the market revolution of the 1970s -- 9/14/20

Today's selection -- from The 1970s: A New Global History by Thomas Borstelmann. The market revolution of the 1970s:

"Well before the election of Ronald Reagan to the presidency in 1980, Americans across the political spectrum had shifted from a faith in the benefits of some collective action through government intervention, repre­sented by the New Deal order that culminated in the Great So­ciety programs of the 1960s, to a new commitment to purer market values instead as the key to an efficient economy and a fair society. These same two undercurrents of egalitarianism and market values gained significant traction in the 1970s through­out the world, as empires declined and capitalism spread. The United States was thus quintessentially a part of, rather than an exception to, the broader world around it in this decade. While sometimes at odds with each other, egalitarian values and mar­ket values converged to form a purified version of individualism and consumer capitalism, one in which all were welcome as buyers and sellers, but the devil might take the hindmost.

"These years marked a transformation in American society that has gone largely unnoticed, even though its reverberations are still being felt decades later. It was the moment when the United States fully embraced two profound yet in some ways antagonis­tic values: formal equality and complete faith in the marketplace. Together, these prototypical American beliefs created a society committed to treating everyone equally, while simultaneously be­coming increasingly unequal. Hyper-individualism has been the result: everyone can and should compete, in the pursuit of indi­vidual advantage and happiness. Americans have, by example and by influence, promoted this combination of equality in word and inequality in deed around the world.

"In the decades after 1970, life in the United States, particularly in its public sphere, became strikingly diverse and inclusive. No other great power -- and certainly no dominant world power ­had been so shaped by people with ancestors from all over the world. And Americans became accustomed to a culture of formal equality. Women, men, gays and lesbians, heterosexuals, whites, nonwhites, able-bodied and disabled: all were to be officially treated equally. Overt discrimination was illegal and widely reviled...

"Free markets were certainly not 'conservative' in any meaningful sense of the word. Rather than conserving anything, the unconstrained pursuit of profit through economic exchange brought constant and often relentless change, as the American Rust Belt demonstrated by the loss of its manu­facturing base and jobs to the Sun Belt and to overseas places with lower costs of production. Small business owners knew too well the radical changes brought by large corporate chain stores. The economist Joseph Schumpeter had famously called this dy­namic the 'creative destruction' of capitalism. Indeed, capitalism had been perhaps the greatest force for change, for better and worse, in the modern world. For social and religious conserva­tives concerned about the preservation of a particular kind of social order and the shaping of a moral citizenry, the unrestrained indulgence of individual consumers should have been anathema. For a generation after the 1970s, the Republican Party reigned in American politics by holding together its two primary wings, so­cial conservatives and free marketers, but the inherent tension between these two constituencies reemerged in the 2008 presi­dential primary and seemed unlikely to disappear completely. The conservatism that pervaded American politics after the 1970s was considerably more libertarian than puritanical.

"Whatever its other benefits or drawbacks, the process of un­leashing market forces deepened economic inequality in the United States for the generation after the 1970s. A society in­creasingly committed treating everyone equally was in prac­tice, increasingly unequal. Indeed, this very inclusiveness actually provided a kind of cover for economic inequality; declining discrimination seemed to mean that remaining differences among individuals' circumstances were their own responsibility. Identity politics wound up bolstering class differences. ...

"The turn toward free markets in the 1970s was a global rather than just an American story, in the same way that the shift toward greater formal equality and inclusiveness in this decade was a worldwide rather than a national process. In the Southern Cone of Latin America, in western Europe and par­ticularly in the United Kingdom with the 1979 election of Con­servative Margaret Thatcher as prime minister, and in Eastern Europe in its early anti-Communist organizing, people across the globe were losing faith in the welfare states and socialist states that had emerged from World War II. They were turning instead to the mechanism of the market as a way to stimulate economic growth after the worldwide recession of the early 1970s. The vast scale and diversity of human societies assured that such a trend was not uniform and did not happen every­where at the same time. Vietnam and Nicaragua, for example, spent the 1970s building revolutionary socialist states of their own kind. But even those exceptional boats paddling upstream would soon, within ten years, be turned around and swept along with the rising current of the capitalist river. The most dramatic evidence came in the largest country, the one that had also long had the most fervidly anti-capitalist government: China. Fol­lowing the death of Mao Zedong in 1976 and a brief interlude of intra-governmental struggle in Beijing, a new regime under Deng Xiaoping moved forcefully by 1978 to introduce market reforms in order to speed its economic growth. World economic history has not been the same since."



Thomas Borstelmann


The 1970s: A New Global History from Civil Rights to Economic Inequality


Princeton University


Copyright 2012 by Thomas Borestelmann


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