Geography Reference
In-Depth Information
profitable sectors. In the UK, for example, this Keynesian managerial
model lavishly provided public services for all, by way of universal
national health coverage, affordable housing provision, public infrastruc-
tural development (railways, highways, waterways), comprehensive
education subsidization (from elementary, through secondary to higher
education and technical college, teacher training college and university
attendance), free milk and subsidized school lunches, and benefits for the
sick, poor and unemployed. In the US, a less comprehensive set of gov-
ernment interventions were practised, whereas in many of Europe's
ex-colonial, newly independent nations, more comprehensive Keynesian
models were widely adopted.
After two prosperous decades of capitalist growth and geo-political
transformations of considerable significance - both in the advanced
core countries and the Third World - it would be international events
that brought the late-1970s economic crisis to a head, and helped bring
on this post-World War II long-wave's recession. The 1970s witnessed
'an unusual bunching of unfortunate disturbances' in the West's finan-
cial and production sectors. There was the collapse of Keynesian sta-
bility, with the bankruptcy of New York City in 1973 being one
indicator of this. There was the unravelling of the 1948 Bretton Woods
currency agreement of fixed exchange-rates when, in response to the
burgeoning trading of Euro-dollars, President Nixon took the US dol-
lar off the gold standard in 1971 and major currencies became specula-
tive commodities. In all major core countries, inflationary pressures,
government overspending, high taxation rates, continued high mili-
tary budgets, and general downturns in consumer confidence were the
main features of this long wave's stagnation. The final 'nail in the cof-
fin' was two OPEC-driven oil price hikes in 1974-75 and again in
1978-79, which effectively raised the price of a barrel of oil eightfold,
dramatically raising energy costs and contributing to widespread
indebtedness.
83
Neoliberalism as the New Ideological 'Faith'
With its weaknesses so glaringly exposed, Keynesian economics was
pilloried as the cause
of the deep recession and capitalist crisis that
occurred in the late 1970s and early 1980s. In its place, neoliberal capi-
talism was trumpeted as a supply-side, free-market solution that would
bring renewed levels of prosperity for electorates and revive national
