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WWI
-Started after the assassination of Archduke Franz Ferdinand of Austria
-The war was Britain, France, and Russia against Germany and Austria Hungary
-Other countries were also involved
-A rough estimate of 40 million people died
-Severe negative impact on economic globalization since many European cities, towns, farms, roads, factories, ports, ships, and railways were destroyed
-Europeans owed more than 7B US dollars to the U.S.
-In 1919 production of manufactured good was 25% lower than in 1913 -
Treaty of Versailles
-Signed to end WWI
-Very harsh terms on Germany and many Germans were furious about the treaty
-Germany had to pay reparation payments
-John Maynard Keynes said that it would collapse Germany's economy if they paid all the payments and eventually lead to another war
-Both negative and positives effects depending on which side you view it from
-Negative economic effect on Germany since you had to pay the payments
-Positive for the other countries since you didn't have to pay for the war damage -
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Rise of Communism
-Communism is the economic and political model that gets rids of class distinctions
-Everyone works for the benefits of everyone
-The Soviet USSR was ruled by Stalin and he made Russia a giant industrial and military country
-Communism is both negative and positive on economic globalization since if you were poor you would still receive benefits while not contributing as much
-If you were rich, you would be contributing a lot more than the poor but still receiving the same amount benefits -
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Stalin
- Military dictator that killed more than 30 million people and introduced communism -He became ruler of Soviet USSR in 1929
- Both positive and negative
- Positive since war is super profitable
- Negative because he killed 30 million and those people would have contributed to the economy but since they are dead they cannot
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The Great Depression
- People borrowed loans to invest in the stock market
- Stocks began to go down and investors sold their stocks
- People had to pay back their loans but couldn't since the stocks they bought were worthless
- U.S. was experiencing a downturn so they wanted their loans back from Europe
- Countries were unable to pay back their loans and became victims of the Depression
- Great Depression had a negative economic impact since many people couldn't afford to pay back their loans and lost their jobs
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Hitler
-Hitler was a dictator in Germany and was elected after The Great Depression and Treaty of Versailles
-He promised Germans that he would fix their economy and make them proud
-Once he was in power he took over Austria, Czechoslovakia and invaded Poland, Britain, and France
-This has both negative and positive impacts on economic globalization since war can be super profitable but also can be super expensive
-It creates jobs for people but also can put countries in debt since you have to re-build -
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WWII
-Great Depression and Treat of Versailles destroyed Germany's economy and Hitler promised to fix that
-Hitler was elected into government in 1933
-Once Hilter became in power he took over Austria and Czechoslovakia and invaded Poland, Britain, and France
-The invaded countries declared war on Hitler
-WWII had a negative impact on economic globalization since unemployment decreased drastically and more than 60 million people died, wars are super expensive since you have to re-build once it's over -
World Bank (WB)
- Goal was to lend out money to help war-torn countries resources to increase their economy -It has both negative and positives effects on economic globalization -Positive because it's giving countries a chance to boost their economy if they've had any disasters -Another positive is that it keeps countries from going to war since everyone has debt -Negative because some countries can't pay back all the loans that they take out and then the interest rate keeps growing and their forever in debt
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International Monetary Fund (IMF)
-IMF is funded by member countries which pay quota based on their wealth and countries that have more votes contribute more money
-Provides short-term loans to countries
-Was formed to help countries after WWII so that the economy would collapse
-Promotes good Governance and gets rid of corruption
-Affects economic globalization in a good way since countries can take out a loan
-Very low-interest rates so that the country can actually pay the loan back and re-build themselves -
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Bretton Woods Conference
-Also known as the United Nations Monetary and Financial Conference, was the gathering of 44 allied nations to create a solution that would not totally destroy the world's economy after WWII
-During the Conference they came up with the WB and IMF
-The solutions that the conference came up with totally has a positive effect on economic globalization since the World Bank and IMF helped many countries by giving out loans
-If not for the WB and IMF those countries economy would be way worse -
General Agreement on Trades and Tariffs (GATT)
- Was signed in 1947 to eliminate or reduce quotas, tariffs, subsidies, and other trade barriers between countries
- This has beneficial effects on economic globalization since more countries can trade with each other without being charged for trading
- It also promotes trade and diversity since you aren't getting charged for wanting to trade for something
- More trade also means more wealth within countries since people are spending their money
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World Trade Organization (WTO)
- First signed in 1947
- WTO gradually was suppose to get rid of tariffs and other trade barriers between countries
- World Trade Tax Organization emerged from GATT in 1995
- WTO has decreased trade barriers between countries and increased trade
- Gives many countries a variety of products from each other and increases economy between countries since people are trading more often -Positive affect on economic globalization since trade is increasing and barriers are decreasing
