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Introduction
| The free market The free marketAt the start of the 20th century, international trade already linked the advanced economies with the rest of the world. It was financed by investment, which came from Europe, led by Britain, Germany and France. The United States was a particularly good place to invest in. Trade, currency payments, insurance and shipping were all helped by improvements in communications and transport. The prevailing policy was free trade, although some countries tried to protect their domestic industries by erecting tariff barriers and taxing imports. Because of its huge empire, Britain played a key role in this system, with its merchant fleet and telegraph system. The pound sterling was the international reserve currency in a financial exchange system that relied on fixed rates of exchange and a gold standard (which was one reason for Britain's desire to have imperial control over South Africa's gold mines). An important economic exchange was of manufactured goods from western Europe and the United States for raw materials from the colonies – for example, palm oil from Nigeria, rubber from Malaya, nickel and phosphate from French New Caledonia and Tahiti. The advanced industrial powers also produced iron and coal, with heavy engineering – such as the building of railways and ships – a source of jobs. By 1914, Germany was overtaking Britain in iron and steel production, and in the new industries of chemicals, electrical engineering and optical goods. In the United States, skilled workers were greatly in demand, which meant
that immigrants with skills found plenty of work. The lack of skilled
workers put pressure on American bosses to innovate. This was one reason
for Henry Ford's success in creating the assembly line, which soon made
mass production (which didn't require skilled workers) a normal work experience
for both men and women. Everyone was compelled to work hard, with few
holidays and even fewer union rights. For this reason, the rise in 1905-15
in the US of the militant socialist Industrial Workers of the World (IWW)
– better known as the Wobblies – challenged the free market system.
In Britain, by contrast, there had been great investment in heavy machinery during the Industrial Revolution of the 19th century. Here it was easy to find unskilled work that depended on muscle. At the same time, office work was beginning to expand, although secretarial work was mainly done by men. Union power was becoming increasingly strong, but had to fight legal battles for the right to strike. Meanwhile, in the colonies, work was often done under slave conditions. For instance, in what became the Belgian Congo, disobedient workers had their hands or feet chopped off. |
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