2023/08/21

Learning Unit 2
Global capital: Twentieth century economic growth
and development (1901-2000)
Dr Simone Halleen

The development of the world economy

Feudalism Mercantilism Industrialisation Globalisation

476-1453 1454-1760 1760-1855 1901-2000

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Lecture outline

• Skidelsky: Phases of economic development:

• 1. Liberal market (1901-1913)
• 2. Autarkic market (1914-1950)
• 3. Managed market (1950-1973)
• 4. Neo-liberal market (since 1973)

Outcomes
• Trace the rise of major economic systems.
• Trace the growth and development of the world
economy over the course of the twentieth
century.
• Trace the history of economic inequality and
comment on this phenomenon.
• Explore the emergence of globalisation.

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Liberal market (1901-1913)

• After IR.
• Liberal economic system.
• Open borders.
• Economic growth, expansion and trade.
• Ended due to WW1.

Autarkic market (1914-1950)

• Followed WW1.
• Mistrust – disrupted world market.
• More government control and centralised
planning.
• Stricter control. Economic decline.
• Prosperous nations struggling.
• Great Depression (1929-1932).
• Development of Autarkic states.
• Struggle between capitalist and communist
ideas.
• Contributed to WW2 (1939-1945) and Cold War.

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The Cold War

Managed market (1950-1973)

• Followed WW2.
• Economic boom and rebuilding.
• GDP and real incomes rose.
• Free market economy but with some state
control. Introduction of regulation (IMF, WB,
GATT, EEC).
• Brenton Woods 1971 (control exchange rates).
• Mixed economies – govs managed major
industries.
• Capitalist states coexisted with Autarkic states
(Cold War).
• 1973 oil crisis - stagflation.
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Neo-liberal market (since 1973)

• Return to liberal economy (capitalism).
• Managed market too expensive for
governments.
• Maastricht Treaty: to balance budget deficits
and debt ratios. Deregulation.
• Privatisation.
• Reagan & Thatcher. Opening up of economy –
globalisation.
• WTO.
• Facilitated by fall of Berlin Wall (fall of
communism).
• SA enters world economy after fall of Apartheid.
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https://www.heritage.org/index/download

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https://en.wikipedia.org/wiki/Communist_
state

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