Name and Surname: Tahlia Teri Bland

Student number: 54709474

Course code: ECS2608

Course Title: Economic History of the World

Assignment number: 1

Unique assignment number: 252753

Cell number: 071 868 0313

[email protected]
After having studied chapters 1 to 5 of part I in the prescribed textbook and the
corresponding sections in the study guide, outline those economic tendencies
described in these chapters which in your opinion have most importantly shaped
the modern economy. And why?

Economics has developed into what we know it as today through the years due to constant
changes in how the world has adapted to various economic tendencies. Not all economic
tendencies were used to shape the modern economy, in this essay the economic
tendencies that shaped the modern economy will be discussed.

Economic tendencies began with nations realising they could benefit from one another
through international trade, a need was seen where nations could gain commodities that
they were not able to produce themselves by trading something they could produce for it.
Trade initially began by foreign nations trading surplus items by train or ship. Trading
became a more affordable solution for most nations, being cheaper to trade than produce
needed items in their own countries. Over time nations sought to develop a common
denominator for trading to make trading between foreign countries. `Economic tendencies
that have shaped international trade would be transporting and communications because
the world would have wanted to make things move a lot quicker and for less money which
would mean it would be more cost effective to move products, commodities, people, etc.
around and they would have wanted to improve transport and communication to get this
done. As mentioned previously, the two main sources of transportation in terms of moving
goods would have been by railway and by ship. To focus on these, they would need to
have built better systems around the railway such as steam railways or steam trains. So,
what would happen was they would constantly develop and come up with ways on how to
transport items better and faster and in terms of transportation over the ocean would have
been via ship, so steam powered ships would also be another way that they would have
done this. The focus would have been on building better ports and warehouses to house
all the goods and commodities in terms of trade that they would have required for trading.
They would have also looked at more space in terms of the ships they would require
boosting trade and the number of commodities which they were able to trade at once.

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The world population growth would have also been another tendency that would have
impacted the international economy, more people mean higher demand and higher
demand means that a country would need to produce a lot more things, a lot more goods
and services to keep up with the increasing demand. Agriculture was a major trade
commodity in the 18 to 19 centuries, the trade for primary or raw materials for finished
products was in demand during this period and really boosted trade between nations.
Along with this was industrialization where machinery was being developed and built at a
fast pace often requiring raw materials, this meant that companies had to trade to gain the
required materials and parts to build their machines. This changed how countries,
subcontinents, and continents traded items. Natural resources were a major part of
economic tendencies, certain countries would be rich in natural resources being able to
grow fruits for example while others had other natural resources or developed products
and had to trade to get the items they required or needed. International trade became very
important in diversifying building a strong foreign commodity because of the need for
countries to depend on each other to trade to get what they needed. An example of this
would be where a country that was able to mine for minerals needed to trade with another
country for vegetables as it was more efficient to trade for these.

The industrial revolution was one of the key factors in economic growth as countries and
subcontinents had to look into trading off their surplus primary production for commodities
that they required. Agriculture was just as important as the industrial revolution because
agriculture yielded a lot of products that needed to be traded with other countries that
didn't necessarily have those products or goods. This was a very important part in
economic growth in general, the industrial revolution started in Britain in the 18th century
and then it spread across different continents. Just as agriculture accelerated, so too did
industrial growth which led to the two commodities being highly traded between different
countries internationally. The use of raw materials increased drastically between the 18
and 19th century, these were commodities such as petroleum and aluminum. It was not
just agriculture that was increasing, it was also raw materials that countries needed or
wanted from other countries. This introduced international trade, which was extremely
important in the transition into where we are now in the modern day. Another key factor
was transport and communication, transport and communication would be how countries
got their goods and products or raw materials and primary products from other countries.
In terms of transportation, railways were built between countries and subcontinents to

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transport the goods and ships were also used to reach the other side of the world or to go
to a different country in terms of trade. Canals were built such as the Suez Canal where
ships could travel through to make the journey both easier and shorter when going from
East to West or vice versa, which was very important. The focus was becoming more
evident that ships were being built larger and better to transport more items, along with
these warehouses were also being built larger in bigger and more ports across the world.
All this increased labour worldwide and aided in boosting the economy of these developing
countries that had the infrastructure to trade with international countries worldwide.

Trade exceeded world output and grew fast from 1800 to 1913, trade during these periods
was mostly done by Europe with their main trade being for primary sources in exchange
for goods that were manufactured. Primary products were not traded as much even after
industrialisation after 1950 and remained as a stable trade commodity, this was mainly
because of underdeveloped countries trading these basic primary resources between
themselves as opposed to developed countries trading them for already manufactured
goods. This pattern of trading soon changed and after 1860 a new multilateral trading
system was developed which focused on the economic specialization of a worldwide
economy. This new system saw many countries over various continents trading in all
goods and resources, balancing out any trade deficits. Foreign trade in the 19th century
was a big steppingstone to getting us where we are today and then also another thing to
touch on is commercial policy in the 19th century again, which was a key factor. Britain
adopting the free trade played a major part in leading foreign trade because they adopted
this free trade, so their colonial commercial policy was sound. Protection was also a key
element for the economy and with various countries such as the USA and Britain providing
protection, it meant that trade was more reliable and safer for people especially when
taking into account foreign investment. The immigration from Europe and other countries
also played a large part in the diversity that we have in international trade up and until
2015 and even now in modern day times it is introducing different cultures to a country.
When they immigrate to a country, they in turn bring culture so people would import stuff
that they were used to from home increasing the trade and it would decrease when
financial strain happened when the Great Depression happened that would have affected
um trade as well so all of these things play intricate part and that is where we are today.
The growth of world population was also another driving factor in foreign and international
trade so as the population increased the need for goods, raw materials, products, and

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commodities to come in and out of a country or sub country subcontinents was very
important. This was also a leading factor in getting us where we are. I did touch on the
supply of natural resources I did not dive into detail but it is pretty self-explanatory that
there will be some countries like Africa that has a lot of natural resources in terms of
minerals agriculture and then we get countries like Germany Britain and the US to an
extent that have agriculture but doesn't produce the same so it gives a very good
opportunity to trade and introduce more things into a country and I think Britain was
leading the way, because of the fact that they had their free trade policy it made the world
of difference in international trade. The growth of real incomes as more people started
coming in and joining the workforce as the population grew all of this grew which means
exported imports in itself meant that the trade their export and import trade could grow.

In conclusion many economic tendencies played a role in shaping the modern economy
into what we know it as today. With the advancement in technology and the constant
growth of how trade takes place, economic tendencies will continue to grow and change,
constantly developing for future generations to come. The various systems of how trade
took place changed as and when required according to the need and demand for both
primary and secondary resources. From the textbook growth of the international economy
1820 to 2005 the 5th edition we can see that there is a lot of infographics showing us how
things have changed over the years you can go look at bar graphs and pie charts to see
just how much things have developed over the years and we can actually learn from the
trends that they bring to see what the future would look like. Export trade in the 1800s the
late 1800s were good and then we can see a steady increase over the next few years
there is a slight decrease it's not a constant up but it's very good in determining what
happened then and how to forecast now we can see there was in fact a few factors where
there was a decline in trade in foreign trade that would be exporting and importing which
is very helpful and useful to know.

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LIST OF SOURCES CONSULTED

Graff, M., Kenwood, A.G. and Lougheed, A.L. (2014) Growth of the International
Economy, 1820-2015. 5th edn. London: Routledge.

University of South Africa. Department of Economics. 2023. Economic History of the

University of South Africa. Department of Economics. 2023. Economic History: Only Study
Guide for ECS2608. University of South Africa. Pretoria.

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