Two crucial influences shaped post-war reconstruction. The first was the US's emergence as the dominant economic of the Soviet Union. It had made huge sacrifices to defeat Nazi Germany and transformed itself from a backwards agricultural country into world power during the very years when the capitalist world was trapped in the Great Depression.

Under the pressure from industrialists and urban dwellers, the British Government abolished the Corn Laws. The effects of it were
(i) Food could be imported into Britain more cheaply than it would be produced within the country.
(ii) British agriculture was unable to compete with imports. Vast Areas of land were left uncultivated and people started migrated to cities or other countries.
(iii) As food prices fell, consumption in Britain rose. Faster industrial growth in Britain also led to higher incomes and therefore more food import.
(iv)  Around the world in Eastern Europe, Russia, America and Australia land were cleared and food production expanded to meet the British demand.

(i) Trade Surplus-Britain had a Trade Surplus with Indian. Britain used this Surplus to balance its trade deficit with other countries.
(ii) Home Charges-Britain's trade Surplus in India also helped to pay the so called home charges that included private remittance home by British officials and traders, interest payments on India's external debt and pensions of British officials in India.
(iii) Major Supplier of cotton-India remained a major supplier of raw cotton to British which was required to feed the cotton textile industry of Britain.
(iv) Supplier if indenture workers-Many indenture workers from Bihar, U.P., central India migrated to other countries to work in mines and plantations.

(i) This reduces the shipping cost and lowered meat prices in Europe.
(ii) The poor in Europe could now consume a more varied diet.
(iii) To the earlier, monotony of Bread and Potatoes many, not all could add meat, butter or egg.
(iv) Better living conditions promoted social peace within the country and support for imperialism abroad.

(i) The international monetary system is the system liking national currencies and monetary system.
(ii) The Briton woods system was based on fixed exchange rates. In this system the national currencies were pegged to the dollar at a fixed exchange rate.
(iii) The Bretton woods system inaugurated an era of unprecedented growth of trade and incomes for the western industrial nations.

One important features of the vibrant US economy of the 1920s was mass production. A well-known pioneer of mass production was the car manufacturer Henry Ford. He adapted the assembly line production to his new car plant in Detroit.
The assembly line production forced workers to repeat a single task mechanically and continuously - such as fitting a particular part to the car - at a pace dictated by the conveyor belt. This was a way of increasing the output per worker by speeding up the pace of work.
Standing in front of conveyor belt no workers could afford to delay the motions, take a break, or even have a friendly word with a workmate. As a result, Henry Ford's cars came off the assembly line at three-minute intervals, a speed much faster than that achieved by previous methods. The T-model Ford was the world's first mass-produced car.
Mass production reduced the cost of good and this resulted in mass consumption.

(a) Agricultural overproduction:
(i) Tthe falling agricultural prices caused a decline in agricultural incomes.
(ii) The farmers tried to expand production and bring a large volume of produce to the market for maintaining their overall income.
(iii) This worsened the situation in the market, pushing down prices even further.
(iv) Farm produce rotted for a lack of buyers.
(b) Investments through loans from the US:
(i) In the first half of 1928, US overseas loans amounted to over $1 billion.
(ii) Countries that depended crucially on US loans now faced an acute crisis.
(iii) The withdrawal of the US loans led to the failure of some major banks and the collapse of currencies such as the British Pound Sterling.
(iv) In Latin America and elsewhere, it intensified the slump in agricultural and raw material prices.
(v) The US attempt to protect its economy in the depression by doubling import duties also affected the world trade.

Example 1: Faster railways, lighter wagons and larger ships helped move food more cheaply and quickly from faraway farms to final markets.
Example 2: Refrigerated ships were made for transporting perishable food over long distances.

The global transfer of disease in the pre-modern world led to the colonisation of the Americas in the following ways
(i) The Portuguese and the Spanish had a strong army. But along with these, germs and viruses helped them in conquering parts of Americas.
(ii) As Americas was isolated earlier, the original inhabitants had no immunity against the germs and viruses present in Europe.
(iii) The diseases once introduced, spread very fast. The diseases, like smallpox affected whole communities that were paving the way for the conquest of the colonisers.
(iv) The germs were more dangerous as compared to guns and fire arms because guns could be bought or captured, but there was no way to escape from these diseases.

(i)Transformation of the world economy: Technology played a major role in all these developments. Railways, steam shipping, telegraph , ect., were important inventions without which it was not possible to imagine the transformation of nineteenth-century world.
(ii) Linking the markets: New investments and improvements in transport faster railways lighter wagons and larger ships helped move food more cheaply and quickly from far away farms to final markets.
(iii) Impact on the meat trade: Till the 1870s, moat from America was shipped to Europe in the form of live animals which were then slaughtered in Europe. But live animals took up a lot of ship space. Many also died in voltage fell ill lost weight or became unfit to eat. So the prices of meat were very high and it was beyond the reacts of the European poor. Due to high price the demand and production meat from one region to another.
(iv) Social peace and imperialism: The refigerated ships reduced shipping cost and lowered meat prices in Europe. The poor Europe could now consume a more varied diet. Better living conditions promoted social peace within the country and support for imperialism abroad.
(v) Colonialism: Technology played very important role in linking the world markets which promoted the sprit of colonialism.

(i) The post-war economic recovery proved difficult as they heavy expenditure on the World War I weakened the British economy.
(ii) While Britain was preoccupied with war, industries had development in Japan and India. So now Britain had to face competition from developed in Japan and India. So now Britain had to face competition from these countries, especially from Japan.
(iii) To finance war expenditures. Britain had borrowed liberally from the United States (US). This meant that at the end of the war. Britain was burdened with huge external debts.
(iv) The war had led to an economic boom, i.e., to a large increase in demand production, prices and employment. When the war boom ended production contracted, employment and unemployment increased.
(v) The economic hardship of the war period forced the people of British colonies against them. For example: Non-Cooperation movement was launched in India.

The causes of the Great Depression were
(i) Conditions Created by War The Great Depression was the result of war. There was an immense industrial expansion due to the increased demand of goods supplied to the army, during the period of the First World War. After the war, the demand for these goods suddenly dropped. So, there was no demand in many industries. There was also a large fall in the agricultural prices due to reduced demand.
(ii) Over Production in Agriculture Agricultural over production was another major factor responsible for the depression. This was made worse by falling agricultural prices.
As prices fell and agricultural incomes declined, the farmers tried to increase the production. They tried to bring a larger volume of produce to the market to maintain their overall income. This act pushed down the prices of farm produce further.
(iii) Shortage of Loans In the mid-1920s, many countries financed their investments through loans from the USA.
While it was often very easy to raise loans in the USA during the boom period, lenders in the USA panicked at the first sign of trouble. Countries that depend crucially on US loans, now faced an acute crisis.
(iv) Collapse of Banking System With the fall in prices and the prospect of a depression i.e. banks in the USA slashed domestic lending and some stopped bank loans, thousands of banks went bankrupt and were forced to close down. Factories closed, leading to unemployment, which further aggravated the crises. The US banking system collapsed.
(v) Large-scale Unemployment Farm could not sell their harvests, which led to businesses collapse. As a result, large scale unemployment occurred.

MNCs means Multinational Corporation are large companies that operate in more than one country.

South America

EI Dorado.