Social Studies 10-1 Notes on Globalization and Sustainable Prosperity

Prosperity

• "Prosperity" can mean "good fortune," but its meaning varies among individuals.
• Prosperity is not always about money; it often means living a satisfying life.
• Economic Prosperity: A state of flourishing, thriving, good fortune, or successful social status.

Defining Prosperity

• Some define prosperity as overall well-being (health, happiness, security of identity).
• Others see it as financial security (money and buying power).

Sustainability

• Sustainability refers to the degree to which the Earth can provide resources to meet people’s needs.
• Sustain: The ability to provide basic necessities of life.

Perspectives on Sustainability

• Sustainability varies from person to person.
• Key questions:
  • Should everyone share Earth’s resources equally?
  • Do we have an obligation to future generations to steward resources?

Sustainable Prosperity

• Practicing stewardship of the environment and resources for future generations to achieve prosperity.
• Standard of Living: The degree of wealth and material comfort available.
• Quality of Life: General well-being of individuals and societies, including physical health, family, education, employment, wealth, religious beliefs, finance, and the environment.
• GINI Index: Measures income distribution, ranging from 0 (perfect equality) to 1 (perfect inequality).
• Gross National Happiness: A holistic approach to progress, giving equal importance to non-economic aspects of well-being.

Gross National Happiness (GNH)

• Key components:
  • Living Standards (Assets, Housing, Income)
  • Psychological Wellbeing (Life satisfaction, Emotions)
  • Health (Mental health, Self-reported health, Healthy days)
  • Time Use (Work, Sleep)
  • Community Vitality (Donations, Relationships, Safety)
  • Good Governance (Government performance, Rights, Services, Participation)
  • Cultural Diversity and Resilience (Language, Participation, Artistic Skills)
  • Education (Literacy, Schooling, Knowledge)
  • Ecological Diversity and Resilience (Ecological Issues, Responsibility, Wildlife Damage, Urbanization issues)

Economic Indicators

• Gross Domestic Product (GDP): Total dollar value of all goods and services produced over a specific time period.
• Per Capita GDP: GDP divided by the number of people in the country, useful for comparing countries.
• Human Development Index (HDI): Composite statistic of life expectancy, education, and Per Capita income, ranking countries into tiers of human development.

Sustainable Development

• Meeting present needs without compromising future generations' ability to meet their needs.

Achieving and Measuring Sustainability

• Politically: Government functions to maintain social order and well-being.
• Environmentally: Rates of renewable resource harvest, pollution creation, and non-renewable resource depletion that can be continued indefinitely.
• Socially/Culturally: Ability of a group to maintain cultural and societal values over time.
• Economically: Refers to Sustainable Prosperity.

Aspects of Sustainability

• Environmental: Natural Resources, Pollution Prevention, Environmental Management
• Social: Standard of Living, Education, Community, Equal Opportunities
• Economic: Economic Growth, Profit, Research and Development

Ecological Footprint

• The impact of a person or community on the environment, expressed as the amount of land required to sustain their use of natural resources.

Stewardship and Resource Depletion

• Stewardship: Responsible planning and management of resources.
• Resource Depletion: Using up a resource faster than it can be replenished.
• Sustainable Development: Economic development without depleting natural resources.

Environmental Sustainability Case Studies

• Canada: 7.25 Hectares per Person
  • 55% Energy Land (4.00 ha): Forested area to absorb carbon dioxide from burning fossil fuels.
  • 3% Pasture Land (0.21 ha): Grazing land for animal products.
  • 5% Built Area (0.37 ha): Land for houses, factories, and roads.
  • -16% Forest Land (1.14 ha): Trees used to produce wood and paper.
  • -19% Crop Land (1.39 ha): Land used to produce crops for food.
  • 2% Sea Space (0.14 ha): Sea area used to produce fish and seafood.
• Bangladesh: Location noted with reference to Arctic Ocean.

The Kyoto Protocol

• Aimed to address whether globalization contributes to sustainable prosperity for all people.

Kyoto Protocol Details

• Negotiated: December 1997
• Came into Force: February 16th, 2005
• Location: Kyoto, Japan (Third Session, Conference of the Parties)
• Objective: Industrialized countries to reduce collective emissions of greenhouse gases by 5.2% compared to 1990 levels.
• Gases Targeted: Carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, HFCs, and PFCs.
• National Targets: 8% reductions for EU, 7% for U.S., 6% for Japan, 0% for Russia; permitted increases of 8% for Australia, 10% for Iceland.

Kyoto Protocol Participants

• 191 States: Including 189 UN members, Cook Islands, and Niue.
• European Union (EU).
• Canada: Ceased membership on December 15th, 2012, claiming the convention was “ineffective”.

Climate Change

• A rise in the average temperature of Earth, primarily caused by emissions from burning fossil fuels.

Key Terms (Chapter 12)

• Sustainable Prosperity
• Sustainable Development
• Knowledge Economy
• Privatization
• Global Climate Change

What is Prosperity? (Chapter 12)

• A successful, flourishing, or thriving condition, especially in financial respects; good fortune.

Sustainable Prosperity (Chapter 12)

• Practicing stewardship of the environment and resources so that future generations can achieve prosperity.
• According to the UN 1987 World Commission on Environment and Development, development is sustainable when it meets the needs of the present without compromising the ability of future generations to meet their needs.

Balancing Economic and Social Prosperity

• Balancing economic and social prosperity can be a challenge, especially when economic and social goals clash.
• Canadian companies are moving operations to countries such as Honduras, Nicaragua, Haiti, and the Dominican Republic, where the workers are paid less.

Measuring Prosperity

• Groups and organizations use various measures to try to develop an accurate picture of how countries are sharing in sustainable prosperity.
• Measures are based on standard of living, number and quality of goods and services, and

GDP (Chapter 12)

• The value of all the goods and services a country produces in a year
• Comparing GDP gives and idea of the differences in standard of living
• Can be used to track the health of a country
• Can be misleading for example the

HDI (Chapter 12)

• Developed by the UN to measure quality of life
• Classifies countries as developed, developing, or underdeveloped
• 3 main categories
  • Longevity, life expectancy at birth
  • Knowledge, enrollment in school/adult

HDI Examples (2006)

• Norway: HDI Ranking 1, GDP per Person $38,454$, Life Expectancy $79.6$, Adult Literacy $99$
• Canada: HDI Ranking 6, GDP per Person $31,263$, Life Expectancy $80.2$, Adult Literacy $99$
• U.S.: HDI Ranking 8, GDP per Person $39,676$, Life Expectancy $77.5$, Adult Literacy $99$
• China: HDI Ranking 81, GDP per Person $5,896$, Life Expectancy $71.9$, Adult Literacy $91$
• Ecuador: HDI Ranking 83, GDP per Person $3,963$, Life Expectancy $74.5$, Adult Literacy $91$
• Honduras: HDI Ranking 117, GDP per Person $2,876$, Life Expectancy $68.1$, Adult Literacy $80$
• South Africa: HDI Ranking 121, GDP per Person $11,192$, Life Expectancy $47.0$, Adult Literacy $82$
• India: HDI Ranking 126, GDP per Person $3,139$, Life Expectancy $63.6$, Adult Literacy Value Unknown
• Bhutan: HDI Ranking 135, GDP per Person $1,970$, Life Expectancy $63.4$, Adult Literacy $42$
• Kenya: HDI Ranking 152, GDP per Person $1,140$, Life Expectancy $47.5$, Adult Literacy $47$

HDI Gap

• The HDI gap between other Canadians and Registered Indians, 1980-2001

HDI and Clean Water

• Main focus of UN development program
• 1 billion people do not have access to clean water
• 1.8 million children die from unsanitary conditions caused by dirty water

GNH (Chapter 12)

• King Jigme Singye Wangchuk of Bhutan, for example, created the gross national happiness index in 1972
• The purpose is to
  • promote sustainable and equitable social and economic development

Challenges (Chapter 12)

• Governments, businesses, communities, and individuals in countries around the world face both challenges and opportunities as a result of rapidly expanding economic globalization

Economic Growth (Chapter 12)

• Creates competition between nations
• As Martin Khor points out, not everyone benefits from rapid economic growth.
• Economic growth and the living standards of a country’s people depend on the success of a country’s businesses
• Government is affected by the taxes

Trade Liberalization (Chapter 12)

• A process that involves countries in reducing or removing trade barriers, such as tariffs and quotas, so goods and services can move around the world more freely

Perspectives on Trade Liberalization -- Horst Köhler

• “Trade liberalization is the most important element to promote sustained growth for industrialized countries and for low-income countries.”

Perspectives on Trade Liberalization --David Suzuki and Kenny Anthony

• “Until the hemisphere as a whole can enjoy the fruits of trade liberalization, we cannot proclaim its glories. Until all the peoples of the Americas are free from hunger and free from the fear of unemployment, we cannot celebrate the benefits of trade liberalization. True, trade liberalization may bring new prosperity for some, but we must be honest and admit that it will

The Knowledge Economy

• Businesses and individuals who use research, education, new ideas, and information technologies for practical purposes.
• The knowledge economy contributes to the evolution of technologies and increased global trade and competition

Privatization

• Privatization involves selling a public service to a private company, so that the service is no longer owned by the government.

Foreign Investments

• Foreign investment is the purchase of assets in one country by individuals, institutions, or governments in another country.
• Growth attracted foreign investment helps stimulate the economy, increase employment, and raise the living standards

Kurdistan

• Kurdistan is in the northern region of Iraq and, compared with some other areas of the country, was relatively peaceful in 2007
• The Kurdish people suffered under Iraqi dictator Saddam Hussein
• $100 000$ Kurds were killed
• When Saddam was overthrown, Kurdistan became more independent of the Iraqi Government

Kurdistan (Continued)

• To help correct this situation and stimulate the economy of the region, Kurdistan government officials are trying to attract foreign investment

Development Goals

• In 2000, the United Nations and leaders of more than 150 countries held an assembly at which they agreed to work toward a world in which everyone had an opportunity to achieve sustainable prosperity and development

Climate Change (Chapter 12)

• This phenomenon is called the greenhouse effect, and many scientists say that it contributes to global climate change
• The IPCC(Intergovernmental Panel on Climate Change) report said that unless people around the world unite to stop the progress of climate change, the poorest people in the world will suffer the most as climate change affects agricultural land and water supplies

CO2 Emissions by Country

• Norway: Total $CO<em>2$ Emissions $35.21$ (Millions of Tonnes), $CO</em>2$ Emissions per Person $7.9$ (Tonnes), GDP per Person $38,454$ (U.S. Dollars)
• Canada: Total $CO<em>2$ Emissions $521.40$ (Millions of Tonnes), $CO</em>2$ Emissions per Person $16.9$ (Tonnes), GDP per Person $31,263$ (U.S. Dollars)
• US: Total $CO<em>2$ Emissions $5762.10$ (Millions of Tonnes), $CO</em>2$ Emissions per Person $30.2$ (Tonnes), GDP per Person $39,676$ (U.S. Dollars)
• China: Total $CO<em>2$ Emissions $3473.00$ (Millions of Tonnes), $CO</em>2$ Emissions per Person $2.7$ (Tonnes), GDP per Person $5806$ (U.S. Dollars)
• Ecuador: Total $CO<em>2$ Emissions $20.70$ (Millions of Tonnes), $CO</em>2$ Emissions per Person $1.7$ (Tonnes), GDP per Person $3963$ (U.S. Dollars)
• Honduras: Total $CO<em>2$ Emissions $5.00$ (Millions of Tonnes), $CO</em>2$ Emissions per Person $0.8$ (Tonnes), GDP per Person $2876$ (U.S. Dollars)
• South Africa: Total $CO<em>2$ Emissions $344.60$ (Millions of Tonnes), $CO</em>2$ Emissions per Person $7.8$ (Tonnes), GDP per Person $11,192$ (U.S. Dollars)
• India: Total $CO<em>2$ Emissions $1008.00$ (Millions of Tonnes), $CO</em>2$ Emissions per Person $1.0$ (Tonnes), GDP per Person $3139$ (U.S. Dollars)
• Kenya: Total $CO<em>2$ Emissions $10.20$ (Millions of Tonnes), $CO</em>2$ Emissions per Person $0.3$ (Tonnes), GDP per Person $1140$ (U.S. Dollars)

Changing Government Policies

• The Bolivian government is very concerned about the speed at which the glaciers in the Tuni Condoriri mountains are melting
• The Norwegian government and the Global Crop Diversity Trust Foundation have co-funded the Svalbard Global Seed Vault, which is located far above the Arctic Circle
• In April 2007, the Alberta government asked Albertans

William McDonough

• “zero pollution and total recycling”and believes that buildings and products should be designed so that they contribute to a “diverse, safe, healthy and just world with clean air, water, soil and power.”

Ecological Footprint

• Humans use fuels, resources, etc. as part of our daily living.
• To live sustainably means to live life now and have our needs met without compromising the lives of future generations by the way we live.
• Is oil use sustainable?
• Is use of natural gas sustainable? Are using trees for paper Lumber etc

Consumption Comparison

• Dividing the bio productive area of Earth by the total population reveals that 1.89 hectares of productive area are available for each person
• Canadians use 7.25 hectares per person
• If everyone consumed as much as Canadians, four Earths would be needed to support the population

Consumption in Canadian Cities

• Why do you suppose Edmonton & Calgary consume the most in Canada?

Bangladesh’s Footprint

• People in Bangladesh use 0.6 hectares for each person
• It is one of the worlds least developed countries
• Only 33% of people have access to electricity
• Consumption of resources is far lower than that of Canada
• Less production of waste

Global Footprint

• North America
• EL-25
• Other Europe
• Middle East and Central Asia
• Latin America
• Asia Pacific
• Africa

The Kogi

• “We Mamas see you are killing [the world] by what you do. We can no longer repair the damage.”

The Resource Gap

• The gap between the resources the earth can reasonably supply — 1.89 hectares per person and what the people of the world now

Population Growth

• Over the next four or five decades, the world’s population is expected to grow by 2 to 5 billion. The Problem is that earths

Consumption of Resources

• The United Nations is warning that consumption at the current rate will affect sustainability
• These individuals and groups are promoting the idea of environmental stewardship Which means accepting responsibility to make sure

Ship Breaking

• There is such a demand for ships there is a 3-4 year backlog of orders to build ships
• Most are built in Asia where labour is cheap
• Shipyards use a lot of electricity and water supplies and generate large amounts of solid and toxic waste.
• Ships use bunker fuel, which is cheap and dirty. A single container ship creates as much pollution as thousands of cars

Flags of Convenience

• Many merchant ships operate under a flag of convenience, a practice that is often called flagging out. It occurs when a ship is registered in a country other than that of its owner.
• This is done so a ship can register in countries where costs are cheaper, laws are less strict, and environmental regulations aren’t as severe

Ship Breaking (Continued)

• Once ships are 25 to 30 years old, they become too expensive to maintain and are scrapped
• When ships are broken apart, hazardous materials are released into the environment. Ballast water, for example, is simply discharged onto the

Sustainability of Ship Breaking

• Organizations such as Greenpeace, the International Maritime Organization, and the International Labour Organization are pressing for more comprehensive international rules and tighter enforcement

Kyoto Protocol

• $1997$ conference in Kyoto, Japan, 141 countries, including Canada, signed it
• Goals: The Kyoto Protocol called on countries to reduce green house gas emissions to 5.2% below 1990 levels by 2012.
• Canada set a target of 6% below 1990 levels; In 2004, emissions were actually 27% higher than 1990 levels

Alberta Oil Sands

• Extracting oil from the oil sands creates a lot of toxic waste
• Following environmental regulations means companies’ profits are lower. Therefore sometimes they cut corners.
• The debate:

Wangari Maathai

• Wangari Maathai is the founder of the Green Belt Movement
• The Green Belt Movement operates in more than 600 communities across Kenya
• More than 30 million trees have been planted since the movement was founded in 1977.
• In 2004, she became the first African woman to receive the Nobel Peace Prize for “her contribution to sustainable development, democracy and peace.”

Chapter 10 Key Terms

• Outsourcing
• Containerization
• Trade liberalization
• Free trade
• Consensus
• Sanctions

Factors Contributing to Expanding Globalization

• There are 4 main factors that contribute to the expansion of globalization:
  • Communication technologies
  • Trade
  • Transportation
  • Media

Communication Technologies

• Innovations in communication technologies have changed the world
• Technological convergence is also increasing the rate of globalization
• Convergence also brings together media companies

Trade

• Today, a typical consumer product is designed, developed, manufactured, and assembled by a host of companies. These companies may located anywhere in the world
• This expansion of trade has occurred due to countries opening their economies to outside influences

Reshaping Patterns

• The globalization of trade has been reshaping international trade patterns since 1970
• Today, goods and services are flowing more frequently between developing countries, particularly those that are developing quickly. Such as Malaysia, India, and Mexico

Transportation

• The key to shipping goods more cheaply and efficiently has been made through containerization
• The just-in-time delivery and inventory system used today by many manufacturers means that parts are ordered and scheduled to arrive at the factory at the moment they are needed

The Media

• Through media and communication, technologies are closet connected. Therefore, media plays a distinct role in expanding globalization
• Celebrity endorsement can also affect the media
• A desire for these products and services also encourages consumers to support government efforts to make it easier for foreign products and services to enter a country

International Agreements

• A key element in expanding globalization is reducing trade barriers so that goods and services can move around the world more easily. This process is called trade liberalization
• When two countries agree to eliminate all tariffs and taxes on goods and services traded between them, the result is called free trade

World Trade Organization (WTO)

• Established in 1995
• The WTO ensures that the terms of trade agreements are followed, settles trade disputes between governments, and conducts trade negotiations
• The WTO officially has a one-country, one-vote system, but in practice, decisions are made coming to a consensus
• Consensus: a general agreement

WTO - Resolving Disputes

• When one member country says another member country is treating it unfairly due to a trade matter, the WTO must settle the dispute
• The WTO has the power to use sanctions
• Sanctions: A penalty. Often an economic penalty, such as a trade boycott, taken to pressure a government to agree to carry out certain actions or follow certain rules.

WTO - Perspectives

• Some people say that the WTO has too much power, is not democratically accountable, does not care about developing countries, and has not done enough about the other countries
• Other people say that the WTO’s rules were written by member states, many of which are democracies. They also say that trade improvements brought about by the WTO have raised - and will continue to raise - living standards around the world

NAFTA → USMCA

• NAFTA, which is the North American Free Trade Agreement, which was a trade agreement between Canada, the United States, and Mexico, went into effect in 1989
• NAFTA was the world’s largest free trade zone at the time. Because of this, NAFTA eliminated half of the trade barriers between the three countries
• More recently, NAFTA has been replaced by the United States-Mexico-Canada Agreement (USMCA).
• The USMCA came into effect on July 1, 2020, and it modernized and updated the terms of NAFTA.
• While NAFTA is still sometimes referred to by that name, particularly in discussions about the older version of the agreement, the current agreement is officially called USMCA

The NAFTA Debate

• The negotiations that led to NAFTA sparked bitter debate. People for and against the agreement expressed strong views about the effects of the agreements

The European Union (EU)

• Liberalized trading area in Europe
• Goods, services, money, and people can more easily
• Replaced many former currencies with the Euro
• Positive effects include the increase in trade in between nations
• Negative effects include the pressure to reduce spending on social programs and to interject money in the economy

Transnational Corporations

• Transnational Corporations reduce costs and increase profits by building factories, service centuries, and retail outlets in various countries
• About 70% of global trade transactions involve transnational corporations
• United States, Japan, France, Germany, and Britain have more than half of the worlds transnational corporations

Influence of Transnational Corporations

• Transnational corporations dominate some key parts of the world economy
• They control most of the world’s energy and extract most of its mineral resources
• The threat that a transnational corporation might leave a community forces governments to make concessions
• To attract and keep transnationals in their community, some governments have used strangers like reducing taxes, selling natural resources at bargain prices, and adopting policies that transtionals will find helpful
• This make transnationals very powerful and, in some senses, reduces the decision-making power of governments

Poverty Reduction

• Investment in infrastructure located in underdeveloped countries
• Today, 75% of investment in developing countries comes from the private sector, especially from transnational corporations
• Poverty rates in countries such as in Malaysia and in India have been reduced
• However, smaller countries offer minimal incentives for investors

Talisman Energy

• Headquarters in Calgary
• Interests in crude oil, natural gas, and liquid natural gas around the world
• Controversial endeavours in Sudan
• Critics have accused Tailsman of supporting a government that was committing genocide

E Commerce

• Electronic commerce (e commerce) is an area that has been stimulated by communication technologies. It is the buying and selling of goods and services over the internet
• Many major retailers and small business now earn substantial revenues from e-commerce

Economic Globalization

• Economic Globalization can be defined as the increasing interconnectedness of people and places as a result of advances in transportation, communication, and informative technologies that can cause political, economic, and cultural convergence.

Economic Globalization Continued

• Some negative concepts associated with Economic Globalization consist of income inequality, job displacement, environmental degradation, and the exploitation of workers in developing countries. The benefits and drawbacks of Economic Globalization are widely debated to this day. There are ongoing discussions about how to manage its effects on different countries and people

Popular Perspectives on Economic Globalization

• Because of globalizing trends, she says, people are unemployed and their basic needs are not being met. “These fences of social exclusion can discard an entire industry, and they can also write off an entire country.” – Naomi Klein (journalist and author)
• Countries and peoples are more economically integrated today than ever before. Interdependence has happened because communication and transportation costs have been greatly reduced and barriers to the flow of goods, services, capital, and knowledge have been taken down. Joseph Stiglitz (Won the Nobel Prize for Economics in $2001$)
• “Globalization is healthy but does not benefit all people economically” – William Tabb

Factors That Affect the Global Economy

• War within a country or among countries
• Natural disasters, such as earthquakes, droughts, and floods
• Famine, which affects people directly and also affects international markets
• Economic uncertainty caused by factors such as the collapse of a major industry, depletion of natural resources, or political change
• Government economic policies, such as tariffs and other trade regulations, foreign aid, and interest rates
• Changes in investors' confidence. which can affect share prices on local and global stock exchanges
• Price changes for non- renewable energy, such as oil and natural gas

Foundations of Economic Globalization

• World War I
• Formation of the USSR
• The Great Depression
  • Protectionism
• World War II

Causes of World War I

• Imperialism
• Militarism
• Alliances
• Nationalism

Costs of World War I

• Death tolls were very high (15 million soldiers and civilians)
• Reconstruction of countries
  • Railroads, roads, factories, ports, ships, farms, buildings, etc
• Very poor financial situations for many countries
  • Many countries restricted international trade while they tried to rebuild
  • Reparation payments to France, Britain, Russia, and Germany
  • In some countries, with all of the soldiers returning from war, there was now a shortage of jobs. With little being produced and traded, there were not many lines of work to do.
  • With an unstable economy in Europe, the world economy was also unstable

Russian Revolution and the Creation of the USSR

• Russia was not an industrialized state even throughout the time of imperialism and expansionism
• It was concerned with taking care of their own country – nationalism was key in Russia
• But, the majority of Russian people had very little and were living a life of poverty where food shortages were common and jobs were few and far in between.
• With this, the Russian people (the workers) began to rebel.
• Therefore, the Russian Revolution of 1917 began and this eventually forced Czar Nicholas II to give up his throne.

The Creation of the USSR (Continued)

• In 1922, the Union of Soviet Socialist Republics (USSR) emerged out of the former Russia
• This would be the first Communist State --Communism: new economic policy (at that time) that gave full control of the economy (the means of production, distribution, and trade) to the government. It completely rejected capitalism.
• With this, the USSR became a one-party state and VERY nationalist
  • A man named Vladimir Lenin become the first leader
  • The USSR exported goods for money to industrialize Russia, but other than that played very little role in the international economy.

The Great Depression

• The Great Depression further destabilize the world when the world was already economically struggling
• Known to be the deepest and longest-lasting economic downturn in the history of the western indicators world
• This led to limited industrial output and very little economic spending throughout the world
• The United States was especially impacted. This impact led to bad ripple effects throughout the world Make sure to remember that the United States was a major super power and was responsible for funding the world war. In addition, many European countries turned to the U.S for economic support and loans

The Great Depression (Continued)

• As a National and Foreign policy, the United States was isolationist, which meant that the U.S did not want to get involved with other countries – respect if it was beneficial. When times get tough in the U.S, people protected their own production
• Protectionism: The economic policy of restraining trade between states (countries) through methods such as tariffs and other imported goods

Depression in Canada

• Between 1929 and 1933, Canadian exports fell by 50%
• In addition, a drought that started in 1928 continued off and on until 1937, which significantly impacted the agricultural sector
• By 1933, 27% of Canadians were out of work

World War II

• The second global war that happened in the $20^{th}$-century. It involved over $100$ million military personnel and resulted in over $70$ million deaths.
• There were many causes for WWII, including unresolved disagreements from WWI. The Treaty of Versailles was signed in 1919 to end WWI. This Treaty treated Germany unfairly, including assuming all blame and paying the Allies $33$ billion in war repayments. This, combined with the Great Depression, led to a lot of unhappiness in Germany.
• Adolf Hitler and the Nazi Party promised to fix things, and in 1933, he was elected leader. He eventually dissolved the German parliament and declared himself führer (absolute ruler).
• Hitler was popular, and he convinced many Germans that they belonged to a master race that was entitled to rule other people.
• On September 1, 1939, Germany invaded Poland. In response, Britain, France, Australia, New Zealand, and Canada declared war. The United States entered the war on the side of Britain and its allies when Japan attacked Pearl Harbor in 1941.

The Creation of the United Nations

• Even before the end of World War II, people knew they had to find a way of avoiding another similar global conflict. As a result, representatives of Britain, the United States, Canada, and other countries worked together to build an organization that would:
  • Support people who wanted to choose their own government
  • Help countries cooperate on trade issues
  • Protect smaller countries against invasion by larger countries
  • Ensure that no single country controlled the world's oceans

The Bretton Woods Conference

• A lot of lessons have been learned from World War I and World War II
• The Bretton Woods Conference happened during World War II as the war was still going on
• The leaders that met at the conference realized that economic instability in the world was one of the leading causing of war. They wanted to ensure that this cause wa limited in order to avoid another World War. The Great Depression and any other forms of aggression that led to war and instability.

The Bretton Woods Conference (Continued)

• Created a global network on institutions to promote international trade and the regulation of currency (money) among western countries
• It is here where the International Monetary Fund (IMF)and the International Bank for Reconstruction & Development (which is now called the World Bank)

At the Bretton Woods Conference

• Led to the General Agreement on Tariffs and Trade (GATT)
• Established trade rules eliminating trade tariffs and to reduce trade barriers
• (Later this would become the World Trade Organization (WTO)

World Bank

• Head of the bank is appointed by the U.S.government
• Owned by the governments of its members, which provide its funds
• Original Goals
  • To lend money to help war-torn countries rebuild
  • To speed up economic progress and industrialization in countries
  • To help countries develop their natural resources
  • To negotiate long-term loans to increase productivity in countries
• Current Goals
  • To increase growth and reduce poverty in developing countries
  • To fund specific infrastructure projects

International Monetary Fund

• Headquartered in Washington, D.C.
• 29 member countries in 1945 and 185 member countries in 2006
• Established by international treaty to hep countries in economic trouble
• Under the control of the UN
• Purpose
  • To help countries get back on a stable financial footing after World War II