Chapter One: Modern Political Economic History and International Politics

Walk-through

Era

States and Nations

Conflict

Economics

1400s

The late Middle Ages is characterized in Europe by a highly feudal system with multiple layers of overlapping political and military jurisdiction, with the Catholic Church's spiritual jurisdiction atop all.

 

Very little trade across borders, except for high value things like precious stones, spices, and expensive fabrics.

 

1452 - The first Habsburg Holy Roman Emperor is elected.

1453 - The Ottoman Empire defeats the Byzantine Empire; the serious economic consequences for Western Europe prompt major developments in European economics.

 

 

Developments of the Hundred Years' War start to produce nationalism as leaders strengthen their influence at home to wield more power abroad during this long struggle.

1453 - England and France resolve the Hundred Years' War (1337-1453).

Developments in shipping technology make longer voyages and faster trade possible. These developments are prompted largely by Ottoman control of Constantinople.

 

1480 - Ivan III becomes tsar of a new state, the future Russia.

 

 

 

1492 - Modern Spain emerges as Ferdinand and Isabelle marry to unite Castile and Aragon. Increasingly centralized monarchies come to dominate most of Europe, with different degrees of independence from the nobility. Some elements of feudalism remain prominent.

 

 

1500s

Under the Tudors, constitutional monarchy slowly begins to develop in England. Parliament uses the increasing cost and frequency of war, and its role as the backers of loans the king took out to finance his wars, to increase its leverage over the king.

 

Mercantilist trade policy promotes the acquisition and accumulation of silver and gold in national treasuries.

 

1517 - Martin Luther's “95 Theses” spark the Protestant Reformation in northern Europe, leading to a bloody, century-long political and religious cataclysm.

1518 - Cortes conquers the Aztec empire, ushering in a new age of exploration and colonization in North and South America.

 

 

 

1529 - Ottoman Empire lays seige to Vienna; the Empire eventually capitulates and ends its European ambitions.

 

 

1555 - The Peace of Augsburg temporarily ends some of the religious warfare in Europe by extending tolerance to Lutherans. The Holy Roman Emperor, Charles V, abdicates and retires to a monastery in Spain, where he dies in 1558. At his abdication, the traditional Habsburg lands of modern-day Germany and Spain are split into distinct kingdoms.

 

Portugal flourishes as a result of its near-monopoly on trade with the East Indies. Some Italian city-states also thrive on this trade. Spain flourishes by importing vast amounts of gold and silver from its colonies in the New World.

 

 

1588 - The Spanish crown, weary of English-backed pirates attacking its treasure fleets from the New World, sends its Armada against the English fleet. The Spanish are defeated; the loss starts Spain's eventual decline from prominence.

 

1600s

1614 - The French Estates-General (proto-parliament) meets; it is not called again until 1789.

 

 

 

By the end of the religious wars, many Northern European (“German”) princes and rulers had split from the Catholic Church. The Church's hold on politics was vastly weakened over much of Europe, with the possible exception of the Papal Territories in Italy.

1618-1648 - The last great war of religion, the Thirty Years' War, ends with the Treaty of Westphalia. This sets the stage for the eventual emergence of the sovereign state.

 

 

1642-1649 - Elizabeth Tudor dies childless and wills the British crown to the Stuarts, who increasingly try to impose French-style absolutist government on the English. This ignoring of Parliament by Charles I leads to the English Civil War, 1642-1648, and Charles’s trial and beheading in 1649.

 

Britain begins exploring North America and acquiring colonies there and in the Carribean.

 

In France, Louis XVI (r. 1643-1715), known as the “Sun King,” perfects an absolutist form of government that relies on hereditary kingship, extensive centralized taxation, and no consultation with the Estates-General (the proto-parliament) or any other bodies.

 

 

 

England tries a republican form of government under the “Protector,” Oliver Cromwell, but it does not last beyond Cromwell's death in 1658.

 

 

 

1660 - The Glorious Revolution in Britain restores the monarchy at the behest of Parliament. Political stability and representative government prove good for the economy.

 

 

1700s

 

1701-1713 - The death of the Holy Roman Emperor leads to a proposal to unify France and Spain under one crown. Such a large and powerful country poses a threat to Britain and other European states, and results in the War of the Spanish Succession. The war is ended by the Treaty of Utrecht, in which Spain and France promise never to unite.

Britain begins to industrialize, starting first with small-scale textile production, then advancing rapidly to iron, steel, and railroads. Political stability and minimal war involvement allow domestic capital to accumulate quickly. The Industrial Revolution starts around 1750.

 

 

1754 - In the Seven Years' War, the French and British fight in Europe. The war continues in their colonies as the Franco-British War (or the American - Indian War).

 

In France, changes in the means of communication and increases in literacy help to fuel the Enlightenment, which encouraged the use of reason and reasoning in public life. New ideas emerge about the role of the citizen and about state-citizen relations.

1766 - In the Seven Weeks' War, upstart Prussia defeats powerful Austria. Prussia under Frederick III emerges as a power to be reckoned with.

 

 

 

1776 - The U.S. War of Independence erupts as colonists revolt over taxation practices and inegalitarian representation in British politics. France participates in the war against her old rival, Britain.

1776 - Adam Smith writes The Wealth of Nations, which argues against mercantilism and for what would eventually become liberal capitalism. Comparison between the highly regulated French economy and the (substantially but still) less-regulated British economy seems to support his conclusion.

 

1788 - Attempting to put some of the Enlightenment's ideas into practice, the Americans begin the world's first large-scale experiment in representative republican government. U.S. nationalism is slow to emerge from the state-oriented confederacy that precedes the republic.

 

 

 

1789 - The French revolution results in the collapse of the French monarchy and is perceived as a threat to monarchs everywhere. The threat materializes when the new republic raises large citizen armies through its levees en masse and wages war against neighboring monarchs. Napoleon Bonaparte emerges as a prominent general in these wars; the republic's government collapses and Napoleon becomes emperor.

 

1800s

1806 - Napoleon dissolves the Holy Roman Empire after conquering most of its constituent parts and seating his relatives on their thrones.

1803-1815 - In the Napoleonic wars, French mass armies conquer most of continental Europe. Napoleon's navies are defeated by the British at Trafalgar; his armies are finally beaten at Waterloo. The Congress of Vienna, composed of the victors of the Napoleonic wars, sends Napoleon into exile and forms the Concert of Europe to manage the balance of power.

 

 

 

 

In the mid-1800s Britain rises to unquestioned dominance of the seas. This is particularly true following the development of the steamship in the 1820s, in which Britain's more industrialized economy gave her an advantage. By the 1850s, she also leads the world in railroad development and other forms of industrial mechanization.

 

 

 

1840s - Karl Marx begins writing on political economy while living in England. His work produces a theory of history and politics based on his observation of the poor conditions of the working class, known as the proletariat. The first volume of his major work, Das Kapital, is published in 1867, and his last writings were published posthumously in 1880s by his longtime coauthor, Friedrich Engels.

 

1848 - Proletarian revolutions sweep France and several other states. The French install a radical pro-labor government, but it collapses in December when Napoleon III wins and reinstates the old social and political order. In 1851 he declares himself emperor of the Second Empire. The Empire collapses and is replaced with the Third Republic.

 

1846 - Britain begins a historic shift towards free trade by repealing its “Corn Laws," which protected the elite and landowners by placing a high tariff on imported grain. Bread prices for urban workers drop as a result, and the economy grows as inflationary pressures are reduced.

 

1860s - In southern Europe, the Risorgiamento, a nationalist resurgence, results in the unification of Venice, Sicily, and other city-states in the region (with the exception of Rome) into modern Italy.

 

1860 - The Cobden-Chevalier treaty between France and Britain commits the two to free trade and includes the now famous “most favored nation” clause. A series of other bilateral free trade treaties that also contain this clause result in the spread of free trade through most of continental Europe. The United States, notably, does not substantially reduce its barriers to trade, but the country shares in the economic growth that follows nonetheless.

 

1868 - Japanese leaders overthrow the Tokugawa Shogunate and “restore” the emperor, Meiji, to political prominence. Meiji's power was minimal, though, as a narrow group of advisors took control of political and economic development. Economic growth and industrialization were rapid.

1870 - The Franco-Prussian war of 1870-1871 effectively ends the Concert of Europe system. Under Chancellor Otto von Bismark, Prussia uses a combination of force and diplomacy to unite a number of other small states into what is now Germany.

International trade and investment are fueled by the almost universal adoption of the Gold Standard, a system of fixed exchange rates based on the British pound sterling. Stability and predictability of exchange rates, coupled with free movement of capital, leads to large capital flows to the United States, Australia, Argentina, and other developing countries. Trade booms.

 

 

 

1880s - In an effort to reduce the risk of popular uprisings and instability, Bismarck creates the foundations of the first welfare state. By providing food subsidies and minimum unemployment benefits, he hoped to decrease the chance that the government would be overthrown during an economic downturn by peasants, who were flocking to urban areas and driving Prussian industrialization. This eventually results in the now infamous “marriage of iron and rye.”

1900s

Austria's efforts to quell Serbian nationalism lead to World War I. The war ends with the controversial and somewhat disputed provision for “national self-determination” entrenched in international law. The Treaty of Versailles also dismembers the Austro-Hungarian and Ottoman empires, creating a large and diverse set of newly independent states in central and southeastern Europe. Meanwhile, Russia experiences a Bolshevik-led revolution in 1917. The new communist government makes peace with Germany in early 1918 at Brest-Litovsk.

1914-1918 - World War I. Serbian nationalism, Austrian expansionism, complicated alliance agreements, and fatal misperceptions about military technology contribute to a four-year war that kills 10 million soldiers and civilians and wounds another 19.5 million. Europeans call it “the lost generation.” U.S. President Woodrow Wilson, calling it "the war to end all wars," leads the way in drafting the peace agreement, the Treaty of Versailles, which creates the League of Nations to help prevent future wars. The treaty also requires enormous war reparations from Germany to the Allies and includes provisions encouraging national self-determination. These last two provisions were to prove critical to the developments of the next quarter century.

 

 

After wartime sacrifices and economic participation, European and North American governments begin extending the right to vote first to all men, then to women.

 

1920s - The gradual collapse of the interwar gold standard leads to high rates of world inflation. Germany, suffering under the Treaty of Versailles's reparation demands, experiences hyperinflation. Prices increase 1,700 percent in a short period.

 

1930s - Under conditions of economic hardship, the Japanese military gains control of the government and begins a program of military-industrial expansion. Democratic institutions in Italy and Germany likewise collapse as fascist political parties win control of the government.

1932 - The Japanese occupation of Manchuria, in Northern China, is driven by Japan's own lack of natural resources for development. Japan pushes to form the Greater East Asian Co-prosperity Sphere under its control to ensure its access to resources; Adolf Hitler comes to power in Germany pressing for the reunification of ethnic Germans under one government and for “living space” (lebensraum) for the German people. By this he means more territory, and particularly territory with natural resources to drive continuing industrialization.

1930s - Beginning with the U.S. stock market crash of October 1929, the world enters the Great Depression. Trade collapses under the weight of inflation, the demise of fixed exchange rates, and rapid, severe tariff increases enacted by governments desperate to protect their domestic constituencies. The United States leads the way with the infamous Smoot-Hawley Act of 1930. Living standards plummet as large portions of the working-age population become unemployed. Social tensions rise.

 

 

1938-1945 - World War II. Germany's invasion of Poland in September 1938 prompts Britain to declare war. France and Russia join rapidly as Italy sides with Germany. Japan expands to occupy much of the eastern Pacific. The United States enters the war in 1941, when Japan bombs its Pearl Harbor naval facility. The European war ends in May 1945 when the Allies occupy Berlin; the Pacific War ends in August 1945 after the United States uses atomic bombs on the Japanese cities of Hiroshima and Nagasaki. Some 40 million people die in the war; nearly half are Soviet.

1945 - As the war nears its end, the United States and other friendly parties meet at Bretton Woods, New Hampshire, to create an international economic architecture for the post-war world. In hopes of avoiding the kind of contagious economic collapse that lead to World War II, they create treaty-based institutions to promote free trade, assist in international trade payments and exchange rate management, and provide loans for postwar economic redevelopment.

 

1946 - The United States, Britain, and France, along with the Soviet Union, occupy Germany and Austria. The western powers slowly install democratic political institutions in their sectors and create a unified West Germany in 1948. The Soviets create and recognize East Germany in their sector. The occupation of Austria ends and all Soviet and western forces leave in 1955, when democratic self-government is restored.

1948 - Soviet leader Josef Stalin reacts to the impending creation of West Germany by blockading the enclave of West Berlin. U.S., British, and French planes provide their sectors of West Berlin with shipments of vital supplies through a fifteen-month airlift, flying supplies around the clock to the city. Stalin eventually lifts the blockade in May 1949.

1947-1952 - The United States emerges from World War II with the only intact industrial economy, producing nearly 50 percent of the world's goods and services in the years immediately following the war. Both to ensure continued export markets for its products and to prevent communism from capitalizing on Europe's economic devastation, the United States creates the Marshall Plan. This large package of $12 billion in foreign aid (mostly export credits) was offered to all the states of Europe, though the Soviet Union and its allies declined. Cooperation on Marshall Plan programs lays the foundations for European economic integration in the years to come.

 

 

1949 - The Chinese civil war ends with a communist victory as the Nationalist (KMT) forces under Chiang Kai Shek are driven off the mainland to the island of Taiwan.

 

1960s - The “second wave” of democratization occurs as decolonization progresses. The number of independent states doubles in about fifteen years as a range of colonies and dependencies gain independence.

1960s - The decade starts off with a high degree of tension as communist and capitalist interests clash. 1961 sees the Bay of Pigs catastrophe and the building of the Berlin Wall; 1962 brings the Cuban Missile Crisis, the closest the world has ever come to nuclear war. Efforts at decolonization spark a series of anticolonial wars that often mutate into civil wars once the countries become independent. The United States and Soviet Union often take sides in these conflicts, earning them the name “proxy wars.”

 

 

1971 - The last remaining developed country, Switzerland, gives women the right to vote.

1961 - The United States begins sending advisors to South Vietnam to assist in the fight against communist North Vietnam. Should containment fail and communism gain a foothold in southeast Asia, U.S. politicians argued, a “domino effect” would ensue as more countries in the region fell to communist influence. By 1963 more than half a million U.S. ground troops were stationed in Vietnam, yet the communists' guerilla tactics continued to frustrate U.S. efforts. By 1969 the United States began withdrawing its troops, conceding defeat, and it completed this process by 1973. In 1975 North Vietnam decisively defeated the South, leading to recriminations in U.S. politics over “who lost Vietnam.”

1971 - U.S. President Richard Nixon unilaterally suspends the convertibility of the U.S. dollar to gold. This effectively ends the Bretton Woods system of fixed exchange rates, and the next decade ushers in a system of floating or managed-floating rates.

 

 

1980 - Under newly elected president Ronald Reagan, the United States begins increasing military and political pressure on the Soviet Union following the Soviet invasion of Afghanistan in 1979. A massive arms race ensues, including Reagan's proposals for a missile defense system known as the Strategic Defense Initiative (SDI) or, popularly, “Star Wars” for its space-based components.

1980s - Changes in communication technology (largely driven by military research) and government regulations (largely driven by the emergence of floating exchange rates) lead to a boom in international investment and currency speculation. The Latin American banking (or debt) crises of the early 1980s presage some elements of the 1997 Asian Financial Crisis as domestic banking systems there are revealed to be too weak to manage effectively such large influxes of cash.

 

1989 - The Soviet economy is beginning to crack under the strain of competing with the United States in weapons spending, though this is not entirely apparent to outsiders. Mikhail Gorbachev comes to power in 1985, bringing new ideas of perestroika (economic restructuring) and glastnost (openness in political life). The Berlin Wall falls, removing the most tangible sign of the cold war. In the “third wave” of democratization, Eastern Europe leaves communism. The Soviet Union disintegrates into fifteen successor states on Christmas Day, 1991, all of which attempt to democratize (though with varying success).

1990 - After a decade of increasingly bitter disputes over oil rights and other issues, Iraq invades Kuwait. The United Nations condemns the invasion and establishes sanctions; when that fails, it authorizes a multinational force under the United States to use military force to evict Iraq. Soviet-American cooperation is hailed as a breakthrough.

1990 - The fall of Communist governments in Central and Eastern Europe brings an end to their communist, command economies. The transition to market capitalism is rocky, and success rates vary. Living standards drop in many states but recover within a decade or so.

 

 

1990s - The early 1990s see increasing ethnic and political tension in Yugoslavia, followed by the secession of Croatia and Slovenia. Fighting over the secessions contributes to ethnic warfare and ethnic cleansing in ethnically heterogeneous Bosnia-Herzegovina and, later, Serbia. UN efforts to mediate the disputes or serve as a peacekeeper fail dramatically. By the mid-1990s, NATO intervenes militarily in Bosnia to separate the combatants and oversee the implementation of the Dayton Accords. The late 1990s sees a resurgence in fighting in Serbia's Kosovo province; a second NATO intervention results in the ouster of Serbian president Slobodan Milosovic and his later trial in the Netherlands on charges of war crimes and crimes against humanity.

1992 - Twelve European states sign the Treaty of Maastricht to convert the European Economic Community into the European Union. The new organization is not only a free trade area and customs union but also has powers in foreign policy and justice and home affairs. A reunified Germany avidly supports the plan and helps to arrange massive aid programs for the former East Germany and other formerly communist states.

2000s

 

2001 - After major terrorists attacks against the United States in September, the United States launches its War on Terror. The country invaded Afghanistan and removed its radical Islamic government, which was known to be sponsoring and harboring the group that perpetrated the attacks. In 2003 the United States invades Iraq on suspicion of it having weapons of mass destruction, and replaces the Iraqi government.

2001 - The World Trade Organization, formed in 1995 by the members of the General Agreement on Tariffs and Trade, launches its ambitious Doha Development Round of trade liberalization talks. It is the first round of multilateral trade talks to address the trade needs of developing states as its primary mission.