Regents Prep: Global History: Economic Systems
Revolutions

French Revolution
The French Revolution has political, social, and economic causes.  Politically, France suffered under an Absolute Monarchy, and most people were denied basic rights, or a say in their government. Socially, France was divided among 3 Estates, or classes.  The 3rd Estate, which constituted 98% of the population, had the fewest rights, the least amount of land, and the heaviest tax burden. Economically, France faced a severe financial crisis due to overspending.  Also, bad harvests resulted in food shortages.  The Third Estate faced the greatest burden because of these problems.

In 1789, King Louis XVI called the Estates General, France's weak legislative body to deal with the crisis.  The meeting begins the French Revolution as the Third Estate attempts to better their situation by taking control of government. Throughout the many stages of the French Revolution, the various governments never solved their economic problems.  This resulted in life becoming more harsh for the Third Estate and the continuance of the Revolution.

Latin America Revolutions
Revolutions: The main causes of Latin American revolutions are Enlightenment ideas, the examples of the American andClick To Download French Revolutions, and the basic inequalities present in their societies.  By the beginning of the 19th century, many wealthy landowners in Latin America were tired of European control.  These landowners enlisted the support of the lower classes in an attempt to gain their independence.  The Latin American revolutions are initially successful, gaining independence from Europe, but they fail to address any of the social class problems that exist.  This resulted in almost 200 years of continued problems, with revolutions, military coups, and foreign control dominating Latin American politics.

Cash Crop Economies:  During the colonial period, Latin American countries exported raw materials to their parent countries and imported finished goods.  These cash crops, such as sugar, cotton, and coffee continued to fuel Latin AmericanClick To Download economies after independence.  The dependence on cash crops made the Latin American economies very unstable.  After independence, foreign investment allowed the Latin American countries to develop mining, limited industry, and increased agriculture.  However, this form of economic imperialism allowed foreign investors to control not only the economy of many of these nations, but also their government.  Despite a growth in the Latin American economies during this time, the majority of people still lived in poverty.

Industrial Revolution
In 1750, most people in Europe lived on small farms and produced most of their needs by hand. A century later, many people lived in cities and most of their needs were produced by complex machines using steam power. The Industrial Revolution began in Great Britain and spread to Belgium, France, Germany, the United States and Japan. It was a fundamental change in the way goods were produced, and altered the way people lived.

Capitalism and the Market Economy: Capitalism and Market Economies are based on trade and capital, which is money for investment. Higher demand for a product means higher prices and higher profits for traders and merchants.  Lower demand means lower prices and lower profits. The British, with their vast overseas empire, had the capital necessary to invest in the building of railroads, factories, and mines. 

The Factory System and Mass Production:  The use of the Factory System allowed for mass production of  textiles and Click To Downloadother goods.  This shifted people from production at home with the Put Out System, to production in large factories in cities.  Mass production also allowed for lower prices on the good produced.

Working Conditions: Factory workers worked very long hours, for little pay, under harsh conditions.  Workers included children as young as 8, both male and female.  Many people were injured or killed due to unsafe working conditions.

Big Business: As the Industrial Revolution grew, so did business.  To meet the needs of this growth, business owners sold shares of their companies to stockholders who would share the profits and losses.  The influx of capital allowed business to grow into corporations that had dealing in many different areas.

 
Economic Philosophy:
 

From Mercantilism to Laissez-Faire

Mercantilism

Laissez-Faire

  • Country's wealth based on exporting more than it imports
  • Strict government control
  • Uses colonies as source of raw materials and exclusive markets for selling goods

Urbanization and the Changing Society: People moved to towns and cities to be closer to the factories.  Conditions were very poor during the early part of the Industrial Revolution, as factory workers lived in over crowded buildings, with noClick To Download sewage or sanitation services.  This resulted in widespread disease. New roles were defined for Middle Class men and women.  MC men went to work in business, while MC women worked from home and cared for the family.  The higher standard of living for the middle class meant that their children received some form of formal education. Working Class families faced many hardships due to poor living and working conditions, and most WC children never received an education.

Russian Revolution
Causes: Throughout the 19th century, Russian Czars attempted to westernize and industrialize, without also importing French Revolution liberal ideas.  They were mostly unsuccessful, and many Russian liberals called for reform.  In response,Click To Download the Czars became harsh and oppressive.  A rigid social class system added to this problem by denying the majority peasant class most basic rights.  The peasant class, composed of both farmers and urban workers, were mostly poor, overworked, and hungry, which would lead them to support liberal ideas that promised better living conditions.

A small revolution in 1905 forced Czar Nicholas II to enact some minor reforms, however, these did not last.  Finally, as Russia suffered through many defeats during World War I, and the country faced shortages in food, fuel and housing, the people began to revolt.  The czar was forced from power in March of 1917, and a provisional government was setup.  In November, after this government had been slow in reacting to the country's problems, a group known as the Bolsheviks, took control of the country.  This is known as the Bolshevik or Communist Revolution, as the Bolsheviks, led by Vladimir Lenin, later renamed themselves Communists.

Effects:  Russia became the first country to base its government on the writings of Karl Marx. By 1922, Lenin and the Communists had retaken most of the old Russian Empire and renamed it the Soviet Union.  Lenin instituted the New Economic Policy where government controlled most banks and industry, but did allow some private ownership.  This allowed the Soviet economy to slowly recover from the effects of the Czars and World War I. 

Under Josef Stalin, the Soviet Union switched to a Command Economy, which gives control of all property and means of production to the government.  Furthermore, a command economy focuses on building up industry, and produces few consumer products.  This often resulted in shortages throughout the Soviet Union.  While Stalin's Five Year Plans did much for rebuilding the Soviet economy after World War II, his policy of farm collectivization, where peasants lived collectively on government owned farms, often resulted in widespread famine as many peasants resisted this policy.

Chinese Communist Revolution
Causes: After China freed itself from foreign control, the Kuomintang, or Nationalist Party led by Jiang Jieshi, began a war against the Communist Party led by Mao Zedong.  Jiang Jieshi believed that Mao Zedong was a threat to his power.  China under the Nationalists did little to improve the lives of the people, as had been promised.  Mao, along with 100,000 supporters, were forced to retreat from the Kuomintang in 1934 in what became known as the Long March.  Despite losing 80% of his forces, Mao continued to fight against the government, and eventually overthrew it in 1949.  Mao then setup a government based upon Communist principles.

Effects: Under Mao and the Communists, China was transformed from an agricultural society, into an industrial society.  Mao eliminated the old landlord and business classes, and provided free health care for peasants.  Similar to the Soviet Union, Mao also instituted a command economy for China.  In 1958, Mao initiated a program called the Great Leap Forward which was to increase farm and industrial output though the creation of communes.  Communes are similar to collectives in that groups of people live and work together on government owned farms and in government owned industry.  Like collectivization in the Soviet Union, these policies often resulted in famine and shortages of consumer goods.

In the 1970s, a new ruler Deng Xiaoping instituted an economic reform program called the Four Modernizations.  This policy called for limited privatization of agriculture and industry, encouraged foreign investment and foreign trade, and resulted in a boost for the Chinese economy.  Unlike the Great Leap Forward, the Four Modernizations was an economic success.

 

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