Economic Systems, 1750-1900 Flashcards Preview

AP World History > Economic Systems, 1750-1900 > Flashcards

Flashcards in Economic Systems, 1750-1900 Deck (73):


● The mass production of goods by means of machine power became a key part of Western economies
● The importance of trade and commerce skyrocketed and a growing number of people moved from rural areas to the city



● Became the dominant economic system
● Led to the creation of great wealth in the Western world
● Based on competition and left unregualted
● Could be cruel to those on the losing end (working class in the early 1800s)


~Industrial Reovlution

● First stage coincided roughly with the political revolutions taking place in America, France, and the Atlantic world
● Lasted decades and had no clear-cut beginning or end
● Changed life in Europe and the rest of the world
● Placed new machines and inventions at the disposal of ordinary people
● Affected old social classes and created new one
● Changed the way millions worked, where they lived, and how they understood political problems


~Proto-industrial practices

● Methods more productive than traditional artisanry and craftsmanship had been in place since 1600s
● Machines such as the flying shuttle and the spinnin gjenny, which sped up the manufacture of cotton were invented as early as 1733 and 1764


~Enclosure Act

● In favor of wealthy landowners
● Fenced off large pieces of farmland that had once been common property
● Impoverished many farmers and forced htem to relocate to the cities, creating a large pool of available labor


~James Watt

● Scottish inventor who patented a steam engine that was both poweful and cost-effective in 1782


~First stage of the Indistrial Revolution

● The first stage of hte Industrial Revolution invovled hte integration of Watt's steam engine into the textile and coal-mining industries


~Second stage of hte Industrial Revolution

● Lasted roughly until the middle of the 1800s
● Involved the universal application of steam power (and more slowly, electricity) to all areas of economic activity
● Spread to other parts of Europe and North America


~Industial era

● Continued throughout the rest of hte century and gave birth to a huge wave of invention


~Second Industrial Revolution

● Crucial innovations during the second half of the 1800s
● Bessember process (1850s)
● Concrete-and-steel construction (1880s)
● Electricity
● Commercial use of petroleum (1859)
● Chemical industries and use of rubber
● Internal combustion engine (1866-1885)
● Telephone (1876-1879)
● Radio (1895-1901)
● Airplane (1903)
● Warfare technology
● Tractor


~Bessemer process

● Made steel production cheaper and easier
● 1850s


~Concrete-and-steel construction

● Enabled the building of skyscrapers pioneered by Chicago int he 1880s
● Enabled engineering projects like the Suez and Panama canals



● Thomas Edison's light bulb came in 1879


~Internal combustion engine

● Led to the automobile
● 1866-1885


~Warfare technology

● Modern rifles, better artillery, and the machine gun



● Helped cause an agriculture boom in the countryside


~Free-market industrialization

● Arose in Britain and dominated in most of Western Europe and North America
● Fundamental assumption was the laissez-faire preinciple that governemnt involvement in and regulation of industrialization should be kept ot a minimum


~State-sponsored industrialization

● Governments either directed industrialization from above or following an approach caleld state capitalism


~State capitalism

● Set nationwide economic and industrial priorities and then contracted with certain favored private firms to achieve htose goals
● Germany and Japan


~Middle class

● Benefited the most from Industrial Revolution, particularly the bankers, merchants, and factory owners who came to be known as the bourgeoisie


~Working class

● Industrial Revolution expanded hte size of the class
● AKA proletariat
● During the first decades, this class bore the heaviest economic burden
- Their labor allowed the Industrial Revoution to move forward, but until the second half of hte 1800s, they were badly treated and barely compensated
● Workers received low wages, lived in squalid and crowded housing, worked long shifts, coped with unsafe working conditions and had no pensions, safety law, or insurance
● Child labor was common


~Traditional aristocracy

● Wealth had been based primarily on land
● Diminished by industrialization



● English textile artisans who, during the 1810s, rioted and wrecked power looms and other industrial devices they felt were destroying their livelihood


~1848 Revolutions

● Caused partly by the socioeconomic stress of early industrialization


~Population growth

● Europe's population grew from an estimated total fo 175-187 million in 1800 to 266 milion in 1851 and 423 million in 1900
● Similar growth took place in US



● European cities htat existed grew larger
- In 1800, London reached the 1 million mark, as did Paris in the 1830s
● Many new cities sprang up, such as Liverpool and Manchester, precisely because of hte Industrial Revolution
● By the mid-1800s, England and Wales were urban societies
● Generally associated with social advancement but cities were typically polluted and crowded, and the lower classes lived in slums or shantytowns where sewage was primitive or nonexistent
● Diseases such as cholera, tuberculosis, and typhoid ran rampant in such conditions


~Urban societies

● 50% or more of the population lived in cities


~Trade union

● In the early 1800s, unions were illegal in Europe and the US, and workers risked injury and arrest if they joined unions or went on strike
● Gave them a way to struggle for political rights and better treatment in the workplace
- Higher wages, five-day work week, shorter hours, safety regulations, pensions, and employee insurance
● In the late 1800s and early 1900s, unions earned legal status in most countries and gained greater economic and political strength


~Adam Smith

● appeared in 1776
● Associated with free-market capitalism (laissez-faire)
● Encouraged free trade and political liberalism, at least for the middle classes
● Governemnts should only take measures to fight extreme poverty (althought some others maintained that little could be done for the poor)


~Invisible hand

● laws of supply and demand should operate freely, with minimal governemnt intervention


~Essay on Population (1799)

● Thomas Malthus of England wrote that povverty was one of the inevitable consequences of population growth


~Iron law of wages

● David Ricardo's belief was just as pessimistic
● Employers, he siad, will naturally pay workers no more than what is needed to allow them to survive
● To force them to pay higher wages would cause them to fire workers, who would then starve


~Dismal science

● THeories such as Malthus and Rcado's
● Were used for a long time by middle- and upper-class industrialists to justify oppressive labor practices


~John Stuart Mill

● English liberal thinker and economic theorist
● Continued to favor free-market capitalism
● More inclined than other classical economists to favor at least some government regulation of capitalist and industrial practices


~Commerce and banking

● Steep rise in the global importance of them coincided with the rise of capitalism and industrialization
● Became economically crucial throughout the Western world


~Central banks

● Govenrment formed these to house national reserves of precious metals to back their currencies, and to determine economic policy
● The Bank of England had been in existence since the 1690s, but itwas in the 1800s, starting with Napoleon's establishment of hte Bank of France, that most other Western naitons followed suit



● Limited liability corporations grew in number and size and became more legally formalized
● Allow investors to pool their resources and further minimize risk by separating their personal assets from the assets they invested in the corporation


~Stock exchange

● aka bourses
● Appeared to regularize the buying and selling of corporate shares
● Most dominant were hte London Stock Exchange, founded in 1801 after decades of less formal trading
● New York Stock Exchange, established in 1817
● Most European capitals, from Paris and Berlin to Vienna and St. Petersburg, operated major exchanges



● During the 1800s, insurance became more common as a way to protect personal property, corporate assets, and even one's life and health
● Lloyd's of London, perhaps hte owrld's most famous insurance campany, took shape in the 1770s and formally incorporated during the 1800s


~Gold standard

● The practice of tying the value of a country's currency (and its rate of exchagne with other currencies) to gold rather than the more traditioanl silver
● Britain moved in this direction in the 1810s, but other countries stayed with silver, or attempted bimetallism (both silver and gold) until late in the century
● The US adopted hte gold standard in 1900 after a debate during the 1890s


~Franco-Prussian War of 1870-1871

● After which, the newly united Germany moved from silver to gold, vastly debasing the value of silver


~Panic of 1873

● Caused by many factors, but mainly by Germany's conversion to the gold standard after its 1871 unification
● Sudden drop in silver's value profoundly affected mining enterprises, railroad building, and a myriad of industrial efforts worlwide
● Caused a global slump, the Long Depression, lasting from 1873 to the mid-1890s


~Joint-stock companies

● Some survived and modernized their operations during the 1800s, such as the Hudson's Bay Company and the British East India Company


~Hong Kong and Shanghai Banking Company (HSBC)

● Opened in 1865 by British merchants who received special privileges and permissions in exchange for consolidating British commercial interests in Hong Kong (a British colony after the Opium Wars) and Shanghai (where Britain enjoyed economic concessions)
● Assumed responsibility for issuing banknotes (official currency) in British possessions like Hong Kong and Singapore
● Commissioned to do the same even in independent states like Thailand
● Quickly establishd braches in Japan and throughout Southeast Asia
● Its presence gave Britain a great deal of informal economic influence over the area


~United Fruit Company

● Execised over large parts of Latin America
● A US corporation that formed in 1899 by merging smaller outfits that had been operating in Central America since the 1870s
● Starting in Costa Rica, then spreading throughout Central America, Ecuador, Colombia, and the Caribbean
● Came to monopolize the cash-crop monoculture of many fruits, with a special emphasis on bananas
● Involved itself in alrge infrasturcture projects
● Used mutually profitable relationships with local business and poltical elites to gian influence over Latin American economies and governments
● The extent of debatable economic imperialism


~Transnational businesses

● Struck deals with aristocrats or the political elite to exploit or extract cash crops or natural resources
● Such practices tended to retard the deveopment of a healthy, diverse economy
● Also exploited native workers in non-Western nations
- Foreign payments or investments ended up in the pockets of a small number of local elites, rather than adding to the national well-being
- The workers themselves typically labored under harsh, or semi-coerced conditions


~Muhammad Ali

● Breakaway ruler of Egypt
● Encouraged industrialization, especially in the textile trade


~Tanzimat reforms

● Attempted by the Ottoman Empire between the 1830s and the 1870s involved a concerted effort to import industrial methods, but these depended on the determination and foresightedness of the sultans, who gave up on the reforms prematurely
● Opposed by Islamic traditionalists who resisted modernization


~Self-strengthening movement

● Similar pattern in Qing China of the late 1800s of the Tanzimat reforms
● Brought about only limited industrialization and also aroused the wrath of traditional-minded foes who undermined its effectiveness


~Meiji Restoration of 1868

● The one place in the non-Western world to fully industrialize was Japan
● Impetus for change came from above, although the leel of success was much greater than in China or the Ottoman Empire
● Young members of hte upper class were sent to visit or study in Europe and America, to learn engineering, economics, and military science


~Ministry of industry in 1870

● Meiji created this in 1870 as well as state banks to finance his industrial campaign
● New railroads, steamships, ports, and canals were constructed



● Huge corporations sponsored largely by the state
● Carried out large-scale industrial efforts
● The government also encouraged private enterprise, spurring the growth of a largeer middle class


~Where was Industrial Revolution considered to have begun?

● England in the 1770s and 1780s
● With the successful application of the steam engine to two sectors of the economy: mining and textiles


~How did environmental change play a role in starting industrialization?

● The depletion of forests in England and Ireland
- TImber was used both for fuel and to build ships for the Royal Navy
● Increased dependecy on coal, and efficient coal mining required machine power, especially to pump water out of mine shafts


~What were the factors working Britian's favor in staring industrialization?

● Location in the Atlantic
● An excellent system of roads and canals
● Large supplies of iron and coal
● Strong tradition of trade and commerce, which allowed investors to accumulate capital
● Environmental factors
● Enclosure Act


~What were the key trends of industrialization?

● Modernization of transport (steamships 1807 and railroads 1820s)
● Modernization of communications, beginning with the telegraph (1837)
● Factory system, which systematized, mechanized, and increased hte scale of production
● Concept of interchangeable parts, pioneered by Ili Whitney and funsmith Smanuel Colt


~Who led the world in industrial production for most of hte 1800s and what is it measured by?

● Britain did
● Measured by key indices like railroad building and output of rion, steel, coal and textiles
● By the end of the century, Germany and the US were catching up to, then surpassing, Britain


~How did industrialization cause new social divisions int he countryside?

● More land came to be owned by well-off farmers and homesteaders who were essentially middle class
● Udner them were poor agricultural laborers who formed a rural working class of sorts


~How did industrialization bring about meaningful improvements for large numbers of people after 1840s?

● Various laws and measures began to give relief to the working class
- Althought completely fair treatment and full political equality were still distant goals, achieved only after hard effort and not until the late 1800s or early 1900s
● Overall standard of living rose during the second half of the 1800s, even for hte lower classes
● many features of modern life in major cities became available after mid-century, icndlugin bus service, streetlight (gas, then electric), citywide sewage systems, icebox refrigeration, indoor plumbing, steam heating, canned food, nad medical advances (vaccination, antiseptic surgery, anesthesia)


~What were some reactions to the initially harsh conditions that arose during capitalism's early decades?

● Fairer labor laws
● Social welfare measures passed by various governments
● Mainly by liberals and reformers, in the mid- to alte 1800s


~What political party formed to address wrokers' needs and interests?

● Political parties dedicated more specifically to workers' needs and interests, such as Britian's Labour, France's Radicals, and Germany's Social Democratic Party


~How did the century's new companies come into being?

● Fund major construction projects in far-off regions
● Russo-Chinese (later hte Russo-Asiatic) Bank, created in 1895 by French and Russian investors to finance hte Chinese Eastern Railway
● France's Suez Canal Company, opened in 1858 to oversee the construction of the Suez Canal
- After the canal's 1869 completion, the company remained in Egypt to oversee its operation


~When and why did the Suez Canal Company's influence wane?

● It waned in 1873, when the Egyptian governemnt sold its shares to Britain and was lost altogether in 1888, when Eypgt's ruler placed the canal under Britian's protection in exchnge for military aid against intenral rebellion


~What did Western economic growth depend heavily on?

● Acquisition of raw materials from non-Western regions
● Transformation of those non-Western regions into new consumer markets for the goods they produced


~How did industrialization foster more imperialism?

● Gunboats, machine guns, faster and more accurate rifles and artillery made Westerners easier to acquire new imperial conquests at the expense of primitively-armed Asians and Africans
● Growing importance of industrial-era warships, powered by coal and petroleum, required Western nations to maintain naval bases around the world, a key way in which industrialization motivated imperialism in addition to making it more feasible


~What were examples of direct exploitation?

● Extraction of gold, diamonds, ivory, ruber, and foodstuffs from Africa
● Extraction of rubber, tin, aluminum ore (bauxite), oil, and cotton from Southeast Asia, Indonesia, and India by the Dutch, French, and British
● Industrialized West's relations with Latin American nations and Qing China--which were technically freebut dealt with an economically unequal terms--were more indirectly exploitative


~What were examples of non-Western parts of the world came to imitate industrial methods of production?

● Western colonizing powers exported industrial practices to their imperial possessions or created industrial-era infrastructures there, in the form of railraods, canals, and telegraph systems
● Brtain brought industrial methods to and modernized India to make their own lives in India more comfortable and to maximize profits
- Also because they thought it would be better for native Indians


~How did Britain bring industrial methods to india?

● Created roads and railways, a telegraph network and a postal service
- Which reduced the number of famines by improving food distribution


~Where did the profits generated in India go to?

● The profits generated by India raw mateirals went to Britain, rather than benefiting the local economy


~What were the down sides of British colonization in India?

● The size and efficiency of British-built textile mills drove local textile enterprises, often run by women, out of business


~How were industrialization typically introduced in free nations (non-Western world)?

● Political leaders came to see industrialization as a way to gain wealth and power
● Typically imposed form above by the ruler and/or encouraged by members of hte elite


~What were examples of local elites carrying out industrialization?

● In Latin America, mining for copper and guano, along with the railroad building and shipping expansion that supported not just those industries, but also the cash-crop monoculture of fruits and coffee, was generally carried out by local elites in conjuction with transation businesses like the United Fruit Company
● Near the end of the 1800s, countries like Mexico and Argentina, largely thanks to immpetus from above, were starting to industrialize more sectors of their own economies


~What did Japan's lower class experience?

● Many of the same travails that Europe's workers had gon ethrough in the early 1800s
● Sweatshop environments, low wages, and unsafe labor practices prevailed, especially in textile mills and coal mines
● In one mine near Nagasaki, workers toiled in temperatures of up to 130 degrees Fahrenheit, and were shot if they tried to escape
● Unions of any type were forbidden