Global Economic Changes Since 1900

Apr 15, 2025

Heimlich History: Globalization After 1900 - Economics in the Global Age

Objective

  • Explain the continuities and changes in the global economy from 1900 to the present.

Key Movements in Global Economy

  1. Proliferation of Free Market Economics
  2. Rise of Knowledge Economies
  3. Rise of Transnational Free Trade Organizations and Multinational Corporations

Proliferation of Free Market Economics

  • Post-Cold War Era: Economic liberalization accelerated after the Cold War and the collapse of the Soviet Union.

    • USSR: Mikhail Gorbachev's perestroika reforms introduced limited free-market principles.
    • Eastern Europe: Shift from communism to free-market economies.
    • Non-Aligned Nations: More opportunities for open economies.

  • Examples of Economic Liberalization

    • US and Great Britain: Under Ronald Reagan and Margaret Thatcher, free market growth was strongly encouraged.
    • Chile: Augusto Pinochet moved the economy away from state control, influenced by the 'Chicago Boys.'
    • China: Deng Xiaoping relaxed some communist policies, leading to economic reforms, which increased desires for further freedoms (e.g., Tiananmen Square protests).

Rise of Knowledge Economies

  • Definition: Economies relying on the monetization of information (e.g., engineers, teachers).

  • Examples

    • Finland: Investment in communication tech and education led to a share in the cell phone and software markets.
    • Japan: Transitioned to knowledge economy; faced low wage issues but progressed in banking, finance, and IT.

  • Impact on Manufacturing

    • Shift of Manufacturing Jobs: Jobs moved to Asia and Latin America (e.g., Bangladesh, Vietnam).
    • Worker Conditions: Lower wages, often insufficient for a livable income.

Rise of Transnational Free Trade Organizations and Multinational Corporations

Transnational Free Trade Organizations

  • Definition: Agreements between nations to eliminate trade barriers.

  • Regional Agreements

    • NAFTA: U.S., Canada, Mexico agreement for tariff-free exports.
    • ASEAN: Southeast Asian nations facilitating regional economic integration.

  • Global Agreements

    • World Trade Organization (WTO): 164 member nations; aims to reduce global trade barriers.

Multinational Corporations

  • Definition: Corporations incorporated in one country, operating globally.

  • Examples

    • Nestlé: Headquartered in Switzerland, uses low-wage labor in West Africa.
    • Mahindra and Mahindra: Indian company with global operations in auto and equipment manufacturing.

Conclusion

  • Massive changes in the global economy post-1900 have been driven by these movements.
  • Understanding these changes is crucial for success in AP World History.
  • Further Learning: Review resources for additional understanding and exam preparation.
  • Support the Channel: Subscribe to continue receiving educational content.

Heimler out.

Full transcript