Welcome back to Global Business Environment. This is module two. This'll be part three, in which we're asking the question, is globalization new? We've been looking at history for a while and we're going to look at it just a little bit more in this part. And we've been talking about how World War I was related to the rise of political leaders like Hitler and others across the world and led to conditions which made World War II almost a foregone conclusion. During the 1930s we saw as we said in part two, a great inflation in Germany. We saw a Great Depression across the world. And I mentioned last time there was isolationism or there was a lot of pulling back from being involved with each other on the part of political leaders and countries across the world. You can see that on this graph which shows both world trade and world production. We're interested in the green line, world trade, which shows you that in the late 1920s, before the Great Depression started. There was an increase, so there was positive momentum in terms of world trade. But by the late 20s, and the onset of the Great Depression there was a sharp dip. And this is that pull back for that isolationism. So, the reason that's important is when political leaders, such as Hitler, start to rise to power, many leaders in other parts of the world, not being as involved, not having as much of an interest in terms of trade were not as active in responding to things like invasions of other countries. And so by the late 1930s, the world had increased some of its trade but, but this is the period when things are heating up leading to World War II. In fact, not to give you too much history, but September 1st, 1939 is the date that Germany invaded Poland, which is considered by many to be the official start of World War II. And many parts of the world, many countries including the United States of America were unwilling to become involved in the war. The citizens of the country thought it was a, a distant war and had nothing to do with them and so, that war started and continued without involvement from many parts of the world. World War II was also a horrific period in terms of human destruction and human tragedy. By the mid 1940s when it was over much of Asia and Europe were destroyed. I like to say that they were in shambles to try to describe how bad the destruction was. And so it was a a horrible period to be a part of. But this is really the beginning of today's world of globalization. By the mid 1940s the world had experienced in a short period of time two major world wars and a great depression. And the greatest minds and the, the leaders of the world decided to come together and try to figure out what could be done to prevent war. And, many factors were looked at, economic causes of wars, political differences nationalism a, all types of factors that could've led to or perhaps prevented the conflicts involved in World War I and World War II. So in the aftermath of World War II, many of the world leaders came together in a place called Bretton Woods in the United States. It's just a name of a community. And had, a set of meetings which created many of the institutions that we know today. For example, out of these meetings came The International Monetary Fund, the IMF, The World Bank the United Nations became very strong. And leaders of the world basically said let's, let's create a way to have peace. Let's ca, work together economically. That's the point behind the IMF and the World Bank. Let's try to prevent the rise of of leaders who are willing to invade countries because of poor economic conditions. By preventing those poor economic conditions in the first place, by having policies in place that could be implemented by the entities or institutions like the IMF and the World Bank. This set of meetings also created a set of policies which are called GATT, G-A-T-T, which stands for General Agreement on Tariffs and Trade. And the idea behind these agreements which, which started back in the 1940s, was that if the world had more involvement with each other, if there was more trade across borders we would be mutually invested in peace. Because we would all benefit from rising prosperity as we interacted with one another. So the GATT is part of the, the important agreements or one of the important agreements that came out of the, the horrible tragedy of World War II. And, once again as we can see, there was great destruction and Asia and Europe for the most part, were in shambles. There was not much in terms of productive capacity or ability at that time. What we saw at the end of World War II and after these agreements were signed in an attempt to create a better system for the world to, to have peace. The United States and the Soviet Union remained at that time, in the mid or late 1940s as the major powers in the world, and their economies were the only ones standing that had any major productive capacity to speak of at that time. And so that's another part of this connection between World War I, the Great Depression, and World War II. This will end part three of module two. In which we're asking, is globalization new? And what we'll do next time is, we will look at the post World War II period and what happened as the world entered a new war, or type of war, the Cold War and the major superpowers that remained and how they interacted. Thank you.
