In 1973, the Organization of Petroleum Exporting Countries (OPEC) cut their production of oil in response to Western support of Israel during the Yom Kippur War of 1973. Almost immediately, the price of oil went from $3 per barrel to $12 per barrel and the era of cheap oil which Western countries depended upon was over. An era of inflation and stagnation began to set in. Consequently, the demand for smaller cars began to increase. Globally, the petrodollars flowing to OPEC countries flowed back to Western banks–known as petrodollar recycling–and were then loaned out to African and Asian countries. Abroad, these dollars financed imports and were used for questionable developmental programs–often disappearing in the form of corruption–aimed at keeping the current regimes in power. Overall, this resulted in a global economic imbalance and created highly-indebted African and Asian countries.
Despite the trends of secularism and international cooperation, the last forty years has been characterized by an increased focus on religion and nationalism. Furthermore, politics shifted largely to the right–more fiscally and politically conservative–with communist regimes reforming their economic policy or collapsing altogether. As the United States began printing more money to pay for the Vietnam War and OPEC increased the price of oil, the post-war period of prosperity came to an end. The last forty years has been marked by several recessions, higher unemployment, and a growing gap between the rich and the poor; both at local and global level. Furthermore, the globalization of the economy led to profound changes that damaged the traditional industries of Western Europe. While people, goods, and ideas circulate at breathtaking speed and growing numbers, people and governments are struggling to respond.
Figure 2: Fluctuating Price of Oil
Margaret Thatcher, in her Christianity and Wealth, Speech to the Church of Scotland General Assembly, May 21, 1988, stated: “Any set of social and economic arrangements which is not founded on the acceptance of individual responsibility will do nothing but harm. We are all responsible for our own actions. We cannot blame society if we disobey the law. We simply cannot delegate the exercise of mercy and generosity to others. I came to office with one deliberate intent: to change Britain from a dependent to a self-reliant society — from a give-it-to-me, to a do-it-yourself nation. A get-up-and-go, instead of a sit-back-and-wait-for-it Britain.”
Then speaking to the Small Business Bureau (8 February, 1984), Thatcher argued: “This Socialist Government takes to seize more power over our daily lives diminishes those lives and the freedom which is their essence and their strength. One of our principal and continuing priorities when we are returned to office will be to restore the freedoms which the Socialists have usurped. Let them learn that it is not a function of the State to possess as much as possible. It is not a function of the State to grab as much as it can get away with. It is not a function of the State to act as ringmaster, to crack the whip, dictate the load which all of us must carry or say how high we may climb. It is not a function of the State to ensure that no-one climbs higher than anyone else. All that is the philosophy of Socialism. We reject it utterly for, however well-intended, it leads in one direction only: to the erosion and finally the destruction of the democratic way of life.”
In the United Kingdom and the United States, unions were attacked as the problem and the number of people in unions greatly decreased. Reagan fired the striking air-traffic control workers; Thatcher battled the steel workers and coal miners as the forefront of labor unionism, although in a precarious and declining industry. In the UK, single parents were characterized as “feckless, benefit-addicted, and work-shy”. The general attitude was that people who were unemployed were too lazy, hurt by their own persona feelings, and too unwilling to find a job. They were perceived to be running away from their personal responsibilities to find work with the aim of taking advantage of the state. The hardest hit were traditional industries, such as ship building and textiles, that almost completely vanished. The outcome was the emergence of neighborhoods without any source of employment; characterized by mass unemployment, high levels of poverty, and increased rates of crime. The Criminal Justice Bill of 1986 provided longer sentences for crimes. The perception was that the level of crime was too high and that the migrants and the poor were responsible for it. While the British economy grew so did the number of those living in poverty–increasing from 5 million in in 1979 to 14.1 million in 1992. The real income gap also widened as the incomes of the bottom 10% dropped by 18% while the richest 10% saw a 61% increase. In the new economies of Western Europe and the United States, the middle class and rich benefited while the poor suffered.
Figure 3: Reagan and Thatcher
The recession of 1990-93 pushed up the rate of unemployment throughout Europe. There was less state aid to rely on and the unemployed struggled to find jobs. In Britain, the number of unemployed doubled during this three year period. The result was that nationalist parties grew in support as they targeted migrant workers and foreigners, blaming the incomers for the economic problems that the countries faced. In France, the National Front Party (currently known as the National Rally) achieved 15% of the vote and continues to have a sizable presence. The country experienced riots as the unemployed and marginalized, mostly Muslim populations, took to the streets. For instance Muslims rioted in Paris in 2005 and led to debates about how the 4-5 million (largely Algerian) Muslims should be incorporated into the country. New-Nazi skinheads led riots while anti-immigration parties grew in support in Austria and the Netherlands; along with Italy, Denmark and Poland.
Ronald Reagan stated: “There is one sign the Soviets can make that would be unmistakable, that would advance dramatically the cause of freedom and peace. General Secretary Gorbachev, if you seek peace, if you seek prosperity for the Soviet Union and Eastern Europe, if you seek liberalization: Come here to this gate! Mr. Gorbachev, open this gate! Mr. Gorbachev, tear down this wall!… And I invite Mr. Gorbachev: Let us work to bring the Eastern and Western parts of the city closer together, so that all the inhabitants of all Berlin can enjoy the benefits that come with life in one of the great cities of the world.”
From the 1970s to the 1990s, US companies, especially McDonalds and Coke, enjoyed unprecedented international growth, while also reflecting changing national economic situations. Highlighting its economic transformation, Japan joined the McDonald’s club in 1971. McDonald’s opened in the Soviet Union-soon followed by Pizza Hut with Gorbachev making commercials-and enjoyed massive success despite high prices and a fluctuating economy. In India and other places, McDonald’s adopted a local flair for increased support. American movies and television shows, such as Baywatch and The Simpsons, enjoyed massive international audiences and reflected the growing Americanization of the world.
Air travel accelerated transportation and global tourism with people moving around the world for jobs or for visits on an unprecedented scale. It was also characterized the quick spread of global diseases, with fears of the spread of Ebola causing hysteria in the United States or the movement of the flu around the world. With the internet increasingly available and cell phones distributed all over the world, information, ideas, music, and movies spread faster than before.
Meanwhile, Europeans pushed for the establishment of a stronger European Union. The European nations were working on a framework for “pooling” the sovereignty of independent nations, giving some decision making rights to the EU government, creating a common market, common currency, and the free movement of labor and people. This economic cooperation encouraged migrations from poorer to wealthier European countries while the wealthier countries helped subsidized the budgets and infrastructure of their poorer counterparts.
There was national backlash, especially in countries like France. Jose Bove became a French folk hero and an anti-globalization activist when in 1999 he destroyed a McDonald’s under construction saying; “This is a fight against free trade global capitalism. It’s about the logic of a certain economic system, not an American system. It can be a struggle against any country, this one or that one.” There was also a 4-year battle to keep the French tourist island of Île d’Oléron free of the global chain, which by 2013 was in over one hundred different countries throughout the world.
Figure 4: McDonald’s Around the World
