SISU-240 Lecture Notes - Lecture 2: Money Supply, Comparative Advantage, Political Evolution
17 Jan 2016
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Document Summary
Gold standard was reaffirmed because it was a symbol of stability. Required governments to ajust their economic policies to fit the global economic pressures. If a country ran a trade deficit the gold standard corrected it. Many traditional societies stagnated or fell apart as economic integration put pressure on those whose goods couldn"t compete. Indigenous population had to extract rubber as taxes. Consequences: destruction of social structure, no benefits of natural resources for the natives, nothing useful for the global economy, no development. Some metropoles had no long-term interest in the region. Extracted resources, forced labor, no good left behind. Opposed the assimilation of natives into the economic, social and political systems. Good economic policy is the main key to economic development. Growth requires investment, contact with costumers, skill, foreign capital and tech, property rights. Misrule kept farmers and miners from taking their goods to world markets.
