The period between 1870 and 1913 has often been referred to as Mach-1, in reference to the speed of economic growth that it presented. This was a period of peace especially when its compared to what came soon after. Under the Hegemonic leadership of Great Britain, Trade and the movement of people with and within Europe grew at rates that were then unprecedented. All these gains crumbled just before the start of the Great War of 1914. For the next thirty years attempts were made to bring the world economy to its glory years without any success. At this point, nation states had retreated back to protectionism and a wave of national identity and anger of one state against another ...view middle of the document...
There is a lot of similarities in the four perspectives from country to country in most cases Industry supports free trade and Agriculture supports protection.
Brief Overview of the Classical world economic order
It can be argued that the decline of the hegemonic and economic dominance of Great Britain can be directly linked to the start of the First World War and the end of the period of the decades of prosperity. At the helm of the Classical world economic order Great Britain had managed to maintain a very prosperous system, with free trade and all the supporting infrastructure of free trade, at the root of the system. Economic success brought about peace and freedoms this was arguably one of the most peaceful eras in European history.
So what is it that was done so well during this period that did not happen after the First World War we may ask? During the decades immediately preceding the First World War the world economies were more integrated and there was free movement of people and goods across borders. The economy grew more in the 75 years before the Great War than the 750 years prior. Its estimated that over 50 Million Europeans migrated to the new world with no or limited impediments, and a further 50 Million Asians also migrated during the same time frame. This free population movement brought with it exchange of knowledge between countries and regions which in turn increased trade.
To facilitate free trade and smoother population movement all monitory exchanges, at least of the well to do economies of the then world, were all pegged against gold. This was known as the gold standard. This made it easier to trade and it also provided monitory confidence since there were very little changes in the monitory value. This allowed traders to take their money from Venice or Genoa and purchase British, French or German goods without having to worry about Tariffs, bureaucracy or fluctuating exchange rates. It is said that the British sterling pound remained stable during peace times for over 200 years this provided confidence and economic security to all world economies under the British hegemonic leadership.
How did Great Britain managed to accomplish this leadership feat? How did she mange to navigate her way through obstacles and get all the international and domestic stakeholders to buy in? As mentioned above Free trade was the main ingredient of the success of this period Under it’s hegemonic leadership Great Britain lead by example, by repealing of the Corn Laws in 1846, which imposed tariffs on grain Britain had shown its willingness to open up her markets to the world as a way to encourage other nations to do the same.
It must be noted that most nations Such as German France and the United States favored some kind of protectionism due to domestic economic and domestic political interests.
The international political Atmosphere: The Napoleonic wars were over and Europe was enjoying relative peace. Britain Provided...