Just before the World War 1 of 1914, there was a shift in the world from an agrarian to an industrial economy in America. There was a remarkable growth in industrialization and international trade as can be justified; from Britain’s exporting products both to primary producers and industrial states. It can be seen that the American economy was stable as many soldiers had been employed and paid handsomely. On the other hand, this was not the case in Italy was during the onset of the 20th century; there were lots of mass emigrations to America, Britain, Germany, and Belgium. These migrations resulted from unemployment that occurred as a result of the slow industrialization leading to industries failing to provide adequate jobs for the Italians. In this case, it can be argued that the low standards of living and rampant unemployment forced many Italians to migrate to America for a better life. Italy today is the world’s sixth wealthiest country as a result of its economic prosperity of 1960; which marked the change in Italian economic history. In this case, private and state-owned investments maximally utilized the foreign funds they received from the U.S.A under the Marshall Plan; as well as the European Economic Community in the attempt to restore the Italian economy. Based on this, Italian industries experienced more developments than before expanding their market for manufactured goods, especially when Italy joined the ‘progressive integration of Western European economies’ (Berghahn 57-98).
In the case of the United States, the period just before 1914; gold mined from South African mines was traded accelerating the American money growth; with the increase in the price of gold. Further, it can be argued that money per unit of output rose more in World War 1 as compared to World War II, as America was not much involved in the First World War as it did in World War II. Before 1914, Europe was leading in economic power and as a result, there was an international movement of capital through exports, imports, and labor in the world especially from Europe to other regions like Asia, America, and Africa (Strayer 20-115).
After World War II, the world’s economy experienced no major problems or breakthroughs. There was a steady economic growth leading America to acquire a superiority in economic strength. Many jobs were created in 1950, by big companies which brought about new technology. There were also issues of inflation that occurred at the end of World War II and at the beginning of the Korean War of 1950 which were caused by the sluggish economic recovery and increases in money supply through exports and imports. As governments were trying to improve their economies, they heavily taxed their citizens, especially from incomes. There was a military cutback in Korea leading to an economic lag by the end of 1953. In 1957, the American economy weakened sharply; unemployment rose and industrial production went down. There was an economic recovery in West Germany where production was doubled in the 1950s; whereas Italy was stable economically. During this time, Britain experienced an economic decline even after the war; while economic growth was experienced in France, the Soviet Union, and China (Strayer 20-115).
On the other hand, foreign politics were much more popular in Europe as were fueled by newspapers and progress in communication techniques; allowing many European nations to receive updated information of the world’s politics. Nationalism was blended with racism in most European countries; where the English people; the French, Germans, Russians, and the Italians, felt superior over each other. The European powers had risen to greater heights of maintaining a balance of power in the whole of Europe during the 19th century; which had yielded by 1900 in a composite network of political and military coalitions throughout Europe (Strayer 20-115).
Liberalism in 1914 led to the defeat of dictatorial regimes and as a result increasing the number of republics in Europe from three to thirteen. An example here is the case of liberals in Duma that was declared a republic by Czar Nicholas. The great depression of 1930 led to extensive conflict in the European political world, which resulted in ideologies such as fascism which disapproved of liberalism. In this case, the fascist and nationalist complaints led to World War II. The victory of the Second World War culminated in the cold war where the communists intensely conflicted with the liberals. During the 1950s, liberal democracies were spreading at a faster rate than was the case before, leading to a decrease in dictatorial regimes (Berghahn 57-98).
There were major trends in the world economy which included; inflation, the great depression, recession, and economic recovery. There was inflation at the end of the Second World War and during the time of the onset of the Korean War in 1950. America’s economy before 1914 was good but deteriorated when the U.S. entered into the battle. The great depression started in 1929 when the stock market was crashed in America, and ended in the early 1940s when America entered World War II. The depression was widespread marking the level to which the world’s economy could decline. After the First World War, there was an economic recession where the global economy declined. An example was the 1918-1919 economic recession in America where the global economy fell drastically. There was a depression of the economy in Europe brought about by the wars; hence Europe could not participate in the cold war as it was still struggling to build up what had been destroyed by the wars. Economic booms were experienced in most countries after the wars, especially America as it was not much destroyed. Japan experienced an economic boom since more concentration was on its economy, after the destruction made by the bombs (Strayer 20-115).
There was a change in locus of disagreement between the United States and USSR from equilibrium zones to the periphery. Any war occurring in developing countries was viewed as one between the two superpowers. An example here is the 1978 Afghanistan war. There was an increased multi-polarization of the world, both economically and politically allowing the possibility of the establishment of new alliances to take advantage of the social disintegrations (Strayer 20-115).
The changes brought about by the economic and political trends had an impact on the whole world. There was growth in a democracy where monarchy and colonialism declined in developed countries; while in the less developed countries authoritarian regimes increased. An example here is Cuba in the1950 and Iran under Shahin 1952. The two superpowers started to lobby for more followers in Asia and Africa where the U.S. feared that the whole world would be turned to communism by the USSR. The great depression in America caused a lot of unemployment, but still, a highly productive ability thrived within the American industries. The economic recession of 1918-1919 in America had an impact on the whole world, since America was the leading economic power at the time (Berghahn 57-98).
Berghahn, V. “Modern Germany”: Society, Economy and Politics in the Twentieth Century, second edition. Cambridge University Press: (1987): 57- 98
Strayer, Robert. “The Making of the Modern World”: Connected Histories, Divergent Paths: 1500 to the Present, second edition. New York: Bedford/St. Martin’s Press: (1995):20-115