Name and Surname: Tahlia Teri Bland

Student number: 54709474

Course code: ECS2608

Course Title: Economic History of the World

Assignment number: 1

Unique assignment number: 252753

Cell number: 071 868 0313

54709474@mylife.unisa.ac.za
After having studied chapters 1 to 5 of part I in the prescribed textbook and the
corresponding sections in the study guide, outline those economic tendencies
described in these chapters which in your opinion have most importantly shaped the
modern economy. And why?

Economics has developed into what we know it as today through the years due to constant
changes in how the world has adapted to various economic tendencies. Not all economic
tendencies were used to shape the modern economy, in this essay the economic tendencies
that shaped the modern economy will be discussed.

Economic tendencies began with nations realising they could benefit from one another
through international trade, a need was seen where nations could gain commodities that
they were not able to produce themselves by trading something they could produce for it.
Trade initially began by foreign nations trading surplus items by train or ship. Trading
became a more affordable solution for most nations, being cheaper to trade than produce
needed items in their own countries. Over time nations sought to develop a common
denominator for trading to make trading between foreign countries. `Economic tendencies
that have shaped international trade would be transporting and communications because
the world would have wanted to make things move a lot quicker and for less money which
would mean it would be more cost effective to move products, commodities, people, etc.
around and they would have wanted to improve transport and communication to get this
done. As mentioned previously, the two main sources of transportation in terms of moving
goods would have been by railway and by ship. To focus on these, they would need to have
built better systems around the railway such as steam railways or steam trains. So, what
would happen was they would constantly develop and come up with ways on how to
transport items better and faster and in terms of transportation over the ocean would have
been via ship, so steam powered ships would also be another way that they would have
done this. The focus would have been on building better ports and warehouses to house all
the goods and commodities in terms of trade that they would have required for trading. They
would have also looked at more space in terms of the ships they would require boosting
trade and the number of commodities which they were able to trade at once.

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The world population growth would have also been another tendency that would have
impacted the international economy, more people mean higher demand and higher demand
means that a country would need to produce a lot more things, a lot more goods and services
to keep up with the increasing demand. Agriculture was a major trade commodity in the 18
to 19 centuries, the trade for primary or raw materials for finished products was in demand
during this period and really boosted trade between nations. Along with this was
industrialization where machinery was being developed and built at a fast pace often
requiring raw materials, this meant that companies had to trade to gain the required
materials and parts to build their machines. This changed how countries, subcontinents, and
continents traded items. Natural resources were a major part of economic tendencies,
certain countries would be rich in natural resources being able to grow fruits for example
while others had other natural resources or developed products and had to trade to get the
items they required or needed. International trade became very important in diversifying
building a strong foreign commodity because of the need for countries to depend on each
other to trade to get what they needed. An example of this would be where a country that
was able to mine for minerals needed to trade with another country for vegetables as it was
more efficient to trade for these.

The industrial revolution was one of the key factors in economic growth as countries and
subcontinents had to look into trading off their surplus primary production for commodities
that they required. Agriculture was just as important as the industrial revolution because
agriculture yielded a lot of products that needed to be traded with other countries that didn't
necessarily have those products or goods. This was a very important part in economic
growth in general, the industrial revolution started in Britain in the 18th century and then it
spread across different continents. Just as agriculture accelerated, so too did industrial
growth which led to the two commodities being highly traded between different countries
internationally. The use of raw materials increased drastically between the 18 and 19th
century, these were commodities such as petroleum and aluminum. It was not just
agriculture that was increasing, it was also raw materials that countries needed or wanted
from other countries. This introduced international trade, which was extremely important in
the transition into where we are now in the modern day. Another key factor was transport
and communication, transport and communication would be how countries got their goods
and products or raw materials and primary products from other countries. In terms of
transportation, railways were built between countries and subcontinents to transport the

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goods and ships were also used to reach the other side of the world or to go to a different
country in terms of trade. Canals were built such as the Suez Canal where ships could travel
through to make the journey both easier and shorter when going from East to West or vice
versa, which was very important. The focus was becoming more evident that ships were
being built larger and better to transport more items, along with these warehouses were also
being built larger in bigger and more ports across the world. All this increased labour
worldwide and aided in boosting the economy of these developing countries that had the
infrastructure to trade with international countries worldwide.

Trade exceeded world output and grew fast from 1800 to 1913, trade during these periods
was mostly done by Europe with their main trade being for primary sources in exchange for
goods that were manufactured. Primary products were not traded as much even after
industrialisation after 1950 and remained as a stable trade commodity, this was mainly
because of underdeveloped countries trading these basic primary resources between
themselves as opposed to developed countries trading them for already manufactured
goods. This pattern of trading soon changed and after 1860 a new multilateral trading
system was developed which focused on the economic specialization of a worldwide
economy. This new system saw many countries over various continents trading in all goods
and resources, balancing out any trade deficits. Foreign trade in the 19th century was a big
steppingstone to getting us where we are today and then also another thing to touch on is
commercial policy in the 19th century again, which was a key factor. Britain adopting the
free trade played a major part in leading foreign trade because they adopted this free trade,
so their colonial commercial policy was sound. Protection was also a key element for the
economy and with various countries such as the USA and Britain providing protection, it
meant that trade was more reliable and safer for people especially when taking into account
foreign investment. The immigration from Europe and other countries also played a large
part in the diversity that we have in international trade up and until 2015 and even now in
modern day times it is introducing different cultures to a country. When they immigrate to a
country, they in turn bring culture so people would import stuff that they were used to from
home increasing the trade and it would decrease when financial strain happened when the
Great Depression happened that would have affected um trade as well so all of these things
play intricate part and that is where we are today. The growth of world population was also
another driving factor in foreign and international trade so as the population increased the
need for goods, raw materials, products, and commodities to come in and out of a country

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or sub country subcontinents was very important. This was also a leading factor in getting
us where we are. I did touch on the supply of natural resources I did not dive into detail but
it is pretty self-explanatory that there will be some countries like Africa that has a lot of natural
resources in terms of minerals agriculture and then we get countries like Germany Britain
and the US to an extent that have agriculture but doesn't produce the same so it gives a
very good opportunity to trade and introduce more things into a country and I think Britain
was leading the way, because of the fact that they had their free trade policy it made the
world of difference in international trade. The growth of real incomes as more people started
coming in and joining the workforce as the population grew all of this grew which means
exported imports in itself meant that the trade their export and import trade could grow.

In conclusion many economic tendencies played a role in shaping the modern economy into
what we know it as today. With the advancement in technology and the constant growth of
how trade takes place, economic tendencies will continue to grow and change, constantly
developing for future generations to come. The various systems of how trade took place
changed as and when required according to the need and demand for both primary and
secondary resources. From the textbook growth of the international economy 1820 to 2005
the 5th edition we can see that there is a lot of infographics showing us how things have
changed over the years you can go look at bar graphs and pie charts to see just how much
things have developed over the years and we can actually learn from the trends that they
bring to see what the future would look like. Export trade in the 1800s the late 1800s were
good and then we can see a steady increase over the next few years there is a slight
decrease it's not a constant up but it's very good in determining what happened then and
how to forecast now we can see there was in fact a few factors where there was a decline
in trade in foreign trade that would be exporting and importing which is very helpful and
useful to know.

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LIST OF SOURCES CONSULTED

Graff, M., Kenwood, A.G. and Lougheed, A.L. (2014) Growth of the International Economy,
1820-2015. 5th edn. London: Routledge.

University of South Africa. Department of Economics. 2023. Economic History of the World:
Semesters 1 and 2. Tutorial letter 101/3/2023 for ECS2608.

University of South Africa. Department of Economics. 2023. Economic History: Only Study
Guide for ECS2608. University of South Africa. Pretoria.

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