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State the relationship between economics and history.

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Phillip Holland eNotes educator | Certified Educator

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There are very close ties between economics and history.  Economic policies help to determine which groups stay in power and which ones fall out of favor.  In 1932, Herbert Hoover's failed economic policies brought about the election of Franklin Roosevelt and the beginning of social programs, such as Social Security in the United States.  The Great Depression led to the rise of Hitler and his quest to make Germany great again.  

On a smaller scale, Henry Ford's practice of paying his workers high wages in 1908 led to the Model T becoming the most ubiquitous car in the United States in the early part of the century.  This led to the United States improving its infrastructure as well as other industries, such as hotels and diners for travelers.  As more people gained disposable income in the 1920s, spectator sports became popular, and baseball and college football are still popular events in the United States.  

Economics was also a factor in the decision to explore the world.  Europeans were desperate for Asian spices; they did not want to risk traveling through Muslim-held lands after 1453 and sought to cut Venetian middlemen out of the market.  For this reason, Columbus sailed West across the Atlantic Ocean in the hopes of reaching Asia.  While he only got as far as Hispaniola, his discovery of the New World still ranks as one of the biggest events in history and economics.  There is even a whole field of history that studies the past through the lens of economics.  

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Michael Koren eNotes educator | Certified Educator

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There has been a long-standing connection between economics and history. Most major historical events have an economic basis to them.

In looking at the major wars fought since the 1890s, economics has played a key role in the start of the war. The United States wanted to become a world power in the 1890s. We were looking for a war that would lead us to gain colonies. By having colonies, we could get stronger economically. Our businesses would benefit. Thus, we went to war with Spain in 1898.

In World War I, Germany wanted more land. They wanted colonies for reasons very similar to why we wanted colonies. They knew winning a war would be good for their businesses and economy.

There is some evidence that suggests the United States joined World War I so our businesses could benefit. The Nye Committee came to this conclusion after explaining why we joined the war.

Business leaders have opposed laws that allow unions to form. Business leaders believe unions will ask for more money and benefits. They believe this will hurt the company economically. Thus, business leaders have supported laws that curtail collective bargaining, make it harder for unions to exist or form, and that require people or business to reveal to whom a person or business is making political contributions.

Slavery was based to a degree on economic factors. Southerners believed they would lose money if slavery ended, and they had to pay the workers on the farms. Southerners argued that ending slavery would be economically a disaster for the South. Economics has always been tied to history.

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rt-plyler1 | Student

When people in the modern world talk about economics, it is often a shorthand for money and markets. While these things are important to economics as a field, they are only component parts of the larger whole. At the broadest level, economics is the study of how human beings control resources. With this in mind, supply and demand have motivated peoples and governments to act according to their interests as far back as there are records. There are certainly more abstract factors that have given rise to the events and personalities that steered the direction of history-- religion, ethnic pride, and political philosophy chief among them. When wars were fought or countries formed, though, the loftiest ideals have tended to recede behind fundamental economic questions: did people have enough resources, and if they didn't, what could they do about it? In that sense, all the milestones of history are in some way a response to economic stimuli.