Introduction to this collection

This collection explores economic changes that happened during the late twentieth century. Some of these changes have been described as neoliberal, which means that they encourage free trade, discourage government intervention in markets, and call for fewer regulations. In this collection, you will see how some of these changes cascaded across China, Chile, Western Europe, the United States, and Southeast Asia. You will also hear voices critical of these changes.

Guiding question to think about as you read the documents: To what extent did the global economy change from 1900 to the present?

WHP Primary Source Punctuation Key

When you read through these primary source collections, you might notice some unusual punctuation like this: . . . and [ ] and ( ). Use the table below to help you understand what this punctuation means.

Contents

Source 1 – Inflation, unemployment, and GDP before and during the premiership of Margaret Thatcher, 1971–1990 (0:55)

Source 2 – Deng Xiaoping speech, 1992 (2:55)

Source 3 – Pinochet Reagonomics article, 1981 (6:00)

Source 4 – Maastricht Treaty, 1992 (10:40)

Source 5 – Killer Mike’s “Reagan”, 2012 (14:10)

Source 6 – Global Knowledge Index, 2020 (17:10)

Source 7 – The Fruits of NAFTA, 2002 (18:35)

Source 8 – ASEAN Declaration, 1967 (22:40)

Source 9 – Nike in Indonesia, 1998 (25:50)

Source 1 – Inflation, unemployment, and GDP before and during the premiership of Margaret Thatcher, 1971–1990 (0:55)

Guiding question

To what extent did the global economy change from 1900 to the present?

Excerpt

Citation

Source 2 – Deng Xiaoping speech, 1992 (2:55)

Guiding question

To what extent did the global economy change from 1900 to the present?

Excerpt

The proportion of planning to market forces is not the essential difference between socialism and capitalism. A planned economy is not equivalent to socialism, because there is planning under capitalism too; a market economy is not capitalism, because there are markets under socialism too. Planning and market forces are both means of controlling economic activity. The essence of socialism is liberation and development of the productive forces, elimination of exploitation and polarization, and the ultimate achievement of prosperity for all. This concept must be made clear to the people.

Are securities and the stock market good or bad? Do they entail any dangers? Are they peculiar to capitalism? Can socialism make use of them? We allow people to reserve their judgement, but we must try these things out. If, after one or two years of experimentation, they prove feasible, we can expand them. Otherwise, we can put a stop to them and be done with it. We can stop them all at once or gradually, totally or partially.

What is there to be afraid of? So long as we keep this attitude, everything will be all right, and we shall not make any major mistakes. In short, if we want socialism to achieve superiority over capitalism, we should not hesitate to draw on the achievements of all cultures and to learn from other countries, including the developed capitalist countries, all advanced methods of operation and techniques of management that reflect the laws governing modern socialized production.

Citation

Source 3 – Pinochet Reagonomics article, 1981 (6:00)

Guiding question

To what extent did the global economy change from 1900 to the present?

Excerpt

Any country that knocks down its inflation rate from high triple digits to the low teens is bound to attract attention. And because Chile did it with a mix of budget cuts, tax changes, and free-market doctrine that looks a lot like Reaganomics, the Administration’s boosters are pointing to Chile as proof that the Reagan economic program is sound and will really work.

Certainly Chile’s turnaround since 1973 is impressive. From the economic wreckage of Salvador Allende’s Marxist regime, when inflation topped 600% and the deficits reached 23.6% of [Gross National Product (GNP)] (equivalent to a US deficit of $680 billion), Chile’s military junta has fashioned a relatively healthy economy. Inflation is down to about 12%, and the budget has a surplus. … For the past four years, GNP has grown an average of 8% annually. Though the government still controls big industries like copper mining, steel, and electric utilities, nearly all of the 500 companies nationalized by Allende have been returned to private ownership. Most tariffs, once averaging 105%, are down to 10% and trade is flourishing.

The results are strikingly visible in Santiago. Glittering, luxury-filled shops rival the best of Houston or Los Angeles. With trade barriers down, shiny new Japanese cars have largely replaced the elderly gas-eating Chevrolet Novas and Ford Falcons that once plied the streets. Though the gap between rich and poor seems not to have narrowed, the junta has sharply reduced the country’s infant mortality rate, once a scandalous 65 per 1,000. Milton Friedman … calls the recovery “comparable to the economic miracle of postwar Germany.”…

That may be too much praise. Even the Chileans are careful not to make extravagant claims about what their program might accomplish somewhere else. And Chile may not be the most suitable laboratory in which to test ideas for the huge and diverse U.S. economy. It has a budget about the size of New York City’s, and its population of 11 million is remarkably homogeneous. …

Moreover, in Chile the market’s invisible hand is an iron fist. The junta, led by General Augusto Pinochet, rules by fiat backed up by Chile’s … army. … Freedom of speech is restricted, industry-wide strikes are outlawed, and police with machine guns keep order in Santiago. Unemployment hovers around 15%, which is surely an unacceptable level for any democracy.

Citation

Source 4 – Maastricht Treaty, 1992 (10:40)

Guiding question

To what extent did the global economy change from 1900 to the present?

Excerpt

Article A

By this Treaty, the High Contracting Parties establish among themselves a European Union, hereinafter called “the Union”.

This Treaty marks a new stage in the process of creating an ever closer union among the peoples of Europe, in which decisions are taken as closely as possible to the citizen.

The Union shall be founded on the European Communities, supplemented by the policies and forms of cooperation established by this Treaty. Its task shall be to organize, in a manner demonstrating consistency and solidarity, relations between the Member States and between their peoples.

Article B

The Union shall set itself the following objectives:

- to promote economic and social progress which is balanced and sustainable, in particular through the creation of an area without internal frontiers, through the strengthening of economic and social cohesion and through the establishment of economic and monetary union, ultimately including a single currency in accordance with the provisions of this Treaty; …

Article 2

The Community shall have as its task, by establishing a common market and an economic and monetary union and by implementing the common policies or activities referred to in Articles 3 and 3a, to promote throughout the Community a harmonious and balanced development of economic activities, sustainable and non-inflationary growth respecting the environment, a high degree of convergence of economic performance, a high level of employment and of social protection, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States.

…

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Source 5 – Killer Mike’s “Reagan”, 2012 (14:10)

Guiding question

To what extent did the global economy change from 1900 to the present?

Excerpt

We brag on having bread, but none of us are bakers

We all talk having greens, but none of us own acres

If none of us own acres, and none of us grow wheat

Then who will feed our people when our people need to eat?

…

The end of the Reagan Era, I’m like eleven, twelve, or

Old enough to understand [things will] change forever

They declared the war on drugs like a war on terror

But it really did was let the police terrorize whoever

But mostly black boys, but they would call us “n******”

And lay us on our belly, while they fingers on they triggers

…

But thanks to Reaganomics, prisons turned to profits

Cause free labor is the cornerstone of US economics

Cause slavery was abolished, unless you are in prison

You think I am [kidding], then read the 13th Amendment

Involuntary servitude and slavery it prohibits

That’s why they giving drug offenders time in double digits

Ronald Reagan was an actor, not at all a factor

Just an employee of the country’s real masters

Just like the Bushes, Clinton and Obama

Just another talking head telling lies on teleprompters

If you don’t believe the theory, then argue with this logic:

Why did Reagan and Obama both go after Qaddafi?

We invaded sovereign soil, going after oil,

Taking countries is a hobby paid for by the oil lobby

Same as in Iraq, and Afghanistan

And Ahmadinejad¹ say they coming for Iran

They only love the rich, and how they loathe the poor

If I say any more they might be at my door

Citation

Notes or additional materials

Students can watch the music video, which remixes samples of Reagan speeches (Note that there is mature language): https://www.youtube.com/watch?v=6lIqNjC1RKU

1 Mahmoud Ahmadinejad was president of Iraq from 2003 to 2013.

Source 6 – Global Knowledge Index, 2020 (17:10)

Guiding question

To what extent did the global economy change from 1900 to the present?

Excerpt

Citation

Source 7 – The Fruits of NAFTA, 2002 (18:35)

Guiding question

To what extent did the global economy change from 1900 to the present?

Excerpt

All along the border, the rule of law has become hollow in the face of the desire by authorities to avoid doing anything to discourage US investors, including enforcing Mexican law. It is not simply a Mexican problem, however. As President [George W.] Bush pushes to extend NAFTA across two continents, and Congress seems ready to give him fast track authority to negotiate the Free Trade Area of the Americas, the [problems at a maquiladora] may be duplicated over and over again, from Canada to Tierra del Fuego.

As usual, what appears to be a legal problem is really about money.

Last spring, Torreon’s² streets filled with women chanting and shouting demands for a return to a standard of living capable of providing something better than cardboard houses and communities without sewers, electricity and running water. The city’s annual May Day parade witnessed over 2000 women shouting, “we won’t be quiet anymore!” and “we want a decent life!”

…

[The organization] SEDEPAC found it takes 1500 pesos a week to provide food, housing and transportation for a family of four. A normal maquiladora worker, however, makes just 320-350 pesos. Many explained that two and three families share a couple of rooms, pooling income to cover rent and basic needs.

That income gap was documented by the Center for Reflection, Education and Action … CREA found that at the minimum wage, it took a maquiladora worker in Juarez³ almost an hour to earn enough money to buy a kilo (2.2 pounds) of rice, and a worker in Tijuana⁴ an hour and a half. By comparison, a dockworker driving a container crane in the San Pedro⁵ harbor can buy the rice after 3 minutes at work, and even an undocumented worker at minimum wage only has to labor 12 minutes for it in LA.

…

Whose priorities will prevail in Mexico—those of workers or those of free-trade investors? “The changes proposed by [the banks, government, and business interests] would be a gigantic step backwards for workers,” Campos Linas emphasized. “The bankers don’t understand that it took a revolution—a million people died—to get our constitution and labor law. Our problem isn’t that we need a new law. It’s to enforce the one we have.”

Citation

2 City in Mexico
3 City in Mexico
4 City in Mexico
5 An area of Los Angeles, CA

Source 8 – ASEAN Declaration, 1967 (22:40)

Guiding question

To what extent did the global economy change from 1900 to the present?

Excerpt

[The five member states] HEREBY DECLARE:

FIRST, the establishment of an Association for Regional Cooperation among the countries of South-East Asia to be known as the Association of South-East Asian Nations (ASEAN).

SECOND, that the aims and purposes of the Association shall be:

1. To accelerate the economic growth, social progress and cultural development in the region through joint [endeavors] in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community of South-East Asian Nations;
2. To promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries of the region and adherence to the principles of the United Nations Charter;
3. To promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields;
4. To provide assistance to each other in the form of training and research facilities in the educational, professional, technical and administrative spheres;
5. To collaborate more effectively for the greater utilization of their agriculture and industries, the expansion of their trade, including the study of the problems of international commodity trade, the improvement of their transportation and communication facilities and the raising of the living standards of their peoples;
6. To promote South-East Asian studies;
7. To maintain close and beneficial cooperation with existing international and regional organizations with similar aims and purposes, and explore all avenues for even closer cooperation among themselves.

Citation

Source 9 – Nike in Indonesia, 1998 (25:50)

Guiding question

To what extent did the global economy change from 1900 to the present?

Excerpt

In 1913, when a member of the U.S. Commission on Industrial Relations asked him how Pullman porters were supposed to live on $27.50 per month, L.S. Hungerford, Pullman’s general manager, replied: “All I can say is that you can get all the men you require to do the work.” Eighty-five years later, Nike CEO Phil Knight trotted out the same line to a crowd at the National Press Club, who had come to hear him talk about plans to improve labor conditions at contractors’ factories in Indonesia. He cited a report from the field by Jill Ker Conway—the best-selling author, first female president of Smith College, and paid member of Nike’s board. Conway, who was seated on the dais with Knight, had reported that she’d observed over three hundred job applicants lined up outside an Indonesian factory that produced Nike sneakers. As it happened, I knew something about Conway’s report; I had called her shortly after her return from Asia. She freely admitted that she’d been on a Nike-guided tour, and that she had never before spoken with a factory worker in Asia. The workers, she said, “didn’t seem intimidated.” She deemed the working conditions exemplary.

Early this summer, in the depths of Indonesia’s economic crisis, I visited shoe factories in Tangerang and Serang—industrial boom towns about an hour’s drive west of Jakarta. This was not the Nike-guided tour. The workers had many complaints, some of which were the same that I’d heard from their predecessors in the early 1990s, when I was director of the AFL-CIO’s Indonesia office: low pay, abusive treatment from supervisors, inadequate breaks, punishing production quotas. And despite the high hopes of this past spring, President Suharto’s fall has not brought any serious liberalization. …

On this visit I also spent time with a group of two dozen workers who had been fired by a Nike contractor in 1992. They had just won a decision from the Indonesian Supreme Court ordering the contractor to put them back to work, with lost wages. The surprise decision … came just after U.S. Treasury Secretary Robert Rubin was pummeled by members of the House Banking Committee when he went to ask for supplemental appropriations for the International Monetary Fund. One of the major issues on which he took heat was Indonesia’s labor rights, or lack thereof. Indonesia has maintained a “security approach” to labor relations, keeping the military on strike-breaking duty in defiance of a 1994 agreement with then-U.S. trade representative Mickey Kantor.

… But since 1994 Indonesia has made a mockery of its promises, pushing striking workers back into factories at bayonet point and jailing independent union activists. …

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