UK and US Foreign Policies PDF

The Industrial Revolution 1750-1850  The seed drill (1701) makes it easier to plant seeds as it is a machine  Crop rotations- invented before the 18th century, the idea is not to overwork the fields o Before, people usually farmed their own land- then they become employe...

The Industrial Revolution 1750-1850  The seed drill (1701) makes it easier to plant seeds as it is a machine  Crop rotations- invented before the 18th century, the idea is not to overwork the fields o Before, people usually farmed their own land- then they become employees and the land is bought by already rich people, aristocrats  Now, farmers, instead of working to feed themselves, are specializing -> DIVISION OF LABOUR (at the beginning of the 18th century) o A sign of an industrialized world, agriculture needed to become more efficient o Wide spread of money  Rigging blocks- necessary to build blocks o increase in production -> internal market needs to increase also  The idea: larger cities, larger market o The need to bring the goods to people - > massive investments to improve water communications  In 1750 about 6 million (most of them small farmers) in England and Wales o one century later: 16 million (vast majority dependent on divided labour) people o more consumers, more workers- ready to work in a capitalistic society  London at that time largest city in Europe - everything needs to be brought there (food, coal, more workers in the factories,...)  British Empire- tariffs- Britain can sell anything with no tariffs as most countries are its colonies  2/3 of manufactured cotton is sold to foreign countries  The UK is super dependent on external market; growing economy Main Industries o Cotton - early stages of the revolution, produced in colonies, brought to the UK, can be sold back to the colonies to make profit o Coal - Wales, North of England o Metallurgy - (transport -> trains) A new world: the factory  Brutal transition: farms - > factories; unnatural, bad conditions o lack of natural light o Repetitive tasks, body changes  New pace- having to be on time- shifts  Low wages- workers are not customers  1st half of 19th century: growing pressure of cities  Massive investments mostly by wealthy individuals Irish Great Famine 1845-1850  There was no Industrial Revolution in Ireland even though it was part of the UK o The Revolution was not a world-wide concept  Agriculture in Ireland became much more specialized -> products sold to England  Introduction of potatoes- do not require a lot of attention, extremely nutritious  In 1845- potato blight (plant disease, infection of potato crops) -> many people had nothing to eat  Lots of hate towards the Irish  1M people died, 1M emigrated (out of a population of 8M) A "modern society"  In 1850 half of the British population lives in a city  Power and voice of rural inhabitants diminished  Population of employees ready for transition from primary industry to tertiary Industrial Revolution (Second Phase) 1840 - 1914  1840-1870 growth  Textile gradually replaced by coal and steel  1840-1860: Coal x3, Steel x4, Cotton x2 (still most revenues)  Railroad o Concrete and symbolic changes o Coal and steel needed o Good example of modern investments  Social consequences o Population gets accustomed to industrial pace o Growing understanding of buying social peace o Reform act 1867- voting expanded to the men leading the household o Middle class superiority over aristocracy o Even familial changes (women actively visible, tourism,…)  Mercantilism (gradually changed) vs Free trade: the Corn Laws o 1815-1846 o war because of Napoleon o limited production of food, high prices o food imported, prices fall, merchants make less money o House of Lords – made a law – tariffs on corn to protect English sellers  1846 – repeal of Corn Laws o shift of power from the aristocracy to bourgeoisie 1870-1914 Decline and Competition  growing competition with US and Germany o European markets protected with tariffs o British Empire market  one among other industrial forces o with expertise and strength but no longer unique  specific drawbacks o produced too much for their own country o way more dependent on other countries than vice versa  importance of external market  the limits of a system o industrial decline o Empire growing complexity  the growing importance of a new sector: the financial sector  Working class o Health and hygiene reforms  o Trains taken to work- being able to live further away from work- larger area being populated- less pollution, clean drinking water; culture, football o 1908 : Old Age Pension Act o 1911 : National Insurance Act  First unemployment benefits in the history of the UK  At least one doctor for a certain area/town o 1870 : Education Act  13 cm difference in height between the kids from the rich and poor class  State-funded schools, Public schools (very much the same today) The British Great Depression 1873 - 1896  Competition => lower price => lower profits o Made possible by division of labour in US notably o Ex.: in the beginning one person doing everything -> more workers, shorter simpler steps to create the product o Division of labour -> cheaper products but lots of investments -> the need to be sure to sell those products o During wars -> it was sure to sell certain products (canned food, armour, boats) o Rationalizing factories  Lots of unemployed people in Britain -> no motivation to invest in factories  Slow shift of mentality when paying the workers  The US at the time: conquering its own territory, internal market, in the UK it took longer to get to the same conclusion  Varying consequences - two sides of the same coin  The situation of the workers actually improved, purchasing power went up (prices go down, they still gain the same amount of money) -> spending more money (in better quality food -> improved health), some started saving up On the eve of WWI  The industrial decline can be explained by: o Education o Motivation o External markets o Finance sector - more people invested in foreign ventures (outside of the UK) than in national; industry slowly depleted  Growing malaise = labour movement becomes more and more powerful, unions also o Strikes - unions reply with violence, deaths o Army officers see that things are falling apart - discussions  The start of WWI in 1914, the situation of a "pressure cooker Interwar Period  Industrial production dropped before WWII (even 50 % decrease in production)  Unemployment - varied situation (coal mines)   Political shift, the number of electors for the Labour Party is multiplied by 8 which changes the dynamic (Conservative x Labour party -> 3 political parties, Liberal party)  Raise of the Labour Party  Winston Churchill - chancellor of the exchequer  1925: Gold standard reintroduced o To try and organize economy o Gold = fixed value (limited product) o Currency has no fixed value which makes it complicated o The value of the money in a country is indexed to the price of gold = if we want to buy pounds (invest in the UK) = equal to a certain amount of gold that does not change o Anyone could come to a bank, want to exchange pounds to gold - stable value o The amount of money is supposed to correspond to the exact same amount of gold - not being possible to print more money  Churchill overvalued the price of the pound (by 10%) which severely impacted the export of the UK, the ability to trade internationally -> British products very made more expensive than they actually were  The fear of inflation was real (ex situation of Germany)  Fear of revolution, 1926 general strike - miners + other workers  In 1927 sympathy strikes forbidden- the British feared there would a general revolution  After the war, Germany had to give out coal for free -> no reason to buy it from the UK 1920s  Massive unemployment, wages getting lower, consumption low; pessimistic period  Not quite "modern" by US standards - American workers are buying cars, fridges-> becoming a middle class (in the UK, the situation was "stuck"- workers were buying radios, bikes,…) The Great Depression  October 1929: Wall Street Crash - impacted the rest of the world 1. Speculation - betting money on the value of the product until losing (expect money returns) 2. Consumption - too much of it because of very easy access, people took too many loans, ended up not being able to pay back  New problem, old methods - high tariffs to protect the economy  End of free trade, lower wages, lower public spending, less international trade - wait and hope the economy is going to kickstart again  John Maynard Keynes o British economist, said this method was a problem and the country should do the opposite o Made an impact in the USA, some of his ideas were adopted o His main idea at the time: to do what does not feel natural  Lower interest trades to promote investments  Money available to everyone even if it means inflation  Fight unemployment  USA: massive instructions but the UK did not adopt his ideas  UK ended the Gold standard in 1931- devaluation the value of the pound to make it competitive for the international trade - worked in a way 1930s  Varying situations (coal, cotton and other industries were going down) - new industries- automobile, chemical industry, food industry  Situation got better - trade  At the end right before WWII, unemployment was still very important but there were measures in order to help poor people, some workers though had very decent life situations - PARADOX WWII  Winston Churchill - Conservative prime minister, created the NG, but he took the leader of the opposition- labour party  National Government - made of different political parties; it was decided to suspend elections during the War  Fighting position - transformation of the country, industries  Planification o = government telling the industries of the country what they produce, when, how… o Churchill is doing the exact same what SSR is doing o UK becomes (food) self-sufficient - everyone has tickets to buy food- government controls the amount everyone is given – same amounts for all o Economic and social transformation o Female employment- women are engaging in industrial production (men must fight in the war)  National Unity - came from surviving the war together Beveridge Report  Planning as early as 1941 o preparing for what comes after the war, working on the future  December 1942 o Social Insurance and Allied Services- states benefits "from the cracked to the grave" o Help provided in case of health problems, when retiring,… General Election  Victory in Europe 8 May 1945  VJ Day (Japan) 15 August 1945  General election 5 July 1945 - Churchill announces snap elections- very soon after the war (the idea- the Labour Party won't have time to prepare therefore loose)  "Let him finish the job" - Winston Churchill campaign  Labour victory: Clement Attlee PM (Winston Churchill lost) o Beveridge Report o They also win enough seats to have parliament majority (the opposition- not enough votes to stop them) The Beveridge Welfare State  Labour gov elected 1945-1951  National Insurance 1946 - needs tested universal benefits replaced the (means tested) "dole" o flat rate system (contributions/distributions) = everyone pays the same amount of money  o Unemployment, maternity grants, pensions (women over 60, men over 65), death grants  National Health Service Act 1946 (NHS) o Not paying to receive medical care o The hospitals are nationalized = taken over by the government  Housing - over 1 million constructions  Full employment at all times - unemployment growth stagnation  Wage policy ended, liberalisation of credit, rise in demand - rise in imports so balance of payments deficit and inflation (8% in 1972)  Spring 1972 U-turns: price and wage freezes - anti-inflatory food subsidies (Industrial Relations Act) The Oil Crisis, the End of Consensus and Rise of Monetarism The 1970s - Oil crisis  October 1973 Yom Kippur (Jewish holiday) War  US support to Israel = OPEC (organization of countries that produce oil) decides to decrease exports, prices up  Oil crisis: oil prices multiplied by 4 overnight -> economic depression   1973: the UK joined the EEC (European economic market, later the EU) > open market > competition with Germany; being flooded with German product but struggling to sell UK products The 1970s  Winter 1973/4 miners' strike - the conservative gov tries to fight back  Emergency powers energy restrictions o Speed limits on roads (cut them in half) o Three-day week o S.O.S. "Switch Off Something" - campaigns, force radio and TV programs to be switched off after 10pm  General population is not very happy  Parliament dissolved - general election in 1974 o Who governs Britain? o Mid 70s the enemies of the Conservative Party are the unions o Labour party elected -> settled the miners' strike immediately (good relations with the unions) Labour Governments 1974 - 1979 Inflation (RPI all items % change over 12 months to December) year 1972 1973 1974 1975 % 10.2 10.6 19.1 24.9  Inflations is on the rise  Stagflation: high inflation + low growth o VAT up to 25% on luxury items and oil o Negotiation with the unions to freeze wages, also not to go on strike o To fight deficit: taxes go up, spendings down  Unemployment o 1974: 560 000 o 1977: 1 400 000  IMF (Internation Monetary Fund- world organization that offers solutions to countries that experience econ difficulties) loan of 3.9 billion dollars o It is humiliating for a country to ask IMF for help o IMF is always willing to give money in exchange for cutting spendings: o Conditional on tax increases + spending cuts > control deficit o The solution results in dissatisfaction in the general public  1977: unemployment + inflation (17%) + wage restraint  1978/9 "Winter of Discontent" o wage policies failed, -> strike  The government has no choice but to declare a general election: 1979  Labour - Unions collaboration is too fragile  Margaret Thatcher leader of the Conservative Party since 1975 o Her messaage: Consensus politics (Keynesianism) had failed o Campaign slogan: Labour isn't working o 1979 - 1997 Conservative Governments  Thatcherism-> free-market economics o Monetarism = all problems are solved by the invisible hand of the market -> government needs to step back  o Trade-unions are the enemies of the market, disruptive forces o Friedrich von Hayek: freedom from the State, individuals should spend money the way they want o Milton Friedman: stable currency and low inflation (unemployment is not a problem) MT's economic policy  "squeeze" on the economy  Income tax cuts, public spending cuts, VAT rise  Interest rate increases to 14% then 17%  Unemployment- not the responsibility of the state o 1979: 1.5 million o 1980: 2.25 million o 1983: 3 million  Inflation o 1979: 10% o 1980: 21.9% o 1983: 5% Consevative and Unions 1. Secondary picketing illegal - cannot go on strike to help someone who is already on strike 2. Closed shop only if >80% vote for it 3. Secret ballot compulsory  Various strikes ended in stalemate - union membership falling  Thatcher decides to close 20 mines in the country (UK is no longer dependent on coal, it has enough of it, for 4 years Thatcher would buy and stock up on coal) o Miners' strike 1984/5: Unions death blow - strike because they though the government would need the coal o Defeat of unions, the union movement killed-> not as powerful anymore Mrs Thatcher's social policy  Welfare policy - redistribution x trickle-down effect (rich people investing money->growth)  1979: 1.5 million people below the poverty line  1990: 7.75 million people below the poverty line  Welfare spending remained on 22% of GDP over the 1980s but more people benefited from it Mrs Thatcher's downfall  1989 Community Charge/poll tax - local taxes should not be based on revenues, everyone should pay the same amount of money  7 out of 10 households had much higher local tax bills -> extremely unpopular-> her Party told her to step down  1990 leadership election - John Major The Road to Brexit  Suez Crisis 1956 o Suez Canal- One of the most important trades for Europe, connects Red and Mediterranean Sea  o Operated by a private institution up until 1956 o In 1956 Egypt decided to nationalize the canal o A secret coalition between Israel, France and the Uk o Israel attacked Egypt from the east, the USA and SSR called the British and French and wanted them to leave as SSR was supporting Egypt, US was supporting the west -> the French left o France and UK discovered they were no longer major players on the international scale (now it was the US and Soviet Union) -> the idea of uniting o France started investing in nuclear power The Uk as a European exception?  Britain's separateness - one of the reasons to join o Geographical and historical separateness o Strong tradition unlike the European countries o Close link with the USA - also making it different from others  BUT Britain is at the heart of Europe o OECD = organization for european economic cooperation  To manage the Marshall plan's aid o NATO o The Council of Europe - there should be shared values  First intentional of unifying Europe  European Coal and Steel Community 1951 o One of the first major steps towards the EU o Idea of shared administration of coal and steel markets o To avoid another war, include Germany as well o First real alliance if shared economic interests European Construction  Negotiations to join EEC (Economic European Community) 1961  De Gaulle's veto 1963 - American influence in European affairs (they are too close to the Americans and will be working with them, instead of Europe) o Charles de Gaulle was not a huge fan of the British  New negotiation in 1967: EEC considered a solution to economic difficulties o Second De Gaulle's veto 1967 - saying the UK would drag it down The UK's EEC membership  UK, Ireland, Denmark joined the EEC 1973  Many claim it would be bad for the country to join - balance of trade is something the UK is not goods at  Referendum 1975 - should the UK stay in the "Common Market"? (uncertainty)- in favour of remaining in the EEC (67.2%)  EEC at the time - economic advantages to trade within Europe, not free trade - still some tariffs, each country has its own money, not being able to cross the borders easily  Margaret Thatcher Prime Minister from 1979 - characterized as a Eurosceptic (she was not fully for Europe although she wanted to stay in the EEC) o Advocate for a single market (basically free market)  o She did not like the political aspect of Europe o She liked the Europe united on econ aspects o She wanted the UK to function the way it wanted, being able to govern  "special place" in European Union - pound vs euro Falklands War 1982  Falkland Islands - extremely convenient (ships to refuel during trade) o Owned by British, they were the first ones to arrive there  Argentina saying for 40 years it would make more sense if they were owned by them -> managed to get approval of other countries o People on those island were against o In 1982 sending troupes to claim the islands, they have the blessing of the USA (because Argentina is not communist) o Margaret Thatcher also sends troupes and destroys Argentina  Falklands are still British Northern Ireland  In 1980s divided with Republicans (not fans of Margaret Thatcher) and Loyalists (want Ireland to be a part of the UK)  Bobby Sands (Republican) - Hunger Strike 1981 o Huge scandal for the UK o Lasted for a month o Pressure on MT was huge but she did not flinch  Grand Hotel Brighton 1984 - assassination attempt  1980s: 854 dead  1990 leadership election - John Major replaces Margaret Thatcher o Different approach, based on compromise o Tried to introduce policies that reminded of consensus o Trying to avoid confrontation, finding practical solutions o Not very popular, did not have a strong message o Started negotiations with Northern Ireland that lead to a peace process  1997 general elections -> conservatives lost o New Labour 1997 - 2010 - longest ran labour government US  The Biden Doctrine o Bellicose statement = it threatens war towards China o 21st century  GDP= amount of wealth produced in the world  American power is relatively recent (1945 - 1991 The Cold War- balance of power rested between US and the Soviet Union)  China is in some way linked to the US Introduction: major foreign policy theories  George Washington = 1st US president (1789-1797) o His views on US foreign policy: o To steer clear of (avoid) "permanent alliances"  o To keep a "respectable defensive posture" = ready to fight only is attacked o "Temporary alliances" IN EXTREMIS = in a difficult situation o "Recommended by … interest" -> view of enlightenment o Maintain good relations with everyone o American isolationism  The basis of American economic history are maritime trades/ships o The first ships were built by hand by the poor o Last voyage 1994, Bedford, whale oil -> now a major fishing port  Foreign policy influences economic policy and other way around o Interest is real or potential gain, profit, wealth  Westward expansion/End of the Frontier 1890  Painting: American Progress, 1872  American Progress, a painting by John Gast, is an allegory of manifest destiny and westward expansion in 19th-century America. The artwork depicts "Columbia," a personification of the United States, advancing westward with settlers, symbolizing progress and civilization. Columbia carries a schoolbook and telegraph wire while the East appears bright and developed, contrasting with the dark, untamed West. The painting illustrates settlers displacing Indigenous peoples and wildlife, encapsulating the optimism and justification for expansion while acknowledging the human and cultural costs. It remains a key visual representation of manifest destiny and its historical significance. o Manifest= evident, bound to happen, God given destiny (to feel the American continent; agriculture, progression,…) o All three presidents believed in this manifest o Imperialism, expansion  William McKinley o 25th US president (1897-1901)  Theodore Roosevelt o 26th US president (1901-1909)  Woodrow Wilson o 28th US president (1913-1921) o -> league of Nations (1920-1946) o In 1919- attempted to create the League of Nations although it was not supported  Isolationism o = not forming any alliances with Europe (still exists to this day) o Imperialism (expansion)- comes after isolationism  3 American virtues: 1. Virtue of industry= hard work 2. Ingenuity= finding solutions to problems 3. Protestant (puritan) belief in predestination  Why did American presidents believe in imperialism? o They believed they possessed certain virtues o Agrarian America -> acquisition of "uncultivated" land  "we must conquer the lands to civilize them"   Image of the Roman republic o Racial superiority to other people  Franklin Delano Roosevelt o 32nd US president (1933 - 1945) o "We must begin the great task that is before us by abandoning once and for all the illusion that we can ever again isolate ourselves from the rest of humanity" (Radio address, December 9, 1941 -> two days after Pearl Harbour)  Harry Truman o 33rd president (1945 - 1953) Isolationism 1. Conservative: preserve American values and interests 2. Liberal: refrain from intervention abroad, notably to prevent exploitation Idealism 1. Liberal: seeks to improve the international order, reduce risks of conflict (Truman, Kennedy, Johnson, Carter, Clinton) 2. Conservative: discourse using universal principles to establish US international supremacy (Eisenhower, Reagan, G. B. Bush) Realism  The realist tradition: T. Roosevelt ("speak softly and carry a big stick)  Realism during and after Cold War (Nixon, Reagan, Trump) Liberal Internationalism  World order based on international institutions and multirealism (but with US leadership) Colonialism 1. Extractivism - going to land to extract 2. Settler - going to people Mercantilism Settler colonialism Terra Nullius = vast/swoft of unoccupied land Imperialism - absolute power over the lands  Neocolonialism o Political control by an outside power of a country that is (in theory) sovereign and independent  Postcolonialism o Political or cultural condition of a former colony  Decoloniality or decolonial studies o Enduring domination of (Western) societies in former colonies  Ethnocentrism o Belief that one's way of life, their foods, dress, habits, beliefs, values, and so forth, are superior to those of other groups U.S. "new" imperialism at the end of the 19th century  1823 Monroe Doctrine o America's sphere of influence  o US will not interfere with other (European) countries, European colonies in the western hemisphere, respect autonomies of other countries but also create allies o Western hemisphere was closed o Any aggression by a European power would be considered an act of aggression against the USA o Western/northern hemisphere o Vast mercantile influence; USA declares itself the most dominant power o Pres. James Monroe (Monroe doctrine, 1823) -> Pres. Theodore Roosevelt (Roosevelt corollary, 1904) Difference: Monroe- what could not be done, Roosevelt emphasised what could be done by the US  1856 Guano Island Act  1861-1865 US Civil War  1867 Purchase of Alaska  1898 Spanish-US War  1898 Annexation of Hawaii  1898-1902 Filipino War The Gilded Age (1880/90s)  To gild = to cover with gold, to cover with a baser material of gold  Taken from the title of a book by Samuel Langhorne Clemens- Mark Twain  Americans viewed their country as unique: a rare functioning democratic republic that had withstood the test of civil war  Americans could point to a number of institutions which guaranteed their liberties: 1. Balance of power thanks to system of checks and balances (executive, legislative, juridical) 2. Due process, or equality under the law 3. Near universal suffrage = almost everyone could vote (14th amendment)  Comparison: GB was a constitutional monarchy. Suffrage was limited to the propertied classes (the working would not obtain the right to vote until 1884; the House of Lords held the power of veto until 1913 (1914)  In the 1860, France was ruled by the absolute power of Napoleon III during the Second Empire National Politics in the Gilded Age  The political discourse was dominated by the Civil War  Republicans controlled New England and the Northeast, the Middle West, and the Agrarian West  The core supporters of the Republican Party included Revivalist Church goers, African-Americans, Protestants, and Union Arty veterans  For example, all American presidents from 1868 until 1900 were former Union Army soldiers; in 1880 alone, all candidates were former Civil War generals  In 1880, pensions for veterans (Civil War) constituted nearly 40 % of the national budget Politics of "Dead Center"  The Democrats controlled the South after the Bargain of 1877, and had support amongst Catholic voters in many Northern cities  National politics were closely divided  In 3 out of 5 elections from 1876 to 1892, one party would lose elections by 1% margin  By 1878, the Democrats gained control of the House of Representatives, which they retained for 20 years  The Gilded Age saw a succession of one-term presidents List of Presidents in the Gilded Age 1877 - 1881: Rutherford Birchard Hayes 1881: James A. Garfield 1881 - 1885: Chester A. Arthur 1885 - 1889: Grover Cleveland 1889 - 1893: Benjamin Harrison 1893 - 1897: Grover Cleveland 1897 - 1899: William McKinley 1899 - 1901: William McKinley Presidential Power, the Reform of the Civil Service in the GA  Presidents did little to mobilize public opinion  Their staff were small: for example, Grover Cleveland used to answer the White House door when callers came  However, the US introduced a merit system for federal employees  The Civil Service Act of 1883 required examinations to qualify civil servants  Previously, appointments were made as political favours  Unintended consequence: parties become more beholden to donations from business interests Popular Political Participation in the Gilded Age  American democracy was robust during this period o People evinced party loyalty (by comparison, Americans today tend to vote for specific candidates) o In the Gilded Age was period of massive political rallies (shromáždění) o The public listened to and expected high oratory (the art of public speaking) The 2nd Industrial revolution  The end of the Civil War inaugurated a swift and profound economic revolution  For example, in 1861, at the start of the Civil War, there were no foundries (slévárny) in Ohio, by 1865, there were over 10  This profound economic expansion transformed American society 1. The end of the agrarian republic 2. The consolidation of economic power in the hands of and industrial elite  3. The creation of social conflict According to the US Census Bureau  1880s: majority of labour force worked in non-farming jobs  1890s: 2/3 of the labour force worked in wage jobs  1870-1920: 11 million people moved from farms to cities  In the same period, 25 million immigrants arrived to the US  The transformation of the American economy from an agrarian to an industrial economy marked the end of "Lincoln's America": a nation of independent farmers  In the GA, half of all industrial laborers worked in factories with more than 250 labourers  Cities emerged as centers of industry, the urban population increased  Mass production of durable goods o By 1913, the US produced 1/3 of the world's industrial goods, more than the UK, France and Germany combined What were the reasons for this rapid change? 1. Abundant natural resources 2. Technological innovations o Increased use of steam engines in the 19th century -> innovations in manufacturing and transportation o By the end of 19th century, the use of electricity further accelerated the industrial economy o Many mills in the 19th century powered by water -> coal-powered steam -> electricity o The increased use of electricity accelerated the industrial output, as it was more reliable than water or steam 3. Technological Innovation: the Railroads o The first ones were introduced in the 1830s in the USA o In 1867, the US completed its first transcontinental railroad o After the Civil War the railroads soar at an even faster rate (between 1860 and 1880, the miles of track tripled, by 1920, they had tripled again) o Consequences: the expansion of railroads allowed for rapid distribution of goods, increased movement of people, creation of time zones (4) 4. Other technological innovations o The Atlantic cable 1866 - communication between the US and Europe o Telephone, Typewriter, Hand-held camera, Phonograph, Lightbulb, Motion pictures o Alternation current electrical motor, invented by Nikola Tesla 5. Labour Supply: Population increase (Also augmented by immigration from Europe) o 1860: 31.5 million o 1870: 39 million o 1880: 50 million o 1890: 63 million o 1900: 76 million 6. Capital  o Increased population -> demand for labour, expanding market for consumer goods o Accumulation of wealth, capital -> further investments in the burgeoning industries of the "Second Industrial Revolution" 7. National Economic Policy during the Gilded Age o Powers had expanded after the civil War, the federal government remained small o Localities and States assumed the role of government, managing: o Education o Health care o Business regulation o Civil and criminal prosecutions o In 1880, there were 100 000 federal employees 8. Federal economic policy o Federal government adopted certain policies to favour economic development o Important divisions between the  Republican (favoured hight tariffs, believed that the federal gov should not spend too much money, supported repayment of national debt, withdrawal of paper currency issued the Civil War)  and Democratic parties (favoured no tariffs although the party elite was close to bankers, resisted call to increase monetary supply to relieve farmers, also favoured other in debt) o Banks and not the federal government controlled the supply of money - such policy favoured bankers and industrialists o Crop prices fall - farmers found themselves without the currency to pay for goods o Consequences on agrarian America Consequences of Economic Expansion and the meaning of the Gilded Age  Increase of manufactured goods on the market, federal monetary prices led to years of unstable, volatile economy  Before the Crash of 1929, the period was referred to as the Great Depression (1873 - 1897)  Supply and demand in a capitalist economy  These included forming pools (creation of fictive companies to sell products at fixed prices - > false impression of competitiveness) and trusts (legal devices whereby affairs of rival companies were managed by a single director)  Corporations struggled to control entire industries Robbert Barons  No personal income tax in the US before 1913 -> anybody could accumulate massive amounts of wealth o J.P. Morgan o Andrew Carnegie - steel company, his steel plants were among the most sophisticated in the world, the plants operated on two 12-hour shifts, 364 days a year o Thomas A. Scott  Some lauded their efforts, calling them "Captain of Industry", "Robert Barons"   John D. Rockefeller o Horizontal expansion = buying out competitors to monopolize oil production o Controlled oil, petroleum o He fixed prices and made secret arrangement with the railroads to ensure favourable rates for the distribution of his oil o Gradually shifted towards "vertical integration" controlling drilling , …  Both Carnegie and Rockefeller were ruthless in their business practices  By 1889, Carnegie possessed a fortune of 350 million dollars, by 1913, Rockefeller an estimated 900 million dollars  By way of comparison, the average wage of Americans in 1900 was 450 dollars pa. Political Corruption in the gilded Age  The combination of power and politics -> scandals of corruption  The included, but were not limited to, the following: o The Crédit Mobilier Scandal o Shareholders formed it to get lucrative contracts (signing checks for themselves) o The federal government gave land for the construction of railroads o Union Pacific Railroad stockholders formed this corporation to oversee the railroad's government-assisted construction o The creation of CM allowed the UPR to sign lucrative contracts - with itself o Influential politicians received stocks, including Vice President Schuyler Colfax o The Whisky Ring o Republicans officials, tax collectors, and whisky manufacturers defrauded the federal government of million of tax dollars o The consequences of this scandal led to a disillusionment with the Grant administration, and was partly responsible for the end of reconstruction o "Boss" William M. Tweed o The mayor of NYC, William M. Tweed, used tens of millions of dollars of public money to consolidate his political power (bribes) o "Boss" Tweed did the following:  Established ties with railroads and miners  Created a system of private welfare for the poor to consolidate his support o Tweed was removed from office in the 1780s  "Liberty and monopoly cannot live together"  The rise of monopolies and the accreditation of extreme wealth disturbed many, who perceived a threat to the fundaments of a democratic society  In 1894, Henry Demarest Lloyd wrote Wealth against Commonwealth, in which he reported on the unscrupulous practises of Standard Oil, which included bribery of legislators Congressional Acts to combat corruption and Corporate Abuse: The Interstate Commerce Commission (ICC)   1887: The United States Congress created the Interstate Commerce Commission  Objective: creation of federal agency to regulate economic activity  Main issue: complaints of public (farmers and merchants) over abusive fares charged by railroads The Sherman Antitrust Act  1890: US Congress passes the Sherman Antitrust Act, sponsored by Sen. John Sherman (Republican of Ohio and brother of W.T. Sherman)  The SAA criminalized any business  Practises with stifled free trade  The Act passed through the Senate (51-1) Outcome  Despite being the first federal agency to regulate economic activity, the ICC did not have the power to establish fair rates  The ICC could only sue railroad companies for abusive powers, thus, it was left to the courts to rule on abusive practises by the railroads  The SAA introduced the possibility for companies to be taken to court for practises which impeded free trade  However, the Act was also used by courts to supress union activity The Labour Question  In the 1870s, the great social question of the nation was no longer slavery, and the fate of the African-American slipped from the public eye as Reconstruction was allowed to wither away  The new question that occupied the public mind was the "labour question"  By 1890, the top 1% of America possessed the total income of the bottom half of the population  The same 1% owned more property that 99% of the population  The American upper class began to emulate the aristocratic habits of Europeans  -> growing gap between the rich and poor The Emergence of a New Social Class  Edward Atkinson, a Massachusetts manufacturer, cited a "permanent factory population"  The new population of workers lived in poverty, owned no land, did not produce their own food, were dependent on their unskilled labour for wages  In 1881, the Massachusetts Board of Labour Statistics reported that every worker in Fall River, a city in southern Massachusetts with many textile mills, complained of: o Abuse o Low wages o Poor housing o Overwork and Tyrannical employers  Between 1880 and 1900, and estimated 35 000 workers died each year in the US Skilled Workers in the Guilded Age  Skilled labourers could command relatively high wages and a degree of freedom   For example, there was the case of "miner's freedom", work rules established by miners that left them free from managerial supervision  Worker's unions were able to dictate production quotas in iron and steel industries  Often, workers understood the production process better than the owners Unskilled Labour in the Guilded Age  Skilled works were only a minority of the labor force  Birth of the Tram, Image of Charlie Chaplin is emerging  Single men traveling around for work - reality of the people Social Darwinism, social reforms and lobor force  Michael Markham (30) 1885 - screw factory in Connecticut, nail heading machine  He gets hurt - the newspaper report that it is his problem  SD- Inspired by Charles Darwin work, The origin of species - his theories about natural evolution, applying them to human society  This philosophy considered poverty a "product of natural selection" - > the poor are responsible for their own fate  Willia, Graham Sumner, Yale professor and proponent of Social Darwinism, wrote What Social Classes Owe to One Another (1883): o "liberty, inequality, survival of the fittest", not "liberty, equality, survival of the un-fittest" The "deserving poor"  From 1870s until the 1890s , there emerged a public discourse about the "deserving poor"  This supposes that there were "undeserving" poor people  In Anglo-Saxon societies, self-reliance is considered an essential trait in the face of adversity; those without this quality are considered to deserve their poverty  Max Weber, German sociologist wrote The Protestant Work Ethic and the Spirit of Capitalism (1904-5): analysed ethics of capitalist society  Samuels Smiles, Self Help (1859), widely read in the United States in the 19th century Labour Strikes  On May 1st, 1886, 350 000 workers demonstrated for an 8-hour day -> origin of May Day  Successful strikes in Chicago forced the railroad to make concessions to its workers  On October 28th 1886 the same as the inauguration of the Statue of Liberty, a series of strikes broke out across the country Economic policy  The great depression + WWII -> need to boost the world economy and avoid future conflicts o Increase international trade  GATT: General Agreement on Tariffs and Trade 1947 -> WTO(World Trade Organization) 1995  Tariff rates in developed countries The Golden Age of Globalization  1986 - 1913 = 73 world trade doubled -> capital moved by European investors in the US, South America and Australia  Innovation (transportation, communication)-> trade more possible and affordable  Trade policy -> David Ricardo  Post WWI + US withdrawal from international cooperation (from of isolationism)  Tariffs raised in 1920s  Roaring twenties = US wealth doubled 1920 - 1929 + consumer society  October 29,1929 = black Tuesday, great crash, wall street crash  Smooth-Hawley act (1930) = 1930 raised US tariffs -> retaliation by other countries -> world trade decreased by 66 % The Age of Trade Agreements Unemployment rates go up in 1934 = 1934 21.7%  The reciprocal trade agreements 1934  GATT after WWII Summary-ish  Monroe Doctrine - specific statement about Latin America - the Americans would not seek to occupy land already occupied by another, the US would stand up for any nation Yellow journalism  Ideologically driven press instrumentalized by powerful interests to influence public opinion, no fact checking  Owned by powerful  Goods are transported using SHIPS (depending on steam vessels- those need coal) o Strategic coal stations in the Pacific - expansion  Latin America and the Caribbean - War of 1898  Spain imperial power - philippines owned by the Spanish since the 16th century o China - trade relations, controlled by the British nation  Lost Hong Kong to the British  Treating ports  Russia, France, GB, Japan at the end of 19th century treating with China  Strategy: open trade o Open door policy (Secretary of state Joh Hay's) for all western powers and Japan -> each power could maintain access to one of the treaty ports in China o "everyone who want to trade with China, should be able" - only Britain said other, other wanted to keep it the eay it was  1900, The Boxer Rebellion: McKinley sends soldiers without permission -> rebellion was supressed, China was obliged to pay reparations to the US  The US never dared to interfere with the EU powers before so this was a major step (in China) -> they succeeded  In some way inti-imperialism remained important in some parts  Anti-im league was founded in 1889, Mark Twain o Hipocracy in Americans o Women figures as anti-imperialism was linked to other philosophies which lead to the right to vote for women 2nd part of the 19th century  American foreign policy in this rapid expansion o Rupture in insolationism->imperialism (imerges at the end of the 19th century)  o Born of a colony that used to belong to the indigenous people o Rupture between democrats and republicans o Late 19th 20th century parallels with contemporary USA (Jugoslavia, Balkans)  Economic policy radical shift: nation of farmers, independent land owners who from the army during the tieme of war  What we learn from the history: Every republic either collapses or itself become an empire (France, USA)  Econ is a political domain and comes down to: who gets what and how