The End of Liberalism

Author: Emanuel Wallerstein (USA)
Publisher:
Publication Date: 2002-01-01
Features: This is not the place to review Cold War history. Let's just note that from 1945 to 1989, the agreements were generally adhered to (as briefly mentioned in this article). Whenever the terms of the agreement were threatened by forces beyond the direct control of the two superpowers, they always made every effort to restrain these forces and reaffirm their tacit understanding. What did this mean for Africa? Simply put. In the late 1950s, the USSR and the US, out of a theoretical reverence for shared values, officially supported decolonization. They often took concrete actions, secretly (and sometimes openly) providing political and financial support to different political movements in specific countries. However, the fact was that Africa was within the sphere of U.S. influence and not within the Soviet sphere. Therefore, the USSR avoided getting involved as much as possible, which can be seen from the Congo crisis of 1960–1965 and the ongoing instability in South Africa after its independence in 1975. In short, the liberation movements in Africa first had to rely on self-reliance and could hardly expect support from the USSR, let alone the U.S., even in moral terms.
What about the world surplus gathered by oil-producing countries? Some of it was used for the "national development" plans of oil-producing countries (such as Nigeria, Algeria, Iraq, Iran, Mexico, Venezuela, and the USSR); another portion was spent on large-scale luxury consumption by oil-producing countries. This meant that this money was transferred to members of the Organization for Economic Cooperation and Development (OECD)—for purchasing goods, investments, and capital outflows. The rest was deposited in banks in the U.S. and Europe. These funds, deposited in banks, were then lent back to Third World countries and socialist countries (and even to oil-producing countries). This government lending helped solve the balance of payments problems these countries faced; and it was precisely due to the rise in oil prices that the balance of payments problems were particularly severe at the time. With this government lending, governments could continue to import (even as exports were declining), thus temporarily countering political opposition. This, in turn, maintained global demand for industrial goods from OECD members, thereby minimizing the impact of the global economic stagnation on them.
By the 1970s, some Third World countries had already begun to feel the effects of declining growth rates and depleted monetary and social reserves. By the 1980s, the effects were felt everywhere (except in East Asia). The debt crisis first emerged on a large scale in Poland in 1980. The Gierak government, like other governments in the 1970s, had borrowed and spent. However, when the debt repayment deadline arrived, the Polish government tried to alleviate the pressure by raising domestic prices, which placed a burden on the Polish working class. As a result, the Gdansk events and the founding of Solidarity occurred. In the 1980s, one by one, the periphery and semi-periphery countries faced economic difficulties. Overall, there were two common points: One common point was public dissatisfaction with the ruling elite, followed by political disillusionment. Even when the ruling elite was overthrown (whether by violence or due to corruption and incompetence, whether by military dictatorship or