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GEOG 135 – Economic Geography Professor: Dr. Jean-Paul Rodrigue Hofstra University, Department of Global Studies & Geography Topic 2 – Historical Developments.

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Presentation on theme: "GEOG 135 – Economic Geography Professor: Dr. Jean-Paul Rodrigue Hofstra University, Department of Global Studies & Geography Topic 2 – Historical Developments."— Presentation transcript:

1 GEOG 135 – Economic Geography Professor: Dr. Jean-Paul Rodrigue Hofstra University, Department of Global Studies & Geography Topic 2 – Historical Developments of Capitalism A – Feudalism and Capitalism B – The Industrial Revolution C – Colonialism and its Demise D – Waves of Economic Change

2 © Dr. Jean-Paul Rodrigue Conditions of Usage ■ For personal and classroom use only Excludes any other forms of communication such as conference presentations, published reports and papers. ■ No modification and redistribution permitted Cannot be published, in whole or in part, in any form (printed or electronic) and on any media without consent. ■ Citation Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University.

3 © Dr. Jean-Paul Rodrigue A - FEUDALISM AND CAPITALISM 1.The Feudal System and its Demise 2.Long Distance Trade

4 © Dr. Jean-Paul Rodrigue 1. The Feudal System and its Demise ■ The Feudal society A system of bonds and obligations: Power in land ownership. Administrative/legal (Lord) and religious (Church) control. Rent/Royalties from the serf to the lord (in kind or labor). Fixation of the productive forces (tools and labor) in agricultural production. Little socioeconomic changes over centuries. Economy: Small local markets (fairs). Low levels of productivity (subsistence level). Profits taken away by the lord/church, inhibiting any increases in agricultural productivity. 80 to 90% of the population was in agriculture while the other share were artisans and landowners. Different types of feudal societies (China, Japan, Europe).

5 © Dr. Jean-Paul Rodrigue Roman Empire, c125AD Empires collapse because of overstretch: resources to maintain hegemony exceed resources collected. Theft, plunder, taxation and (hyper)inflation (final phase).

6 © Dr. Jean-Paul Rodrigue The Silk Road and Arab Sea Routes (8th to 14th Centuries)

7 © Dr. Jean-Paul Rodrigue 1. The Feudal System and its Demise ■ The end of the Middle Ages The Plague of 1348 created labor shortages and social disruption. At the end of the 15th century, large parts of Europe were still under a feudal regime: Trade was almost non-existent because each locality was almost self-sufficient. Distribution costs were high: Diversity of currencies. Different units of measure. Tariffs imposed on goods moving between small kingdoms. The emergence of a merchant class (proto-capitalism): Commodification of goods and services.

8 © Dr. Jean-Paul Rodrigue 1. The Feudal System and its Demise ■ The European origin of the global economy The fifteenth century marked the beginning of an expansion of European control throughout the world. Europe progressively assured the development of the global economy by an extension of its hegemony: Mercantilism was the first phase. The industrial revolution was the second. Over three centuries ( ): The setting of capitalistic systems. Limits of the world were pushed away. A world where borders are drawn; a delimited world. Establishment of vast colonial empires. Waves of innovations and socio-economic transformations.

9 © Dr. Jean-Paul Rodrigue 2. Long Distance Trade ■ Merchants and Mercantilism A new structure of wealth accumulation: Investing in trade and in the manufacture of consumption goods. Expansion of the wealth of merchants: –It was them, and not the feudal Lords, who had the largest amount of capital. –Merchants invested the capital in commercial enterprises while lords fixed it on land. Rich merchant families such as the Medici (modern banking). Goal: Buy goods at the lowest possible price. Sell them at the best price, thus generating a profit. Used to finance new commercial initiatives. Financing the first maritime explorations: Attempt to acquire information on the commercial potential of new territories.

10 © Dr. Jean-Paul Rodrigue Early European Maritime Expeditions, Exploration (inventory of territories and resources). Setting of colonial empires (control of territories). Setting of a global trade network.

11 © Dr. Jean-Paul Rodrigue Density of Ship Log Entries,

12 © Dr. Jean-Paul Rodrigue 2. Long Distance Trade ■ Trading companies: Private mercantilist tools From the 17 th to the 18 th century trading companies acted on behalf of European governments in East Asia. Joint stock companies. Guarantied trade monopoly: Rights paid to their respective governments. Almost states in themselves: Had their own ships (military and merchant) and military forces. Could acquire and manage a foreign territory. Developed trade links for commodities such as pepper. Increasingly involved in the control and development of their respective territories. Faced lack of interest from European governments.

13 © Dr. Jean-Paul Rodrigue 2. Long Distance Trade ■ English East Asian Company In 1592, a Portuguese ship was captured by England: Its cargo contained stores of goods from Asia. Triggered the need to establish a lucrative Asia trade. EEAC founded in 1599 by British merchants: Granted a monopoly to trade with Africa, India and America. Trade structure: Fill ships with European goods, sail to Asian trade depots. Sell the goods in exchange of colonial commodities. Sail back to Europe and sell the goods, cash in and pay dividends to the shareholders. Dividends were over 10% per year (Sometimes up to 65%). 25% of the profits coming from the China trade.

14 © Dr. Jean-Paul Rodrigue 2. Long Distance Trade Constant warfare with French, Dutch and other competitors. China trade: From the middle of the 18 th century, the company became more involved in trade with China. European markets needed porcelain, silk and tea. The company traded silver in exchange. Opium, grown in India, became a substitute for silver. Lead to conflicts with China (Opium War of 1844). Collapse of the EEAC: Facing intense discontent from other British interests, the company gradually lost its monopolies from Dissolved in Holdings transferred to the British Crown which appointed Governors.

15 © Dr. Jean-Paul Rodrigue 2. Long Distance Trade ■ Dutch East India Company The first Dutch expedition the Indonesia took place in Founded in 1602 by Dutch merchants: The world’s first multinational corporation. Conquest: Gained a foothold in Batavia (Indonesia; 1610). Conquest of most of the island of Ceylon (Sri Lanka; 1640). Took Malacca from the Portuguese (1641). Sunk all vessels they found in Indonesian waters, removing competition. Impacts: Replaced local trading networks with their own. Established fortified trading posts. Founded Cape Town (South Africa; 1650) as a stage for the long Europe-Asia voyage. Took advantage of feuding Indonesian dynasties by arming allies and gaining territorial rights.

16 © Dr. Jean-Paul Rodrigue 2. Long Distance Trade Plantations: Forced the introduction of new cultures such as coffee in West Java (1711). Monopoly on nutmeg (meat preserver) and cinnamon. Destroying spice production on uncontrolled islands. One of the first true multinational corporation: By 1750, employed around 25,000 people. Business in 10 Asian countries. Built 1,500 ships. Made 5,000 voyages to Asia. Bankruptcy in 1799: Corruption and mismanagement. Holdings transferred to the Dutch Crown which appointed Governors.

17 © Dr. Jean-Paul Rodrigue Dutch East India Company, Trade Network, 17th Century

18 © Dr. Jean-Paul Rodrigue Major Global Trade Routes,

19 © Dr. Jean-Paul Rodrigue B - THE INDUSTRIAL REVOLUTION 1.The European Origins of the Industrial Revolution 2.A “Revolution” in Industry

20 © Dr. Jean-Paul Rodrigue 1. The European Origins of the Industrial Revolution ■ Why Europe? Competition: Political fragmentation (monarchies and republics). Divided into competing corporate entities (early multinationals). The Scientific Revolution: 17 th century breakthroughs in mathematics, astronomy, physics, chemistry and biology. The Rule of Law and Representative Government: Private-property rights. Representation of property owners in elected legislatures. Modern Medicine: Breakthroughs in health care (19 th and 20 th centuries). Drop in death rates and increase in life expectancy.

21 © Dr. Jean-Paul Rodrigue 1. The European Origins of the Industrial Revolution Consumer Society: Supply of productivity-enhancing technologies. Demand for more, better, and cheaper goods. Work Ethic: Combine more extensive and intensive labor. Higher savings rates; sustained capital accumulation.

22 © Dr. Jean-Paul Rodrigue 2. A “Revolution” in Industry ■ Emergence Started at the end of the 18 th century ( ). Economic and social transformations first observed in England. Demographic transition of the population: Fast growth rate. Improvements in sanitary conditions and hygiene. Why speak of “revolution” for a process occurring over on more than 150 years? At the scale of the world’s economic history, the industrial revolution radically changed the foundations of economic systems. It established the foundations of the global of the economy. Most of the technical innovations took place on a short period, mainly between 1760 and 1800.

23 © Dr. Jean-Paul Rodrigue 2. A “Revolution” in Industry ■ Technological innovations New methods of production by trials and errors: New materials (steel, iron, chemicals). Substitution of machines to human and animal labor. Usage of thermal energy to produce mechanical energy. Changes in the nature production and consumption: Textiles. Steam engine. Iron founding. Production (factory): The first factories appeared after Division of labor. Increased productivity within a factory system of production. Location (initially waterfalls and then coal fields).

24 © Dr. Jean-Paul Rodrigue Major Technological Innovations of the Industrial Revolution Power GenerationTextilesMetallurgyTransportation Thermal energy used for mechanical energy Mechanization of spinning and weaving Mass production of steel (shipbuilding, rails, construction and machines) Modern transport and telecommunication systems First water pump (1712) in mines. Watt (1769); significant improvements. Steam locomotive (1824). Electric generator (1831). Steam turbine (1884). Electric motor (1888). Diesel engine (1892) “Flying shuttle” (1733) doubled weaving productivity. “Spinning jenny” (1765). “Water frame” (1768); hydraulic power. “Spinning Mule” (1779); steam power. Cotton gin (1793). Sewing machine (1846). Coke instead of coal for iron production (1709). Bessemer process (1855). Railroads (1825). Telegraph (1836). Steamship (1838). Transatlantic cable (1866) Telephone (1876). Airplane (1903).

25 © Dr. Jean-Paul Rodrigue Geographical Impacts of the Suez and Panama Canals

26 © Dr. Jean-Paul Rodrigue Productivity in the Textile Industry, Great Britain,

27 © Dr. Jean-Paul Rodrigue Turnpikes in Great Britain, Late 18 th and Early 19 th Century

28 © Dr. Jean-Paul Rodrigue American Rail Network, 1861

29 © Dr. Jean-Paul Rodrigue Global Telegraph System, c1901 (the Victorian Internet)

30 © Dr. Jean-Paul Rodrigue 2. A “Revolution” in Industry ■ Agriculture A second agricultural revolution. Introduction of new food sources: The potato could account for 22% of the post-1700 increase in population growth. Crop rotation, selective breeding, and seed drill technology. Less agricultural population. Growth of the production of food. Mechanization and fertilizers: Combine (McCormick, 1831). Scientific and commercial agriculture (crop rotation). Declining food prices.

31 © Dr. Jean-Paul Rodrigue 2. A “Revolution” in Industry ■ Social changes Significant urbanization: Migration from the countryside to cities. By 1870 more of the half of the population of the first industrial nations was no longer in the agricultural sector. England had reached this stage since Towards 1901, 75% of the English population lived in cities. Creation of a labor class: Exchange of labor for a wage. London: Counted for half a million inhabitants in Reached a million during the first English census of 1801.

32 © Dr. Jean-Paul Rodrigue Share of the Population in Agriculture, Early Industrial Countries,

33 © Dr. Jean-Paul Rodrigue 2. A “Revolution” in Industry ■ Consequences of the industrial revolution Setting of high capacity maritime and inland transport systems. Scramble to capture remaining territories. Consolidation of colonialism: First Opium War in Opening of Japan in Consolidation of British Raj in “The Scramble for Africa” in 1890s.

34 © Dr. Jean-Paul Rodrigue C – COLONIALISM AND ITS DEMISE 1.Colonial Economic Systems 2.The Demise of Colonialism

35 © Dr. Jean-Paul Rodrigue 1. Colonial Economic Systems ■ Colonialism Quest for riches and profit The most important factor. Early colonialism was a capitalist venture. Religious and racist drive: A moral justification. Support of the church. Military technology advantages: Better guns. Better ships (artillery). Two waves of colonialism: First wave: Mercantilism (1415 – 1815); independence of the Americas. Second wave: Industrial revolution ( ).

36 © Dr. Jean-Paul Rodrigue Colonial Trade Pattern, North Atlantic, 18 th Century

37 © Dr. Jean-Paul Rodrigue Intermediate Globalization: The British Empire, % of the world’s surface 25% of the world’s population

38 © Dr. Jean-Paul Rodrigue Global Colonial Empires, 1900

39 © Dr. Jean-Paul Rodrigue 1. Colonial Economic Systems ■ Impacts of colonialism Annihilation and displacement of indigenous populations: 90-95% of the population died because of disease (e.g. smallpox) and wars. Forced migration through slavery (Africa) or contract workers (Southeast Asia). Development of the primary sector: Export-oriented plantations (sugar, cotton, tea, coffee, fruits, rubber, tobacco, etc.). Suppressing industrialization (economic dependency). Dual society: Ruling elite class (sometimes a minority). Population in servitude (e.g. taxation). Artificial boundaries: “Balkanization”.

40 © Dr. Jean-Paul Rodrigue World Trade Routes, 1912

41 © Dr. Jean-Paul Rodrigue European Control of the World, (37%) 1878 (67%) 1913 (84%)

42 © Dr. Jean-Paul Rodrigue 2. The Demise of Colonialism ■ Decolonization Emerging nationalisms and patriotisms. Successful first wave of independence in the Americas after the Napoleonic Wars (late 18 th, early 19 th century) Influence of Marxism-Leninism in explaining past oppression. Japan’s impact in Pacific Asia during WWII. Nationalism was the driving force: Upheld by leaders such as Bolivar (Latin America), Sun Yat-sen (China), Mao Zedong (China), Ho Chi-Minh (Vietnam) and Sukarno (Indonesia). Created a wide variety of post-colonial governments and ideologies.

43 © Dr. Jean-Paul Rodrigue Decolonization since 1945 Since

44 © Dr. Jean-Paul Rodrigue D – WAVES OF ECONOMIC CHANGE 1.Socioeconomic Changes 2.Technological Changes

45 © Dr. Jean-Paul Rodrigue Political-economic Forms of Globalization: Imperialism, Mercantilism and Capitalism ImperialismMercantilismCapitalism DefinitionExpansion by territorial conquest Control and monopoly of the trade of commodities Generation and accumulation of capital GrowthDomination and subordination Unequal tradeProductivity (profit) AgentMilitaryStateCorporation Main relationTribute / tradeTrade / taxesTransactions TerritoriesProtectoratesColoniesMarkets ExampleRoman EmpireDutch East India Company Ford

46 © Dr. Jean-Paul Rodrigue Major Phases of Socioeconomic Change Stone AgeFeudalismIndustrialPlanetary Organization Tribe / Village City-state, Kingdom Nation-state Global governance Economy Hunting and gathering Settled agriculture Industrial system Globalization Communication LanguageWritingPrintingInternet

47 © Dr. Jean-Paul Rodrigue Mass Production Long Wave Cycles of Innovation Water power Textiles Iron Steam Rail Steel Electricity Chemicals Internal-combustion engine Petrochemicals Electronics Aviation Digital networks Software New Media 60 years55 years50 years40 years30 years Pace of innovation Industrial Revolution Post Industrial

48 © Dr. Jean-Paul Rodrigue Long Run Productivity Growth CommodityTime to earn 1885 (hours) Time to earn 2000 (hours) Productivity multiple 1-speed Bicycle Office chair Hair brush Silver Spoon

49 © Dr. Jean-Paul Rodrigue Cumulative Waves of Transport Development Sailships (17-18 th century) Empires and global trade networks Canals (19 th century) Inland access Railways (19-20 th century) Inland and national accessibility Highways (20 th century) National mobility systems Sub- urbanization Airports (20-21 st century) Global mobility systems

50 © Dr. Jean-Paul Rodrigue Primary Energy Production by Source, United States,

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