GS101 Lecture Notes - Lecture 9: Brian Mulroney, Economic Liberalism, Neoliberalism
Finished lecture from Oct 26
Neo-Liberal Capitalism in the First World
1970s-1989
Agenda:
● Post WWII, 1950s-1970s
● Post Cold War, 1989-
● A New World Order?
● Laissez-Faire Economies and the Global South
● 2008 Economic Crisis
FIRST WORLD ECONOMIES, 1950s-1970s
● Post-war boom economies, controlled capitalism (government intervening) → war bad for
people but good for economy, destruction and reconstruction
● National control of fiscal (taxation) and monetary (e.g. interest rates) policies
● Rising wages and increased social services
● High taxation on wealthy individuals and profitable corporations
Demise of Controlled Capitalism, post 1970s
● Late 1970s, early 1980s election of many governments in “First World” countries on neo-
liberal platforms
○ Margaret Thatcher, UK, 1979-1990
○ Ronald Reagan, USA, 1981-1989
○ Brian Mulroney, Canada, 1984-1993
● Neo-Liberalism: an ideology based on ideas of classical liberal economists on laissez-
faire capitalism → government not involved
○ Adam Smith (1723-1790)
○ David Ricardo (1772-1823)
● Margaret Thatcher: “Society does not exist”; there are only individuals and each is
responsible for himself
● Neo-liberal policies affect students, can cause tuition increase as they can not afford to
pay
Neo-liberalism as Ideology
● Ideology: a set of partial truths which cover up or mask hidden interests
● Ideology of neoliberalism conceals hidden interests of business elites by making it
appear to be a neutral economic system that benefits everyone, everywhere
● Who benefits from freer trade? Many people do, but not everyone equally (we are made
to think it is good for everyone)
● Critics of neoliberal policies ask who benefits from these freer trade policies
Laissez-faire Capitalism, post 1970s
find more resources at oneclass.com
find more resources at oneclass.com
● Calls for a new global economic order based on freer markets, precipitated by:
○ 1. OPEC crisis (energy crisis) of 1973
○ 2. Demise of manufacturing in global north (labour costs cheaper in other
countries, manufacturing less viable enterprise in first world countries)
○ 3. Relative decline of US economy and floating currency rates pegged to the US
dollar
■ American economy still growing, but not growing as quickly as before
Neoliberalism, post 1970s
● Smaller role for governments, and larger role for markets to even out economic
disparities
● Assumption that private industry can better manage than bureaucratic governments
● Privatization of national (“crown”) corporations
○ E.g. Air Canada; Canada Post; Petro Canada; British Airways, etc
POST-COLD WAR 1989-
● Soviet Bloc (“iron curtain”) disintegrates
○ Collapse of the “Second World”
● Soviet-style communism and state socialism discredited as viable political-economic
systems
● 1989 and the Wave of Democracy:
○ Lifting up of the Iron Curtain → meaning was couldn’t get in/out
○ Soviet Bloc countries open up to Western, liberal, capitalist, democratic
influences
○ Immigration and emigration made easier
○ Consumer culture
How to talk about the new world order?
● With the collapse of Soviet Bloc, there is no longer a communist, “Second World” to
compete ideologically with the “First World”
● Three Worlds theory no longer has salience
○ Also, racist connotations of “Third World” no longer acceptable
● Need new way to conceptualize the world:
○ Global North and Global South
○ Division of the world based on economic development rather than economic
ideology
Global North vs Global South
● North refers generally to countries in Northern hemisphere - notable exceptions of
Australia and New Zealand
● South refers generally to countries south of the equator
● North - South distinction is crude and sweeping
● Typical characteristics of Global North
○ Developed, or more developed countries
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Post-war boom economies, controlled capitalism (government intervening) war bad for people but good for economy, destruction and reconstruction. National control of fiscal (taxation) and monetary (e. g. interest rates) policies. High taxation on wealthy individuals and profitable corporations. Late 1970s, early 1980s election of many governments in first world countries on neo- liberal platforms. Neo-liberalism: an ideology based on ideas of classical liberal economists on (cid:3247)laissez- faire(cid:3248) capitalism government not involved. Margaret thatcher: society does not exist ; there are only individuals and each is responsible for himself. Neo-liberal policies affect students, can cause tuition increase as they can not afford to pay. Ideology: a set of partial truths which cover up or mask hidden interests. Ideology of neoliberalism conceals hidden interests of business elites by making it appear to be a neutral economic system that benefits everyone, everywhere. Many people do, but not everyone equally (we are made to think it is good for everyone)
