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Economics: Defining Globalisation Pt2

By Edited Nov 15, 2016 0 0

Continued from Part 1 ...
Personally, I don't deny the dates Adam Smith and Frank states bare
insignificance to economic history, as it can be argued it massively helped
the transfer of technology and biology on a large scale, just the immediate
impacts of these events on trade and globalisation is non related matter.
The Heckscher-Ohlin trade theory suggests if globalisation doesn't affect
wage rental ratios with relative returns to sector capital and other forms
of income distribution measures it can't have a impact on the structure of
economic welfare, suggesting the nineteenth century economy was globalised
more than ever. There was little evidence to suggest there was a widespread
transportation system before 1800 or any inter-related commodity price
convergence, certain price data suggests a discontinuity in early 19th
century and a rise of trade liberalisation. Little price convergence
occurred before then, and after 1800 it soon rose. Issue of if
globalisation is strong enough to have a effect on income distribution,
then political battles over trade policy shall occur, which was certainly
evident in the 19th century, with free trading slave and land owners in
cotton south opposed capitalists of the North etc., holding evidence in
itself. Hence political trade changed after the year 1800, nations would
conflict with other nations rather than within itself. To me globalisation
didn't start 5,000, or even 500 years ago, it was within the early 19th
century and in relative terms that is 'new', however today's society seem
to think they invented it recently.

To me the next logical question is, what features actually occurred in the
nineteenth century which were caused by globalisation? Economists have
suggested that the increasing trade of commodities, movement of people,
transferring of capital and information between the world etc.,are all
prominent features resulting from globalisation.

I believe In the nineteenth century two specific types of inventions were
vital to the birth of globalisation, one being transportation technology
(rail way, steam boat etc.) benefiting trade of commodities and ideas with
the reduction of costs and freedom. Then that of the telegraphy with the
transference of information, both contributing to mass integration.

A feature to analyse is trade, its internationally integrated growth
occurred for many reasons. Such as the issue of decreasing international
freight rates due to continuing process of advancements in technology, for
example the increased speed and quantity of, steamships, signalled 1869
Suez canal, accessible by only steamships. Overland transport was more
expensive than transportation over water, so the development of rail roads
were detrimental., as this example shows "Chicago, wheat price to New York,
dropped by almost 12% in land transport, then the water transportation
costs to Liverpool dropped by just under 7%." (Findlay and O'Rourke 2007 -
cited in The Cambridge Economic History of Europe Volume II). There was
also the reduction in trade barriers, inclusion of more currencies and
increased protection of property rights. There is also the exchanging of
ideas, technology and techniques etc. It transferred quite freely, an
example being that of textile machines around the world were similar, some
regulations were in place such as Britain's law against the emigration of
skilled workers and machinery exports, these were however later repealed
within the same century.
Please continue to Part 3.

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