[SAJC] Reasons for the Growth of the Global Economy 2024_final

9174/01 H2 History Paper 1 Theme II: The Development of the Global Economy 1 The development of the Global Economy Topic 1: Reasons for the Growth of the Global Economy SAJC History Unit, 2024 Learning Outcomes (from the Examination Syllabus) 4 Essential Questions for this topic: 4 Guiding Questions for this topic: 4 1. Defining the term, “global economy” 5 2. The Post-WWII Economic Situation in 1945 7 2.1 Post- WWII Alignments 8 2.2 Quest for Peace and Sustained Wealth 8 3. Analysing the growth of the “global economy”: The “Golden Age of Capitalism” (1945 to ~1971) 9 3.1 Evidence Supporting 1945 to ~1971 as the “Golden Age of Capitalism” 9 3.1.1 Rates of Growth 9 3.1.2 The Rise of Industrialism 10 3.1.3 The Growth of the Automobile Industry 10 3.1.4 The Consumer Boom 11 3.1.5 Technological Innovation 11

9174/01 H2 History Paper 1 Theme II: The Development of the Global Economy 2 3.1.6 Positive Economic Indicators in the Third World 14 3.2 Evidence Undermining 1945 to ~1971 as the “Golden Age of Capitalism” 15 3.2.1 The Capitalist Bloc > The Socialist Bloc and the Third World 15 3.2.2 Onset of Economic Decline and Issues from the 1960s Onwards 17 The Late 1960s: Decline in Productivity and the Onset of Inflationary Pressures 18 The Late 1960s: U.S. Deficits and The Impending End of the Bretton Woods System 19 4. Reasons for growth of the global economy 20 4.1 The Role of the USA in the Growth of the Global Economy 20 4.1.1 The Cold War Providing the Impetus for U.S. Foreign Aid 21 4.1.2 The USA Providing Its Allies with Access to the Open Market 21 4.1.3 U.S. Leadership of the Bretton Woods System and Establishment of Key Financial Institutions 22 4.2 The Role of Mixed Economies in the Growth of the Global Economy 25 4.3 The Role of Oil in the Growth of the Global Economy 27 5. Post-War Economic Liberalisation: Economic Miracle in Western Europe 29 5.1 Role of the USA in Western Europe’s Economic Miracle 29 5.2 Role of Western Europe in the Region’s Economic Miracle 28 6. Post-War Economic Liberalisation: Economic Miracle in Japan 33 6.1 Role of the USA in Japan’s Economic Miracle 33 6.2 Role of Japan in Its Economic Miracle 34 6.2.1 The “Income Doubling” Plan 35

9174/01 H2 History Paper 1 Theme II: The Development of the Global Economy 3 6.2.2 Direct Role of the Government in Economic Growth and Development 35 6.2.3 Socio-Economic Reasons 37 6.2.4 Concluding Thoughts 38 7. Post-War Economic Liberalisation: The Rise of Multinational Corporations (MNCs) / Transnational Corporations (TNCs) 38 7.1 Reasons for the rise of MNCs Error! Bookmark not defined. 7.1.1 Lower costs of production abroad 40 7.1.2 Larger Markets 38 7.2 Benefits of MNCs / TNCs 38 7.2.1 Technological Modernisation 38 7.2.2 A New International Division of Labour 39 7.2.2 Foreign Direct Investments (FDI) 39 Case Study – FDI-driven industrial development in developing countries and the Growth of