⇒ Till 1900 world was a single world economy.
⇒ Only a few industrialised countries provided manufactured goods and the remaining countries provided the raw material necessary for the same.
⇒ Each country exploited the respective colonies or their respective neighbouring countries. For example USA exploited Latin America and Britain exploited Uganda.
⇒ Always the colonial products were taken at a very cheap rate and the finished goods from the industrialised countries were sold at the highest rate possible.
USA as a dominant industrial power
⇒ By 1900, USA was producing twice the resources than any other European country.
⇒ Even the incomes of USA where twice high.
⇒ Main causes for the American success: 1) the First World War and after 2) the Second World War
⇒ The First World War and after:
1. First World War help USA to become an economic since 1900 power
2. First World War resulted into boosting of American economy.
3. Success was met by two ways : 1) by selling goods to China and Latin America. 2) with the help of interest on the war loans
4. China and Latin America depended on Europe for the material goods. But in the war times the supply of these goods was stopped. Due to this they started purchasing from America and continue to do so even after the war.
5. Britain and her allies took huge war loans from USA. Europe became dependent on USA so much so that the economic depression of 1929 in USA caused a huge loss in Europe as well.
⇒ The Second World War
1. Second World War helped USA to become an industrial and military power along with economic which it was already due to First World War.
2. All the wartime needs of Europe were met by USA has no direct war was fought on the American soil.
3. After the war, American industries quickly turned to consumer production and the trade between Europe and USA continued.
4. USA even helped Europe to recover from the war losses by giving financial help which was called Marshall aid.
5. There were two motives behind this: a) they wanted Europe to prosper so that they can easily buy American goods. B) they wanted Europe not to switch to communist regime.