UNIT-3
ECONOMIC DEVELOPMENT OF UK, USA, RUSSIA AND JAPAN
What is the American Revolution (1765-1783)?
In the northern America, British had established 13 colonies on the western coast of the Atlantic Ocean. During the 18th century, the British and the French were arch rivals in terms of expanding their colonial reach. USA was one of the contentions between the two. But after the seven year war, France’s influence in America declined significantly.
Causes of the American Revolution:
Mercantile Capitalism-British mercantilism developed an environment that influenced Americans’ resentment against then. Mercantile capitalism was a British policy according to which, the government should regulate the economy at home and colonies to increase their own national power so as to ensure a positive balance in trade. The policy was imposed through acts like trade barriers on the colonies. This prevented Americans develop their own indigenous industry base. Also, certain raw materials’ export could only be made to Britain which deprived a fair price to the Americans.
Proclamation of 1763- many American settlers fought the 7 year war so as to expand their reach in the western part of the America. This western part was occupied by the American Indians (natives) who started rebellion. To control this rebellion, the British parliament signed a truce with the natives which banned the westward expansion of the American settlers. Therefore, the American settlers felt cheated due to this truce.
Enlightenment thinkers-It was a time when many social thinkers began to ask for the reason of everything. They demanded freedom, happiness, progress, liberty and the idea of democratic form of government.
Recovery of 7 year war expenditure: Britain had huge monetary loss due to the 7 year war. Britain decided to levy the loss by taxing American people.
No representation in British parliament: The British parliament enacted the “stamp act, 1765”. As per the act, taxes were to be imposed on all business transactions in the American colony. Americans’ response was fierce. They denied Britain’s right to levy any taxes as there was no American representation in the British parliament. Henceforth, leaders of all 13 colonies gathered in the Massachusetts assembly and raised the slogan of “No taxation without representation”. This growing threat forced the British to repeal the stamp act.
The Americans also opposed tax on consumer goods imported by colonies by reducing British imports by half. This further forced British to repeal taxes on other goods, except on tea. The “Boston Tea Party, 1773” was a protest against this very tax. A ship had arrived the Boston port with tea loaded in it. Americans did not let it unload for few days after which the governor of Boston ordered unloading of the tea from the ship. To stop this, some American settlers dressed like Red Indians and offloaded all the tea into the sea as a protest.
Intolerable act of 1774 and Philadelphia congress: The Philadelphia Congress 1774, whichhad representatives from 12 colonies was held in response to the Intolerable Acts/Coercive Acts passed by the British Parliament earlier in 1774 to punish the colony ofMassachusetts for the incident of Boston Tea Party by taking away its right of self-government. None the less, Americans appealed to Britain’s King to remove restrictions on indigenous industry, reduced tariffs and not tax the American colonies without their consent. Britain assumedthese demands as a Mutiny and, as a result, attacked the colonies in 1775. This led the American representatives to proclaim the Declaration of Independence in 1776.
The Declaration of Independence document helped develop the philosophy “self-evident truths” and it also listed Americans’ problems to justify the breaking of ties between the colonies and England.
American War for Independence (1775):
The growing anger amongst the Americans and the resultant reaction from the British finally took the shape of a war. In 1777, Britain tried to invade America through Canada but failed completely. Arch rivals like France and Spain also helped Americans by calling for full-fledged war in Europe, Asia and parts of America itself. Finally in 1783, Britain, led by Commander Cornwallis, surrendered before George Washington and this entire was followed by the signing of the Second Treaty of Paris 1783 which ended the American War of Independence that peace between USA and Britain. The treaty also gave recognition to all US colonies of being sovereign and independent states.
Effects of the American Revolution:
Like the earlier distinction between “origins” and “causes,” the Revolution also had short- and long-term consequences. Just after the declaration of independence, state constitutions were created in 1776 and 1777. The Revolution also developed powerful political, social, and economic forces which transformed the post-Revolution set-up of the US society. The Revolution also had significant short-term effects on the lives of women in the new United States of America. In the long-term, the Revolution would also have significant effects on the lives of slaves and free blacks as well as the institution of slavery itself. Native Americans were also affected to a large extent due to the opening up of western settlement and the creation of governments which were, in fact, hostile to their territorial claims. One most significant change was that due to the Revolution, the mercantilist economy ceased to exist. These factors grew new opportunities in trade and manufacturing for the Americans.The constitution, drafted and adopted by the new states, waswritten constitution, which stood contrary to the traditional unwritten British Constitution. Due to past experiences, these states created weak governors and strong legislatures with regular elections. They also expanded the size of the electorate. They created a unicameral legislature and an Executive Council. Unlike the traditions, all free men were given the right to vote, including those who did not own property. Hence, 1776 was the year of independence, but it was also the beginning of the period of constitution-making and state building.
Despite these important changes, the American Revolution had its limits. Women served as great patriots for the cause of independence during the war. Yet, the Revolution did not result gave any civic equality to women. Instead, the new republican societies required more aware and aspirational citizens and it became mothers’ responsibility to raise and educate future citizens. This opened opportunity for women regarding education, but they still remained largely outside the new American polity.
Slaves and free blacks were one of another important part of the Revolution. The British were the first to recruit black regiments, which promised freedom to any slaves who escapes their masters and join the British expansionism and cause. At first, Washington, resisted allowing free blacks and former slaves to join the Continental Army, but he later relented.
In 1783, thousands of slaves fled with the British army. They hoped that the British government would uphold the promise of freedom and help them establish new homes elsewhere in the Empire. The Treaty of Paris, which ended the war, demanded that British troops leave runaway slaves behind, but the British military commanders upheld earlier promises and evacuated thousands of freedmen, transporting them to Canada, the Caribbean, or Great Britain. But black loyalists continued to face social and economic marginalization, including restrictions on land ownership.
The fight for liberty led some Americans to manumit their slaves, and most of the new northern states soon passed gradual emancipation laws. Manumission also occurred in the Upper South, but in the Lower South, some masters revoked their offers of freedom for service, and other freedmen were forced back into bondage. The Revolution’s rhetoric of equality created a “revolutionary generation” of slaves and free blacks that would eventually encourage the antislavery movement. Slave revolts began to incorporate claims for freedom based on revolutionary ideals. In the long-term, the Revolution failed to reconcile slavery with these new egalitarian republican societies, a tension that eventually boiled over in the 1830s and 1840s and effectively tore the nation in two in the 1850s and 1860s.
Native Americans, too, participated in and were affected by the Revolution. They had hoped for a British victory which would prevent the settlers from moving west beyond the Appalachian Mountains. Unfortunately, the Americans’ victory led to Native American tribes’ displacement and they were pushed further west. Ultimately, American independence marked the beginning of the end of the Native American independence.
The Civil War in the United States began in 1861, after decades of rising tensions between northern and southern states over issues like slavery, states’ rights and westward expansion. Due to the election of Abraham Lincoln in 1860, seven southern states decidedto quit and formed the Confederate States of America. Later, four more states joined them.
The war between, the states (civil war) ended in Confederate surrender in 1865. The conflict was the resulted in huge monetary and life losses.In the mid-19th century, while the United States was experiencing an era of tremendous growth, a fundamental economic difference existed between the country’s northern and southern regions.
The northern states were far developed in terms of manufacturing industrial base and agriculture was limited to only small scale farming. But the southern states were different. Their economy was basically based on the system of large scale farming which needed huge influx of labours. This requirement of labours was fulfilled by the black people working in the form of slaves.
As the northern states were not as dependent on black slaves like the southern states, there was a growing sentiment against the system of slavery across the northern states. Furthermore, this sentiment had started expanding to further western parts. This led to increasing fear amongst the southern states as the already growing sentiments against slavery could deprive them from the labours (seeded by the slavery system) needed for their farm fields which would eventually destroy their economy.
In 1854, the U.S. Congress passed the Kansas Nebraska Act, which essentially opened all new territories to slavery. Pro and anti-slavery forces struggled violently. The opposition to the act in the North led to the formation of the Republican Party. On the other hand, more and more southerners were convinced that their northern neighbours were destroying the very institution (slavery) that sustained them for so long. Abraham Lincoln’s election in November 1860 was the final straw, and within three months seven southern stateshad seceded from the United States.
The Civil War (1861-1865)
After Lincoln took office in 1861, the Confederate forces threatened the federal Fort-Sumter. It was after Lincoln ordered a fleet to resupply Sumter that the Confederates fired the first shots of the Civil War and the fort surrendered after less than two days of bombardment.
The Civil War seemsto be a one-sided conflict, with the 23 states of the Union having an enormous advantage in population, manufacturing (including arms production) and railroad construction. But the Confederates had a strong military tradition. They also had some of the best soldiers and commanders in the nation. They also had a cause to preserve their traditions and institutions, one of which was slavery.
In the First Battle of Bull run, the Confederate soldiers forced a greater number of Union forces (or Federals) to retreat towards Washington, D.C. Any hopes of a near victory of the union was not visible that lead Lincoln to call for 500,000 more recruits. Eventually, both sides’ initial call for troops had to be increased after it became clear that the war would not be a short conflict.
George McClellan became new supreme commander of the Union Army after the first months of the war. In the spring of 1862, McClellan with his captured Yorktown.
However, the combined southern forces drove back McClellan’s army in the Seven Days’ Battles, and a cautious McClellan called for yet more reinforcements.
But Lincoln refused McClellan’s demands, and withdrew the Army of the Potomac to Washington. As a result, McClellan was replaced as Union general-in-chief by Henry W. Halleck (McClellan remained in command of the Army of the Potomac).
At the same time, South’s Lee and Jackson split and moved troops northwards. Jackson then moved his troops near Manassas where union troops led by John Pope struck his forces in the Second Battle of Bull Run (Second Manassas).
But again, the next day, Lee attacked with massive assault, and pushed Pope’s men back towards Washington. After the victory at Manassas, Lee began the first Confederate invasion of the North.
However, McClellan with his army attacked Lee in Maryland, which led the Confederates back to a defensive position near Sharpsburg.
Again, the Army of the Potomac (led by McClellan) hit Lee’s forces, this time at Antietam. The Union victory at Antietam proved to be decisive, as it halted the Confederate advance in Maryland and forced Lee to retreat into Virginia.
Lincoln had used his victory at Antietam to issue an Emancipation Proclamation, which freed all enslaved people in the rebellious states in 1863. But he did notfree the enslaved people in the Border Stateswhich were loyal to the Union. But, the Emancipation Proclamation took away bulk of labour forces of the Confederacy. Lincoln also managed to put international public opinion strongly on the Union side. As a result, thousands of Black Civil War soldiers joined the Union Army.
In March 1864, Lincoln made Grant the supreme command of the Union armies and made William Tecumseh Sherman the controller in the West. Grant headed to Washington, and led the Army of the Potomac towards Lee’s troops in northern Virginia. Grant incurred heavy Union casualties in the Battle of the Wilderness and at Spotsylvania; he pursued a strategy of attrition, putting Petersburg under siege for the next nine months.
Sherman took Atlanta by September, after which he and some the Union troops began the famous “March to the Sea,” devastating Georgia on the way to capturing Savannah.
The fall and occupation of Atlanta in the autumn of 1864 was a turning point in the war which broke the Confederacy’s strategic, economic, and psychological capacity for further warfare. Sherman’s scorched earth policies throughout the Atlanta Campaign traumatized the South. Union troops burned crops, killed livestock, and took supplies, leaving a desolate path of destruction in their wake. That, combined with years of a successful naval blockade levelled against the South, took a heavy psychological and economic toll that was not easily reversed, even after the war ended.
In early April 1865, Lee’s army was fighting Grant’s forces in a series of battles in the Appomattox Campaign that destroyed lee’s defence. Being too spread out to effectively defend against Grant’s attacks along a 30-mile front, the troops became exhausted and increasingly vulnerable. On the morning of April 9, Lee requested a meeting with Grant, and during that meeting he surrendered his troops, leading to a series of surrenders. On May 10, 1865, Union cavalrymen captured Confederate President Jefferson Davis, and the last land battle of the Civil War took place two days later near Brownsville, Texas. A federal victory was secured and the Union was made whole again.
The Great Depression was a major economic crisis that began in the United States in 1929, and went to have a worldwide impact until 1939. It began on October 24, 1929, a day that is referred to as“Black Thursday”, when a monumental crash occurred at the New York Stock Exchange as stock prices fell by 25 per cent. This crash was influenced by many minor events, but factors like miscalculated monetary policies, fall in aggregate demands played significant role into amplifying its impact.
Causes of the great depression:
Speculation on borrowed money which led to the collapse of American Share Market.
Rapid selling created further fall.Failure of banks to provide credit to agriculture and industries.Economic inactivity due to First World War.
Impacts of the great depression: The destruction caused in the US spread to other countries mainly due to the gold standard, which linked most of the world’s currencies by fixed exchange rates.In almost every country of the world, massive job losses were reported. Negative economic trends like deflation, and a drastic contraction in output was observed.In the United States, prices and real output fell significantly. Industrial production fell by heavy 47 per cent, while the wholesale price index fell by 33 percent, and the real GDP by whopping 30 per cent.Unemployment in the US increased from 3.2 per cent to 24.9 per cent between 1929 and 1933. In the UK, it rose from 7.2 per cent to 15.4 per cent between 1929 and 1932.The Depression caused extreme human suffering, and political turmoil took place around the world and the resultant economic stagnation is believed to bethe reason behind rise of fascism and the consequent WW2.It had a profound impact on institutions and policymaking globally, and led to the gold standard being abandoned.
The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. It responded to needs for relief, reform, and recovery from the Great Depression. It dramatically expanded the federal government’s role in the economy in response to the Great Depression.
The term New Deal derives from Franklin Roosevelt’s 1932 speech accepting the Democratic Party’s nomination for president. The New Deal created many federal government programs that were meant to offer economic relief to the suffering, regulate private industry, and grow the economy. The New Deal is often summed up by the “Three Rs “relief (for the unemployed), recovery (of the economy through federal spending and job creation), and reform (of capitalism).
The new deal also helped the American political culture evolve and introducedprinciple that the government is responsible for the welfare of its citizens.
The first new deal:
The First New Deal began with the name “The First Hundred Days.” The Congress passed legislation aimed at addressing the banking crisis, unemployment, and weak industrial performance, etc. by enacting new laws and agencies. Among these, some of the most important were:
The Federal Emergency Relief Act (FERA): It gave federal grants to states that funded salaries for government workers as well as local soup kitchens and other direct-aid to the poor programs.
The Agricultural Adjustment Act (AAA): To boost agricultural prices by offering government subsidies to farmers to reduce output.
The Civilian Conservation Corps (CCC): To employ young, single men at federally funded jobs on government lands.
The National Recovery Act (NRA), which sought to boost businesses’ profits and workers’ wages by setting up prices and wages. It also guaranteed workers the right to organize into unions.
The Federal Deposit Insurance Corporation (FDIC), which guaranteed individuals that money they deposited in a bank would be repaid to them by the federal government in the event that their bank went out of business.
In 1934, Roosevelt supported the passage of the Securities and Exchange Commission (SEC), which brought important federal government regulation to the stock market.
The Second New Deal (1935-1938)
The second phase of the New Deal focused on increasing worker protections and building long-lasting financial security for Americans. Four of the most notable pieces of legislation included:
The Works Progress Administration (WPA), which employed millions of Americans in public works projects, from constructing bridges and roads to painting murals and writing plays.
The Social Security Act: It required workers and employers to contribute through a payroll tax to the Social Security trust fund. That fund made monthly payment to retirees over the age of 65, and to the long-term disabled.
The Fair Labour Standards Act, which mandated a 40-hour work week set an hourly minimum wage, and restricted child labour.
The New Deal was only partially successful. Despite the New Deal's some of impractical ideas, the United States only fully recovered from the Great Depression due to massive military spending brought on by the Second World War. But some of the elements in the New Deal remain with us today, including federal regulation of wages, hours, child labour, and collective bargaining rights, as well as the social security system.
