Title: Observe And Explain VariablesPhenomenonNa Hegemon And Hegemonic Theory Dependent Variable F Independ
1Observe And Explain Variables/Phenomenon/NaHegem
on And Hegemonic TheoryDependent Variable F
(Independent Variable/S)At International
LevelState LevelSocietal/Corporate
LevelIndividual Level
2The Nature of Pre-industrial EconomyAgriculture
Self-sufficientSubsistent LevelLow Level of
/SpecializationLow Level of Product
DifferentiationLittle Need/Rationale for Trade
3World Trade ShareAs Indication of British
Hegemony And Decline
4Causes for the Rise of British HegemonyA First
Cut
- Industrial Revolution
- A Clustering of Innovations in Cotton Textile
Production - Application of Water and Steam Power to
Manufacturing - Gathering of Previously Dispersed Manufacturing
Operations under One Factory - Key to Remember Mechanical vs Human or Animal
Power
5Explain the Onset of Industrial
RevolutionDifferent HypothesesPure
Luck?Individual (Market) LevelWhat About
Religion?State (Institutional)
LevelInternational Level - ConstantContractsSt
ock Market in Britain 1698Stock Market in Paris
1724
6Consequences/Implications of Industrial Revolution
- 1.Demand Increase for Raw Materials
Implications for Ricardian Growth Strategies -
- 2.Schumpeterian Gale of Creative Destruction
Blow Away Nascent Industry in Other Regions - 3. First Mover Advantage Britains Rise to
Global Hegemony - Core-periphery Relationship
- Rationale for Complementary Trade
- Steamboats/Rail Made Trade More Easily
7British Hegemony An ObservationBedrock
Manufacturing (Textile) and RailroadComplementary
Trade Between Core and PeripheryBritish Market
(8) Labor Force in Rural Areas
8British Industrial Dominance (Per Capita Level of
Industrialization Britain in 1900100)
9Big Men and Big Ideas
- Adam Smith Division of Labor
- Joseph Schumpeter Creative Destruction
- David Ricardo Comparative Advantage
- Nicholas Kaldor Verdoorn Effect
- Alexander Gerscherkron Collective Action Problem
10Decline of British Hegemony
- Complementary Economies
- Ok. But Long Term Limits Where Is the Market?
- Competitive Economies
- Alternative Core-Periphery Centers
- We Are Looking at International Variables
- Bad News!
11More Bad News at State and Firm Levels
- Anti-trust in USA Sherman Act
- Professionalization of Management
- Electrification Of Production
- Taylorization Of Production Processes
- Economy Of Scales Stable Market Demand
- Results
- US Productivity Per Unit Labor Grew by 2 from
1890 to 1907 Compared to British Growth of 0.1
by 1909 US Productivity Was Over 2.5 Times as
High as British Productivity in 15 Major
Industries. From 1870 to 191, US GDP Grew 4.9
Per Year Comparable Figures for Germany Was 3.9,
and for Britain 2.6. - US Steel Production Doubled Every 10 Years in the
1880s and 1890s, and Doubled Every Five Years in
the 1900s as Electtric Machinery and Taylorsim
Swept the Industry
12Last Straw of British HegemonyInternational
Finance
- The System
- Gold Standard Key Attraction and Problem
Money Supply Cannot Be Increased Through Policy
Decision - An Efficient Functioning International Money
Provides a Source of Liquidity That Grows in Line
with the Growth Transaction and the Economy in
General Otherwise, Inflation or Deflation - From 1870 to 1914, That Gold Standard Worked
Owed More to Growing Supply of Credit Instruments
Than to Increased Supply of Metallic Money
13WWI Killed Gold Standard
- Differential Rates of Inflations Destroyed Prewar
Exchange Parities Reflecting Underlying
Productivity - 1913100
- Price Levels in 1920
- USA 221
- Japan 259
- Britain 307
- France 488
- Germany 1000
- Overvalue or Undervalue?
- Causes and Implications
- Capital Control and Trade Regulation
14British Decline as a Reflection of Fundamental
Changes in International Political Economy
- International Investment From Portfolio to FDI
From - Agriculture to Manufacturing
- Overseas US Firms in Britain Created a Novel
Problem For Britain to Adopt, Adapt or Create
New Institutional Innovations to Compete with
Best Practice -
- Complementary Trade to Competitive Trade Fords
or Mercedes - Overroad Trucking Filled Holes of Rail and
Steamships More Fierce Competition.