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Interdependence: c. 1900 - Present

AP Concept: 6.3 New Conceptualizations of Global Economy and Culture
Key Concepts
  • States and communities became increasingly interdependent
Economic Interdependence
  • Industrialization and the increasingly global network of trade meant that one or several countries could influence the health of world markets
  • A global Depression developed in 1929 when America's stock market collapsed
    • Since Europe already depended on American loans and economic support to recover from WWI, this collapse destroyed Europe's economy, as well as financial capitals like Tokyo
    • The high rate of bank failures in the United States meant investors could not cover losses banks failed in Europe, too, and many individuals went bankrupt, leading to high global unemployment
    • The hardships of the Depression contributed to political instability and a rise in political extremism in many countries
    • Allowed fascist rulers to come to power in Europe, and communist countries criticized the failings of capitalism
  • New economic organizations formed in the 20th century, aiming to promote economic progress through cooperation
  • The Organization of Petroleum Exporting Countries (OPEC) formed in 1960 to raise the price of oil through cooperation
  • The World Trade Organization (WTO) formed in 1995 to promote unrestricted global trade
  • The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico aims to remove trade barriers between member countries
  • These organizations, again, could influence the health of world markets
  • When the United States supported Israel in the Arab-Israeli conflict in 1973, Arab members of OPEC issued an embargo against the US, halting all oil exports
  • The US experienced long lines for gasoline until OPEC lifted the ban in 1974
Political Interdependence
  • Political organizations formed at the close of global conflicts to prevent future conflicts between countries
  • The League of Nations was established in 1921 as a multinational organization aimed at preserving world peace
  • The League struggled to maintain peace, especially in the 1930s when member countries began to expand into foreign territory
  • Japan, for example, left the League after the League protested its invasion of Manchuria, and the League's policy of appeasement did not prevent Hitler from invading European countries
  • Nevertheless, the League managed to combat malaria and other diseases in Europe, stop labor abuses, control the distribution of opium products, and reduce the slave trade in Africa and Asia
  • The United Nations (UN) formed at the close of WWII to maintain peace and promote postwar recovery, led by the Allied victors of the war (United States, China, USSR, Britain, and France)
  • The UN established relief agencies and peacekeeping mechanisms, but the United States shouldered many of the costs of postwar recovery
  • The UN meets regularly to discuss world problems and settle disputes through diplomatic protest and pressure, economic sanctions, or collective military action by member states, with the aim of preventing global conflict
  • The UN also promotes human rights values across national boundaries, as with the 1948 Universal Declaration of Human Rights


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Economic Responses: c. 1900 - Present