AP World History - Thematic Review

Economics Creation, Expansion, and Interaction of Economic Systems

Major transitions in trade: From bartering to regional trade to long-distance trade ​

Economic systems: Agricultural, pastoral, industrial ​

Labor systems: Forced labor, farmers, capitalism, socialism ​

Source: McCannon, John. Barron's AP World History. Barron's, 2018. ​ ​ ​

Economics Period 1 (8000 BCE - 600 BCE )

● Hunting and foraging Before 8000 BCE ● Barter and limited trade

● Hunting and foraging 8000 - 3500 BCE ● Domestication of animals gives rise to nomadic pastoralism (Neolithic Era) ● Domestication of plants gives rise to early agriculture ● Early regional trade networks

● Agriculture spreads ● Trade networks become regional and transregional slavery emerges (household 3500 - 1200 BCE servitude and hard labor) ● Mesopotamian-Indus trade (Bronze Age) ● Mesopotamian-Egyptian trade ● Nubian-Egyptian trade ● Phoenician trade in the Mediterranean

1200 - 600 BCE ● Agriculture spreads further ● Regional and transregional trade networks become more extensive (Iron Age) ● Coins first used as currency

● Hunting and foraging emerged as the means of livelihood for most Stone Age peoples. Hunter-forager societies lived at subsistence levels and possessed few goods. Labor specialization was limited, while trade, where it existed, was based on simple barter. ● During the Neolithic Revolution, domestication of animals gave birth to pastoralism, an economic ​ ​ ​ practice based on herding, which made it easier to maintain a constant supply of food. Most pastoral herders were nomadic. ● Also during the Neolithic Revolution, domestication of plants gave birth to agriculture. Even more ​ ​ so than pastoralism, agriculture ensured not just a constant supply of food, but food surpluses that ​ caused profound social changes (including the accumulation of wealth and the concept of private ​ property). ● Trade became more common, first on a local basis, then at the regional and transregional levels. ​ Cities served as important points of economic exchange. ● Trade networks extended overland, but tended to follow rivers and coastlines where they could, because large-scale transport was easier by water than by land. Important transregional trade ​ networks include Mesopotamian-Egyptian trade, Egyptian-Nubian trade, trade between Mesopotamia ​ and the Indus River valley, and Phoenician trade throughout the Mediterranean.

Economics Period 2 (600 BCE - 600 CE)

● Mediterranean trade network European and the ● Standard currencies, weights, and measures Mediterranean ● Slavery and corvée ● Intensive agriculture (wheat)

● Mediterranean trade network ● Silk Road ● Trans-Saharan caravan routes Middle East ● Standard currencies, weights, and measures ● Slavery and corvée ● Intensive agriculture (wheat)

● Trans-Saharan caravan routes ● Indian Ocean trade network Africa ● (Mediterranean trade network) ● Slavery

● Silk Road East (and Central) ● Indian Ocean trade network ● Standard currencies, weights, and measures Asia ● Slavery and corvée ● Intensive agriculture

South (and ● Indian Ocean trade network ● Standard currencies, weights, and measures Southeast) Asia and ● Slavery and corvée Oceania ● Intensive agriculture (rice)

● Mit’a labor obligation Americas ● Intensive agriculture (corn, potatoes)

● Transregional trade was practiced on a larger scale and over greater distances than before. This ​ change stemmed from innovations in overland and maritime transport. ● Major trade networks of the era included the Mediterranean Sea, the Indian Ocean basin, ​ trans-Saharan caravan routes, and Eurasia's Silk Roads. ● Mobilizing resources and ensuring a steady supply of food became chief state priorities. ● Infrastructure - which included markets, roads, harbors, and other facilities built and maintained by states - supported local, regional, and transregional trade. ● Cities became increasingly important as centers of trade. ● Tax collection and the gathering of rents became more efficient and intrusive. ​ ● Currency came to be used in a growing number of regions, greatly facilitating trade.

Economics Period 3 (600 - 1450 CE)

Region 600 - 900 CE 900 - 1200 CE 1200 - 1450 CE

● Open-water navigation ● Feudal manorialism ● Feudal manorialism improves (impact of Viking (serfdom) (serfdom declining in longships) ● Revival of European and Western Europe) ● Feudal manorialism Mediterranean trade ● European and (serfdom) ● Guilds (artisans and Mediterranean trade Europe craftsmen) intensifies ● Italian peninsula and ● Guilds (artisans and Mediterranean trade craftsmen) ● Crusades stimulate ● Italian peninsula and appetite for goods from the Mediterranean trade east ● Hanseatic League

● Silk Roads ● Silk Roads partly disrupted ● Silk Road revives

Middle East ● Mediterranean trade ● Trans-Saharan caravans (Arab-Berber expertise with camels) ● (connection with Indian Ocean basin)

● Salt, gold, ivory ● Salt, gold, ivory ● Rise of Swahili city-states ● Swahili city-states

Africa ● Pastoralism continues in many areas ● Mediterranean trade ● Trans-Saharan caravans (Arab-Berber expertise with camels) ● Indian Ocean trade

● Nomadic pastoralism ● Silk Roads partly disrupted ● Silk Road revives continues in steppe zone ● Grand Canal in China ● Nomadic pastoralism continues in steppe zone East (and ● China’s regional trade ● Silk Roads partly disrupted Central) Asia network ● Connection with Indian Ocean basin ● Silk Roads ● Silk, iron, steel, and porcelain industries expand in China ● Connection with Indian ● Feudal landholding in Japan (serfdom) Ocean Basin

South (and ● Indian Ocean trade ● Cotton industry in India Southeast) Asia ● Spices

● Pastoralism continues in many areas Americas ● Mit’a labor system in Andes ● Trade networks in Mesoamerica, the Andes, and the Mississippi Valley

● General rise in agricultural production (due to technological innovation) ● Increased craft production ● New trading cities and merchant classes GLOBAL AND ● Luxury goods fuel expansion of trade networks INTERREGIONAL ● Coins and paper money ● Credit and banking become more common ● Slavery and serfdom become increasingly common ● Little Ice Age begins Broad Trends Period 3 (600 - 1450 CE)

● Economic production increased globally. ● Transregional trade was practiced on a massive scale. Existing routes, such as the Silk Roads, the ​ Mediterranean sea lanes, the trans-Saharan caravan trails, and the Indian Ocean basin, witnessed huge upswings in commercial activity. New routes expanded trade in Mesoamerica and the Andes ​ as well. ● New cities emerged as key centers for interregional trade. They include Venice, Novgorod, ​ ​ Baghdad, the Swahili city-states, Timbuktu, Hangzhou, Melaka (Malacca), Calicut, Cahokia, and Tenochtitlan. ● Trading organizations like northern Europe's Hanseatic League came into existence. ​ ​ ● Demand for luxury goods assumed a more prominent role in interregional commerce. Silk, cotton, ​ ​ porcelain, and spices from the Middle East and South and East Asia became especially important. ● In Afro-Eurasia trade was made easier and safer by the emergence of new forms of banking and ​ monetization (credit, checking, banking houses), as well as state practices like the minting of coins ​ ​ and the printing of paper money. Customs agencies and standard weights and measures helped to ​ regulate and regularize trade. ● Interregional trade was facilitated by the warmer weather of the medieval climatic optimum and then affected by the global cooling that led to the Little Ice Age. ● Technological innovation played a role in expanding trade, especially in the fields of ship design ​ (including the Viking longboat, the Indian Ocean dhow, and the Chinese junk) and navigation ​ ​ ​ ​ ​ ​ ​ (especially the astrolabe and the magnetic compass). Also important was the effective adaptation of ​ ​ ​ ​ environmental knowledge (such as Saharan camel herders' knowledge of the desert or Central Asian pastoralists' use of horses for steppe travel). ● Agricultural production increased worldwide, thanks partly to climatic changes, partly to ​ technological innovations (including the horse collar, better terracing, rice cultivation in Asia, and warn warn and chinampa techniques in the Americas).

Economics Period 4 (1450 - 1750 CE)

● Joint-stock companies (including Dutch East India Company, Hudson's Bay Company, British East India Company) Europe ● Investment disasters ("bubbles"): tulipmania, Mississippi Bubble, South Sea Bubble ● Mercantilism ● Cottage industry and proto-industrialization

● Decline of Silk Road ● Omani-European rivalry in Indian Ocean and East Africa Middle East ● Ottoman-Persian competition over Indian Ocean trade ● Carpets

● Arrival of European traders ● Omani-European rivalry in Indian Ocean and East Africa Africa ● Arab slave trade continues ● Atlantic slave trade begins and intensifies

East (and Central) ● Decline of Silk Road ● Appearance of European traders Asia ● Porcelain and tea

South (and ● Appearance of European traders ● Omani-European rivalry in Indian Ocean Southeast) Asia and ● Ottoman-Persian competition over Indian Ocean trade Oceania ● Cotton and spices

● European piracy and privateering in Caribbean ● Rise of plantation and cash-crop agriculture Americas ● Increased reliance on slavery and coerced labor ● Sugar, cotton, tobacco, coffee, silver

● Global circulation of trade goods (finished products and raw materials) ● Piracy, privateering, and state competition over trade routes ● Triangular trade in the Atlantic GLOBAL AND ● Influx of New World silver into world economy INTERREGIONAL ● Increased agricultural production (plantation/agriculture) ● Increased manufacturing and the emergence of proto-industrial production ● increased resource extraction (mining, fishing, hunting)

Broad Trends Period 4 (1450 - 1750 CE)

● The incorporation of the Americas into existing networks of exchange led to the emergence of a truly global economic system, complete with the worldwide circulation of raw materials and finished ​ ​ products. ​ ● The emergence of a "triangular" Atlantic trade system, combined with the Europeans' ability to ​ ​ circumnavigate the globe, disrupted and altered traditional trade routes, particularly land routes such as the Silk Road. ● Competition over trade routes, especially maritime ones, affected state relations in several parts of ​ the world, including the Atlantic Ocean (and the Caribbean Sea) and the Indian Ocean. ● Agriculture remained dominant as a mode of economic production and as the form of labor practiced by the vast majority of people worldwide. Even so, trade and manufacturing ​ became steadily more important during these years. ● The rise in global productivity and wealth rested on a foundation of coerced labor, which took many ​ ​ forms. The Atlantic and Arab slave trades were extensive. Serfdom was common in Europe (especially Russia) and other parts of the world. Plantation and cash crop agriculture in the Americas was largely based on unfree labor. ● Mercantilism became the dominant economic principle of states that formed maritime or trading-post ​ empires. Joint-stock companies and monopolies with royal charters financed and carried out much ​ ​ ​ ​ of this era's exploration and colonization. These include the Muscovy Company, the Dutch East India Company, the Hudson's Bay Company, the Company of New France, and the British East India Company. ● During the 1500s and 1600s, Spanish and Portuguese extraction of precious metals - especially silver ​ from the Americas - affected economies around the world. This huge and sudden influx of coinage into so many economies created a harmful glut of precious metals, leading to severe inflation in places as ​ ​ diverse as China and Europe. ● In several civilizations, primarily Europe, proto-industrial modes of production began to appear, ​ ​ especially during the 1700s. By the late 1700s, the concept of capitalism was emerging as well. Both ​ ​ of these trends would have a profound impact on economic life in the 1800s. ● Interregional trade was affected by the global cooling that led to the Little Ice Age.

Economics Period 5 (1750 - 1900 CE)

● From proto-industrialization to Industrial Revolution (ca. 1780s-1840s; steam engine, coal, iron, textiles) ● Second Industrial Revolution (late 1800s; steel, electronics, petroleum) ● Free-market vs. state-sponsored industrialization ● Steamships, railroads, telegraph Europe ● Free-market capitalism (classical economists = Adam Smith, John Stuart Mill) and state capitalism ● Trade-unionist and socialist reactions to capitalism ● Financial instruments (central banks, stock exchanges, corporations, gold standard) ● The Panic of 1873 and the Long Depression (1870s-1890s) ● Rise of the middle and industrial working classes

● State-sponsored and limited industrialization (Muhammad Ali in Egypt, Tanzimat reforms in Ottoman Turkey) Middle East ● Construction of Suez Canal (transnational company = Suez Canal Company) ● Resources (cotton, petroleum)

● Economic imperialism by Western powers ● Continued reliance on African slaves by Western economies Africa ● Construction of railroads by Western powers ● Resources (gold, diamonds, rubber, ivory)

● Economic imperialism by Western powers in China (Opium Wars, foreign concessions and treaty ports) East (and ● Transnational company = Hong Kong and Shanghai Banking Company Central) Asia ● State-sponsored and limited industrialization in China (self-strengthening movement) ● State-sponsored and full industrialization in Japan (Meiji Restoration of 1868, zaibatsu)

● Economic imperialism by Western powers South (and ● Construction of railroads, telegraphs, and infrastructure by Western powers Southeast) Asia ● British industrialization of Indian cotton trade and Oceania ● Transnational company = British East India Company ● Resources (cotton, coffee, metals, rubber, petroleum)

● Industrial Revolution (ca. 1780s-1840s) and Second Industrial Revolution (late 1800s) in the United States ● Free-market capitalism in the United States ● Financial instruments (central banks, stock exchanges, corporations, gold standard) Americas ● Rise of middle and industrial working classes ● State-sponsored industrialization and limited industrialization in Latin America (late 1800s) ● Economic imperialism in Latin America (transnational company = United Fruit Company) ● Resources (metals, petroleum, guano, fruit, coffee, sugar)

● Widespread proto-industrialization ● International impact of industrialization (importation by colonial powers, state-sponsored imperialism) GLOBAL AND ● Economic imperialism by Western powers (raw materials, consumer markets, INTERREGIONAL transnational corporations, "banana republics") ● Population growth and urbanization ● Oceanic whaling and sealing in search of oil Broad Trends Period 5 (1750 - 1900 CE)

● Economic life was transformed by industrialization, which displaced agriculture as the most influential sector of the economy. New patterns of global trade emerged as well. ​ ● Industrialization began in England and spread to parts of Europe during the late 1700s and early ​ 1800s-the era of the Industrial Revolution. During the late 1800s, a period often referred to as the Second Industrial Revolution, industrial practices matured and spread further, expanding to include ​ steel, electricity, chemical industries, and petroleum. Gradually and to varying extents, industrialization spread to other parts of the world. ● The non-Western world adopted industrialization in different ways. Sometimes, European imperial powers introduced it to their colonies. In other cases, non-Western rulers imposed industrialization from above, or at least attempted to do so. ● Capitalism became the dominant mode of economic organization in the industrial-era West. ​ Over time, its influence became global. ● Reactions to the stresses of early industrialization, and to the more exploitative aspects of early capitalism, included trade-union activism, utopian socialism, Marxism, and anarchy. ​ ​ ​ ​ ​ ​ ​ ​ ● Commerce and banking - the foundations of a money-based economy, as opposed to a land-based one - grew in importance. Banks, stock markets, and other modem financial instruments became more solidly established. ● See "Social Structures" for the relationship between economic growth during this era and reliance on coerced and semi-coerced forms of labor.

Economics Period 6 (1900 CE - present)

● Impact of Great Depression (low exports, mass unemployment) ● Economic intervention: Soviet nationalization (five-year plans), state capitalism (syndicalism) in fascist nations, democracies' relief-and welfare programs (Keynesian theory) ​ ● Marshall Plan vs. Soviet economic zone in Eastern Europe ● Economic union in Western Europe (European Coal and Steel, Europe European Economic Community, European Union) ● 1980s free-market reform and economic liberalization (Margaret Thatcher and theories of Milton Friedman; Mikhail Gorbachev and perestroika) ● G-7/G-8 ● The EU and the euro ("eurozone")

● State intervention: Nasser's nationalization of the Suez Canal Middle East ● OPEC + petroleum-centered economies ● North-south split ● Bretton Woods ● African Free Trade Zone system (World Africa ● North-south split Bank, IMF, GATT) ● Economic intervention: state capitalism (zaibatsu) in imperial Japan ● 1970s economic ● Impact of Great Depression (low exports, mass unemployment) crisis (gold ● Asia's economic "tigers" standard, oil ● G-7 /G-8 (Japan) embargo, East (and ● Economic intervention: Mao's Great Leap Forward stagflation) Central) Asia ● 1980s free-market reform and economic liberalization (Deng ● Globalization in Xiaoping's limited capitalism in China) 1990s and ● Asia-Pacific Economic Cooperation group 2000s ● Some nations afflicted by north-south split ● 2007 economic crisis South (and ● Asia's economic "tigers" Southeast) Asia ● North-south split and Oceania

● U.S. origins of Great Depression (Smoot-Hawley Tariff Act) ● Economic intervention: New Deal (Keynesian theory), Cardenas's nationalization of Mexico's oil industry ● Impact of Great Depression on Latin America (low exports, mass unemployment) ● G-7/G-8 Americas ● 1980s free-market reform and economic liberalization (Ronald Reagan, Augusto Pinochet, and theories of Milton Friedman) ● NAFTA + Mercosur

● Partial or widespread industrialization of non developed and developing world ● Dominance of post industrial and service economies in developed GLOBAL AND ● World observance of Bretton Woods system by majority of non-communist INTERREGIONAL world ● Growing importance of multinational corporations ● Rise of regional economic associations and free-trade zones ● Transition from GATT to WTO

Broad Trends Period 6 (1900 CE - present)

● During the first half of the 1900s, the West (Europe, Canada, and the United States) fully, industrialized. Certain other parts of the world achieved significant degrees of modernization and industrialization (such as Japan, parts of Latin America, and China). ● During the 1930s, the Great Depression, emanating from the United States, negatively affected the economies of ​ ​ most of Europe and Latin America, as well as Asia and Africa, ● Fascist and authoritarian regimes typically relied on state-directed forms of capitalism to regulate their ​ economies, with varying degrees of heavy-handedness. ● A number of countries experimented with communist economies (the Soviet Union, Eastern Europe, China, ​ ​ North Korea, Cuba, Vietnam, and others). ● After World War II, the primary form of political and economic organization in the West (Canada, the United States, and Western Europe) was the democratic state with a capitalist system, although ​ capitalism was modified to varying degrees by social welfare systems. During the Cold War, a wide split ​ separated these economic systems from those of the communist blocs led by the Soviet Union and China. ● A different split emerged between the developed world, whose prosperity steadily grew (with a few minor regressions, as during the 1970s), and the non developed or developing (or Third) world, which lagged behind. Because so many non developed and developing nations are located near or south of the equator, this disparity is sometimes referred to as the north-south split. ​ ​ ● Also after World War II, an elaborate system of international economic organizations appeared, influential ​ ​ ​ mainly in the West and in the Third World, including the General Agreement on Trade and Tariffs (GATT), the ​ ​ World Bank, and the International Monetary Fund (IMF). ​ ​ ​ ● After the 1950s and 1960s, Western economies began to move from industrial production to post industrial ​ ​ production, based less on manufacturing and more on service, high-tech fields, and computers. This trend ​ continues. ● During the 1970s, a general economic crisis, characterized by oil shortages, recession, and unemployment, ​ ​ struck the capitalist West. A general rise in prosperity - associated with an emphasis on free-market economics, but not necessarily equitably distributed throughout society - took place in Western economies during the 1980s and 1990s. The same was true in China. The Soviet bloc experienced a severe economic downturn. ● The 1980s and 1990s were an era of greater economic globalization, as international, trade, economic regionalization (as typified by NAFTA and the European Union), and the clout of multinational corporations ​ ​ ​ ​ became increasingly important. This trend continues. ● A worldwide financial crisis, arguably the worst since the Great Depression, struck in 2007. Its effects still ​ ​ linger.