Chapter 4
THE MAKING OF A GLOBAL WORLD
Glossary
1. Dissenter: One who refuses to accept established beliefs and practices.
2. Indentured Labor: A bonded labourer under a contract to work for an employer for a specific amount of time; to pay off his passage to a new country or home.
3. Exchange Rates: They link national currencies for purposes of international trade. There are broadly two kinds of exchange rates: fixed exchange rate and floating exchange rate.
4. Fixed Exchange Rate: When the exchange rates are fixed and governments intervene to prevent movements in them.
5. Flexible or Floating Exchange Rates: These rates fluctuate depending on demand and supply of currencies in foreign exchange markets, in principle without interference by governments.
6. El Dorado: Fabled land of gold.
7. Rastafaria: A Jamaican sect, the members of which regarded blocks as the chosen people.
8. Coolie: Unskilled 'native' labourers. Indentured Indian labourers were often referred to as 'coolies' in trinidad. flowed from Europe to Asia
II.NCERT TEXTBOOK EXERCISES
(Page 102)
Write in Brief
Q. 1. Give two examples of different types of global exchanges which took from the Americas,
Ans. Before the seventeenth century global exchanges were in the form of trade and traders and travelers introduced new crops to the lands they traveled. culture. Food offers an example of long distance cultural exchange which was beneficial.
Example 1: Americas: Many of our common foods such as potatoes, soya, groundnuts, Americans into Europe and Asia. maize, tomatoes, chillies, sweet potatoes were introduced due to contact with original Asia and the distant parts of the world.
Example 2: Asia: The silk routes are an important example of global exchange between these routes by land and sea knitted together vast regions of Asia, linking Asia with Europe and North Africa. Chinese silk, pottery, Indian textiles and spices from South - East Asia and in return gold and silver flowed from Europe to Asia. Besides trade links cultural exchanges in the form of Buddhist, Christian missionaries and muslim preachers went hand in hand. These travelers carried with them skills, ideas, values, spiritual messages and inventions.
Q. 2. Explain how the global transfer of disease in the pre-modern world helped in the colonization of the Americas.
Ans. Discovery of America and its fabled wealth in the form of land and minerals led to exodus of many Europeans. e.g. Spaniards and Portuguese. The most powerful weapon of the Spanish conquerors was not a conventional military weapon (as the case of other colonial acquisitions) but germs such as those of smallpox that they carried on their person. The original American residents had for centuries lived in isolation life, therefore they had no inbuilt immunity against diseases that came from Europe. In Europe deadly diseases were widespread. Smallpox proved a deadly killer. Once introduced it spread deep into the continent '. It killed and deciminated whole communities paving the way for conquest. John Winthrop the governor of Massachusetts. Bay colony wrote in May 1634 Smallpox signaled God's blessing for the colonists - the natives were near all dead of smallpox. Thus colonization of America was a result of biological warfare 'diseases such as smallpox.
Q. 3. Write a note to explain the effects of the following:
(a) The British government's decision to abolish the Corn Laws.
(b) The coming of rinderpest to Africa.
(c) The death of men of working - age in Europe because of the World War.
(d) The Great Depression on the Indian economy
(e) The decision of MNCs to relocate production to Asian countries.
Ans. (a) Corn Laws: The British Governments decision to abolish Corn laws under pressure from industrialists and urban dwellers led to:
(i) Import of food more cheaply into Britian than could be produced within the country.
(ii) Farmers found cultivation of agricultural crops financially non-viable. Vaar Innds in Britian were left uncultivated. Thousands of men and women GOLDEN SOCIAL SCIENCEX 98 country. became unemployed
(iii) led to migration of rural population to urban areas Thoro migrants swelled the numbers of urban unemployed and contributed to poverty, housing and other urban problems.
(iv) Higher incomes and decline in food prices led to further increase in food imports.
(v) Around the world - in Eastern Europe, Russia, America and Australia lands were cleared and food production expanded with the aid of machines to meet increased British demands. (vi) To clear lands and meet demand for labor where labor was in short supply indentured labor from India e.g. , in Australia, and slaves from Africa e.g. , in America were employed. (vii) Repeal of corn laws contributed to the emergence of global agricultural economy in the 1890s.
(b) Rinderpest: Rinderpest is a fast spreading disease of cattle plague. It had a terrifying impact on people's livelihoods and local economy in Africa: mainstay of African livelihood. (i) The resultant loss of almost 90% of cattle, due to rinderpest destroyed the
(ii) It strengthened colonial governments power and enabled European colonizers to force the Africans into the labor market as wage earners to work on plantations and in mines.
(iii) Control over left over cattle by colonial government enabled the European colonizers to finally conquer and subdue Africa.
(c) The death of men of working - age in Europe because of World War resulted in:
(i)The First World War was the first modern industrial war. It is estimated about 9 million people died and 20 million were injured.
(ii) Reduction in able - bodied workforce in Europe.
(iii) With fewer members within the family household incomes declined after war.
(iv) Increase in child labor and women workforce.
(d) The Great Depression on the Indian Economy: Due to an integrated global economy the tremors of the Great Depression which began in America and spread to Europe were even felt in India, more so in the agricultural sector because in the nineteenth century India had become exporters of agricultural goods and importer of manufactured goods:
(i) The Great Depression immediately affected Indian trade in agricultural goods.
(ii) Indian exports and imports nearly halved between 1928-1934.
(iii) As international prices crashed wheat prices fell in India by 50%, prices of
(iv) Across India peasant's indebtedness increased. Peasants who had borrowed in the hope of better times, faced ever lower prices and fell deeper and deeper into debt. They used up their saving, mortgaged lands, and sold whatever jewelery and precious metals they had to meet their expenses notably gold () In these depression years India become an exporter of precious metals
(vi) The depression gave an impetus to the national movement under Gandhiji .
(vii) The depression proved less grim for urban India, because due to falling prices people with fixed income (salaried employees, or land owners who recovered rents) now and themselves better off.
(viii) Industrial investments grew as the government extended tariff protection to industries under the pressure of nationalist opinions.
(e) The decision of MNCs to relocate production to Asian countries: The decision of MNCs to relocate production to Asian countries:
(i) Stimulated world trade and capital flows from developed to the developing world.
(ii) Brought many countries e.g. , China into the world economy.
(iii) Generated employment in developing countries and helped stimulate improvement in low wage structures and poverty. (i) Enabled MNCs to take advantage of low cost structure of the Chinese and Indian economy most significantly their low wages.
(iv) Was said to give a boost to infrastructure development and technical skills in these countries.
Q. 4. Give two examples from history to show the impact of technology on food availability. Ans. Impact of technology on food:
(i) technology enabled commercialization of agriculture and development of global agricultural economy by 1890. Improvement in transport: faster railways, lighter wagons and larger ships helped move food (e.g., wheat and cotton), more cheaply and quickly from far away farms to the final market. e.g. , England. a)
(ii) The technique of cold storage and use of refrigerated ships boosted export of example: Till 1870 meat from America was shipped to Europe in the form of live animals, which were slaughtered on arrival. Meat was hence an expensive luxury beyond the reach of the European poor. With the development of refrigerated ships animals were slaughtered for food at the starting point eg. America, Australia and transported as frozen meat. This reduced shipping costs, and lowered meat prices and enabled the poor in Europe to consume a more varied diet.
Q. 5. What is meant by the Bretton Woods Agreement?
Ans. The United Nations Monetary and Financial Conference held in July 1944 at Bretton Woods, USA established the International Monetary Fund (IMF) and World Bank.
The IMF was to deal with external surpluses and deficits of its member nations and the in 1947. The IMF and World Bank are referred to as Bretton Woods institutions or Breton Wood twins. To preserve economic stability and full employment in the industrial world Western industrial powers. The US was given the right to veto over key IMF and World is often described as Bretton Woods Agreement. Decision making authority was given to the bank decisions. The Bretton Woods system was based on fixed exchange rate. In this system national currencies e.g. , Indian rupee were pegged to the dollar at a fixed exchange rate. The textiles dropped from 30% in 1800 to 3% in 1870 but exports of raw cotton rose from 5% to 35% between 1812-1871. Other items of export were indigo used for dyeing cloth, and opium for export to China. By nineteenth century India became an exporter of raw materials and importer of British manufactures. The value of imports far exceeded exports. Thus Britian had n trade surplus with India. 100 dollar itself was anchored to gold at a fixed price of $ 35 per ounce of gold.
THE MAKING OF A GLOBAL WORLD
Glossary
1. Dissenter: One who refuses to accept established beliefs and practices.
2. Indentured Labor: A bonded labourer under a contract to work for an employer for a specific amount of time; to pay off his passage to a new country or home.
3. Exchange Rates: They link national currencies for purposes of international trade. There are broadly two kinds of exchange rates: fixed exchange rate and floating exchange rate.
4. Fixed Exchange Rate: When the exchange rates are fixed and governments intervene to prevent movements in them.
5. Flexible or Floating Exchange Rates: These rates fluctuate depending on demand and supply of currencies in foreign exchange markets, in principle without interference by governments.
6. El Dorado: Fabled land of gold.
7. Rastafaria: A Jamaican sect, the members of which regarded blocks as the chosen people.
8. Coolie: Unskilled 'native' labourers. Indentured Indian labourers were often referred to as 'coolies' in trinidad. flowed from Europe to Asia
II.NCERT TEXTBOOK EXERCISES
(Page 102)
Write in Brief
Q. 1. Give two examples of different types of global exchanges which took from the Americas,
Ans. Before the seventeenth century global exchanges were in the form of trade and traders and travelers introduced new crops to the lands they traveled. culture. Food offers an example of long distance cultural exchange which was beneficial.
Example 1: Americas: Many of our common foods such as potatoes, soya, groundnuts, Americans into Europe and Asia. maize, tomatoes, chillies, sweet potatoes were introduced due to contact with original Asia and the distant parts of the world.
Example 2: Asia: The silk routes are an important example of global exchange between these routes by land and sea knitted together vast regions of Asia, linking Asia with Europe and North Africa. Chinese silk, pottery, Indian textiles and spices from South - East Asia and in return gold and silver flowed from Europe to Asia. Besides trade links cultural exchanges in the form of Buddhist, Christian missionaries and muslim preachers went hand in hand. These travelers carried with them skills, ideas, values, spiritual messages and inventions.
Q. 2. Explain how the global transfer of disease in the pre-modern world helped in the colonization of the Americas.
Ans. Discovery of America and its fabled wealth in the form of land and minerals led to exodus of many Europeans. e.g. Spaniards and Portuguese. The most powerful weapon of the Spanish conquerors was not a conventional military weapon (as the case of other colonial acquisitions) but germs such as those of smallpox that they carried on their person. The original American residents had for centuries lived in isolation life, therefore they had no inbuilt immunity against diseases that came from Europe. In Europe deadly diseases were widespread. Smallpox proved a deadly killer. Once introduced it spread deep into the continent '. It killed and deciminated whole communities paving the way for conquest. John Winthrop the governor of Massachusetts. Bay colony wrote in May 1634 Smallpox signaled God's blessing for the colonists - the natives were near all dead of smallpox. Thus colonization of America was a result of biological warfare 'diseases such as smallpox.
Q. 3. Write a note to explain the effects of the following:
(a) The British government's decision to abolish the Corn Laws.
(b) The coming of rinderpest to Africa.
(c) The death of men of working - age in Europe because of the World War.
(d) The Great Depression on the Indian economy
(e) The decision of MNCs to relocate production to Asian countries.
Ans. (a) Corn Laws: The British Governments decision to abolish Corn laws under pressure from industrialists and urban dwellers led to:
(i) Import of food more cheaply into Britian than could be produced within the country.
(ii) Farmers found cultivation of agricultural crops financially non-viable. Vaar Innds in Britian were left uncultivated. Thousands of men and women GOLDEN SOCIAL SCIENCEX 98 country. became unemployed
(iii) led to migration of rural population to urban areas Thoro migrants swelled the numbers of urban unemployed and contributed to poverty, housing and other urban problems.
(iv) Higher incomes and decline in food prices led to further increase in food imports.
(v) Around the world - in Eastern Europe, Russia, America and Australia lands were cleared and food production expanded with the aid of machines to meet increased British demands. (vi) To clear lands and meet demand for labor where labor was in short supply indentured labor from India e.g. , in Australia, and slaves from Africa e.g. , in America were employed. (vii) Repeal of corn laws contributed to the emergence of global agricultural economy in the 1890s.
(b) Rinderpest: Rinderpest is a fast spreading disease of cattle plague. It had a terrifying impact on people's livelihoods and local economy in Africa: mainstay of African livelihood. (i) The resultant loss of almost 90% of cattle, due to rinderpest destroyed the
(ii) It strengthened colonial governments power and enabled European colonizers to force the Africans into the labor market as wage earners to work on plantations and in mines.
(iii) Control over left over cattle by colonial government enabled the European colonizers to finally conquer and subdue Africa.
(c) The death of men of working - age in Europe because of World War resulted in:
(i)The First World War was the first modern industrial war. It is estimated about 9 million people died and 20 million were injured.
(ii) Reduction in able - bodied workforce in Europe.
(iii) With fewer members within the family household incomes declined after war.
(iv) Increase in child labor and women workforce.
(d) The Great Depression on the Indian Economy: Due to an integrated global economy the tremors of the Great Depression which began in America and spread to Europe were even felt in India, more so in the agricultural sector because in the nineteenth century India had become exporters of agricultural goods and importer of manufactured goods:
(i) The Great Depression immediately affected Indian trade in agricultural goods.
(ii) Indian exports and imports nearly halved between 1928-1934.
(iii) As international prices crashed wheat prices fell in India by 50%, prices of
(iv) Across India peasant's indebtedness increased. Peasants who had borrowed in the hope of better times, faced ever lower prices and fell deeper and deeper into debt. They used up their saving, mortgaged lands, and sold whatever jewelery and precious metals they had to meet their expenses notably gold () In these depression years India become an exporter of precious metals
(vi) The depression gave an impetus to the national movement under Gandhiji .
(vii) The depression proved less grim for urban India, because due to falling prices people with fixed income (salaried employees, or land owners who recovered rents) now and themselves better off.
(viii) Industrial investments grew as the government extended tariff protection to industries under the pressure of nationalist opinions.
(e) The decision of MNCs to relocate production to Asian countries: The decision of MNCs to relocate production to Asian countries:
(i) Stimulated world trade and capital flows from developed to the developing world.
(ii) Brought many countries e.g. , China into the world economy.
(iii) Generated employment in developing countries and helped stimulate improvement in low wage structures and poverty. (i) Enabled MNCs to take advantage of low cost structure of the Chinese and Indian economy most significantly their low wages.
(iv) Was said to give a boost to infrastructure development and technical skills in these countries.
Q. 4. Give two examples from history to show the impact of technology on food availability. Ans. Impact of technology on food:
(i) technology enabled commercialization of agriculture and development of global agricultural economy by 1890. Improvement in transport: faster railways, lighter wagons and larger ships helped move food (e.g., wheat and cotton), more cheaply and quickly from far away farms to the final market. e.g. , England. a)
(ii) The technique of cold storage and use of refrigerated ships boosted export of example: Till 1870 meat from America was shipped to Europe in the form of live animals, which were slaughtered on arrival. Meat was hence an expensive luxury beyond the reach of the European poor. With the development of refrigerated ships animals were slaughtered for food at the starting point eg. America, Australia and transported as frozen meat. This reduced shipping costs, and lowered meat prices and enabled the poor in Europe to consume a more varied diet.
Q. 5. What is meant by the Bretton Woods Agreement?
Ans. The United Nations Monetary and Financial Conference held in July 1944 at Bretton Woods, USA established the International Monetary Fund (IMF) and World Bank.
The IMF was to deal with external surpluses and deficits of its member nations and the in 1947. The IMF and World Bank are referred to as Bretton Woods institutions or Breton Wood twins. To preserve economic stability and full employment in the industrial world Western industrial powers. The US was given the right to veto over key IMF and World is often described as Bretton Woods Agreement. Decision making authority was given to the bank decisions. The Bretton Woods system was based on fixed exchange rate. In this system national currencies e.g. , Indian rupee were pegged to the dollar at a fixed exchange rate. The textiles dropped from 30% in 1800 to 3% in 1870 but exports of raw cotton rose from 5% to 35% between 1812-1871. Other items of export were indigo used for dyeing cloth, and opium for export to China. By nineteenth century India became an exporter of raw materials and importer of British manufactures. The value of imports far exceeded exports. Thus Britian had n trade surplus with India. 100 dollar itself was anchored to gold at a fixed price of $ 35 per ounce of gold.
Discuss
Q. 6. Imagine that you are an indentured Indian labourer in the Caribbean. Drawing from the details in this chapter, write a letter to your family describing your life and feelings.
Ans. Points for Reference: Life and feelings as indentured labourer in the Caribbean: (i) The contractor who hired, provided false information about the final destination, mode of travel and living and working conditions.
(ii) Living and working conditions are harsh, abusive and cruel and there are few legal rights.
(iii) Often thought of as 'coolies' and Indians are an uneasy minority in the cocoa plantations in Trinidad.
(iv) In case of absentism from work.One is prosecuted, and even sent to jail.
(v) Pressure of work is unreasonably high for tasks to be completed in a day are extremely heavy.
(vi) Deductions are also made from wages if the work is considered to have been done unsatisfactorily.
(vii) Have to spend period of indenture in great trouble, and life is no better than that of a slave.
Q. 7. Explain the three types
of movements or flows within international economic exchange. Find one example of each type of flow which
involved India and Indians, and write a short account of it.
Ans. Economists identify three types of movements or flows within international economic hanges. All flows are interconnected and affect peoples lives.
Ans. Economists identify three types of movements or flows within international economic hanges. All flows are interconnected and affect peoples lives.
(i) Flow of Trade: Refers largely to trade in goods e.g., wheat or cotton.
(ii) Flow of labor: Refers to migration of people in search of employment.
(iii) Flow of Capital: Movement of capital for short - term or long - term investments over long distances.
In the nineteenth century, labor migration was often more restricted than goods or
(i) Flow of Trade: Historically fine cottons produced in India were exported to Europe, but with industrialisation and imposition of tariff barriers trade in cotton textiles dropped from 30% in 1800 to 3 % in 1870 but exports of raw cotton rose from 5% to 35% between 1812-1871. Other items of export were indigo used for dyeing cloth, and opium for export to China. By nineteenth century India became an exporter of raw materials and importer of British manufactures. The value of imports far exceeded exports. Thus Britian had a trade surplus with India.
(ii) Flow of labor: Refers to migration of people in search of employment.
(iii) Flow of Capital: Movement of capital for short - term or long - term investments over long distances.
In the nineteenth century, labor migration was often more restricted than goods or
(i) Flow of Trade: Historically fine cottons produced in India were exported to Europe, but with industrialisation and imposition of tariff barriers trade in cotton textiles dropped from 30% in 1800 to 3 % in 1870 but exports of raw cotton rose from 5% to 35% between 1812-1871. Other items of export were indigo used for dyeing cloth, and opium for export to China. By nineteenth century India became an exporter of raw materials and importer of British manufactures. The value of imports far exceeded exports. Thus Britian had a trade surplus with India.
(i) Flow of Labor in the nineteenth
century hundreds of Indian Inbourers went to work on plantations, in mines, and
in rond and railway construction projects around the world. These were indentured labourers who were
faced with poverty, unemployment and indebtedness. Main destinations of Indian indentured
migrants were the Carribbean islands (mainly Trinidad, Guyana and Surinam)
Mauritius, Fiji, Malaya and Ceylon (Sri Lanka) most stayed on after their contracts
ended. Consequently there are large
communities of people of Indian descent in these countries. Opposition of Indian nationalists leaders to
the system as abusive and cruel led to abolition of indentured labor in 1921.
(i) 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 eg, Shikaripuri Shroffs and Nattukottai Chettiars. They had a sophisticated system to transfer money over long distances and developed indigenous forms of corporate organizations. Indian traders and traders moneylenders operated even in European colonies of Africa eg, Hyderabadi Sindhi
Q. 8. Explain the causes of the Great Depression.
Ans. The Great Depression began around 1929 and lasted till the mid - 1930's. It was caused by a combination of several factors: (i) Agricultural overproduction was a major factor. As a result agricultural prices fell and agricultural incomes declined. Farmers tried to maintain their income by expanding production. This increased the volume of goods in the market. The glut in the market, pushed down prices even further.
(ii) In mid - 1920's afte r the war many countries financed their investments through loans from the U.S. Withdrawal of US louns, at the first sign of trouble affected countries in varied ways. In Europe, it led to collapse of major banks and currencies eg. , British pound sterling, while in agricultural economies e.g. , India and Latin America it intensified the slump in agricultural and raw material prices.
(iii) The US attempts to protect its economy by doubling import duties dealt another severe blow to world trade.
(iv) In US the depression was more severe because, with the fall in prices and prospects of depression US banks also slashed domestic lending and called back loans.
Q. 9. (i) Explain what is referred to as the G - 77 countries.
(ii) In what ways can G - 77 be seen as a reaction to the activities of the Bretton Woods twins?
Ans.(i) Newly independent developing countries did not benefit from the fast economic growth of the western countries. In order to catch up they organized themselves. This grouping is referred to as the G - 77 countries. They demanded a New International Economic Order (NIEO) - a system that would give them real control over their natural resources, more developmental assistance, fairer prices for raw materials, and better access for their manufactured goods in developed countries markets.
(ii) G - 77 can be seen as a reaction to the activities of the Bretton Woods twins because: (a) The Bretton Woods twins IMF and World Bank commenced financial operations in 1947 with decision - making controlled by westorm industrial powers. The US had effective right to veto over key. IMF and World Bank the industrial countries. They were not equipped to cope with the challenge governments were needed to minimize fluctuations in price, output and employment. GOLDEN SOCIAL SCIENCEX 102 decisions.
(b) Developing countries were in a hurry to catch up with advanced countries because they invested vast amounts of capital importing industrial plants and equipment featuring modern technology,
(c) The IMF and World Bank were designed to meet the financial needs of poverty and lack of development in former colonies.
(d) As Europe and Japan built their economies they grew less dependent on IMF and World Bank. Thus from 1950s Bretton Wood Twins began to shift their attention more towards the developing countries.
(e) Ironically as newly independent countries facing urgent pressures to lift their populations out of poverty, they came under the guidance of international agencies dominated by former colonial powers. Therefore, they organized themselves as a group of G - 77.
(i) 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 eg, Shikaripuri Shroffs and Nattukottai Chettiars. They had a sophisticated system to transfer money over long distances and developed indigenous forms of corporate organizations. Indian traders and traders moneylenders operated even in European colonies of Africa eg, Hyderabadi Sindhi
Q. 8. Explain the causes of the Great Depression.
Ans. The Great Depression began around 1929 and lasted till the mid - 1930's. It was caused by a combination of several factors: (i) Agricultural overproduction was a major factor. As a result agricultural prices fell and agricultural incomes declined. Farmers tried to maintain their income by expanding production. This increased the volume of goods in the market. The glut in the market, pushed down prices even further.
(ii) In mid - 1920's afte r the war many countries financed their investments through loans from the U.S. Withdrawal of US louns, at the first sign of trouble affected countries in varied ways. In Europe, it led to collapse of major banks and currencies eg. , British pound sterling, while in agricultural economies e.g. , India and Latin America it intensified the slump in agricultural and raw material prices.
(iii) The US attempts to protect its economy by doubling import duties dealt another severe blow to world trade.
(iv) In US the depression was more severe because, with the fall in prices and prospects of depression US banks also slashed domestic lending and called back loans.
Q. 9. (i) Explain what is referred to as the G - 77 countries.
(ii) In what ways can G - 77 be seen as a reaction to the activities of the Bretton Woods twins?
Ans.(i) Newly independent developing countries did not benefit from the fast economic growth of the western countries. In order to catch up they organized themselves. This grouping is referred to as the G - 77 countries. They demanded a New International Economic Order (NIEO) - a system that would give them real control over their natural resources, more developmental assistance, fairer prices for raw materials, and better access for their manufactured goods in developed countries markets.
(ii) G - 77 can be seen as a reaction to the activities of the Bretton Woods twins because: (a) The Bretton Woods twins IMF and World Bank commenced financial operations in 1947 with decision - making controlled by westorm industrial powers. The US had effective right to veto over key. IMF and World Bank the industrial countries. They were not equipped to cope with the challenge governments were needed to minimize fluctuations in price, output and employment. GOLDEN SOCIAL SCIENCEX 102 decisions.
(b) Developing countries were in a hurry to catch up with advanced countries because they invested vast amounts of capital importing industrial plants and equipment featuring modern technology,
(c) The IMF and World Bank were designed to meet the financial needs of poverty and lack of development in former colonies.
(d) As Europe and Japan built their economies they grew less dependent on IMF and World Bank. Thus from 1950s Bretton Wood Twins began to shift their attention more towards the developing countries.
(e) Ironically as newly independent countries facing urgent pressures to lift their populations out of poverty, they came under the guidance of international agencies dominated by former colonial powers. Therefore, they organized themselves as a group of G - 77.
Discuss
Q. 1. Who profits from jute cultivation according to the jute growers' lament? Explain. (Textbook, page 97)
Ans. According to the jute growers' lament the traders gained from the Jute cultivation. Jute producers of Bengal increased cultivation because of the increased demand of the world market. Peasants borrowed money to increase jute production in the hope of better times or increase output in the hope of higher incomes. During the Great Depression years decline in gunny bag exports, led to decline in demand for raw jute and crash in jute prices by about 60%. Forced with ever lower prices, and more bargaining power of the trader due to surpluses, the farmer fell deeper and deeper into debt.
Q. 2. Briefly summarize the two lessons learnt by economists and politicians from the inter - war economic experience?
(Textbook, page 99)
Ans.The two lessons were learnt: a) First an industrial society based on mass production could be sustained only by mass consumption. To ensure mass consumption there was need for high stable incomes. Stable incomes inturn required steady full employment. It was realised markets alone could not guarantee full employment and intervention of () the second lesson related to a country's economic links with the outside world, the goal of full employment could only be achieved if government had power to control flow of goods, capital and labor.
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