Three flows of international exchange
Topic: The Making of a Global World · NCERT: Class 10, Ch 3 "The Making of a Global World"
Meaning
Economists divide international economic exchange into three flows. The first is trade, which was mostly in goods like cloth and wheat. The second is labour, meaning people moving to other places to find work. The third is capital, meaning money invested in distant places for short or long periods. In the 19th-century world economy (1815–1914), all three flows were closely linked. Of the three, the movement of labour faced the most restrictions.
Example
In the 19th century Britain needed to import food. Land was cleared in America and Australia to grow it, which is trade. Capital from London paid for railways and ports there. Nearly 50 million Europeans moved to America and Australia to work this land, which is labour.