Impact of Resources on the Movement of Products, Capital & People in Europe Video

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  • 0:00 Natural Resources & Products
  • 2:20 Movements of Capital & People
  • 3:50 Lesson Summary
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Lesson Transcript
Instructor: David Wood

David has taught Honors Physics, AP Physics, IB Physics and general science courses. He has a Masters in Education, and a Bachelors in Physics.

After watching this video, you will be able to describe the natural resources of Europe (past and present) and how they impacted the movement of products, capital, and people. A short quiz will follow.

Natural Resources & Products

Natural resources are the products contained within and on the land, like water, timber, coal, oil, and rock types. Natural resources drive the economy in many parts of the world, and when your economy is strong, good living standards usually result. This, in turn, affects what humans choose to do, including the movement of their families, their products, and their money (capital). In this lesson, we'll summarize the natural resources of Europe and discuss how those resources lead to the movement of these three things.

In many ways, the natural resources of Europe are kind of old news. In modern-day Europe, the most important export is services, which account for 73% of Europe's GDP as of 2013. Services have little to do with natural resources unless you count humans as natural. But Europe's position as a financial and service-driven part of the world was developed over the years and centuries. And historically, natural resources were hugely important to Europe's success.

Europe's climate is relatively mild. It contains marine climates in the west and Mediterranean climates in the south. These climates are great for agriculture and even to this day, this is a major chunk of the economy. The biggest crops are wheat, rapeseed, potatoes, and livestock products in the marine areas, and olives, wine, and grapes in the Mediterranean. Germany remains one of the few major exporters to this day, exporting in particular: cars, machinery, chemicals, electrical products, and drugs.

But as we mentioned, the modern economy isn't about physical products, but more about services. Many of the major manufactured exports like cars, paper products, and food products are created using raw materials that are no longer sourced in Europe. Only certain countries still produce significant amounts of certain metals, and the UK does produce some significant oil in the North Sea.

But these are all relatively small aspects of the economy. It's in the past that Europe built its urban, service-driven economy with the natural resources of the past. During the Industrial Revolution from about 1760 until 1840, the natural resources of Europe were exploited to their fullest, starting in the United Kingdom where coal and iron ore were major parts of the economy. It is these resources that built Europe and caused European people, with their culture and ideas, to spread all over the world. If that doesn't prove that natural resources lead to movement, nothing does.

Movements of Capital and People

In general, where there are natural resources, you'll find that people and money will move. Private companies will move to an area to extract the resources and make money. These companies contain people who then move to the area and they hire even more people as the company expands, encouraging workers to follow. This certainly happened during the Industrial Revolution, when Britain, France, and Spain all had significant empires overseas and people traveled to make their fortune with promises of gold, diamonds, and other valuable resources.

But in modern-day Europe, natural resources mostly involve imports. Resources that can be extracted cheaply in other countries are imported into Europe to be used there or even manufactured abroad before being imported. If anything, natural resources drive companies and people to move out of Europe to take advantage of the resources overseas. Though the natural resources of other countries continue to drive money into the hands of European companies who operate abroad.

But it's the natural resources of the past that created Europe's financial centers and those certainly caused people to want to move to Europe. Net migration is significantly towards Europe, not away. These financial centers also attract people within Europe; there's a flow of Eastern European workers into the richer areas of Western Europe. This isn't surprising considering Western Europe has among the best living standards in the world.

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