5.1 III: To facilitate investments at all levels of industrial production, financers develped and expanded various financial institutions.
A: The ideological inspiration for economic changes lies in the development of capitalism and classical liberalism associated with Adam Smith and John Stuart Mill.
1) Adam Smith is the more important figure of the two mentioned above. In 1776, he published a book called On the Wealth of Nations that cited China for its prosperity being caused by specialization of labor. He proposed to free the economy from gov't monopolies and regulations. This is called laissez faire.* This became par of a theory called liberalism which endorsed economic and personal freedom guaranteed by the rule of law. Smith also saw trade as being virtuous as it required cooperation in the process of trade. Smith was also concerned with the community as a whole and argued the abolition of slavery.
*A more literal definition is an economic doctrine that advocates freeing economies from gov't intervention and control.
2) John Stuart Mill was, like Smith an author of economics. He was read by East Asians and South Americans when they began to use the system of the nation-state. This system fostered world trade, of both goods and ideas. The people then began to read Western books, like those of John Stuart Mill's, to learn about economics and world trade.
B: The global nature of trade and production contributed to the proliferation of large-scale transnational businesses that relied on various financial instruments.
1) Transnational businesses
a. The United Fruit Company: This company was based in the US but operated in Central America. They produced, you guessed it, fruit.
b. HSBC: The Hong Kong and Shanghai Banking Corporation was founded by British bankers.
2) Financial instruments
a. Stock markets: These are sites for buying and selling financial interests, or stock, in businesses. Some examples of this include the London and Hong Kong stock exchanges.
b. Insurance: This was like the protection of your property. It began to flourish because since people had more money, they had more things that they needed to protect with insurance.
c. Gold standard: Gold became the universal currency for trade around the world. This made trading easier because now, merchants didn't have to convert money to buy things.
d. Limited liability corporations: This was a way of making sure that if someone invested in a company, their investment was safe, they didn't lose thousands of dollars. This was because investors were not held responsible for paying off the debt of their company.
5.1 IV: There were major developments in transportation and communication, including railroads, steamships, telegraphs, and canals.
A: Railroads
1) fastest transcontinental travel
2) World different
a. middle and upper class face to face
b. speed transfer of knowlegde
c. standardization of time- lives were dictated by railroad times, when a train left, when it arrived.
3) destroy traditional relationships with nature: Environment damaged by construction of railroads.
B: Steamships
1) ships faster, trade quicker
C: Telegraphs
1) allow people to communicate with different parts of the world faster than writing a letter to them.
D: Canals
1) Panama Canal: At this time, the Panama Canal was just a theory, not a project yet. But, it was a marvelous theory that would connect the Atlantic and Pacific Oceans.
2) Suez Canal: This canal connected the Red Sea to the Meditteraenean Sea. It had many desirable effects. It connected the Europeans to Indian Ocean trade faster than going around Africa, there was a boom in trade and trade became quicker, and it opened up new areas for other countries.
Next time, we'll finish up 5.1 as the week comes to a close. See you then!
This is much better. Very thorough. 4!
ReplyDelete