The Global Economy Since the Seventeenth Century

Subject: Economics
Pages: 2
Words: 366
Reading time:
2 min

The development of the global economy since the seventeenth century has passed several stages. It includes the growth of international trade, the emergence of the capitalist system, and the split of the economy into socialism and capitalism. The relation of the global economy to political and social struggles is manifested in changes such as the fall of the colonialism system after World War II. Apart from it, some nations and regions fare better than others, which is explained by the appearance of the Protestant Reformation and the ideas of the Enlightenment on their territory.

The seventeenth century is characterized by the development of goods’ production, the growing value of which is exchanged on an ongoing basis between countries. Consequently, trade moves to the world market, gradually replacing the power of the feudal system’s vassals with nascent capitalists and merchants. In addition, the rise of Protestantism and the ideas of the Enlightenment in Northern Europe has secured an advantageous position for countries such as England and France. Protestant ethics encouraged efficiency, frugality, and perseverance, which contributed to capitalism’s development.

The Enlightenment contributed to significant social and scientific advances in the seventeenth and eighteenth centuries. The discovery of calculus, electricity, oxygen, and many other findings led to their application in industry and the formation of large-scale machine production at the end of the nineteenth century. The Industrial Revolution, the foundation of which was the period of the Enlightenment, served, in addition, to the rise of the United States economy.

After World War II and the political and social struggles that occurred at that time, the process of changes in the world economic system began, which ended with abolishing the colonial system. In addition, the International Bank for Reconstruction and Development, the International Monetary Fund, and the International Trade Organization were created, each of which was designed to keep the global economy running smoothly. Moreover, the world was divided into industrial capitalist countries, communist nations, and former colonies, which began to be called developing, and the Cold War arose. Finally, after the Cold War’s completion, the primary outcome was the formation of growing global economic interdependence.