History 240 Week 7 Notes
- Focus on structural changes, and key individuals and laws.
- Don’t waste time talking about style and grammar.
- Use concrete evidence that you’ve read the book; don’t rely on knowledge you’ve
acquired from other sources.
- Focus on about a page (double spaced) of notes per chapter.
- The essay will only cover until 1914.
- Chapter titles will be provided.
- It would be a mistake to focus on the start of the book; have knowledge up to 1914
- All of the readings and lectures to tonight is relevant.
- Short answer.
- Explain 4/11 lectures; big themes, issues, people, laws discussed.
- Unit 1 can’t be used (intro class)
- Unit 2 might be relevant.
- Theories of the state.
- Unit 3 relevant.
- Guide/hints for Fraser book.
- Unit 4 Depression is a topic of common knowledge; won’t really be focused on.
- Topics that are exclusive to this course will be more important.
- Unit 6 (no class)
- The second half of the term has more emphasis in the exam.
- Study Units 2, 3, 4, 7, 8, 9.
***Part 2 will ONLY have 11 questions; choose ONLY 4***
- You will have the option to do only four lectures!
The New Right Strikes Back: Stagflating in the Seventies, the Rise of Thatcher, Reagan and
- When the glory age of capitalism and the time of growth slowed down in the 1970’s
states needed to find a way to pay the bills.
- From 1975-1990:
- High income tax goes down while low income tax goes up.
- Everyone except the rich bear the burden of a slowly growing economy
- 1979-1981: Thatcher’s tax cuts that were heard around the world
- Income tax rates reduced; VATs increase. Many British people actually paid more
taxes (esp. those who spent a lot of their income).
- Top 5% of population receives 40% of the gains from tax cuts. - Howard Jarvis: the father of the anti-statist tax revolt (consistent since 1970’s).
- Jarvis, the middle class, and the OC Revolt:
- Proposition 13, California, 1978; 2 years before Reagan.
- After the tax cuts; taxes increase for low incomes, decrease for middle-
high and high incomes.
Saving the Canada Pension Plan
- The largest tax increase in Canadian history to finance the richest generation in world
- Society will need to pay in the form of higher taxes.
- There will be many jobs opening up with the stepping down of the baby boomers.
- Those who take jobs in government and public policy will be faced with
- Canadian society has reached its tax threshold; people don’t want to pay more
- All policy changes will come at the expense of another.
- About 450 000 people were in some way involved with the Apollo program for about a
- Employed by the state.
The Politics of Division (late 1970’s)
1) People begin to fear for the future in an inflationary environment with the increase of
- In the 1970’s big business lashed back stating that they couldn’t invest due to
their inability to make a profit; caused by post-WWII-like low spending.
- The rich hadn’t necessarily done well; their taxes had gone up and the return they
were receiving on the stock market was minimal.
- Reagan and Thatcher ultimately wanted to roll back taxes for the rich.
- American new right has a morale aspect; in Europe it was limited to the concern
of big gov’t.
2) OPEC and the Oil Crisis of 1973 and the Slowdown of Western Economies
- Seeks to prevent the production of oil and keep it profitable for producers.
- In 1973, OPEC constrained the production of oil and prices almost quadrupled.
- OPEC maintains almost half of all oil production.
- The West’s support of Israel in its war caused OPEC to enact an embargo.
- Many nations had gov’t ration cards for gas.
- Had to wait in lines for up to 2hours with no guarantee of getting
- The 1970s defies what was known about economies (according to Keynesian
- Between 1974 and 86 there was no economic growth; very little in US.
3) Stagflation and Unemployment
- In Europe, there was now 4 times as many unemployed. Many nations have never
fully recovered from this period.
- Inflation had stagnated at 3.7%; starts rising in 1974 up to 15%
- In the US inflation had jumped to 11% in one year (1974). - Directly caused by the oil crisis.
- Gov’t spending comes to be associated with inflation.
- Movement against high gov’t spending comes in.
- Private sector protests public sector or union increases of 30% when the private
sector is lucky to receive 10%.
The Collapse of the Keynesian Edifice
- Thatcher is really just taking ownership of thinking that has already existed.
- PM James Callaghan quote (1976)
- “We used to think that you could get out of a deficit by increasing spending; this
caused by injecting inflation into the economy”.
- Unemployment returns but inflation is attacked with full force.
Age of Monetarism
- Spearheaded by Milton Friedman, Robert Mundell, Jude Wanninski, Gary Becker, Paul
- Temporary abandonment of full employment policy
- Darwinian attitude: only the strongest will survive.
- Unemployment is a necessary evil to prevent inflation, a greater evil.
- Get rid of the inflation and the jobs will follow in the aftermath.
- After the inflation of the 1970’s rich nations are overall poorer
- Something had to give.
- In the early major unions (which represented 3/4 of workers) accepted a pay cut
- A slight amount of cut in working hours took place (but not enough to make up
for the pa