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WW1
- War between Germany, Austria, and Hungary was fought by Britain, France, and Russia when Archduke Franz Ferdinand of Austria was killed.
- A approximate estimate puts the death toll at 40 million.
- The destruction of numerous European cities, towns, farms, highways, factories, ports, ships, and railways had a major adverse effect on economic globalization.
- Europeans owed the U.S. more than 7 billion dollars.
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Treaty of Versailles
- Signed to end World War I
- Very tough terms on Germany, and many Germans were angry about the treaty
- Germany was required to pay reparation payments
- Depending on your point of view, there were both positive and negative effects:
- Negative economic impact on Germany because you had to make the payments
- Positive for other nations because you didn't have to make war damage payments
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Rise of Communism
- The Soviet Union was ruled by Stalin, who turned Russia into a massive industrial and military power.
- Communism is both a positive and a negative influence on economic globalization because if you were poor, you would still receive benefits while not contributing as much.
- If you were rich, you would be contributing much more than the poor while still receiving the same benefits.
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Stalin
- Stalin ruled the Soviet USSR from 1929 to 1953 and was a military dictator who killed more than 30 million people and established communism.
- There were both positive and negative effects of Stalin's rule.
- Positive was given how profitable war is.
- Negative because he killed 30 million individuals who would have helped the economy but now that they are gone, they are unable to.
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The Great Depression
- People took out loans to make stock market investments.
- Stocks started to decline, and investors sold their holdings.
- People needed to repay their loans but were unable to do so since the stocks they purchased were worthless.
- Due to the economic slump, the United States demanded repayment of its loans from Europe.
- Because so many families lost their employment and couldn't afford to pay back their loans during the Great Depression, it had a negative economic impact.
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Hitler
- Hitler was a dictator in Germany who was elected following the Great Depression and the Treaty of Versailles.
- He promised the German people he would fix their economy and make them proud.
- Once in power, Hitler invaded Poland, Austria, Czechoslovakia, Britain, and France.
- This had an impact on economic globalization both positively and negatively because war can be extremely profitable while also being extremely expensive.
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WWII
- Hitler was elected to office in 1933 and vowed to restore Germany's economy, which had been decimated by the Great Depression and the Treaty of Versailles.
- Once in office, Hitler seized control of Austria and Czechoslovakia and attacked Poland, Britain, and France.
- WWII had a negative impact on economic globalization since unemployment reduced significantly and more than 60 million people died; wars are also very expensive because you have to rebuild afterward.
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World Bank (WB)
- The objective was to provide loans to give war-torn nations resources to revive their economies.
- This had both negative and positive impacts on economic globalization.
- Positive because it gives nations a chance to revive their economies after disasters; Additionally, because everyone is in debt, it prevents nations from going to war;
- Negative because some nations are unable to repay all of the loans they take out, leading to an endless cycle of debt with rising interest rates.
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International Monetary Fund (IMF)
- Members support the IMF through percentage payments depending on their wealth, while nations with more votes make larger financial contributions.
- Was established to assist nations after World War II so that the economy would collapse
- Promotes good governance and eliminates corruption
- Has a positive impact on economic globalization because nations can apply for loans
- Very low interest rates so that the nation can actually pay the loan back and rebuild itself.
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Bretton Woods Conference
- It was the meeting of 44 allied nations to develop a solution that would not completely destroy the world's economy after World War II.
- During the Conference, they created the World World Bank and IMF.
- The solutions that the conference came up with totally have a positive effect on economic globalization since the World Bank and IMF helped many countries by redistributing loans.
- If not for the WB and IMF, those nation's economy would have been way worse.
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General Agreement on Trades and Tariffs (GATT)
- Was signed in 1947 with the intention of removing or reducing trade restrictions between nations such as quotas, tariffs, subsidies, etc.
- As a result, more nations can trade with one another without paying a fee, which benefits economic globalization.
- Since there are no fees associated with trading for something, it also encourages trade and diversity.
- Increased trade also increases national income because more individuals are spending their money internationally.
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World Trade Organization (WTO)
- Initially signed in 1947
- WTO was intended to gradually eliminate tariffs and other trade barriers between nations.
- In 1995, the World Trade Tax Organization split off from GATT.
- WTO has lowered trade obstacles and increased trade between nations.
- Gives numerous nations access to a variety of items from one another and boosts trade between nations.
- Since people are trading more often it poses a positive impact on economic globalization as a result of rising trade and falling barriers
