketers Shivnarine Chanderpaul and Ramnaresh Sarwan all descend from indentured migrants. From the 1900s India’s nationalist leaders began opposing the system as abusive and cruel, and it was abolished in 1921, though descendants remained an uneasy minority, often called “coolies,” for decades afterwards. The book’s caption to a photograph of indentured labourers photographed for identification notes: “For the employers, the numbers and not the names mattered.”

2.6 Indian Entrepreneurs Abroad

Growing crops for the world market needed capital that ordinary peasants could not easily borrow. Indian bankers such as the Shikaripuri Shroffs and Nattukottai Chettiars financed export agriculture across Central and Southeast Asia, using their own funds or loans from European banks, and developed sophisticated systems to move money across long distances. Indian traders also followed European colonisers into Africa; Hyderabadi Sindhi traders went further still, establishing emporia at ports worldwide from the 1860s, selling curios to a growing number of tourists.

2.7 Indian Trade, Colonialism and the Global System

Fine Indian cotton had long been exported to Europe. But as British cotton manufacturing industrialised, tariffs were imposed on cloth imports into Britain, and the share of cotton textiles in India’s exports fell steadily.

While exports of manufactures declined rapidly, export of raw materials increased equally fast: the share of raw cotton in India’s exports rose from 5 per cent (1812) to 35 per cent (1871). Indigo (for dye) remained an important export for decades, and from the 1820s opium shipments to China grew so fast that opium became, for a while, India’s single largest export: Britain grew opium in India, sold it to China, and used the proceeds to buy tea and other Chinese goods. (Earlier, all through the seventeenth and early eighteenth centuries, Surat had remained the main centre of overseas trade in the western Indian Ocean.)

3The Inter-war Economy

3.1 Wartime Transformations

The First World War (1914-18) was fought mainly in Europe, between the Allies (Britain, France and Russia, later joined by the US) and the Central Powers (Germany, Austria-Hungary and Ottoman Turkey). When it began in August 1914, many governments thought it would be over by Christmas; it lasted more than four years and became the first modern industrial war, using machine guns, tanks, aircraft and chemical weapons on a massive scale.

Most of the dead and injured were men of working age, which shrank Europe’s able-bodied workforce and cut household incomes. Industries were restructured for war production, and as men went to the battlefront, women stepped into jobs earlier reserved for men. The war also snapped economic links between the major powers: Britain borrowed heavily from US banks and the American public, which turned the US from an international debtor into an international creditor: the US and its citizens now owned more overseas assets than foreign governments and citizens owned within the US.

3.2 Post-war Recovery

Britain, the world’s leading pre-war economy, faced a long crisis. While Britain was preoccupied with war, industries had developed in India and Japan, and Britain struggled afterwards to recapture its old dominance in the Indian market or compete with Japan, all while carrying huge debts to the US. As the wartime economic boom ended, production fell and unemployment rose sharply: by 1921, one in every five British workers was out of work. Wheat-growing economies suffered too: wartime disruption to Eastern European wheat had pushed up production in Canada, America and Australia, but once Eastern Europe recovered after the war, the resulting glut crashed grain prices and pushed many farmers deeper into debt.

3.3 Rise of Mass Production and Consumption

In the US, recovery was quicker. One important feature of the US economy of the 1920s was mass production: the move towards it had begun in the late nineteenth century, but in the 1920s it became a characteristic feature of industrial production in the US. Car manufacturer Henry Ford adapted the assembly-line method of a Chicago slaughterhouse to his car plant in Detroit, forcing workers to repeat a single mechanical task at a pace set by the conveyor belt.

Fordist methods spread through the US and, in the 1920s, through Europe too. Lower costs and higher wages let more workers buy durable goods: car production rose from 2 million (1919) to over 5 million (1929), alongside a boom in refrigerators, washing machines and radios bought on credit (“hire purchase”). Rising investment in housing and consumer goods created a self-feeding cycle of employment, income and demand. In 1923, the US resumed exporting capital to the rest of the world and became the largest overseas lender; US imports and capital exports also boosted European recovery and world trade and income growth over the next six years. By 1929, it all collapsed.

3.4 The Great Depression

The Great Depression (1929 to the mid-1930s) brought catastrophic falls in production, employment, income and trade across most of the world, hitting agricultural regions hardest because farm prices fell further and longer than industrial prices.

The withdrawal of US loans triggered bank failures and currency collapses in Europe (including the British pound), and deepened the slump in Latin American commodity prices; the US then made things worse for world trade by doubling its own import duties. The US was also the industrial country most severely affected by the depression: banks slashed domestic lending and called back loans, farms could not sell their harvests, households were ruined, and businesses collapsed. Many households could not repay what they had borrowed and were forced to give up their homes, cars and other consumer durables. When an unemployment census showed 10 million people out of work, the local government in many US states began making small allowances to the unemployed.

3.5 India and the Great Depression

India’s exports and imports nearly halved between 1928 and 1934, and wheat prices in India fell by 50 per cent in the same period, showing how tightly India was now bound into the world economy. Peasants suffered most, since the colonial government refused to lower revenue demands even as agricultural prices crashed. Bengal’s jute growers, for instance, saw the price of raw jute crash by more than 60 per cent as gunny exports collapsed, driving them deep into debt, a hardship captured in a contemporary jute growers’ lament about traders who “will pay only Rs 5 a maund.” Across India, peasants sold jewellery and precious metals to survive, and India became a notable exporter of gold in these years. Economist John Maynard Keynes thought that Indian gold exports promoted global economic recovery. They certainly helped speed up Britain’s recovery, but did little for the Indian peasant. It was amid this rural unrest that Mahatma Gandhi launched the Civil Disobedience Movement in 1931. Urban India suffered less: falling prices actually helped those on fixed incomes, such as landowners and salaried employees, and nationalist pressure won tariff protection that encouraged industrial investment.

4Rebuilding a World Economy: The Post-war Era

The Second World War broke out just two decades after the First ended, fought between the Axis powers (mainly Nazi Germany, Japan and Italy) and the Allies (Britain, France, the Soviet Union and the US). Unlike earlier wars, most of its victims were civilians rather than soldiers.

Two powers shaped the post-war world: the US, now the dominant economic, political and military power in the West, and the Soviet Union, which had made huge sacrifices to defeat Nazi Germany and had transformed itself from a backward agricultural country into a world power during the very years the capitalist world was mired in Depression.

4.1 Post-war Settlement and the Bretton Woods Institutions

Economists and politicians drew two lessons from the inter-war years: first, that mass production needs mass consumption, which needs stable full employment, which only government intervention can guarantee; second, that full employment requires governments to be able to control flows of goods, capital and labour across borders.

This framework was agreed at the United Nations Monetary and Financial Conference, held in July 1944 at Bretton Woods, New Hampshire.

The Bretton Woods system rested on fixed exchange rates: national currencies (including the Indian rupee) were pegged to the US dollar, and the dollar itself was anchored to gold at a fixed price of $35 per ounce.

4.2 The Early Post-war Years

The Bretton Woods system brought an era of remarkable, stable growth for the Western industrial nations and Japan: world trade grew at over 8 per cent a year between 1950 and 1970, incomes at nearly 5 per cent, and for much of this period unemployment in most industrial countries averaged less than 5 per cent. Developing countries, eager to catch up, invested heavily in imported industrial plant and technology during these decades, which also saw the worldwide spread of multinational corporations.

4.3 Decolonisation and Independence

Over the two decades after the Second World War, most Asian and African colonies won independence, but poverty and a lack of resources, the legacy of long colonial rule, left them badly handicapped. The IMF and World Bank had been designed to serve industrial countries, not to fight poverty in the newly independent world, so as Europe and Japan rebuilt and needed them less, the Bretton Woods institutions gradually shifted their attention towards developing countries from the late 1950s. Yet former colonial powers, and corporations from powerful countries like the US, often still controlled vital resources, minerals and land, in these newly independent nations, very cheaply.

4.4 End of Bretton Woods and the Beginning of “Globalisation”

From the 1960s, the rising cost of US overseas commitments weakened its finances, and the dollar could no longer hold its value against gold. This led to the collapse of fixed exchange rates and the introduction of floating exchange rates in their place. From the mid-1970s, developing countries could no longer rely on international institutions for loans and had to borrow instead from Western commercial banks and private lenders, leading to repeated debt crises, falling incomes and rising poverty, especially in Africa and Latin America. Industrial-world unemployment also rose from the mid-1970s and stayed high until the early 1990s. From the late 1970s MNCs also began to shift production operations to low-wage Asian countries.

China, cut off from the world economy since its 1949 revolution, rejoined it through new economic policies, just as the collapse of the Soviet Union and Soviet-style communism in Eastern Europe brought many more countries back into the world economy. Low wages made China an attractive destination for foreign MNC investment, which is why so many everyday goods are made there today. This relocation of industry to low-wage countries drove a new surge in world trade and capital flows, and over the last two decades the world’s economic geography has been transformed by the rapid growth of countries such as India, China and Brazil.