Creation Interaction and Expansion of Economic Systems Creation

Creation, Interaction and Expansion of Economic Systems

Creation, Interaction and Expansion of Economic Systems n This theme includes: q q q Agricultural and pastoral production Trade and commerce Labor systems Industrialization Capitalism and Socialism

Foundations Unit 8000 BCE – 600 CE

Neolithic Revolution n Traditional Economy q q Hunting and gathering Sedentary agriculture developed between 10, 000 and 8, 000 BCE n n n q 1 st developed in southwestern Asia Earliest method was slashand-burn agriculture Subsistence agriculture Herding animals (pastoralism) Slash-and-burn agriculture in northeast India

Development of Agriculture

Economic Regions

Early Village Economy n Farming led to the rise of permanent villages q n n Jericho Village life led to specialized labor Development of early industry q Pottery, metallurgy, and textiles

Ancient Civilizations n Mesopotamia, Egypt, & Indus River Valley q q n China q n Regular rains & fertile soil minimized irrigation Olmec q n Irrigation led to improved agriculture Development of cities contributed to rise of trade Develop in rainforest; water control systems Chavin q Develop in mountains; complex irrigation

Nile-Indus Corridor

Pre-classical labor systems n Slavery q q n Existed in all early civilizations but was relatively unimportant Most slaves gained through military conquest Egypt q q q Used corvée labor to build pyramids & temples Peasants were bound to the land Men were organized into labor gangs of 50 -100

Pre-classical labor systems n Mesopotamia q q Large number of slaves due to militaristic nature of society Peasants lost their freedom over time n n Rise of debt slavery China q Zhou dynasty peasants paid a percentage of their crops to aristocrats in exchange for protection n Manorial system

Classical Civilizations n Han China q q n Mauryan India q n Monopolized production of iron, salt, and liquor Rise of the Silk Road Ashoka built irrigation systems and roads to promote trade Mayans q Terrace farming improved production of cotton, maize, and cacao

Classical Civilizations n Ancient Greece q q n Cities, such as Athens, become centers of trade Economy depended heavily on slavery Rome q Latifundia – large landed estates focused on commercial agriculture (olive oil, wine, wheat) n q q North Africa was the major grain producing region Depended on slave labor Roman roads promoted trade and linked empire to Silk Road

Classical era labor systems n China q Free peasants were the backbone of the labor force n q Qin Shi Huangdi ended the manorial system n q “Recruited” labor to build the Great Wall Silk weaving supplemented farm income n q Peasants ranked just below bureaucrats but above artisans and merchants “Men as tiller, woman as weaver” During the Han dynasty, slaves made up less than 1% of the total population

Classical era labor systems n Greece & Rome q q Slaves never constituted more than 50% of the population Slaves worked as domestic servants, miners, and farmers n n n In Greece, slaves could serve as tutors In Rome, development of commercial agriculture led to the rise of slavery Rome also used slaves as gladiators and chariot racers

Classical era labor systems n India q Caste system was based largely on job classification n n q Farmers did not rank high in prestige Merchants had a higher social standing than they did in China or the Mediterranean Slaves played almost no role in the economy n Sudras (lowest caste) and untouchables took the place of slaves

Post-Classical Unit 600 – 1450

Creation, Interaction and Expansion of Economic Systems n This theme includes: q q q Agricultural and pastoral production Trade and commerce Labor systems Industrialization Capitalism and Socialism

The Silk Roads Cotton

Arabs n n Did not rely heavily upon agriculture Abbasid sakk (checks) encouraged trade q n Urbanization: Baghdad Dar al-Islam facilitated expansion of trade q q q Islamic law protected merchants Revival of the Silk Road Growth of Indian Ocean trade n Dhows increase the volume of maritime trade

Indian Ocean trade routes Chinese junk East Africa gold salt slaves Arab dhow

Labor in the Islamic World n Islamic slaves were viewed as humans rather than just property (chattel) q n n Slavery was seen as a method of conversion Slaves were acquired from Africa or central Asia Abbasid introduced the use of Turkish slavesoldiers q q Mamluks Janissaries (Ottoman Empire)

Post-Classical Empires n Byzantine Empire q q Manufactures glassware, jewelry, & silk Trade a major part of the economy n q n Mediterranean Sea, Silk Roads, Russia, etc. Urbanization: Constantinople Sudanic Africa (Ghana, Mali, Songhai) q Trans-Saharan trade n q Use camel caravans to trade gold, slaves, and ivory for horses, manufactured goods, and salt Urbanization: Timbuktu

Trans-Saharan trade routes

Post-Classical Empires n Swahili Coast q q n Trade gold and parts of exotic animals to Islamic and Indian merchants for products from Persia, India, and China Urbanization: Mogadishu, Kilwa, etc. Great Zimbabwe q Supplies gold to the Swahili coast

Tang/Song China n Emphasis on internal trade q q n Champa rice & terrace farming Grand Canal & flying money Song “pre-Industrial” era q q Commercial economy focused on the production of silk, porcelain, & steel Urbanization: Hangzhou

Post-Classical Empires n Mongols q q Pastoralists Promoted trade on Silk Road via Pax Mongolica n n Marco Polo Japan q q Villages relied on rice cultivation World’s leader in silver production n q Trade silver to China for manufactured products Development of feudalism caused peasants to become serfs

Medieval Europe n Manorialism q q n Self-sufficient agricultural estates worked by serfs Three-field system & moldboard plow Trade revived after 1000 CE q q Rise of merchant & craft guilds Crusades led to an increase in demand for Asian products Rise of Italian merchants & the Hanseatic league Urbanization: Italian cities & Paris

Hanseatic League (1400 s-1600 s)

Post-Classical Empires n Aztecs q q q n Chinampas Pochteca monopolized longdistance trade Tribute system Inca q q Built 9, 500 miles of roads to facilitate trade Inca socialism Use terrace farming to grow potatoes Mita labor

Early Modern Era 1450 - 1750

Rise of World Trade n European exploration q q Seeking easier access to Asian luxury products Columbus discovery of the Americas Vasco da Gama reached India in 1498 Spain established Manila in 1571 n n Manila galleons connect Asian markets to American silver Trade Empires q q q Spain/Portugal in the 16 th century Netherlands (Dutch) in the 17 th century England (Great Britain) in the 18 th century

European Colonization

World Trade after 1571

Dutch Trade Empire

Western Europe n Commercial Revolution q q Rise of a middle class (bourgeoisie) and proletariat Mercantilism n n q Rise of manufacturing Encouraged colonization Joint Stock Companies n n Privately owned with government support Ex. Dutch East India Co. , Royal African Co. , Virginia Company

Economy of New Spain n Encomiendas q q n Manorial system in the New World Declined with the death of the natives Plantations q Majority of labor provided by African slaves

Economy of New Spain n Mining q q q n Silver “the Heart of the Empire” Largest mine was Potosi Mita labor Haciendas q Estates focused on cash crops & livestock

Africa & the Slave Trade n Commercial relationship developed between West African kingdoms & Europe q n n Triangle Trade or the Atlantic System Slavery was common in Africa Slave Trade q q q Trade continued with Muslim merchants Increase demand caused by sugar plantations Atlantic slave trade altered traditional African trade routes

African Slave Trade

Emancipation of Slaves

Ming Dynasty n Economic Recovery q q n “Silver Sink” q q n Rebuilt irrigation systems destroyed by the Mongols Increased production of silk textiles & porcelain Single-whip tax system Chinese demand for silver contributed to rise of world trade Limited trade to Macao/Canton

Voyages of Zheng He n Established tributary relationships throughout the Indian Ocean q Exchanged silk & porcelain for other luxuries

Tokugawa Japan n n Portugal established trade relations in 1543 Trade silver to China in exchange for luxury products q n Began isolation in 1640 s q n 2 nd in silver exports behind Spain Allowed Dutch & Chinese to trade at Nagasaki Urbanization led to rise of a merchant class

Russia n n Peter the Great modernized the economy focused on mining and metallurgy Serfdom q q q Began under Mongol occupation Provided cheap labor for Russian agriculture Could be bought and sold

Mughal Empire n n Continued manufacturing cotton textiles British establish trading posts at Madras and Bombay in the early 1600 s q British East India Company continued to expand their interests into the 1700 s

The Modern Era 1750 -1914

Causes of the Industrial Revolution n n Favorable natural resources Population Pressure q n Growth of large manufacturing sector q n n n Abundance of labor Cottage industry (putting-out system) Advantages in world trade Technological innovation Government support of business

Industrial Technology n n Cottage Industry (putting-out system) Mechanization of weaving q n Iron smelting q n Bessemer steel process Energy q n Cotton that took an Indian worker 500 hours to spin took a machine in England 80 minutes to spin Steam engine and electricity Transportation q Canals, steamboat, railroads

Economic Effects of Industrialization n Labor changes q q q n n n Factory labor was dangerous and toilsome Initially women & children work in factories Rise in white collar jobs for new middle class High unemployment rates Labor unions were formed to protect workers Rise of consumer culture Standard of living increases Frequent economic depressions

Economic Effects of Industrialization n New economic theories q Capitalism n q q Direct attack on mercantilism Positivism Socialism n n The Communist Manifesto by Karl Marx and Friedrich Engels Communism

Global Industrialization n Industrialization turned nations into either manufacturers of consumer goods or suppliers of raw materials n Manufacturers: Western Europe, the United States, Japan, Russia(? ) n Suppliers: the Ottoman Empire, Egypt, China, India Africa, Latin America, Southeast Asia, Australia

Spread of Industrialization in Europe

Russian Industrialization n n Caused by Russian defeat in Crimean War Abolish serfdom in 1861 q n Do NOT make major reforms to help peasants Limited industrialization q q Trans-Siberian railroad Focus on heavy industry n n q 2 nd in petroleum and 4 th in steel production by 1900 Do NOT produce consumer goods Lower class women move to cities for factory work

Japanese Industrialization n Ends isolation in 1853 Abolish samurai class Economic modernization q q Industrialization Zaibatsu n q Mitsubishi Women work in silk factories

Africa: 1750 -1914 n British ended the slave trade in 1807; the United States in 1808 q n n England bans slavery in 1833; U. S. in 1863; Natural resources (gold, ivory, palm oil) replace slaves in trade with Europe Muhammad Ali modernizes Egypt q q q Forced peasants to grow cotton for export Built irrigation canals and railroads Successors build the Suez Canal n Makes Egypt one of the most strategic places on Earth

The Middle East: 1750 -1914 n “Sick Man of Europe” q q q Declining agricultural revenues Large debts to foreign nations European imports exceed exports n n Caused massive inflation Reforms q q Creation of a central bank Factories opened in urban areas n Relied heavily on European investment and technology

Asia: 1750 -1914 n India q British transform India from supplier of textiles to exporter of raw cotton n n China q Opium War ends Canton system n n Opium trade reverses causes silver to flow from China Southeast Asia q n Also export opium, coffee, and tea British establish Singapore and colonize other areas to gain access to raw materials Indentured Servitude q Thousands of Indians, Chinese, and Japanese migrated to the Caribbean to replace slave labor

The Americas: 1750 -1914 n Latin America supplied raw materials to the West in exchange for manufactured goods q q n n Influence switched from Spain to England Monroe Doctrine Indentured servitude & immigration replace slavery Mexico and Argentina undergo limited industrialization in the late 1800 s q Porfirio Diaz

The Twentieth Century 1914 – Present

The West n Great Depression q Causes n q German economic depression, France & England unable to pay war debt; surplus in agriculture & industry; U. S. stock market crash (October 1929); U. S. bank failures Effects n Economic nationalism, expansion of welfare state (New Deal in U. S. ), increased government regulation of the economy; political radicalization

The West: Post-WWII n Transition from secondary economy (industrial) to a tertiary economy (service) q n n Expansion of the welfare state Economic cooperation q q n Growth of white-collar jobs European Economic Community (eventually EU) IMF and World Bank Multinational corporations q Volkswagon built cars in Mexico for U. S. consumers

Eastern Europe n Russia q New Economic Policy n q q Lenin’s response to the Great Depression; minimal impact Collectivization of agriculture Five-Year Plans n Command Economy

Latin America n Export raw materials (crops, rubber, etc. ) for manufactured goods q q Industry dominated by Europe Great Depression had major impact n n Exports fell by over 65% Import Substitution Industrialization Attempts at economic nationalization was often opposed by the U. S. NAFTA

Africa n Export raw materials (cocoa, palm oil, gold, etc. ) for manufactured goods q n Colonial rulers often forced Africans to work in mines or on plantations Post-Independence q q Debt Emerging markets n q Low GDP with opportunity for economic growth Violence over resources n Conflict diamonds

The Middle East n Post-Independence q q Often remained dependent upon trade with Europe Impact of oil economy n n q OPEC Allowed nations to gain tremendous wealth Many countries have used oil wealth to invest in other industries n Ford, Citicorp, AIG, etc.

East Asia n Japan, Inc. q n Little Tigers q q n Government works closely with business South Korea – steel, automobiles, etc. Taiwan – textiles then computers Hong Kong – textiles then banking Singapore – shipping China q q Five-years plans & collectivization under Mao Four modernizations under Deng Xiaoping n Semi-autonomous regions