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Economics- background. A Look at WWI and WWII. Things to Remember. Europe, especially Britain, was steadily gaining power through imperialism Control of resources, wealth, and slaves was an issue of great importance, profit and pride There were not many places left to take over

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Economics background

Economics- background

A Look at WWI and WWII


Things to remember
Things to Remember

  • Europe, especially Britain, was steadily gaining power through imperialism

    • Control of resources, wealth, and slaves was an issue of great importance, profit and pride

  • There were not many places left to take over

    • The big four (Britain, France, Spain and Portugal) plus other countries, were quickly dividing up the remaining land


Definitions
Definitions

  • Sustainable Prosperity

    • How does one make wealth and happiness last?

  • Corporate Globalization

    • The expansion of companies into foreign countries in an effort to expand market, product control and make more money


WWI

  • Imperial powers are looking to maintain, and expand, control

    • Competition for raw resources was a large factor in starting WWI

  • Approximately 15 million people were killed in the war

  • Once the war ended, industry production dropped by almost 25%

    • Many countries restricted international trade in an effort to aid rebuilding internally


WWI

  • Treaty of Versailles

    • Drafted and signed in an attempt to ensure peace and avoid another war

    • Harsh penalties, or reparations, were imposed on Germany

      • Germany had to pay money to Britain, France, Russia and other countries for war damages

  • John Maynard Keynes warned that these penalties were too harsh and cause Germany to rebel, starting another war


Impact on canada
Impact on Canada

  • Following the end of WWI, income tax was introduced to cover the cost of the war

    • The war cost Canada roughly $2.5 million a day

    • Canada owed $164 million in war debt to the US

    • Canadian soldiers pensions were totaling close to $76 million

  • Unemployment rose because soldiers were no longer needed and weapons were not being manufactured


Over in russia
Over in Russia

  • Once ruled by a czar, an ancient form of monarchy, Russia entered WWI behind the world in economic and technological advancement

    • Not only was Russia fighting a world war, they were also experiencing internal civil war as well

    • The people wanted change


Communism
Communism

  • A new economic and political model that was supposed to get rid of class distinctions

  • The government was all powerful

    • They ruled the economy, development, and the people

    • A dictator (one who rules totally and, usually, oppressively) took control of the country


Meanwhile
Meanwhile

  • The rest of the world is experiencing the Great Depression

    • Unemployment was very high

      • Industry created by the war was no longer necessary and many people were out of work

    • People who had invested in stocks during the war were confident that prices would continue to rise

    • Tuesday, October 29, 1929 is Black Friday


The great depression
The Great Depression

  • People who lost money in the stock market crash could no longer pay their bills and those who owed money on loans defaulted on their payments

  • Those who were owed money could not collect

  • Reduced demand for consumer goods

  • Unemployment continued to rise

  • Economic depression


The great depression1
The Great Depression

  • What do we remember from last class?


Causes of wwii
Causes of WWII

  • The Treaty of Versailles forced Germany to pay war reparations

  • The German population was unhappy with this outcome and was looking for political change within the country

    • Adolf Hitler, and the Nazi party, were elected into power in 1933

    • Hitler was slowly gaining territorial power


WWII

  • After taking over Austria, the Rhineland, and Czechoslovakia, on September 1, 1939 Hitler invaded Poland, staring WWII

    • Britain, France, Australia, New Zealand and Canada declared war in response

    • When Japan attacked the United States in 1941, they also declared war

    • Statistics

      • More than 50 countries and colonies were involved, more than 60 million people fought, an estimated 50 million people died globally


Post wwii
Post WWII

  • How does the world avoid a similar situation to the one following WWI?

    • The United Nations was formed

  • Before the war ended, countries were already preparing to stabilize the economy

  • John Maynard Keynes led the talks at the Bretton-Woods Conference


John maynard keynes
John Maynard Keynes

  • He believed that a free market system was not the way to go

    • Leaving the country to the fate of supply and demand did not work

    • Another solution was needed

  • The government needed to have some role in the economy, even if it was small

  • Keynes said their needed to be programs in place to hire workers who had been laid off


Friedrich hayek
Friedrich Hayek

  • Disagreed with Keynes

  • He mistrusted government control

    • He did not like any form of control, whether it was total control as in the Soviet Union or partial control as in Western countries following WWII

  • He believed the government had no place interfering in competition between bu


World bank and imf
World Bank and IMF

  • Formed at the Bretton-Woods Conference

  • These organizations are supported by the United Nations and were started to encourage international trade

  • They promoted international trade but with rules and regulations

  • There are positive and negative arguments for both organizations


GATT

  • General Agreement on Tariffs and Trade

    • A tariff is a bill, charge or cost that one country will impose on another

  • Trade rules were agreed on for international trade at the Bretton-Woods Conference

  • GATT attempted to regulate international trade by lowering tariffs and make trading freer


Multinational corporations
Multinational Corporations

  • Also known as transnational corporations

    • MNCs or TNCs

  • Think of as many companies as you can that have a global market


Disney
Disney

  • How does Disney represent what we know of multinational corporations?

  • How does Disney represent corporate globalization?


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