Trade Patterns in Latin America and Eastern Europe from 1750-present

Eastern Europe
Eastern Europe
Latin America
Latin America

The Global Economy From 1750-1823

Many substantial changes in the global economy and overall setting of the world occurred in the 1700's. This period was a time when the people of the world saw the total population of humans sky-rocket from 450 million to 1 and a half billion. Naturally, with this exponential explosion of population, technology and culture were rapidly shifting and revolutionizing. The industrial revolution had an impact so enormous on this time periods way of life that the effects are still being felt and integrated into the present culture worldwide. During this revolution new inventions and innovations became a daily practice, and people began industrializing (moving into the cities for work in factories, and away from farms.) The use of new machinery and the development of factories led to a huge increase in the production of goods. With the increase in goods and the natural temptation to profit from these goods, to go along with new transportation techniques and ideas came expanded boundaries. Better transportation and communication between cities became necessary to transport these products. Many railroads, roads, and waterways were built. By 1837, the invention of the telegraph furnished fast long-distance communication. This time period was characterized by innovation and encounters with new and foreign cultures. With Latin America's constant flow of silver and gold to the "New World" (Europe) and Europe's continued colonization and exploration the 1700's were a time of absolute change. The largest cause that ran parallel with almost all matters was the industrial revolution. As industrial nations began exporting manufactured products and importing raw materials for their factories, a worldwide system of markets took shape.

Latin American Trade

The backbone of Latin America basic economy in the 1700's was its part in the Atlantic Slave Trade and Triangular Trade, African slaves. Between 1700 and 1800 was the highest import of African slaves. The Triangular/Atlantic slave trade was where African slaves were exported to Latin America, where the raw materials and crops produced would be exported, through Spain, to the world, and finished luxury products would be exported from Europe to Latin America. Seven million African slaves arrived in Latin America. Brought by the Europeans in exchange for crops, these innocent and severely abused people were forced to work in agriculture for the most part. This cycle would last all the way into the mid 1800’s.

Latin America’s trade and economy grew very slowly. Early discoveries of gold and silver production created the first basis of its economy. Mining of raw materials, metals, and especially silver would remain a huge source of Latin America’s trade and exports. The mines were usually started by private investors and companies, but backed by governments, primarily Spain. Mexico and Peru were the sites of huge silver mines which would continue to flow for years and years to come. The influx and import of so much silver would lead to higher prices and inflation in first Spain and later all of Europe. Silver mining/exports would make up more than 2/3 of Latin America’s economy, trade, and income.

Plantations, agriculture, and the crops produced would make up the majority of the rest of Latin America’s trade/exports. Sugar and cacao were two of the biggest major crops exported, but sugar was the ultimate largest. Sugar plantations would be and were set up from the very beginning of foreign investing, exploration, and discovery in Latin America. Sugar would also continue to be the major trade crop and economic booster and boom for Latin American nations and would continue to be a huge part, even into present day. There were still other trade crops as well, though. New demands for Latin American products cam around the 1850’s during expansion of the European economy. Brazilian coffee, beef and hides from Argentina, and grains and minerals in Chile created a base for growth. Guano, bird droppings used as fertilizer, was huge in Peru. Peru earned more than 10 million pounds from guano exports alone between 1850 and 1880.

With growing profits and and wealth, to parallel with revolutions around the world, the Latin American colonies basked in ideas of independence. With other "role models to look up to and model after, many Latin American territories and colonies wanted to rebel against unfair and long time European rule.
This set up the Latin Americans for a severe depletion of economy because the countries in this region were not yet capable of catching up with the rest of the world in terms of industrialization. They came completely dependent on others trading them resources because they could not industrialize. But with an extreme demand for Latin American products around the world, they were able to survive.

Recently, the Latin American region has generally begun to adopt neo-liberal views on economics. They have begun to privatize exports, and sold state-controlled companies to private owners. In 1993, the NAFTA bill was passed to allow for free trade in North America, between Canada, US and Mexico. This was in an effort to help Mexico better conditions and pay, as well as create more workers for American and Canadian companies. But the companies have taken advantage of the bill and used the poor wages and conditions in Mexico to create a greater profit. Ultimately this bill ended up making everything worse for all parties.

After failures like these, current leaders in Latin America are questioning the policy of globalizaton. They want to reduce dependence of foreign companies and take initiative for themselves. This attempt, runs similar to a sense of imperialism and is the new trend for Latin American countries that seem to be leaning toward new "left" or extreme liberal ideas.

Monroe Doctrine

The U.S. though set up the Monroe Doctrine stating that no other countries could intrude in Latin American affairs or try any colonization. The U.S. was trying to cut off Latin America from the rest of the world and leaving Latin America’s resources, goods, and markets to them. Foreigners wanted the resources, though, and began investments, which helped Latin America immensely. Latin American economies were expanding due to exports. Each country seemed to have specialties. For example, bananas and coffee from Central America, tobacco and sugar from Cuba, and rubber and coffee from Brazil. These were beneficial in allowing them to import more luxury goods and helping government fundings. They were risky though in that they were vulnerable and dependent on the condition of the outside world. They also lead to violence and war, such as the War of the Pacific, in which Chile increased size by a third and Peru’s and Bolivia’s governments fell. Because of the rapidly expanding economy and trade, there was a large interest from foreign investors from the major powers, the British, French, German, and U.S. These investors helped the Latin American economy, but were lessening their independence. Much of Latin America began to industrialize. Foreign investments were encouraged and policies were changed to help promote investments as well. The U.S. especially began to take part and expand in investments. The U.S. backed Puerto Rico and Cuba in the Spanish-American War, but after helping them win independence, the U.S. took control themselves. The Monroe Doctrine was an attempt by the United States to "claim" resources and land. They tried to protect these resources and shelter them but ultimately did not have the military power at the time. Also not all the rules were followed and satisfied.

Eastern Europe


Russian Empire 1721-1917

In celebration of his conquests of the west, Peter The Great assumed the title of emperor as well as tsar, and Muscovite Russia officially became the Russian Empire late in 1721. Peter died in 1725, leaving an unsettled succession and an exhausted realm. His reign raised questions about Russia's backwardness, its relationship to the West, the appropriateness of reform from above, and other fundamental problems that have confronted many of Russia's subsequent rulers. Nevertheless, he had laid the foundations of a modern state in Russia.

Nearly forty years were to pass before a comparably ambitious ruler appeared on the Russian throne. Catherine II, the Great, was a German princess who married Peter III, the German heir to the Russian crown. She contributed to the resurgence of the Russian nobility that began after the death of Peter the Great. State service had been abolished, and Catherine delighted the nobles further by turning over most government functions in the provinces to them.

Catherine II was taking away rights and severely oppressing the formerly free serfs. On top of the oppressive social system that required lords' serfs to spend almost all of their time laboring on the lords' land, provoked a major peasant uprising in 1773, after Catherine legalized the selling of serfs separate from land.

Conquest of Eastern Europe

From the time when Catherine II began her reign, she had continuous and dominant power of Eastern Europe. Eastern Europe was dominated by the new Russian Empire, and then by 1796, nearly all of Eastern Europe was the Russian Empire.

Catherine successfully waged war against the Ottoman Empire and advanced Russia's southern boundary to the Black Sea. Then, by plotting with the rulers of Austria and Prussia, she incorporated territories of the Polish-Lithuanian Commonwealth during the Partitions of Poland, pushing the Russian frontier westward into Central Europe. By the time of her death in 1796, Catherine's expansionist policy had made Russia into a major European power.


Eastern Europe/Russian Empire Economy

Although the Russian Empire would play a leading political role in the next century, secured by its defeat of Napoleonic France, its retention of serfdom precluded economic progress of any significant degree. As West European economic growth accelerated during the Industrial Revolution, which had begun in the second half of the 18th century, Russia began to lag ever farther behind, creating new problems for the empire as a great power. Russia's great power status obscured the inefficiency of its government, the isolation of its people, and its economic backwardness.

The obvious backwardness was began with Catherine II, and her rules and regulations about serfdom. The solution was obvious, but because the Tsar's of Russia had not abolished these economically restricting laws, the Empire's trade was almost non-existent.
When Alexander II, came to the throne in 1855, desire for reform was widespread. A growing humanitarian movement, which in later years has been likened to that of the abolitionists in the United States before the American Civil War attacked serfdom. In 1859, there were more than 23 million serfs living under conditions frequently worse than those of the peasants of western Europe on 16th century manors. Alexander II made up his own mind to abolish serfdom from above rather than wait for it to be abolished from below through revolution.
The emancipations of serfdom in 1861 was the single most important event in 19th century Russian history. It was the beginning of the end for the landed aristocracy's monopoly of power. Emancipation brought a supply of free labor to the cities, industry was stimulated, and the middle class grew in number and influence

World War I

German control of the Baltic Sea and German-Ottoman control of the Black Sea severed Russia from most of its foreign supplies and potential markets. By the middle of 1915 the impact of the war was demoralizing. Food and fuel were in short supply, casualties were staggering, and inflation was mounting. Strikes increased among low-paid factory workers, and the peasants, who wanted land reforms, were restless.

The Duma (current form of national council) refused to disband, the strikers held mass meetings in defiance of the regime, and the army openly sided with the workers. A few days later a provintial government headed by Prince Lvov was named by the Duma and the following day the tsar abdicated. Meanwhile, the socialists in St. Petersburg had formed a Soviet (council) of workers and soldier's deputies to provide them with the power that they lacked in the Duma.

Eastern Bloc

During the Cold War, the term Eastern Bloc (or Soviet Bloc) was used to refer to the Soviet Union and countries it either controlled or that were its allies in Central and Eastern Europe (Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, Romania.) Technically, these countries were their own nations, and were not included in the Soviet Union. But these countries were communist, and if they gained independence when the Soviet's were in power, they were to follow the rule of the Soviet communist. A communist or social government controls the economics and trade with a tight leash. The Easter Europeans were allowed to trade, and they did mostly with there geographical neighbors of West Asia or the Middle East. The catch was that all trade was severely regulated by the government, which meant restrictions and limitations. This regulation caused the Eastern Bloc to be cut off the from the world in a fashion similar to an imperialistic government. The economy was weakened and technology was severely lagging. During a period of globalization, because communication, military, politics, travel and even economics were able to travel the globe, a communist economy could not be healthy. It prevented itself from interaction and had a sent of imperialism. This fact alone gave Eastern Europe a supreme disadvantage in economics and trade.

Post World War II

Following World War II, the Soviets remained in power of Eastern Europe, and maintained their communist views and styles. This economic stall remained until the late 1970's. The world market has been dominated by Capitalistic governments since the end of World War II. This style proved to be more efficient and even more popular than the socialist/communist government controlled economy. This became increasingly more obvious to the Eastern Bloc, especially the smaller independent countries in Easter Europe (controlled by the USSR.) This realization caused discontent among the populations and pressure to reform. The pressure being applied by the countries in Eastern Europe was put to rest by Soviet tanks. It then became obvious that the window of opportunity to reform to a democratic style could only be done directly through the communist USSR or Soviet Union. Remarkably, the Soviet Union surprised the world and began political and economical changes in the early 1980's. These changes proved to "help" but were not enough. They were small enough changes, like giving countries more leeway in the governments, that the effects were hardly even felt. In 1991, the Americans had had enough of this communism, and took matters into their own hands. In early 1990, the Soviet's gave up control of 15 republics in Eastern Europe. Later that year on December 8th, the powers of Russia and Ukraine deemed the Soviet Union dissolved. By the last day of the year, December 31st, 1991 all the republics of the Union had seceded and the Soviet Union was gone.

Present Day Eastern Europe

From 1917-1991 the majority of Eastern Europe's economy was in tatters. Struck down and restricted by the communism, most republics had a complete rebuilding process to go through, and were far behind those of the long-time democratic Western Europeans. Those republics that chose to have free-markets were receiving extensive aid from the United States and were struggling, yet on their way to economic improvement. Countries such as Ukraine and Russia that were struggling immensely to adapt to this new and foreign way of economics were getting aid from the EU as well. More recently 12 of the 15 former communist states created a trade bloc headed by the CIS (formation after USSR.) This trade bloc allows free-market trade among themselves and does support democritazation. Overall, since the fall of the Soviet Union all European trade and economy has been increased, even though some countries have taken different routes, It appears Eastern Europe is on the road to economical success after hundreds of years of economy being almost a non-factor in government and culture.

What does Eastern Europe Trade?

Today the main source of economical revenue seems to be gas, chemicals and natural minerals and resources, especially in Russia, Ukraine, Poland mostly the larger countries of the region. Russia is filled with organic minerals that can be exported worldwide, because many many places do not have these necesitites. Also a new and upcoming way of economy in Eastern Europe is tourists and travelers coming to see fashion and design productions. This is considered a main profit in Ukraine and several other countries in the region.

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