Economic History: Pre-Industrial Economies, Industrial Revolution, and Global Trade

Comprehensive practice flashcards covering pre-industrial economies, demographic regimes, Malthusian dynamics, measures of economic development, the British Industrial Revolution, diffusion theories, and mercantilist-imperial policies.

What was the Hanseatic League ("Hansa City")?

A powerful medieval commercial and defensive confederation of merchant guilds and market towns in Northern and Central Europe.

What was the impact of the Black Death pandemic between $1346$ and $1352$ on Europe's population?

It swept through Eurasia and North Africa, killing between $30\%$ and $60\%$ of Europe's total population.

How are "Malthusian limits" defined?

The maximum population size that a given environment or agricultural system can sustainably support before resource shortages (primarily food) trigger societal collapse.

What characterized the "Old Demographic Regime" before modern industrialization?

It was characterized by high birth rates, high death rates, low life expectancy, and slow population growth caused by poor hygiene, epidemics, malnutrition, and limited medical knowledge.

What are Thomas Malthus's First and Second Laws of population and food growth?

The First Law states that population tends to increase geometrically ($1, 2, 4, 8, 16, 32\dots$), while the Second Law states that food production tends to increase only arithmetically ($1, 2, 3, 4\dots$).

In Malthusian demographic theory, what does the shaded region between the two curves represent?

It represents the crisis zone where population exceeds the subsistence level of food production, leading to conflict, famine, disease, and population collapse ("positive checks").

What are the three main economic sectors and their functions?

1. Primary sector: produces raw materials from nature (e.g., agriculture, fishing).\n2. Secondary sector: transforms raw materials into manufactured products (e.g., factories, textiles, construction).\n3. Tertiary sector: provides services (e.g., banking, education, tourism).

What is the difference between "economic growth" and "economic development"?

Economic growth is a sustained increase in the total output of goods and services produced by a society, whereas economic development is economic growth accompanied by substantial structural change in the economy.

What economic concept is illustrated by this curve plotting inputs against output?

The Production Function ($\text{PF}$), demonstrating diminishing marginal returns where successive additions of input yield progressively smaller increases in total output.

What were the Millennium Development Goals (MDGs), and what framework replaced them in $2015$?

Eight global antipoverty goals established by the United Nations in $2000$ to be achieved by $2015$; they were succeeded by the Sustainable Development Goals ($\text{SDGs}$).

What absolute poverty threshold did Shaohua Chen and Martin Ravallion establish?

1\,\ a day per person (which has since shifted to around 3\,\ a day in modern standards).

What are the three core dimensions and relative weights evaluated in the Human Development Index (HDI)?

Income ($\frac{1}{3}$), Health via life expectancy ($\frac{1}{3}$), and Education via adult literacy and school enrollment ($\frac{1}{3}$).

In this graphical representation of income distribution, what are the curve and the ratio $\frac{A}{BCD}$ called?

The curve is the Lorenz Curve, and the ratio of area $A$ (between the line of perfect equality and the curve) to the total triangle area $BCD$ represents the Gini Index (where $0$ equals perfect equality and $1$ equals extreme inequality).

What are the five stages of economic growth outlined by Walt W. Rostow in $1960$?

1. Traditional society\n2. Preconditions for take-off (transition, increases in productivity and education)\n3. Take-off (rapid growth and industrial diversity)\n4. Drive to maturity (expansion into new sectors like chemistry and electricity)\n5. Age of high mass consumption (services and consumer goods).

How did Alexander Gerschenkron's theory of industrial imitation differ from Rostow's model?

Gerschenkron argued that backward countries (e.g., Germany, France) do not simply copy England's exact path, but industrialize using institutional substitutes (such as large investment banks and the state) to overcome missing preconditions.

What is the core premise of Arthur Lewis's ($1954$) dual-sector structural change model?

The economy consists of an overpopulated traditional rural agricultural sector with zero marginal labor productivity and a high-productivity urban industrial sector that expands by drawing rural labor funded by reinvested capital profits.

What was the Price Revolution of the 16th and early 17th centuries in Europe?

A prolonged inflationary period driven by the large influx of silver and gold from the Americas into Spain, which multiplied European price levels by $3$ to $4$ times by the end of the 16th century and eroded real wages.

What is Irving Fisher's ($1922$) Quantity Theory of Money equation, and what does it imply?

$M \cdot V = P \cdot Q$, where $M$ is money supply, $V$ is velocity, $P$ is the price level, and $Q$ is the volume of transactions/output; because $V$ and $Q$ are assumed relatively stable, doubling the money supply ($M$) doubles the price level ($P$).

Which Spanish scholar from the School of Salamanca formulated an early version of the Quantity Theory of Money during the Price Revolution?

Martín de Azpilcueta.

Why did European pepper prices drop by $85\%$ to $96\%$ by $1760$?

Direct oceanic trade routes bypassing middlemen, combined with intense shipping competition among maritime powers, drastically lowered transportation and product costs.

How did Robert Allen explain why the Industrial Revolution began in Britain rather than Continental Europe?

Britain had a unique wage and energy price structure: high real wages and cheap energy (coal) made it economically profitable for British industrialists to substitute expensive labor with fuel-powered machinery, unlike in other nations where wages were low.

By $1750$, how did the wage-to-capital ratio in England compare to that of France?

Wages relative to capital were approximately $60\%$ higher in England than in France.

How did Rondo Cameron's view on the origins of the British Industrial Revolution differ from purely technological explanations?

Cameron argued that industrialization was a gradual evolution produced by multiple interacting factors, including intellectual shifts, early commercial banking developments (e.g., goldsmith bankers), and a parliamentary political system that checked monarchical power and protected property rights.

What were the comparative rates of return and adoption rates of the Spinning Jenny in England, France, and India?

The rate of return was $40\%$ in England (leading to over $1{,}000$ machines installed), $9\%$ in France (around $100$ machines installed), and $1\%$ in India (virtually none installed), illustrating how factor costs drove technological adoption.

Why did Thomas Newcomen's early atmospheric steam engine ($1712$) diffuse primarily in Britain?

Because it consumed enormous amounts of fuel, making it economically viable almost exclusively near British coal mines where fuel was cheap and abundant.

What contrasting conclusions did John Clapham and John L. Hammond reach in the British standard of living debate?

John Clapham argued that real wages grew by roughly $60\%$ over the period (optimist view), whereas John L. Hammond argued that wage increases could not compensate for the qualitative deterioration in living, social, and urban working conditions (pessimist view).

What was the purpose of the British Factory Act of $1833$?

It regulated and restricted child labor in textile mills, establishing legal limits on work hours and instituting factory inspections.

What was the central economic doctrine of Mercantilism between the 16th and 18th centuries?

An economic policy aimed at maximizing national wealth and power through state intervention, accumulating gold and silver bullion, promoting domestic manufacturing, and maintaining a positive balance of trade (exports exceeding imports).

According to Adam Smith and classical liberals, what are the only four legitimate duties of the state?

1. National defense (border protection)\n2. Protection of private property\n3. Administration of justice and the monetary system\n4. Provision of essential public works and certain public assistance.

What was J.A. Hobson's economic theory of imperialism ($1902$)?

Hobson argued that imperialism was driven by capitalists seeking foreign outlets for surplus capital rather than benefiting the ordinary citizens of the metropole, resulting in high military costs and rent-seeking elites.

In which four years did the Spanish Crown suspend debt payments (declare bankruptcy) due to imperial overspending exceeding state revenues?

$1557$, $1575$, $1596$, and $1607$.