War & Progress
International trade prior to World War II
International trade has been practised for centuries. It has allowed residents of one area to obtain goods and resources, which have regional and seasonal restricted distributions. Barter-based trading between tribal communities developed mutual respect, and some degree of craft specialisation, e.g. the Masai tribe are African cattlemen who refuse to repair water wells. Since pre-history they employed other tribes to perform this necessary maintenance.
The price of goods reflected the local availability of the product, demand, production costs and the value of a shared currency within that market system.
Goods were generally non-perishable, high value items, and trade was conducted mostly by near neighbours and those with shared languages. Merchant trade routes into Asia became significant sources of cultural exchange. Quantities of imported goods were restricted by prohibitive transport costs, travel time exceeding shelf life, and competition from the relatively inexpensive local products or alternatives.
 |
International commerce was a reality even before the rise of the Roman civilization nearly 2000 years ago. In the Roman Forums (above), economic transactions occured and other matters of order were discussed. However, the system did not fully resemble globalisation, which would not arrive until several centuries later. |
Colonial expansionism by the Viking, Roman and Greek empires quickly enriched these societies; at the expense of the areas they dominated. Food crops were taken for the army and in Roman times send back to support the citizens' granaries, while other valuable resources were commandeered for the benefit of the Empire, or sometimes, the local Governors. Often the Indigenous people were enslaved or conscripted to serve in armies, while women were forced to labour as servants, or were sexually abused. Resistance to these large forces was futile and usually resulted in death, torture or imprisonment.
The British, Spanish and French Empires, all improved the wealth of the dominant nation at the expense of their colonies. Although most expansionist regimes believed that the spread of their preferred religion was the reward for their colonies, the politicians were aware of the many economic and strategic advantages of global linkages.
During the late 19th century, use of bulk ice allowed perishable food items to be exported. Salting and corning of meats and then canning of fruit and vegetables began the food export trade between distant nations. Until this was developed food trade was limited to localised exchanges.
Traditional communities practised forms of agriculture, which have slowly developed to fit the geophysical environment. These farms have adapted both food crops and farming methods, which sustain both the community and the environment. European settlers to New World areas interrupted these long-standing forms of agriculture. They usurped the Indigenous ownership traditions and interrupted the nomadic migrations of communities, which both allowed areas to recover from human occupation and to take advantage of seasonal crops and prey abundance. Settlers introduced new crops and animals, which thrived, as they had no adapted predators in these new settings. Many of these have since become significant pests, including rabbits, cats, rats, dogs, pigs and foxes, which threaten the survival of native species.
They introduced new infectious diseases, to which the Indigenous community had no immunity. In Australia there are many examples of attempted genocide against the Indigenous people of the area. In one generation the Yorta Yorta tribe of Southern NSW, were reduced by 80% by deliberate European reduction.
Critically they introduced intensive sedentary forms of agriculture, which altered the soil, nutrient and water distribution, fundamental to problems of salinity threatening much of Australian agriculture today. They altered the flow of rivers, as part of the attempt to modify Inland Australia to be like productive areas of Europe. However Australia has a different geological history. It is an ancient, infertile dry continent, and is unsuited to this style of production. It only achieved modest levels of productivity by heavy use of added fertilizer, and irrigation, which has added to the current environmental challenges .
Each country produced agricultural products for local consumption with the surplus used for trade. Self-sufficiency was valued as it protected the nation's food supply in times of conflict. Many European nations suffered severe food shortages during the 1st and 2nd World Wars, when their external food supplies were disrupted.
The developed economies grew by adding value to imported 3rd World raw materials. These processed commodities were marketed to the consumers within the workforces of the developed world.
Third World commodity prices were limited by their unequal bargaining power, as most resources could be purchased from other suppliers. They were competing against other suppliers for market share.
As transport improved many nations introduced policies to promote consumption of their own products while imposing restrictions and tariffs on imported goods, as a strategy to maintain consumption of local products while providing full employment.
Post World War II Developments
In the post war period the USA became the dominant world power. Social and economic theorists saw the world divided into three sections:
- The First World, the developed capitalist economies
- The Second World, the developed communist economies and
- The Third World, the under-developed nations.
The Marshall Plan was introduced to reduce the risk of further under- developed nations introducing communist systems, rather than capitalist ideology. Several organisations were introduced to assist development and growth in these countries. They included the US Agency for International Development, The Alliance for Progress, and The Peace Corps. The allied forces agreed to form a new organisation for international co-operation, The United Nations.
The United Nations, (UN) replaced the previous failed League of Nations. The UN aims to maintain peace and security and has become a significant contributor through its Economic and Social Development Council. (ECOSOC) This aims to promote
"Higher standards of living, full employment, economic and social progress: identifying solutions to international economic, social and health problems, facilitating international cultural and educational co-operation; and encouraging universal respect for human rights and fundamental freedoms" (UN, ECOSOC aims). This council utilises approximately 70% of all UN funding. Current areas of activity include
- African development,
- Environment,
- Human rights,
- Population,
- Regional Co-operation,
- Sustainable Development,
- Countries with Special Needs, particularly Least Development Countries, Landlocked Developing Counties and Small Island Developing States,
- Financing for Development,
- Human Settlements,
- Prevention of Crime,
- Social Development,
- Trade,
- Development Trends,
- Forests,
- Narcotic Drugs and
- Public Administration and Statistics.
Ecosoc has been critical in the formation of Millennium Development Goals, The Information and Communication Technologies Taskforce, and the Bretton Woods institutional conference, including the World Bank and International Monetary Fund.
Organisation for Economic Co-operation and Development
The OECD is committed to democratic government and market economies. It has 30 member nations, and relationships with 70 other countries. The OECD has a major role in promoting practical policies, for both corporate sector and government actions. It carries out surveys and makes recommendations. It provides the 'rules' for multilateral trading agreements, and aims 'to share the benefits of growth', via emerging economies, sustainable development, territorial economy and aid.
The governing body, the Council, guides the work of the OECD, and again is made up of dominant economy nations.
These and other international development groups promoted the belief that Westernised development was achievable for all nations provided they adopt policies built on democratic government with economies which were integrated within the global market system. From a sociological perspective, this phase of 'Institutional Developmentalism' had several ideals; each nation would achieve modernity equal to 1st World Nations, and that the difference in development would diminish over time.
The World Bank
This organisation provides finance for its mission to fight poverty and improve living standards. It has 5 associated institutions.
- The International Bank for Reconstruction and Development. This focuses on finance to 'credit-worthy' nations
- The International Development Association, which provides free credits to the poorest nations, which are unable to borrow on market terms.
- The International Finance Sector, which promotes private investment.
- The Multilateral Investment Guarantee Agency, which secures foreign investments against non-commercial risks.
- The International Centre for Settlement of Investment Disputes. This provides a forum for arbitration between parties, aimed to increase business confidence.
The World Bank operates as a co-operative, with nations as shareholders. The largest shareholder is the USA, which holds 16.1%. Other large shareholders are France, Germany, Japan, and The United Kingdom. Together these nations hold 37.39% of the shares. Their representatives control the Board of Governors, and reflect their interests.
The World Bank provides Poverty Reduction Strategies, and requires progress reports from these nations to measure how effective the measures have been. Many developing nations experience difficulty in providing the level of documentation required for additional resources.
Post-War Capitalism to Globalisation
During the era of 'Developmentalism', some believe that economies were stabilised through nationally based economic management, featuring replication of localised industries and services. During the 1970's, the altered linkages lead to new global economic management, which featured lines of specialisation and new, increased areas of marginalisation; replication became a redundant concept. In this new adaptation of globalisation, global elites replace the concept of development for all nations, which grew out of desire for post -war peace, with one where the financial and Transnational Corporation's shareholders become the new ruling class.