Impact of Industrial Revolution on Global Economies
Impact of the Industrial Revolution on National Economies
What did the recent Industrial Revolution mean for national economies? Economic growth, the product of the Industrial Revolution, undoubtedly led to increased well-being and improved quality of life.
Classical Economists’ View on the Modern Economic System
What did classical economists think? They believed that the modern economic system was based on free and decentralized exchange. They posited that the economy contained elements that allowed for self-balancing and self-regulation, resulting in perfect markets and, ultimately, the development of nations.
Adam Smith’s Classical View and the Natural Order
What was Adam Smith’s classical view? Smith’s view centered on a natural order and the existence of certain laws enacted by the director of the Universe. Even though later in his thought he diluted the idea of God, he remained convinced that there is a reality whose laws and voluntarism cannot violate.
Adam Smith’s “The Wealth of Nations”: Key Concepts
What best describes “The Wealth of Nations”? It describes how some countries are getting richer, from a blend of:
- Security
- Free Trade
- Antitrust Law
Governed by an “invisible hand.”
The Western World in the Early 20th Century
What about the Western world in the early twentieth century? The Western world had been modernized, thanks to technological development and surplus colonial expansion. But globally, this process showed a heterogeneous group of countries in Africa, Asia, and America living in conditions of backwardness. The crisis of colonialism, which began in World War I, the loss of British hegemony, and the success of the United States after the Second World War, brought into discussion some of these interpretations of historical evolution.
Post-World War II Territorial Configuration
What does the bipolar territorial configuration post-World War II entail? On one side of the coin, the United States supported economic, military, and technical assistance for the reconstruction of Western Europe (Marshall Plan) and some emerging economies such as Taiwan and South Korea. It also set up businesses where the British Empire had failed (Latin America), becoming an overwhelming economic and military power. On the other side of the coin was the USSR, which had occupied large areas of Eastern Europe, where it found strong social opposition, leading to severe crises (Berlin, Hungary, Poland). Added to this was the intensification of the Cold War, implemented by the U.S. to consolidate its hegemony over the so-called Western World.
The Reorganization of the World into Three Spaces
And what about the West in this context? The West realized that the world had been reorganized and divided into three spaces:
- The First World of developed industrial societies, including Western Europe and the United States, soon joined by Japan and newly industrialized countries of the East.
- The Second World of socialist societies, dominated by the Soviet Union, had embarked on a path of forced industrialization.
- The Third World of postcolonial societies of the South and East, anchored in the preindustrial era and deeply underdeveloped.
The Intellectual Challenge of Addressing Global Disparities
What then is the intellectual challenge? The process of abandonment of the last European colonies in Africa, Asia, and Central America, the technological revolution that made the world more interdependent, and finally, the bi-polarization of world politics with the onset of the Cold War, ultimately attempted to address the causes of this sharp contrast between advanced and backward societies.
Characteristics of Modernization Theorists
What characterizes Modernization theorists? The idea that progress goes hand in hand with the adoption of rules of behavior, attitudes, and values identified with modern economic rationality, characterized by the pursuit of maximum productivity, income generation, and the creation of investment to accumulate wealth by individuals from each national society.
Influence of Classics on the Modernization Approach
What influence have the classics had on the evolution in the approach to modernization? The linear view of social change suggests that backward societies must follow the same path as developed ones. The changes are irreversible and inevitably move towards modernity, based on democratic values and the capitalist mode of production in the Fordist phase. The change occurs endogenously, sequentially, gradually, and non-confrontationally. It is the result of structural or functional differences, to adapt the social system. The process of modernization improves living conditions.
Modernization Theories’ Break from Evolutionary Ideas
What is the “breakdown” of modernization with evolution? Theories of modernization break with the idea that progress is something spontaneous. They seek to locate the barriers to development. This is done to design intervention tools from engineering and social planning to achieve the expected results.