Significant Factors that Influenced the Establishment of Trade and Economic Growth

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Essay 1: Significant Factors that Influenced the Establishment of Trade and Economic Growth in the 1800s, 1930s, 1950s, and 1980s to present. Introduction             Trade is among the most significant sectors of humanity involving the production and exchange of goods and services. What started as barter trade in ancient times is now an established system of international transactions managed through state-of-the-art technologies and systems that have turned the world into a global village. While the main aim of trade is to generate products and capital responsible for human development, different eras across history have had different reasons for establishing trade and economic growth. The 1800s             The 1800s saw significant developments and a shift from agricultural-based to industrial-based economies due to the emerging Industrial Revolution. With the Industrial Revolution came mass production or products that could be distributed into different markets. In this era, the critical factor for establishing trade and economic growth was increased reliable sea transport across oceans. Transportation allowed goods to move from one region to another where they were sold and other goods transported from these destinations back to the original country. In this era, mercantilism was the leading theory that drove trade in which the main aim was to augment state power at the expense of other national powers. Thus, the key underlying factor of trade and economic trade in this era was to make states more powerful at the expense of others. The 1930s             The early 1900s came with WWI (and later II), whose outcomes were too depressing to the economy. Following the economic lessons from the war, the factors that had influenced trade in the 1800s were no longer viable. Political leaders realized that global peace was more important. In this aspect, trade (and international trade) was a unifying factor in which no country could be isolated and in which isolation of a country could lock it out of association with others. Thus, with a common goal of symbiotically benefitting from trade, global peace became the primary factor driving trade in the 1930s. This is the period in which the League of Nations was formed to unite the global community by reducing barriers to trade such as customs duties and tariffs. Mercantile theories that promoted nationalism were discarded for more open liberal theories that scholars like Adam Smith proposed. The 1950s             The failure of the League of Nations to stop WWII implied that changes were needed for a different trade motivation. The era saw the emergence of international trade agreements. Countries divided along regional political lines looked to find allies and strengthen their global reputation, especially during the Cold War. In this period, the main factor that influenced trade was the idea of global civilization ...