Key changes in the world between 1850 and 1914

¶ … 1750 to 1914 was that decisive moment in human history called the Modern Revolution (San Diego State University 2006). It consisted of global and unprecedented exchanges of ideas, goods and people. The changes were described as autocatalytic or a condition wherein one kind of change evolved on its own and produced other kinds of changes. The spheres of change in the Modern Revolution were communication and transport, population growth, fossil fuel revolution, industrialization, democracy and colonial empires. The invention of printing, the railroad, the telegraph and the steamship radically changed the framework of human interactions in the world. World population also more than doubled with increased and long-distance migrations and global exchange of plant and animal species. The world's source of energy changed from biomass to fossil fuels. Industrialization greatly modified the distribution of wealth as well as poverty in the world and produced perilous attitudes towards nature and society. The democratic revolution inspired movements for the abolition of slavery, the formation of representative government, constitutions, universal suffrage, rights of workers, and national self-determination. These movements started in Europe and the Americas and later spread across Afroeurasia. And with the use of new and powerful technologies of communication, transportation and warfare, colonial empires asserted domination over weaker peoples. Europe led and was the largest among these empires. Later, the United States and Japan became the other important players in the global scene in their quest for empire. Historians referred to that period of expansion as the second industrial revolution. In that period, global growth rose threefold, world trade increased four times, and international trade eight times. These were the consequences of the combination of the modern communications revolution, the mechanization of agriculture and the emergence of the steel and chemical industries as the new focus of production and profit. The Modern Revolution enhanced the extremes of wealth and poverty in the world, made wider by the expansion of European colonial empires. Between 1870 and 1914, most of Africa came under European colonial rule. Britain had expanded in Burma, France in Indochina, and the Netherlands in Indonesia. Although most local populations resisted European takeover, Europeans' superior weapons and equipment easily overcame organized resistance. In 1800, they controlled 35% of the world's land area. By 1914, their dominion grew to approximately 84% (San Diego University).

Great Britain was the engine of world economic growth during the Industrial Revolution period between 1820 and 1890 (Adelman 1995). It started the Industrial Revolution. Competition with Great Britain and the spread of British technology spurred industrialization in the responding countries in Europe and overseas. The Industrial Revolution primarily linked European and overseas economies in complementing development patterns, which set the trend of economic growth in developed countries overseas. It also substantially increased economic differentiation among nations. The ratio of the per capita income of the most advanced country to the least advanced country rose from 2.8:1 at the start of the Industrial Revolution to 10.4:1 or four times in 1913. This imbalance put a set of developed industrial countries in one hand and a set of raw-material, agricultural-staple-based developing countries on the other (Alderman).

The autocatalytic change in the global scene prevailed as ecological, economic, political and technological developments affected one another and fused into a single global process, the Modern Revolution (San Diego University 2006). It was global in that it derived from the cumulative interactions of peoples in earlier historical eras. All the peoples of the world, especially the elite who possessed power and wealth, tried to comprehend and influence these massive and strange phenomena. These phenomena, which comprised the Modern Revolution, were doctrines of liberalism formulated mostly in Europe and came out of it (San Diego University).

The governments of responding or follower countries unified themselves by creating the institutional framework for capitalism by eliminating institutional barriers to the growth of capital markets (Alderman 1995). Supportive political institutions were set in place with appropriate economic policy. Appropriate exchange rates and tariff levels were critical in the sphere of trade policy. Country tariff policies during this time and within this global liberal trade regime were systematically altered with industrialization levels. Tariff production of new industries was needed to initiate industrialization Other major players were large latecomers at the Organization for Economic Cooperation and Development or OECD to the Industrial Revolution were Germany, Italy, Japan and Russia. They all adopted an import substitution industrialization strategy (Alderman).

Growth since the Industrial Revolution has been capital and energy-intensive (Alderman 1995). Technological changes in industry have displaced labor and technology has been embedded in capital. Technology, therefore, has required high rates and levels of capital. Among the major players in global economy, the rate and structure of investment were closely linked with inter-country differences in their rates of economic growth. When domestic investment rates in these leading or major global players went down, their technological leadership also went down. The more dynamic countries took the lead from them. As a result, Great Britain handed world economic leadership to the United States from 1890 (Alderman).