Main Features of International Economy in the 20th Century - Coursework Example

Running Head: Assignment Two Assignment Two Name Institution Professor Course Date Introduction The economic history of the globe is termed as a record of the economic activities such as the consumption, distribution, production of goods and services of human beings, which spans a certain period of time which has been recorded in history and also have an evidenced prehistory. Economic history sets out to explain how economies have developed over time. In more precise terms economic history seems to be less concerned about what individuals did and what the political history does and rather it is more concerned with a largest group of people such as farmers and industrial workers and therefore sets out to explain the technological changes and how the business world as well as offer an analysis of the effects of various institutions such as the trade associations and governments on the economy of a country. In this regard, this paper sets out to use examples from a particular period of economic history since the industrial revolution to discuss the main features of the international economy during that particular period and explain the role of free trade and/or protectionism in shaping the international economy during that period. The particular period of economic history to be used in this case is the 20th century. Discussion Main features of international economy in the 20th Century The beginning of the 20th century is mainly characterized with huge changes in the means and modes of artistic production and this was mainly as a result of the wide range of movements and as a great number of countries re-evaluated their techniques, media, color, aesthetics as well as many other aspects related to art. The impressionists who existed at the end of the 19th century played an essential role in championing the landscape painting and they also revolutionized the techniques and color use that would open the floodgates for the movements that evolved in the early years of the 20th century (UNESCO, 2008, p. 600). These mirrored the social and economic changes that occurred on the globe during that time. In the first two decades of the century there was massive industrial, social, economic and cultural change. International trade which was also present at the time came about with a number of advantages such as increased growth along with prosperity. Through international trade, people who engaged in trade and their countries achieved growth economically and thus they uplifted their living standards. A major disadvantage is that there was also a rise on poverty levels leading to development or mushrooming of slums in some of the major cities as people came to the cities in such as manual jobs and to work for the rich in the cities (Keylor, 2011, p. 30). Another groups of features that marks the 20th century international economy in an effective manner is the concept of urbanization, increase in technology, architectural advances and spread of information and goods (Economides, S. & Wilson, 2002, p. 50). Among the stated features the dramatic growth of technology is seen as the most prominent features of the 20th century. In relation to these, there was organized research and practice of science and this eventually lead to a great number of advancements in the engineering, communication, travel, war and medicine fields. For instance, there was an increase in the types and number of homes appliances as a result of technological advancements, availability of electricity and increase of leisure time and wealth. In relation to urbanization, it is viewed as being a dominant demographic trend in the late 20th century. In the late 20th century the number of people residing in the cities increased from an estimated amount of 600 million in the year 1950 to a total of more than 2 billion the year 1986. It is crucial to note that if the growth continues in the cities, about half of the people in the globe will be living in the urban centers in the early 21st century. In the past, the globe population has been overpoweringly rural but the size and number of urban settlement have increased periodically (Brown & Jacobson 1987). It is important to note that the prevalent urbanization that is been experienced in the globe is basically a phenomenon of the 20th century since in the year 1900 about 14% of the globes population lived in the cities. . Competition between the various nations at the time was depicted as each of them tried to show off their advances in relation to business, technology and architecture among other aspects with each of them trying to outshine the others (Dyster & Meredith, 1990, p. 23). A good example of technology and science that erupted during this period is the Einstein’s theory of relativity. With certain technological advancement there was also improvement in terms of trade between people in the same locality and also with other countries which was beneficial to the parties involved since it led to more improved and high quality products. In relation to the architectural design, the 20th century was marked by the construction of sophisticated building that was the main focus of the modernist architectures. The architectures considered the regional, historical, environmental; and technological factors in their architectural design (Palmer, 2009, p. 295). A good example of architectures of the 20th century is the green architecture which took place in the latter half of the century. There were also other architectures such as the Stansted Airport Terminal building which was located in Essex England which was completed in 1991 and the World Trade Centre tower which was designed by Moniru Yamasaki and it was located in the New York. Role of free trade in shaping international economy in the 20th Century Free trade also termed as laissez-faire is a policy which calls on governments of countries not to discriminate against the country imports and not to interfere with the exports by placing tariffs to the country imports or subsidies to the exports. However, the free trade policy does not imply that a country should totally abandon all their control and taxations on exports and imports (Nye, 1991, p. 23). Free trade has played an essential role in the shaping of international economy in the 20th century in that since the mid 20th century, a great number of countries more than ever reduced the tariff barriers as well as the currency restrictions in regard to international trade. However, at the same time there were other barriers that were implemented by some countries that were in a way equally effective when it came to hindering trade between countries for example taxes, import quota as well as various means of subsidizing the domestics industries (Froning, 2000). Another role that free trade played in shaping international economy is that, it promoted innovations and competition. Through free trade, people from various countries had the opportunity to engage in fair trade since they were offered with a wide range of choices and the best opportunities to improve their living standards since people had the economic freedom and a wide range of goods to choose from. Thus, in most instances the consumers were likely to purchase items that met their needs and wants in the most appropriate manner. Through free trade, competition was fostered and companies encouraged to develop and innovate better and improved products to bring to the market and this helped in keeping the prices low and quality high with the aim of retaining and increasing their market share (Gomes, 2003, p. 77). Free trade contributed to innovations in that together with the goods and services, their trade flow also circulates new ideas. The idea of free trade continued to spread but they were greatly undermined by the rivalry that was happening between nations in the early years of the 20th century. Ultimately, the universality of the aspect of trade gave in to the colonial, international, economic as well as national rivalries whereas as at the domestic levels, liberalism was greatly challenged by the socialist and collectivist doctrines. Until 1914, the concept of free trade remained untouched in Britain only. This was only possible due to the political and financial imperatives in addition to the centrality of the interests of the consumers while the custom duties leveled were applied mainly for revenue purposes. This further shows that at this time, free trade had no role to play in the international economy since it was rejected by a great number of nations at the time. As a matter of fact, those who practiced free trade were not willing to accept the fact that economic decline was taking place, apart from that they accepted that other nations were likely to create or be harmful to their national industries and exploit their comparative advantage (Gomes, 2003, p. 80). The 1980s show a great number of countries reducing the barriers they had placed in relation to trade and other barriers to growth (Frieden, 2007, p. 67). A good example of this is Mexico which embarked on a number of noteworthy economic reforms in the late 1980s and the reforms were anchored in the North American Trade agreement. Due to the reforms in the various nations and investments that were more profitable, the private capital flows increased a lot, concealing the official capital flows in their enormity. This was of benefit to the international economy but it was short-lived since as it happened, some emerging markets became vulnerable to the changes in investment flow spectacularly (International Monetary Fund 2006). For instance, a country such as Mexico was affected greatly in that the country’s exchange rate policy was not accommodative of the domestic credit expansion as well as the distorted outer oriented trade position and in the year 1994 over the investors was reluctant to finance any deficits in the accounts. Role of protectionism on shaping international economy in the 20th Century Protectionist is termed as an economic policy that is applied by countries with the aim of restricting trade between various countries and this is mainly done through the use of restrictive quotas, tariffs on the goods that are imported and a number of regulations from governments that have been designed to enhance fair competition between the imports and the locally produced goods and services. Based on the proponents of the policy, the policy are mainly put in place so as to protect the workers and businesses in the country by regulating or restricting trade with the foreign countries (Xinhua, 2012, p. 1). A negative and derailing role that the protectionism policy played is that since it took hold of countries such as the United States as a result of the Smooth-Hawley Tariff Act the great depression was spread and prolonged (Eun & Resnick 2011 and Dyster & Meredith 76). At the end of the First World War, the United States prolonged their stand on the high tariffs that had characterized their trade policy since the period of the civil war. The main reason for enactment of such tariffs was to appease to their domestic constituencies but they also hindered the international economic trade and cooperation in the late 1920s and also in the early 1930s (Marrison, 1996, p. 44). The Smoot-Hawley tariff was not of any good when it came to fostering the cooperation between various nations in the political and economic sphere during a dangerous era in international relations. As matter of fact, it acts as a symbol of “beggar-thy-neighbor” policies which had been applied in the 1930s. Such kind of policies had been adopted contributed greatly to the reduction of international trade as opposed to augmenting it. For example, in the year 1932 the U.S imports from Europe reduced from imports amounting to $1,334 million and they dropped to just $ 390 million in the year 1932. At the same time, the U.S exports to Europe also fell from $2,341 million in the year 1929 to a total of $784 million in the year 1932. In general, the world trade was also reported to have declined by about 66% between the year 1932 and the year 1932 (US Department of state, 2016). The protectionist approach did very little in shaping or improving international economy in that it designed policies that aimed at restricting the competition between countries and this meant that the consumers bore the heavy cost. This was best demonstrated by unions such as the European Union which protected and also protects the member’s agricultural industries from numerous foreign competition and they do so by implementing policies that restricts the importation of beef and at the same time maintains a protectionist approach on bananas (Froning, 2000). Conclusion In conclusion, it is important to note that the 20th century saw numerous changes in the means and modes of artistic production, another groups of features that marks the 20th century in an effective manner is the concept of urbanization, increase in technology, architectural advances and spread of information and goods. At the same time, there were massive industrial, social, economic and cultural change as people interacted more as it was easier to travel and trade with each other in the first two decades of the 20th century. Free trade and protectionist were also policies that played different role in the international economy in the 20th century. In this regard, the protectionist approach did very little in shaping or improving international economy in that it designed policies that aimed at restricting the competition between countries and this meant that the consumers bore the heavy cost. At the same time though free trade had some disadvantages, it played an essential role in that it encouraged trade between various countries and those involved in free trade reaped the benefits associated with it for instances improved quality of goods and promotion innovations and competition. Through free trade people from various countries had the opportunity to engage in fair trade since they were offered with a wide range of choices and the best opportunities to improve their living standards. In this regard, it would be essential to recommend that nations need to lessen their restrictions in regard to trade since it is argued that when some countries engage in trade protection, the countries that have remained open may tend to gain more from the cheap imports when compared to what they may lose in denied markets exports. This should be a notion that should be considered though trade protection may not disappear totally. References Brown, L. & Jacobson, J. (1987, May 8). The 20th century shift to city life. Chicago Tribune on the web. Retrieved April 6, 2016, from http://articles.chicagotribune.com/1987-05-08/news/8702040157_1_20th-century-urban-world-population Dyster, B. & Meredith, D. (1990). Australia in the International Economy: in the twentieth century. Melbourne: Cambridge University Press. Economides, S. & Wilson, P. (2002). The Economic Factor in International Relations: A Brief Introduction, London: I.B. Tauris Publishers. Eun, C. & Resnick, B. (2011). International Financial Management. New York, NY: McGraw-Hill/Irwin. Frieden, J. (2007). Global Capitalism: Its fall and Rise in the Twentieth Century. New York: WW Norton. Froning, D. (2000, August 25). The Benefits of Free Trade: a Guide for Policymakers. Heritage organization on the web. Retrieved April 6, 2016, from http://www.heritage.org/research/reports/2000/08/the-benefits-of-free-trade-a-guide-for-policymakers Gomes, L. (2003). The Economics and Ideology of Free Trade: A Historical Review. Cheltenham: Edward Elgar. International Monetary Fund 2006, The World Economy at the Start of the 21st Century. IMF Organization on the web. Retrieved April 6, 2016, from https://www.imf.org/external/np/speeches/2006/040606.htm Keylor, W. (2011). The Twentieth century world and Beyond: An International History Since 1900. Oxford: Oxford University Press. Marrison, A. (1996). British Business and Protection, 1903-32. Oxford: Clarendon Press. Nye, J. (1991). 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