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Difficulty: EasyDevelopment of Industrial Capitalism and Transnational Businesses

"The Government of His Imperial Majesty the Shah grants to the concessionaire [William Knox D'Arcy]... a special and exclusive privilege to search for, obtain, exploit, develop, render suitable for trade, carry away and sell natural gas, petroleum, asphalt and ozocate throughout the whole extent of the Persian Empire for a term of sixty years..."

— D’Arcy Oil Concession, signed by the Shah of Persia, 1901

Which of the following 19th- or early-20th-century developments is best illustrated by the concession described in the passage?

  1. A
    The adoption of Marxist revolutionary policies to state-control oil production
  2. The growth of large-scale transnational businesses that operated across national bordersAnswer
  3. C
    The continuation of mercantilist economic policies that barred private corporate investments
  4. D
    The transition of non-industrialized states to direct colonial rule under European empires

Answer

The growth of large-scale transnational businesses that operated across national borders
The D'Arcy Concession illustrates the growth of transnational businesses because it allowed a private foreign investor to establish enterprise operations across national borders to extract resources (oil) for global markets. This is a key feature of the development of industrial capitalism, where industrial nations and their corporations sought raw materials globally.

Step-by-Step Solution

1
Analyze the provided source
The passage describes an agreement (concession) where the government of Persia grants a private British investor (D'Arcy) the exclusive rights to extract and sell petroleum resources for sixty years.
Understanding the context of the source is necessary to identify the economic development it represents.
2
Relate the source to 19th- and early-20th-century global economic trends
The arrangement shows a private entity based in one country (Britain) securing rights to extract raw materials from another country (Persia) to sell in global markets. This is a classic characteristic of transnational businesses.
Connecting the specific historical example to the broader curriculum concept of transnational businesses allows us to identify the correct answer.
3
Evaluate the options to identify the correct historical development
The option stating the growth of large-scale transnational businesses matches the analysis, while the other options represent common historical misconceptions about mercantilism, direct colonial rule, or Marxism.
Eliminating distractors based on historical inaccuracies ensures that the chosen option is the only correct and supportable one.

Key Concept

The global nature of trade and production contributed to the proliferation of large-scale transnational businesses in the 19th and early 20th centuries.
Estimated Time:45s
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Topics

Development of Industrial Capitalism and Transnational Businesses

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