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Econ 102 > WEEK 2 > Flashcards

WEEK 2 Flashcards

1
Q

What is the Organizing Principle?

A

Trade is what happens when consumption occurs in a different place than production

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2
Q

What are “phases” by definition of trade?

A

Goods produced in one place, and consumed in another

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3
Q

What are the FOUR phases?

A
  1. Humanising the Globe
  2. Localising the World Economy
  3. Rise of Trade
  4. Rise of North-South Offshoring
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4
Q

What are the FOUR transition phases?

A
  1. Climate
  2. Agricultural Revolution
  3. Steam Revolution
  4. ITC Revolution
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5
Q

What happened in Phase Transition: Climate Change?

A
  • Modern humans evolved in climate similar to today’s

- 2 “Out-of-Africa” migrations

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6
Q

What happened in Phase 1: Humanising the Globe?

A
  • 185-200 millennia
  • Hunter-gatherers hunted and gathered their way around the world
  • Consumption moves to production
  • Trade is an exotic phenomenon
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7
Q

Phase Transition: Agricultural Revolution

A
  • Domestication of plants and animals
  • Fertile Crescent
  • Result: Production BUNDLES with Consumption
  • Result: Population booms, cities and civilizations emerge
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8
Q

Phase 2: Localising the World Economy/FIRST “Bundling”

A
  • 12 000 BCE - 1820
  • First “bundling” - Production moves back to consumers
  • Trade is regular, but not significant
  • Agriculture allows production to be brought to consumption > concept of civilization
  • 3 Stages
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9
Q

First Stage of Phase 2

A

Rise of Asia (12 000 BCE - 200 BCE)

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10
Q

Key Events: Rise of Asia

A
  • Villages, cities, and civilizations
  • Asia/Egypt dominate global economy for 2 millennia
  • Asia (Mesopotamia, Egypt, India, and China) dominated the world economy up to 1820
  • Largely populated the world
  • Long distance trade regularized - elite goods
  • Bronze Age Trade - Mesopotamia the “hub”
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11
Q

Second Stage of Phase 2

A

Eurasian Integration (200 BCE - 1350 CE)

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12
Q

Key Events: Eurasian Integration

A
  • Silk Road connected same basic production/consumption clusters for 17 centuries - East, West, and South of the Tibetan Plateau
  • Silk Road - Rare trades
  • Voyages of Admiral Zhang He (1405-1433)
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13
Q

Third Stage of Phase 2

A

Proto-Globalization (1450-1776)

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14
Q

Proto-Globalization

A
  • Anthony Gerald Hopkins

- 3 Key Elements

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15
Q
  1. Proto-Globalization: Renaissance, Reformation, and Enlightenment - Renaissance
A
  • 1300-1600s
  • Revival of Middle Eastern knowledge and rise of humanism
  • Commercial Revolution
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16
Q
  1. Proto-Globalization: Renaissance, Reformation, and Enlightenment - Reformation
A
  • 1518
  • Radical ideas in 16th C
  • Printing Press
17
Q
  1. Proto-Globalization: Renaissance, Reformation, and Enlightenment - Enlightmentment
A
  • 1600-1700s

- Reason, logic, scientific revolution

18
Q
  1. Proto-Globalization: Why Europe?
A
  • Place where marriage of capitalism, science, and empire occurred
  • 1750-1850 - centre of global power
  • Explore and conquest attitude
19
Q
  1. Proto-Globalization: Age of Discovery
A
  • Reversal of Asian dominance
  • Cape of Good Hope (1488)
  • Camel transportation
  • Major political integration of production/consumption clusters (up until 1350)
  • Rise of Europe
20
Q
  1. Proto-Globalization: Age of Discovery - Rise of Europe
A
  • 1350 CE - 1850 CE
  • Black Death (1347) rebooting Ancient World
  • European Radical Population Decline
  • World Historic Shift
  • Black Death impact on British incomes
  • Silk Road shut down (15th C)
21
Q
  1. Proto-Globalization: Colombian Exchange
A
  • Started to import food crops from America
  • Raised Euro pop. density
  • European disease de-populated the New World
  • Differences between New World and Old World trades
  • European population increase; American population decrease > Americas rapidly repopulated with European immigrants
22
Q
  1. Proto-Globalization: Colombian Exchange - European-Asia Trade
A
  • 16th Century
  • Europeans dominated - “King of the Hill”
  • 1700s - Europeans mapped the world > navigate seas
23
Q

Impact of Proto-Globalization

A

Europe breaks out of the Malthusian trap

24
Q

What is the Malthusian Trap?

A
  • Robert Malthus
  • Ensures that gains in income per person through technological advances are inevitably lost through subsequent population growth
  • Health, longevity, quality of life, survival rate increases
  • Causes population to increase over generations > food per person to fall back until equilibrium level of subsistence
  • Population is trapped into a subsistence level of life
25
Q

What was the pre-industrial revolutionary thinking about international trade?

A
  1. Doctrine of Universal Economy

2. Mercantilism

26
Q

What is the Doctrine of Universal Economy?

A

God created the sea, geographic separation, and diversity in endowments in order to promise interactions through trade between the various people of the earth

27
Q

What is Mercantilism?

A
  • 16-18th C thinking
  • Viewed exports as good, imports as bad
  • Land was a main source of national wealth
  • Trade was viewed as a zero-sum game
  • Strong regulations of int’l trade
  • National trade surplus > nation’s gold stock increases > wealth rises; everyone else’s falls
28
Q

Summary

A
  • A7 declined while G7 increased
  • Consumption and Production became largely bundled geographically
  • Trade; but low volume
  • Growth stagnation for A7
  • Per capita income gap opened up b/w Atlantic economies and Asia during the Proto-Globalization period
  • Asia’s economic dominance con’t (60% of world GDP) - population outweighed Atlantic income advantage

Econ 102 (4 decks)

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