Kaarten: Chapter 7 flashcards | Quizlet

What is globalization?

Globalization refers to the increasing interconnectedness of economies, societies, and cultures across the world, driven by trade, technology, and communication.

What does the Trade Openness Index measure?

It measures the sum of world exports and imports divided by world GDP, reflecting the level of economic globalization.

What are the "waves" of economic globalization?

1. Early Modern Globalization (1500-1800)

2. First Global Economy (1850-1914)

3. De-globalization (1914-1945)

4. Restoration of the Global Economy (1945-1980)

5. Neoliberal Globalization (1980-today).

What is the Law of One Price?

In a perfectly integrated global economy, identical goods have the same price, wages equalize, and exchange rates are unnecessary due to market integration.

What is Mercantilism?

A pre-1800 theory emphasizing the promotion of domestic industries and restrictive trade policies to increase national income and employment.

What is Adam Smith's theory of Absolute Advantage?

Countries should produce goods they can produce most efficiently, trading for others to maximize global welfare.

What is David Ricardo's theory of Comparative Advantage?

Countries should specialize in producing goods where they have the greatest relative efficiency, regardless of absolute advantage.

What is convergence in globalization?

The process where market integration leads to similar prices, wages, and interest rates across different regions.

What was the Silk Road?

An ancient trade route connecting Asia, Europe, and Africa, primarily for luxury goods like silk and spices.

What were the Iberian explorations, and why were they significant?

Led by Portugal and Spain in the 15th-16th centuries, they established maritime trade routes, replacing the overland Silk Road and integrating continents.

Who was Zheng He, and why are his voyages significant?

A Chinese explorer who led maritime expeditions in the Indian Ocean, promoting trade and cultural exchange, though China did not pursue further expansion.

How did silver facilitate global trade in the early modern era?

Silver from mines in Bolivia and Mexico was used as global currency, linking Europe, Asia, and the Americas and driving commerce.

What was the Triangular Trade?

A system where European goods were traded for African slaves, who were shipped to the Americas to produce commodities like sugar, which were then sent back to Europe.

How did the Atlantic slave trade impact Africa?

It caused depopulation, conflicts, and long-term economic destabilization, while benefitting coastal regions and European powers.

What role did the consumer revolution play in globalization?

Rising market integration and price convergence in the 18th century led to increased availability and affordability of goods for European consumers.

What was the Treaty of Tordesillas (1494)?

An agreement between Spain and Portugal dividing newly discovered lands along a meridian in the Atlantic Ocean.

What is the significance of the Belt and Road Initiative?

A modern Chinese project aimed at revitalizing trade routes similar to the historical Silk Road, connecting Asia, Europe, and Africa.

What ended the transatlantic slave trade?

Factors included abolitionist movements, the Haitian Revolution (1791), and laws like Britain's Slavery Abolition Act (1833) and the U.S. Civil War (1861-65).

What was the impact of maritime trade on bulk goods like pepper?

While transportation costs decreased, monopolies like the Portuguese pepper trade initially kept prices high until competition lowered them.

How global was early modern globalization?

It demonstrated clear signs of price integration in luxury goods, facilitated by maritime trade, but bulk goods faced high costs and limited convergence.

What were the drivers of early modern globalization (1500-1800)?

European explorations, structural connections between continents, maritime trade routes, and the demand for luxury goods like spices and silk.

What is the Consumer Revolution?

A period in the 18th century where increased market integration and price convergence made goods more affordable, leading to a rise in consumer demand and lifestyle changes in Europe.

Why was silver considered the "wheels of commerce"?

It enabled global trade by serving as a universal currency, particularly connecting Europe, Asia, and the Americas through flows from mines in Bolivia and Mexico.

What was the importance of the VOC (Dutch East India Company) in globalization?

The VOC facilitated market integration and price convergence through competitive trade in goods like tea, silk, and textiles, significantly influencing global trade patterns.

What are the limitations of early modern globalization?

High transportation costs, monopolies, protectionism, and limited integration of bulk goods like grain and timber compared to luxury commodities.

What is the historical significance of the Atlantic slave trade?

It was a central component of early modern globalization, driving global production systems like sugar plantations while causing immense human suffering and long-term social consequences.