The International Economy

Trade in history

Technological progress is the primary driver behind the growth of international trade.

Every acceleration of man’s ability to utilise Nature’s resources is matched by the spread of geographical reach of commercial relations and the appearance of new forms of cooperation.

Ancient Greece, Rome, etc., and the Middle Ages – Trans-European trade in certain items [salt, wood, tar, etc] was already INTERnational by the 10th century AD.:
- Trade in luxury goods.
- Trade relations were impermanent [as such didn’t result in changes of production structure in both nations].

Next development stage was tied in with the wave of geographical discoveries:
- No new trade goods;
- Primary aim of new territories: sourcing gold.

International trade was limited by the technological ability to transport goods over long distances.

Technological Revolution

The inventions of the time resulted in a qualitative and quantitative explosion of trade.

Which??
- Steam machine.
- Telegraph.
They enabled but also demanded (required) an expansion via new goods and new territories.

Steam resulted in:
- Increasing the effectiveness of production;
- An emergence of NEW goods;
- An increase in the demand for resources;
- An increase in demand for resources previously NOT used or used in minute quantities [which now had to be found and delivered].

The Revolution increased the division of labour.
Division of labour increased the need to trade between nations.

Structure of production began to change.
Countries began to specialise.

The International Economy

By the mid-19th century the process begun in England that had been spreading for decades across the world covered Europe, America and overseas countries.

The international economy was formed.
i.e. a system of PERMANENT economic relationships between countries, covering the entire world.

The system existed until WW1.
The War destroyed most relationships established during the 19th century [including colonial ones].

After WW2, inter-national trade accelerated.
Other forms of cooperation appeared in 1960’s and took hold by 1980’s.
Trade in goods began to loose primary spot.

Date: 2015-01-29; view: 1048