HSTORY OF GLOBAL MARKET INTEGRATION

Market Integration
Agricultural Revolution
Industrial Revolution
Capitalism
Socialism
The Information Revolution

Market Integration
Market integration is a term that is used to identify a phenomenon in which markets of
goods and services that are somehow related to one another being to experience similar
patterns of increase or decrease in terms of the prices of those products. The term can
also refer to a situation in which the prices of related goods and services sold in a defined
geographical location also begin to move in some sort of similar pattern to one another.
At times, the integration may be intentional, with a government implementing certain
strategies as a way to control the direction of the economy. At other times, the integrating
of the markets may be due to factor such as shifts in supply and demand that have a
spillover effect on several markets.

When a market integration exists, the events occurring within two or more markets are
exerting effects that also prompt similar changes or shifts in other markets that focus on
related goods.

HISTORY OF GLOBAL MARKET INTEGRATION

Agricultural Revolution

 It was the first big economic change.

 When people learned how to domesticate plants and animals, they realized that it
was much more productive than hunter-gatherer societies.
 Farming helped societies build surpluses, meaning, not everyone had to spend
their time producing food. Thus, it led to major developments.
Industrial Revolution

 It was the second major economic revolution in1800s.

 With the rise of industry came new economic tools, factories popped up and
changed how work functioned.
 Instead of working at home, people began working as wage laborers and then
becoming more specialized in their skills. Thus productivity went up, standards of
living rose, and people had access to wider variety of goods due to mass
production.

Economic casualties:

 The workers in factories worked in dangerous conditions for low wages.

 More productivity came with greater wealth, but also greater economic
inequality.
 Because of it, in the late 19th century, labor unions began to form that sought
to improve wages and working conditions.

Capitalism

 A system in which all natural resources and means of production are privately
owned.
 It emphasizes profit maximization and competition as the main drivers of efficiency
 The idea is that if one leaves a capitalist economy alone, consumers will regulate
things themselves by selecting goods and services that provide the best value.
This is what Adam Smith called the “invisible hands”.
 In practice, an economy does not work well if it is left completely on autopilot. It
would lead to market failure such as monopoly.
 Market failures are the reasons most countries are not purely capitalist societies.
Socialism

 Government plays an even larger role in socialism.

 The means of production are under collective ownership – property is owned by
the government and allocated to all citizens, not only those with the money to afford
it.
 To Karl Marx, socialism is a stepping stone to communism.

Information Revolution

 Computers and other technologies are beginning to replace many jobs because of
automation or outsourcing jobs offshore.
 Development of technologies in the second half of the 20th century.
 Technologies have reduced the use of human labor and shifted from a
manufacturing-based economy to one that is based on service work and the
production of ideas rather than goods.