CBSE Class 10 Social Science The Making of a Global World Worksheet

Assertion and Reasoning Based Questions

Mark the option which is most suitable:
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.

Question : Assertion: The First World War involved the world's leading industrial nations which harnessed the vast powers of modern industry to inflict the greatest possible destruction of enemies.
Reason: It was the first modern industrial war, which saw the use of robots and satellites on a massive scale.

Answer : (c) A is true but R is false.

Question : Assertion: During the Great Depression, agricultural regions and communities were worst affected.
Reason: The fall in agricultural prices was greater and more prolonged than that in the prices of industrial goods.

Answer : (a) Both A and R are true and R is the correct explanation of A.

Question : Assertion: 'Chutney music', popular in Trinidad and Guyana, is another creative contemporary expression of the post-indenture experience.
Reason: Some of the Naipaul's early novels capture their sense of loss and alienation.

Answer : (b) Both A and R are true but R is not the correct explanation of A.

One Word Answer Type Questions 

Question : A major supplier of wheat in the world market.
Answer : North America.

Question : Which Great War transformed US from international debtor to international creditor ?
Answer : The First World War (1914-19).

Question : When did Rinderpest arrive in Africa ?
Answer : Late 1880s.

Question : What did indentured labour mean ?
Answer : Bonded Labour.

Question : Who financed export agriculture in Central and Southeast Asia ?
Answer : Shikaripuri shroffs and Nattukottai Chettiars.

Question : Which group of traders ventured beyond European colonies ?
Answer : Hyderabadi Sindhi traders.

Question : Which areas does the word 'America' describe ?
Answer : North and South America and the Caribbean.

Question : How many Irish people died of starvation during the Great Potato Famine in 1840s ?
Answer : Around 1,000,000.

Question : What is IMF ?
Answer : International Monetary Fund.

Question : Which bank was set up to finance post-war reconstruction ?
Answer : The International Bank for Reconstruction and Development (popularly known as the World Bank).

Question : What kind of ships enabled the transport of perishable foods over long distance ?
Answer : Refrigerated ships.

Long Answer Type Questions 

Question : The 19th century world of faster economic growth still brought misery for many. Explain. 
Answer :   Nineteenth-century was the world of faster economic growth as well as great misery, higher incomes for some and poverty for others, technological advances in some areas and new forms of coercion in others:
i. Hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines, and in road and railway construction projects around the world.
ii. In India, indentured labourers were hired under contracts which promised return travel to India after they had worked five years on their employer’s plantation.
iii. As a result, the cottage industry declined and land rents rose. Land and forest were cleared for mines and plantations.
iv. Increased indebtedness among poor became prevalent.
v. Living and working conditions for the indentured labour were harsh and with few legal rights. 

Question :  Give three examples to show that the premodern world changed with the discovery of new sea routes to America.
Answer : Three examples are as follows:
(i) Many common foods, e.g. potatoes, soya, tomatoes, maize, etc., were introduced to Europe from America. These crops made a difference between life and death. The poor began to eat better and live longer in England with the introduction of potatoes.
(ii) Religious dissenters from Europe fled due to the fear of persecution in Europe and migrated to America.
(iii) Slave trade was started. European traders captured slaves in Africa and took them to America where they worked on plantations. Europe became the centre of the world trade.
(iv) Precious metals, e.g. silver from mines located in present day Peru and Mexico also enhanced Europe’s wealth and financed its trade. 

Question : Describe the contribution of indentured labours towards the cultural fusion in emerging global world.
Answer : Indentured labour made a huge contribution towards cultural fusion.
(i) Cultural fusion is a phenomenon, which emerges when two or more cultures inter-mingle and produce a new culture.
(ii) Indentured labourers used to live and work in very harsh conditions. This forced them to seek new avenues of comfort and relaxation. This blended different cultural forms.
(iii) Examples : (a) Hosay : In Trinidad, the annual Muharram procession was transformed into a riotous carnival called ‘Hosay’ in which workers of all races and religions joined.
(b) Chutney Music : It is another creative contemporary expression of the post indentured experience.
(c) Rastafarianism : The protest religion of ‘Rastafariansim’ is also said to reflect social and cultural links with Indian migrants to the Carribean.

Question : What were the results of ‘shrinking’ of the world from sixteenth century onwards?
Answer : The "shrinking" of the world from sixteenth century onwards, culminated in many developments. The results are as follows:
(i) The Americas (North, South America and Caribbean islands) came into the purview of public consciousness.
(ii) The supreme European powers, armed with advanced weapons, colonised the vast swathes of the American landmass.
(iii) The European sailors, mainly Spanish and Portuguese, invented sea trade routes through the Indian Ocean. This led to expansion and redirecting of trade to Europe.
(iv) China, ostensibly cut-off from the whole world, did not forge any commercial contacts with the European powers. As a matter of fact, the center of gravity got drifted from China towards Europe.
(v) The gold and silver mines of South American countries, like Peru, Mexico and El Dorado got exposed to the European powers.
(vi) Smallpox, a pernicious disease, was transmitted into the American continents through European soldiers.

Question : How World War-II marked a watershed in the twentieth century?
Answer : The Second World War started two decades after the end of the First World War. It was fought between the Axis Powers (mainly Nazi Germany, Japan and Italy) and the Allied Powers (Britain, France, the Soviet Union and the USA). The Second World War had set another paradigm as it was another instance of 'industrial war'.
The World War-II, doubtlessly, marked a watershed in the twentieth century history of International Relations. It was a catastrophe in human history and all major powers were driven into the whirlpool of the global war. It was a total war like the World War-I, which left both the teams with lasting wounds. The World War-II was fought on a much wider scale and was relatively more violent than the World War-I. The World War-II had set the embryonic stage of the 'atom bomb' culture.
The World War-II had greatly upset the balance of power in the world. There was a huge outcry for peace, freedom and democracy. The world was in a state of turbulence as this Great War began a new cold battle between the USA and the USSR. The armed strength of the USA was reflected in the World War -II.
Thus, the main tussles originated from the World War-II and the world was set in a heated cauldron. The diplomatic equations underwent changes as the world got involved in new forms of battles. Hence, this war marked a watershed in the history. It left an indelible mark in the global history and certainly was the ultimate world war in history.

Question : Imagine that you are an indentured Indian labourer in the Caribbean. Drawing from the details in this chapter, write a letter to your family describing your life and feelings.
Answer : Dear mother, I have been working in Trinidad (Caribbean) as an indentured worker for several months. My life is afflictted with sorrows and hardship. You will be shocked to hear that the contractor concealed correct information from us regarding place of work, mode of travel, living and working conditions. At the same time, we are not given sufficient legal rights. The contractors abuse us by using harsh and vituperative language at the worksite. They treat us like a ragamuffin coolie and we constitute a minority in the cocoa plantations in Trinidad. Mother, I am leading a difficult life in this region. If I remain absent from work and 'then they send me to jail'. There is a huge work load at the plantation site, which I have to finish in one day. I am enslaved by the contractor and my plight is deplorable. You take my regards and convey the same to my grandparents. With love, Collin

Question : The men of the Working Age in Europe died because of the World War. Substantiate the statement.
Answer : Most of the victims of world war hailed from the younger generations of working men. As a matter of fact, the level of workforce reduced in Europe, which resulted in the decline of the household income. The role of women was renewed and this increased the demand for the equality of status. It gave a new impetus to the feminist movement. Women started working alongside men as far as farming activities were concerned. The activities of women and damsels were independent of the superior controls.

Question . Differentiate between Socialism and Capitalism.
Answer : 

Question : Explain the effects of the Great Depression of 1929 on the Indian economy.
Answer : (i) The impact of the Great Depression in India was felt especially in the agricultural sector.
(ii) As international prices crashed, prices in India also plunged.
(iii) The fall in agricultural price led to reduction of farmer's income and agricultural export. Wheat prices in India fell by 50 per cent.
(iv) Peasants and farmers suffered more than urban dwellers.
(v) The colonial government refused to reduce revenue demands.
(vi) The government did not decrease their tax, and so many farmers and landlords become more indebted to moneylenders and corrupt officials.
(vii) They used up their savings and sold jewellery and precious metals. The Great Depression helped the urban people especially the fixed income earners.

Question : “The multinational companies (MNCs) choose China as an alternative location for investment”. Explain the statement.
Answer : The MNCs (multinational companies) select China as an alternative location for investment. The reasons are as follows:
(i) In the aftermath of revolution of 1949, China occupied a dominant space in the domain of global economy. China became a favourable ground for the foreign MNCs.
(ii) China is the most populated country. Therefore, they established a large consumer base.
(iii) Labour wages in China were comparatively low. Therefore, they greatly attracted the foreign MNCs.

Question : Briefly summarise the two lessons (in terms of value) learnt by economists and politicians from the inter-war economic experience.
Answer : In principle, the two lessons learnt by economists and politicians are enumerated as follows :
(i) Ensuring economic stability : Most of the countries were devastated and cities were razed to the ground. The economists and politicians learned that they had to ensure economic stability of the industrial nations.
(ii) Understanding economic resilience and interdependence : They comprehended the interdependence of national economies across the world.

Question : Describe the impact of Rinderpest on people’s livelihood and local economy in Africa in the 1890s.
Answer : In Africa, in the 1890s, a rapid spreading disease of cattle plague or rinderpest had a terrifying impact on people's livelihoods and the local economy. In the high noon of European imperialism and colonisation, rinderpest arrived in Africa in the late 1880s. It was carried by infected cattle imported from British Asis to feed the Italian soldiers invading Eritrea in East Africa. Entering Africa in the east, rinderpest moved west. It killed 90% of the cattle on the way. The loss of cattle destroyed African livelihoods and heavily affected their economy. Planters, miners and colonial governments now monopolised what resources remained to strengthen their power and to force Africans into the labour market.

Question : Imagine that you are an agricultural worker who has arrived in America from Ireland.
Write a paragraph on why you chose to come and how you are earning your living.
Answer : Hello! I am Jack (supposed name); I hail from Ireland and used to work as peasant in my country. I have just arrived in America on Monday. There is a vital reason that made me take this step. In Ireland, the problems of employment and food shortage are increasing at a rapid pace. Many people are migrating to this New World in search for job opportunities. Import of cheaper food items led to the problems of unemployment in our country. As a matter of fact, I decided to migrate to America. In the New World, people will get an opportunity to work on vast stretches of farmland. In America, I live adjacent to my owner's farm land and grow crops in his field. I am happily employed now and can put bread on my table.

Source/Case Based Questions

Question : Read the extract given below and answer the questions that follows:
The silk routes are a good example of vibrant pre-modern trade and cultural links between distant parts of the world. The name 'silk routes' points to the importance of West-bound Chinese silk cargoes along this route. Historians have identified several silk routes, over land and by sea, knitting together vast regions of Asia, and linking Asia with Europe and Northern Africa. They are known to have existed since before the Christian Era and thrived almost till the fifteenth century. But Chinese pottery also travelled the same route, as did textiles and spices from India and Southeast Asia. In return, precious metals - gold and silver - flowed from Europe to Asia. Trade and cultural exchange always went hand in hand. Early Christian missionaries almost certainly travelled this route to Asia, as did early Muslim preachers a few centuries later. Much before all this, Buddhism emerged from eastern India and spread in several directions through intersecting points on the silk routes.

Answer the following MCQs by choosing the most appropriate option:

(i) Find out the incorrect statement from the following about the ‘silk route’:
(a) It was a prominent trade route in ancient times.
(b) Silk was the main trading item, that's why it was called 'silk route'.
(c) India used this route mainly to export silk to European countries.
(d) There were two silk routes, inland route and maritime.

Answer : (c) India used this route mainly to export silk to European countries.

(ii) Find out the incorrect statement from the following:
(a) A route from India met in Central Asia with the main silk route.
(b) Mainly, cotton and spices were supplied from India through this route.
(c) Silk route was not profitable for India but to China.
(d) Silk was costly and used by elite class in Europe.

Answer : (c) Silk route was not profitable for India but to China.

(iii) Silk route was never used:
(a) To spread Islam from West Asia to East Asia.
(b) To spread Christianity from Europe to Asia.
(c) To spread Buddhism from East Asia to India.
(d) To explore the knowledge by Chinese travellers.

Answer : (c) To spread Buddhism from East Asia to India.

(iv) Which of the following religion was first to use ‘silk route’ for expansion:
(a) Christianity
(b) Buddhism
(c) Islam
(b) Jainism

Answer : (b) Buddhism.

Creating Based Questions 

Question : Use the information provided along with the terms given in the box to form coherent passage to elaborate the spread of rinderpest in Africa. Also include information that is not mentioned below to complete it. 
Africa, Italian soldiers, Atlantic coast, 90 per cent  Rinderpest arrived in....cattle imported from British Asi(a)...moved to west like fire....reached Cape 5 years later......killed a lot of cattle. 
Answer : Rinderpest arrived in Africa in the late 1880s. It was carried by infected cattle imported from British Asia to feed the Italian soldiers invading Eritrea in East Africa. Entering Africa in the east, Rinderpest moved west 'like forest fire', reaching Africa's Atlantic coast in 1892. It reached Cape (Africa's Southernmost tip) five years later. Along the way rinderpest killed 90 per cent of the cattle.  

Question : Use the information provided along with the terms given in the box to form a coherent passage to show the construction of irrigation canals in Punjab. Also include information that is not mentioned below to complete it. Network, transform semi-desert wastes, wheat, peasants. The British Indian government....into fertile.....for export.....other parts of Punjab. 
Answer : The British Indian government built a network of irrigation canals to transform semi-desert wastes into fertile agricultural lands that could grow wheat and cotton for export. The Canal Colonies, as the areas irrigated by the new canals were called, were settled by peasants from other parts of Punjab.

Points to remember for Contemporary India Chapter 03 The Making of a Global World

Globalisation is an economic system, which is hardly 50 years old but the making of the global world has a long history. To understand phenomena of Globalisation, it is required to understand the history of trade, migration, people’s search for work, the movement of capital, etc.

The Pre-Modern World
Human societies have steadily become more interlinked.
From ancient times, travellers, traders, priests and pilgrims travelled vast distances for various reasons, like
• to gain knowledge
• for more opportunities
• for religious or spiritual fulfilment
• to escape from ill-treatment
They carry with themselves goods, money, ideas, skills, values, inventions and even germs and diseases. By the 13th century, a strong link was established between the countries.
An active coastal trade linked the Indus Valley Civilizations with West Asia in the early 3000 BC. For more than a millennia, Cowries (sea shells) used as a form of currency from the Maldives to China and East Africa.

Silk Routes Link the World
Silk routes1 were existed since before the Christian era and flourished till the 15th century. The silk routes are good examples of pre-modern trade and cultural links between the distant parts of the world, i.e. linking Asia with Europe and North Africa. Along the silk routes, the silk cargoes from China, Indian spices and textiles, gold and silver from Europe were carried to different parts of the world.
The Buddhist preachers, Christian missionaries and later on, Muslim preachers travelled along these routes. These routes proved to be a great source of trade and cultural links between distant parts of the world.

Food Travels : New Crops Introduced
Traders and travellers introduced new crops to the land they visited. Foods like potatoes, soya, groundnuts, maize, tomatoes, chillies, sweet potatoes were introduced in Europe and Asia after America was discovered by Christopher Columbus.
Noodles travelled West from China and became spaghetti.
Europe’s poor began to eat better and live longer after the introduction of potatoes. Arab traders took pasta to Sicily, an island in Italy.
Ireland’s poor peasants depended upon the potatoes and when the Irish potato famine occurred around 1 million people died of starvation in Ireland and many had migrated in search of work.

Conquest, Disease and Trade
The pre-modern world shrank after European sailors found a sea route to Asia and America in the 16th century. The Indian subcontinent was central to the trade, but the entry of Europeans helped to expand this trade towards Europe.
Precious metal, silver, found in the mines of Peru and Mexico enhanced Europe’s wealth and financed its trade with Asia.
Many expeditions were taken in search of El Dorado, the fabled city of gold in South America.
The Spanish and Portuguese were the first Europeans to conquer America in mid-16th century. The conquest of America was possible through the deadly disease smallpox that the Spanish conquerors carried on their person.
America’s original inhabitants had no immunity against this disease. As a result, thousands of European moved to America and slaves captured in Africa worked in plantation2 of cotton and sugar for European market.
India and China until 18th century were among the world’s richest countries and the main centres of world trade.
However, with Indian’s colonisation and China’s restriction of overseas contacts, Europe emerged as the centre of world trade.

The 19th Century (1815-1914)
In the 19th century, economic, political, social, cultural and technological factors interacted in complex ways. It changed the society and reshaped its external relations immensely.
Economists identify three types of movement or flows within international economic exchanges (i) The flow of trade in goods (especially cloth and wheat).
(ii) The flow of labour due to migration of people in search of employment.
(iii) The movement of capital for short-term or long-term investments over long distances.
All these flows affected people’s lives significantly.

A World Economy Takes Shape
In the late 18th century industrialisation and population growth had increased the demand for foodgrains in Britain.
This situation resulted in the increase in foodgrain prices.

Corn Laws and its Effects
Due to the pressure from the landowners, the government restricted the import of corn. These laws were commonly known as Corn Laws.
After the introduction of the Corn Laws, food prices became exorbitant (unreasonably high). Industrialists and people living in towns were unhappy with high food prices. They
forced the British Government to abolish the Corn Laws.
After the abolition of the Corn Laws, food could be imported into Britain at much cheaper rate than before.
British agriculture was unable to compete with imports. Vast areas of land were uncultivated and thousands of people lost their livelihood. They came to the cities in search of works or migrated overseas. The effects of abolition of Corn Laws were
• Food could be imported into Britain more cheaply than it could be produced in Britain.
• As food prices fell, consumption in Britain increased.
• From the mid-19th century, faster industrial growth in Britain led to higher incomes and more demand for food.
• Around the world in Eastern Europe, Russia, America and Australia, land was cleared to cultivate more foodgrains to meet the increasing demand of Britain.
• New railways and harbours were needed to export agricultural products.
• Increasing number of workers needed more homes and settlements.
• Due to the demand for labour, millions of people migrated from Europe to America and Australia in the 19th century in search of a better life.
• Capital flowed from financial centres such as London.
• By the 1890, a global agricultural economy had developed.
• Sometimes, food came from thousands of miles away by railways or ships.
• The effects of abolition of corn laws also affected India as some change occured in West Punjab. In India, the British rulers transformed Punjab into a fertile agricultural land by
developing irrigation system for growing wheat and cotton for export.
Regional commodities developed so fast that between 1820 and 1914, world trade had multiplied 25 to 40 times.
About, 60% of this trade comprised primary products i.e. agricultural products like wheat and cotton and minerals like coal.

Role of Technology in 19th Century World
Technology or new inventions like railways, steamships and the telegraph had a great impact on the transformation of 19th century world.
Faster railways, lighter wagons and larger ships helped to move food more cheaply and quickly from far away farms in America, Australia or New Zealand to final markets of Europe.

Role of Technology in Meat Transportation
Till the 1870s animals were shipped live from America to Europe and then slaughtered when they arrived there. Live animals took up a lot of space in ship and many animals also died in voyage, fell ill and became unfit to eat.
The development of refrigerated ships greatly helped to transport the perishable food items over long distances. Frozen meat was exported from America, Australia, New Zealand to different European countries.
The role of technology in meat transportation decreased the price of meat in European market and the cost of shipping.
Meat (sometimes butter and egg) became a daily diet for the poor. This better living conditions created social peace within the country and support for imperialism in the colonies.

Colonialism in the Late 19th Century
Trade flourished and markets expanded in the late 19th century. The European conquest in 19th century led many painful economic, social and ecological changes in the colonised countries.
In many parts of the world, expansion of trade led to loss of freedoms and livelihood. Britain, France, Germany, Belgium and later USA became colonial powers.

Rinderpest or the Cattle Plague
In Africa, a fast-spreading disease of cattle plague or rinderpest destroyed a large number of cattle in the 1890s. The disease spread like ‘forest fire’ in the whole of Africa and killed 90 per cent of the cattle.

Indentured Labour Migration from India
Indentured labour means a bonded labourer under contract to work for an employer for a specific amount of time, to pay off his passage to a new country or home. In the 19th century, lakhs of Indian and Chinese indentured labourers went to work on plantations, in mines and in different construction projects around the world. Most Indian indentured workers came from the present-day regions of Eastern Uttar Pradesh, Bihar, Central India and Tamil Nadu. In mid-19th century, these regions of India experienced many social changes like cottage industries declined, land rents rose and lands were cleared for mines and plantations. All these forced the poors to migrate in search of work.

Destinations of Indian Indentured Migrants
The main destinations of Indian indentured migrants were the Caribbean Islands mainly Trinidad, Guyana, Surinam, Mauritius and Fiji besides other places near home. Tamil migrants went to Ceylon and Malaya. Some indentured workers were recruited in Assam’s tea plantations.

Condition of Indentured Labourer
Recruitment of indentured labourers was done by agents engaged by employers and paid a small commission.
Agents recruited indentured labourers by promising them better living conditions, more money and other benefits.
However, when they arrived at the plantations, labourers found harsh conditions.

Changes in Cultural Scene in 19th Century
19th century indenture has been described as a ‘new system of slavery’. Although, living and working conditions were harsh, workers discovered their own ways of surviving. They developed new forms of festivals and other forms of entertainment by combining their different cultural forms.
Riotous Carnival (Hosay4) in Trinidad, the protest religion of Rastafarianism, which was made famous by Jamaican singer Bob Marley, Chutney music of Trinidad and Guyana are all examples of cultural fusion.

Descendants of Indentured Labourers
Many indentured labourers permanently settled in the countries where they had gone after their contracts ended.
So, there are large communities of people of Indian descent in these countries.
For example, Nobel Prize winner writer like VS Naipaul, etc. are descended from indentured labourers from India.
The system of indentured labour was abolished in 1921.

Indian Entrepreneurs Abroad
Indian bankers were amongst the many groups of bankers and traders, who financed export agriculture in Central and South-East Asia. Shikaripuri Shroffs, Nattukottai Chettiars were some famous Indian bankers.
Indian traders and moneylenders also followed European colonisers into Africa. Hyderabadi Sindhi traders developed flourishing trades at busy ports worldwide. They usually sold local and imported curios (rare objects) to tourists.

Indian Trade, Colonialism and the Global System
Fine cottons from India were exported all over the Europe.
With industrialisation, British cotton manufacturers began to expand. The industrialists pressurised the government to restrict cotton imports from India and protect local industries.
Due to this, the flow of fine Indian cotton in Britain began to decline.

Indian Trade and Colonialism
The British Government introduced high tariffs5 on import of cotton cloth. From the early 19th century, British manufacturers also began to seek overseas markets for their cloth. As a result, the Indian textile industry was adversely affected. Indian textile faced stiff competition in other international markets. Consequently, India’s share in International cotton textiles exports declined from 30% in 1800 to 3% in 1870.
As the exports of manufactures declined rapidly, export of raw materials increased equally fast. Between 1812 to 1871, the share of raw cotton exports increased from 5% to 35%.
British forced the farmers of India to produce indigo and opium.
Indigo used for dyeing cloth was exported to Britain. Opium grown (from the 1820) in India was exported to China. The money earned through opium sale was used by Britain to finance its tea and other imports from China.

Trade Relationship Between India and Britain
Over the 19th century, the British manufactures were available in large numbers in the Indian market. Foodgrains and raw material which were exported from India to Britain increased.
The value of British exports to India was much higher than the value of British imports from India. Thus, Britain had a trade surplus with India and used this surplus to balance its trade deficits with other countries. This trade surplus of Britain helped to pay the home charges i.e. private remittances of British officials, traders, interest payments on external debt and pensions of British officials in India.

The Inter-War Economy
The First World War (1914-18) was mainly fought in Europe but it had impact on whole world. It was fought between two power blocs. On one side were the Allies7 – Britain, France, Russia (later joined by the US) and on the opposite side were the Central Powers – Germany, Austria-Hungary and Ottoman Turkey.World’s leading industrial nations joined the war and tried to do the greatest possible destruction on their enemies.
The First World War was the first modern industrial war.
For the first time, modern weapons like machine guns, tanks, aircraft, chemical weapons etc were used on a massive scale.

Impacts of the First World War
• During the war, 9 million were dead and 20 million were injured.
• Household incomes also declined due to the death or injury of the earning members of the family and women had to take the jobs.
• Britain borrowed large sums of money from US banks as well as the US public. This made the USA an international creditor from an international debtor.

Post-War Recovery
The post-war recovery was difficult. After the war, Britain found it difficult to recapture its earlier position of dominance in the Indian market and to compete with Japan Internationally. Britain faced an economic crisis and was burdened with huge external debts. This led to many British workers being out of work in 1921.
The wheat exports from Eastern Europe were disrupted during the war, as a result wheat production in Canada, America and Australia expanded.
After the war, production in Eastern Europe revived and created a glut8 in wheat output. Grain prices fell, rural incomes declined and farmers fell deeper into debt.

Rise of Mass Production and Consumption
After a short period of economic trouble, the US economy resumed its strength in the early 1920s. During that period, mass production became a characteristic feature of industrial production in USA.

First Mass Production of Cars
Car manufacturer Henry Ford adapted the ‘assembly line’ method of a Chicago slaughter house to his new car plant in Detroit. He realised that this method would allow a faster and cheaper way of producing vehicles. This assembly line method forced the worker to repeat a single task mechanically and continuously which is dictated by the conveyor belt.
As a result, Henry Ford’s cars came off the assembly line at three-minute intervals. The T-Model Ford was the world’s first mass-produced car. Ford paid high wages to the workers to do monotonous9 tasks, but recovered this cost through faster production. Car production in the US hike from 2 million in 1919 to more than 5 million in 1929.
Mass production lowered cost and prices of engineered goods like refrigerators, washing machines, radios, gramophone players etc. The housing and consumer increase created scope of large number of employment and incomes in the US and as a result, it became the largest overseas lender.

The Great Depression
The Great Depression began around 1929 and lasted till the mid-1930s. During this period, most of the countries of the world experienced catastrophic10 declines in production,
employment, income and trade. The agricultural sector, in general was the worst affected.

Factors Responsible for Depression
A combination of several factors were responsible for the depression
• Agricultural overproduction remained a problem. This decreased the prices of agricultural products. Farmers tried to expand production by bringing a larger volume of produce to the market to maintain their overall income. But, this further decreased the prices of agricultural products in the market.
• In the mid-1920s, many countries financed their investment through the loans they got from the USA. American capitalists stopped all loans to European countries.

Effects of Great Depression
• In Europe, the depression led to the failure of some major banks and collapse of currencies like Sterling.
• The US was severely affected by the depression, as the banks had cut domestic lending and called back loans.
• Farms could not sell their harvests, households were ruined and businesses collapsed.
• The US banking system collapsed because the banks were unable to recover investments, collect loans and repay depositors.
• The US attempted to protect its economy in the depression by doubling the import duties, which hit the world trade badly.

India and the Great Depression
Due to the Great Depression, India’s export and imports declined to half (50 per cent) and prices of primary products like wheat and jute fell sharply between 1928 and 1934. The colonial government refused to reduce revenue demands, so the peasants became the worst suffers.
During this period India became an exporter of precious metals, especially gold. It promoted global economic recovery and helped to speed up Britain’s recovery but did not help the Indian peasants to improve their conditions.
Across India, peasants condition became worst. People having fixed income faced less problem due to the price fall. In 1931, Mahatma Gandhi launched the Civil Disobedience Movement as a result of depression.

Rebuilding a World Economy :
The Post-War Era
The Second World War resulted in immense devastation in human and economic terms. It broke out after two decades of the First World War (1939-45). It was fought between the Axis Powers (Nazi Germany, Japan and Italy) and the Allies (Britain, France, Soviet Union and USA).
At least 60 million (about 3 per cent of the world’s 1939 population) people were killed and millions were injured in this war.

Post-War Reconstruction
Vast parts of Europe and Asia were devastated and several cities were destroyed by the war, therefore reconstruction became long and difficult task.
Two crucial influences shaped post-war reconstruction
(i) The US emerged as the world’s dominant political economic and military power in the Western world.
(ii) Soviet Union became super power. It defeated Nazi Germany. It transformed itself from an agricultural country into a world power. As a leader of the Communist bloc, Soviet Union posed a great threat to the Capitalist economy.

Post-War Settlement and the Bretton
Woods Institutions
From inter-war economic experiences, two key lessons were drawn by the economists and politicians. These were
(i) The first lesson was that an industrial society based on mass production needed mass consumption. Mass consumption needed high and stable income. Stable income required steady and full employment, for which government should take necessary steps.
(ii) The second lesson was related to a country’s economic links with other countries. The target of full employment could be achieved only if government had the power to control flows of goods, capital and labour.
It was supported by the United Nations Monetary and Financial Conference held in July, 1944 at Bretton Woods in New Hampshire, USA.

Establishment of IMF and World Bank
The Bretton Woods Conference established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations. The International Bank for Reconstruction and Development (known as World Bank) was set up to finance post-war reconstruction.
The IMF and World Bank are referred as the Bretton Woods Institutions or Bretton Woods twins. They commanded financial operations in 1947 and the decision making in these Constitutions were mostly controlled by the Western Industrial powers.
The International Monetary System is the system linking national currencies and monetary system. Under this system, the national currencies followed the fixed exchange rates11 and were fixed to the US dollar.

The Early Post-War Years
The Bretton Woods System inaugurated an era of stable growth of trade and income for the Western industrial nations and Japan.
World trade grew annually at over 8% between 1950-1970 and incomes at nearly 5%. The unemployment rate of this period was averaged less than 5% in most industrial countries. Developing countries were in hurry to catch up with the advanced industrial countries.

Decolonisation and Independence
When the Second World War ended, many countries were still under European colonial rule. Over the next two decades, most colonies in Asia and Africa became free and emerged as independent nations. But independence did not bring freedom from poverty or a lack of resources to these countries. Their economies and societies suffered a lot by long periods of colonial rule.
The IMF and the World Bank were designed to meet the financial needs of the industrial countries. But as Europe and Japan rapidly rebuilt their economies, they grew less dependent on the IMF and the World Bank. Therefore, from the late 1950s, the Bretton Woods Institutions began to shift their attention more towards developing countries.

Condition of Developing Nations
Newly independent countries were trying to lift their population out of poverty. But after many years of decolonisation, they are still controlled by the international agencies which are dominated by the former colonial powers like US and France.
Most developing countries did not benefit from fast growth like the Western economies in the 1950s and 1960s. Thus, they organised themselves as a group, the Group of 77 (or G-77) countries to demand a New International Economic Order (NIEO).
By the NIEO, they meant a system that would give them
• real control over their natural resources
• More development assistance
• fairer prices for raw materials
• better access for their manufactured goods in developed countries’ markets

End of Bretton Woods and the Beginning of ‘Globalisation’
From the 1960s, the rising cost of US’s overseas involvements weakened its finances and competitive strength. The US dollar could not maintain its value in relation to gold.
This eventually led to the collapse of the system of fixed exchange rates12 and the introduction of a system of floating exchange rates.

Change in International Financial System
From the mid-1970s, the international financial system changed. The developing countries were then forced to borrow from Western commercial banks and private lending institutions. This change led to periodic debt crises, unemployment i.e., lower incomes and increased poverty in Africa, Latin America and also in the industrial world.
From the late 1970s, MNCs also began to shift production operations to low-wage Asian countries.

New Economic Policy in China
China had been cut off from the post-war world economy since its revolution in 1949. But new economic policies in China and the collapse of the Soviet Union and Soviet-style communism in Eastern Europe brought many countries back in the world economy.
Wages were comparatively low in countries like China.
Thus, they became attractive destinations for investment by Foreign MNCs. In the last two decades, countries like China, India and Brazil have achieved rapid economic development.