Lecture 11: Allen: Global Economic History (Ch. 4: The Ascent of the Rich)

what are the components of the standard development strategy?

large unified national market, external tariffs to shield infant industries, creation of banks to stabilize currencies and provide businesses with capital to expand, and establishing mass education

western Europe had a more _______ industrialization approach than Britain

proactive

what was the power shift from 1870-1913?

western Europe and the US surpassed Britain in output

the development of new industries was intertwined with

developments in science

what underpinned the US’s global technological leadership?

sustained university research supported by the government

what was a driver of high wages/incomes in developed countries?

high wages provided incentives for the invention and adoption of labor-saving technology which led to increased capital investment and further wage growth

what does the world production function show?

the more capital you have per worker the more output you can produce per worker

true or false: adopting more advanced methods translated into advantages for poorer countries

false

the benefits of advancements in technology go to who?

the wealthier countries that can invest in and adopt them more readily

why can poorer countries not just adopt new modern technologies?

modern western technology is capital-intensive and only becomes profitable when wages are high relative to the cost of capital

when wages are low and capital costs are high then the new technologies are not economically viable

the very nature of technological progress unintentionally

widened the economic gap by increasing the competitive advantage of rich countries without providing the same benefits to poorer nations

the direction of technological innovation was heavily influenced by the economic conditions of priorities of the leading industrial powers

what was crucial for market integration and industrial expansion?

railways

what was the role of investment banks in industrial development? how did this differ from Britain?

there was a heavy reliance on banks to finance industrial expansion; Britain relied on private investment

what were the heavy industries that emerged in the 19th century?

coal, steel, and machinery ; the rest of the Dover Circle Plus was catching up to Britain in these industries

what kinds of technologies led to rising wages and economic growth?

capital-intensive, labor-saving technologies (steam engine, mechanized textile production)

what were the new industries that arose in the late 19th century?

automobiles, petroleum, electricity, and chemicals, with all major industrial countries contributing to innovation

what did Germany emphasize that later influenced the US?

Germany’s strong university system fueled industrial advances in chemistry and physics, which later becomes a model for the US

what were the global technology disparities?

technological innovation was concentrated in rich countries, leaving poor nations with outdated technology

what were the developmental barriers for poor countries?

it was not cost-effective to adopt the capital-intensive western technology due to low wages in poorer countries

when and by whom was Britain surpassed by in manufacturing

1913 by Germany, France, Belgium while the US became the leading industrial power

how did industrial growth fuel tension leading up to WWI?

global trade rivalries between the US and Germany emerged

by the early 20th century, ______ emerged as the global leader in technological innovation and industrial growth

the US

when did the shift in scientific leadership happen?

Germany led as the center for scientific and technological research but was surpassed by the US after WWII largely due to federal funding