Class 10 NCERT Solutions History Chapter 3 - The Making of a Global World

Before the seventeenth century, global exchanges were in the most part in the fields of trade and culture. Food offers one example of long distance cultural exchange which was beneficial. Traders and travelers introduced new crops to the lands they travelled to.

Many of Indians' common foods like potatoes, soya, groundnuts, maize, tomatoes, chillies and sweet potatoes were introduced because of contacts with native Americans into Europe and Asia.

The silk routes are an important example of global exchange between Asia and the distant parts of the world. These routes by land and sea knitted together vast regions of Asia, linking Asia with the European peninsula and North Africa. Traders carried Chinese silk, pottery, Indian textiles and South-east Asian spices to Africa and Europe and in return brought back gold and silver.

It is said that the most powerful weapon of the Portuguese and Spanish conquistadors was not a conventional military weapon but germs such as those of smallpox that they carried on their person.

The original inhabitants of the Americas had lived a life of isolation from the rest of the world for centuries together. As a result, they had no inbuilt immunity against diseases that came from Europe. Smallpox in particular turned out to be deadly. Whole communities of American Indians were decimated because of it and it became easier for the European travelers to conquer those lands ravaged by the diseases.

Before the abolition of the Corn Laws, the population spurt in Britain had resulted in an enormous increase in the demand for foodgrains. However, the Corn Laws made it impossible to fill the shortfall in the indigenous production as compared to the national demand. As a result, the British government was pressurized to abolish the Corn Laws and it did. The abolition helped in driving down the prices of foodgrains in England. It facilitated the import of foodgrains and hence stabilized the situation in England.

The Rinderpest is fast spreading disease of cattle plague. When it had arrived in Africa, it had left a debilitating impact on the life and economy of that continent. The affliction of the disease resulted in the death of almost 90% of the cattle in Africa, thus decimating one of the chief sources of livelihood of the native people. It consolidated the colonial power in Africa and helped Europeans to push the African in the labour market to work as wage labourers in plantations and mines. Also, their control of what was left of the livestock enabled the Europeans to hand African rulers a comprehensive defeat and perpetuate their rule over Africa for a long time to come.

The First World War is said to be the first modern industrial war. It is supposed to have caused the death of 9 million people and injury to the person of almost 20 million. This resulted in a major reduction in the numbers of the able bodied workers in the industrial sector of the European nations involved in the war. With fewer working hands within every family, the family income obviously took a beating and went down the surface. It also increased the occurrence of child labour and women's involvement in professional activities.

Due to an integrated global economy, the ramifications of the Great Depression were also felt in a British colony like India. This was felt more so in the agricultural sector of the economy since by the 19^th century, India had become an exporter of agricultural goods and an importer of manufactured products. As a result, Indian exports nearly halved between the years 1928 and 1934. The price of wheat nosedived by 50% while that of jute crashed by a whopping 60%. This led to an enormous increase in indebtedness among the peasantry. Peasants who had borrowed in the hope of better times faced ever decreasing prices for their crops and ended up selling all their possessions to keep afloat. This and other sorts of distress also gave an impetus for the national movement for the political independence of India.

The decision of the MNCs to relocate production to Asian countries has stimulated world trade and capital flow from developed countries to the developing countries. It has also generated high rates of employment in developing countries like India and China and changed the dynamics of the low wage and poverty problems existent in these countries. MNCs have been enabled to take advantage of the low cost of production process in China and India, especially the low price of their labour force. In a way, the relocation of the production of MNCs has helped in bringing the national economies of China and India into the mainstream of international financial activity.

Technology enabled commercialization of agriculture and development of global agricultural economy by 1890. Improvement in transport facilities and invention of cold storage coupled with refrigerated ships for transport enabled movement of perishable goods over long distances without fear of ruin. Till 1870, meat from America was shipped to Europe in the form of live animals, which were slaughtered on arrival. Meat was hence expensive and could be consumed only by the upper classes. But with the development of refrigerated ships, animals were slaughtered at the starting point and then shipped to markets as frozen meat. This drove down the shipping cost, lowered meat prices and allowed the poor in Europe to consume meat.

The United Nations Monetary and Financial Conference held in July 1944 at Bretton Woods, USA established the International Monetary Fund (IMF) and the World Bank. The IMF was entrusted with dealing with external surpluses and deficits of its member nations and the World Bank was set up to finance post-war reconstruction. The IMF and the World Bank in unison are known as the Bretton Woods system or the Bretton Woods twins. The Bretton Woods agreement entrusts these two institutions with preserving and maintaining the economic stability and full employment in the industrial world.

Following are the points of reference for writing such a letter:

1. The contractor who hired you lied about the final destination, mode of travel and the living and working conditions.
2. Living facilities and working conditions are harsh, abusive and cruel. There are no legal rights.
3. Often called 'coolies', Indians are in minority.
4. In case one is absent from work, one can be prosecuted and even sent to jail.
5. Pressure of completing work is extraordinarily high and the workload of the day is extremely heavy.
6. Deductions are made from wages if work is considered to have been done unsatisfactorily.
7. Life is no better than that of a slave here.
8. You cannot wait to return home.

There are three types of movements or flows within the international economic exchange:

1. Flow of trade - Refers largely to trade in goods, e.g., wheat or cotton.
2. Flow of labour - Refers to migration of people in search of employment.
3. Flow of capital -Movement of capital for short term or long term investments over long distances. 

Flow of Trade - The cotton produced in India was exported to Europe, but with industrialisation and introduction of tariff barriers, trade in cotton textiles declined considerably. Other items of export were indigo and opium. By 19^th century, India had become an exporter of raw materials and importer of British manufactured products.

Flow of Labour - In the 19^th century, hundreds and thousands of Indians went to work on plantations, mines, road and railway construction sites around the world. These were the indentured labourers who were forced with poverty, unemployment and indebtedness. Main destinations of the Indian indentured labourers were the Caribbean islands, Fiji, Malaya and Sri Lanka. Most of them stayed on even after their contracts ended.

Flow of Capital - Many groups of Indian bankers and traders financed export agriculture in Central and South East Asia using either their own funds or those borrowed from European banks. They had a sophisticated system of transferring money over long distances and even worked in European colonies in Africa.

The Great Depression was caused by a variety of factors. They are as follows:

1. Over production in agriculture was a major factor in the coming of the Great Depression. Due to the huge amount of agricultural surplus, the prices fell and peasant income declined.
2. Farmers tried to maintain income by expanding production. This increased the volume of goods in the market and drove down the prices again.
3. As soon as signs of financial trouble began to appear, US stopped giving out loans to the capital starved economies of Europe. This left European nations in major financial problems and the Asian and Latin American colonies in dire straits.
4. The US measure of doubling its import duties also dealt a major blow to world trade and further complicated the situation.

 Newly independent countries could not really benefit from the fast economic growth of the western countries as a result of the Bretton Woods arrangements. In order to articulate and mobilize support for their interests, they have formed a group that is known as the G-77 countries. Their demand is for a New International Economic Order (NIEO) - a system that would accord them real control over their natural resources, more developmental assistance, fairer prices for raw material and better access for their manufactured goods in developed countries markets.

G-77 can be seen as a reaction to the Bretton Woods twins because their decision making is often unfairly influenced by western industrial countries. The US has veto powers over many key IMF and World Bank decisions. Both the institutions are geared to serve the economic interests of the industrialized nations and are neither ideologically inclined nor equipped to deal with the problems of poverty and lack of development in the developing and under-developed countries.  Hence, these countries have formed themselves into a group in order to safeguard their interests.