UC Berkeley - HIST 186 - 2012 Spring - Sargent - International and Global History Since 1945 - Lecture 14 - Crises of Political Utopias - 01h 20m 56s

Lecture Overview

Okay, good morning. today we're going to be taking a comparative look at the prospects that postwar political projects faced across the world in the 1970s. We're going to be looking at the liberal capitalist world at the sort of culminating crisis of managed capitalism as it is experienced by the nation-states of Western Europe and North America in the 1970s.

[00:28]

We'll then move on to look at the postcolonial world, at the crisis of post colonial nationalism in the developing world, and finally we'll sort of conclude with some discussion of the travails of Soviet style socialism in Eastern Europe and the USSR itself.

[00:47]

The purpose of this comparative approach is to pose a set of questions as to how the sort of prospects for state building projects were changing in the 1970s. Though managed capitalism in the West, postcolonial nationalism in the South, and Soviet style socialism in the East represented very different kinds of political and ideological project there were certain you know common features to these different social and economic models which we've discussed.

[01:18]

Right, each of those models place central emphasis on the role of the state, on the role of national government as an instrument of economic and political mobilization. And one of the you know sort of common characteristics of the crisis... or the crises that each of those systems experiences in the 1970s is that the capacity of government, the capacity of national authorities to orchestrate outcomes, political outcomes, social outcomes and economic outcomes, appears to be increasingly in doubt. So that's sort of the common thread that ties these distinct crises together.

[01:56]

Crises of the Capitalist West in the 1970s

We'll start by talking about the crisis of managed capitalism, the crisis of the progressive liberal slash social democratic synthesis that emerges in the West during the Great Depression, and is sort of institutionalized at the end of the Second World War.

The Breakdown of Bretton Woods and the Specter of a Return to Protectionism

[02:14]

We've already talked about the crisis of the Bretton Woods institutional framework. That was where we concluded Tuesday's lecture. But the crisis of Bretton Woods as an institutional structure is you know merely one face of what seems to contemporaries in the early 1970s to be a much larger crisis of the managed capitalist order.

[02:38]

There are other aspects to this crisis too. And the end of Bretton Woods raises a you know series of very profound questions as to the future shape of the international economy. Remember that Bretton Woods after the Second World War provided a framework in which liberal international trade was to some extent restored.

[03:01]

Financial integration is more qualified after the Second World War. Bretton Woods enables sort of nation-states to control cross-border movements of capital so globalization is not restored, at least not to the extent that it had existed prior to the Second World War, prior to the Great Depression, but there is a qualified restoration of liberal globalization within the framework of Bretton Woods which takes place after the Second World War.

[03:30]

The breakdown of Bretton Woods in the early 1970s puts this accomplishment in some jeopardy -- at least as contemporaries perceive it. Questions are asked as to whether globalization, that is to say sort of the integration of open market economies, in a sort of framework of mutual interdependence, can continue now that the fixed currency system has come to an end.

[03:55]

After all fixed exchange rates are, as it looks from the perspective of the early 1970s, a source of stability for the international economy.

[04:07]

How might the end of the fixed exchange rate regime affect international trade?

[04:14]

What are the benefits of fixed exchange rates for trade?

[04:19]

(student response)

[04:23]

Exactly. Fixed exchange rates are a source of stability. They make trade predictable. If exchange rates are you know fixed in relation to each other then you can be fairly confident when you enter into a transaction that the values of the currencies in which the transaction is being made will be the same at the end of the transaction as they are at the beginning.

[04:44]

And if you're dealing with a transaction that takes you know period of months to unfold, cross Pacific shipment of you know grain for example, then exchange rate stability is a source of confidence, and it has you know sort of obviously beneficial implications for international trade.

[05:02]

So contemporaries in the early 1970s are concerned that the remarkable reintegration of the global economy that has been accomplished after the Second World War may be put in jeopardy by the end of the fixed exchange rate regime.

[05:16]

In the United States and in Western Europe protectionist sentiment seems to be on the rise as well. One of the you know major accomplishments of the postwar decades had been the liberalization of tariff policies. During the 1930s of course nation-states throw up tariff barriers to protect their own industries at the expense of foreign competition.

[05:39]

It's what known as a sort of beggar thy neighbor strategy↗. You try to protect your own economy, your own industry, at the expense of other peoples. This was the sort of general response to the Great Depression -- was to throw up tariff barriers in order to shut out competition and protect your own industries.

[05:57]

After the Second World War, a series of trade negotiations substantially reduce the tariff barriers which we're thrown up during the 1930s. The most sweeping round of trade negotiations of tariff reform comes in the 1960s -- the so-called Kennedy Round↗, named for President Kennedy, which takes place within the framework of the GATT↗.

[06:21]

But the breakdown of Bretton Woods raises question as to whether trade protectionism might come back. And after all there is a great deal of pressure from you know textile workers in the United States for example from auto workers in Michigan for tariff protection, tariff protection that will protect domestic industry against foreign competition.

[06:43]

The consolidation of the European Economic Community also has implications for world trade. Within Europe the European Economic Community constitutes a free trade zone. It reduces tariffs. But the European Economic Community has a common tariff that separates Europe from the external world. So from the perspective of US exporters or Japanese exporters the consolidation of the EEC is not necessarily a good thing.

[07:09]

It creates a sort of monolithic European bloc which may make it harder for Japanese and US exporters to compete in Europe. So the creation of the EEC is just one of the developments that you know sort of raises fears in the early 1970s that the world economy may be about to experience a new you know wave of deglobalization, of deintegration.

The Rise of Interdependence in the 1970s

[07:32]

In fact what happens in the 1970s is exactly the opposite of this. For all of the fear about deglobalization that you know sort of percolates at the beginning of the decade the 1970s experience remarkable wave of economic integration.

[07:48]

Trade continues to expand. Though the '70s are a period in which there's a you know great deal of economic rescission, the global economy does not grow as much as it had done in the '50s or the '60s, the world economy integrates much faster than it had done in either of the preceding decades.

[08:04]

As a fraction of world output trade virtually quadruples during the '70s. Financial integration increases even faster.

[08:17]

By the end of the 1970s the sort of global capital market, that is to say the market for mobile short-term funds is very big and very substantial. It is a source of you know serious disruptive influence in the global economy. At the beginning of the 1970s the role of short-term sort of financial capital in the world economy was not negligible, we've already discussed the role that it played in the breakdown of Bretton Woods, but it's a role that expands very greatly as the decade progresses.

[08:51]

Though the word is not used at the time, it doesn't begin to be used until the mid-1980s what occurs during the 1970s is something akin to the emergence of new era of globalization. And we're going to talk much more about this in you know subsequent lectures, the week after next week, we're going to come back to globalization as a theme in its own right. But what I want to sort of point out today is just the disruptive influence that globalization, its called interdependence at the time, has upon governance.

[09:22]

Insofar as the world economy is rapidly reintegrating, insofar as capital markets in particular are integrating, the implications for governance are disruptive.

[09:33]

Governance through the sort of era of postwar managed capitalism, the quarter-century after the Second World War, had been orchestrated at the level of the nation-state, right.

[09:45]

Keynesian economic theory, which most governments in the West adhered to after the Second World War, identifies a large role for government as a manager of the economy. But this relationship between government and the economy exists within the context of a territorial nation-state. Right, it's national governments that are to be managing economic space in the Keynesian concept. It's not to be the United Nations that is managing the world economy. You know nor is to be the government of California that is managing the Californian economy.

[10:20]

The economy is to be managed and regulated at the level of the nation-state. And globalization has disruptive implications for this relationship. The integration of capital markets for example, and we're going to talk about this much more, makes it harder and harder for governments to manage monetary policy.

[10:37]

If money is you know moving across borders fairly freely then it's difficult to control the domestic money supply because that's effected by the movement of capital into and out of your domestic economy.

Summit Meetings and Collaboration Among the Liberal Capitalist Nations

[10:48]

So how do governments react to the advent of a new era of globalization, an era of globalization that is in key respects disruptive to the institutions of macroeconomic governance and management that have evolved in the decades after the Second World War?

[11:08]

Well one of the most obvious responses is for governments to coordinate so as to collaboratively manage an integrating global economy.

[11:18]

Hence the sort of institutions of cooperation that become known as the sort of G7↗ group begin to emerge in the mid-1970s at exactly the same time as the world economy is beginning to reintegrate.

[11:33]

In 1974 a group of Western finance ministers meets in the library room at the White House. This sort of informal colloquium is one of the first you know sort of dialogues among national government leaders as to sort -- that tries to sort of orchestrate relationships of economic cooperation and collaboration in response to integrative international circumstance.

[12:00]

Soon it will be followed up by a series of heads of state summit. In 1975 the G5 meet at Rambouillet in France↗. The G5 comprise the United States, West Germany, France, and Great Britain. Is that five? That's four. Japan of course. Japan is part of the G5.

[12:22]

And these are the big five capitalist economies. The next year they meet at Puerto Rico which is a territory of the United States. The following year they meet at London for the London Summit. The year after that in 1978 they meet at Berlin. And what these summits do is they try to establish relationships of cooperation through which the leaders of the capitalist countries will coordinate national policies so as to serve you know some collectively defined purposes and interests.

[12:53]

And this will involve tradeoffs and compromises. In 1978 for example the United States agrees to decontrol domestic oil prices which had previously been controlled -- the price of oil had been set by the government -- until you know 1979. But the United States in 1978 agrees to decontrol oil prices in exchange for a West German and Japanese commitment to introduce economic stimulus packages.

[13:18]

And the purpose of this you know is complex. Jimmy Carter who's the American President at the that time doesn't want to necessarily decontrol oil prices because if you remove price controls on oil -- oil becomes more expensive. And what happens if you're President and oil becomes more expensive?

(student response)

[13:36]

That's right. You don't get reelected. And this is probably the single thing that Barack Obama has to be most concerned about this year is the price of oil.

[13:44]

So oil gets more expensive in the United States and that's good for Germany. Why would rising oil prices in the United States be good for Germany?

[13:53]

What happens as prices go up?

(student response)

[13:59]

That's right demand goes down. So decontrolling oil prices in the United States will reduce American demand for oil, and what does that do to the price of oil on the world market? If demand falls?

(student response)

[14:13]

That's right. The price falls. So there's an interest for Germany in the United States decontrolling oil prices. Now the German stimulus will serve beneficial purposes for the United States. You know insofar as Germany has historically been reluctant to simulate its economy because of the fears of inflation that...you know reflect the experience of the 1920s.

[14:37]

Germany has maintained you know sort of a strong balance of payment surpluses. Its exported more to the world than it has imported from the world. The United States would quite like Germany to pursue a more stimulative policy so that German demand for foreign goods, including American goods, would increase and perhaps so that German exports to the world will become a little bit less competitive.

[15:01]

This stimulus package which is introduced in Germany serves an American self-interest and it can be introduced in exchange for a quid pro quo which is oil price decontrol on the part of the United States.

[15:14]

So there are tradeoffs to be negotiated and the fact that these are being negotiated reflects the fact that interdependence between you know the economy of Germany and the economy of the United States increases considerably during the 1970s.

[15:29]

Interdependence is both a reality and a perception of reality. And it's the combination of the two things, the reality and the perception thereof that leads the leaders of nation-states to coordinate and collaborate in pursuit of collective you know macroeconomic governance.

[15:49]

Now you may be wondering why when I've talked about interdependence I've mainly talked about the advanced capitalist countries. The members of the G7: Germany, France, Britain, the United States, and Japan plus Canada and Italy from 1975.

[16:06]

Well, its amongst these economies, the liberal capitalist economies, that interdependence or globalization is most advanced during the 1970s.

[16:15]

When we talk about globalization it's easy to imagine that we're talking about the world as a whole. After all the word itself you know sort of implies that. But interdependence relationships, relationships of thickening economic integration, are during the 1970s most pronounced amongst the countries of the advanced capitalist West.

[16:36]

The socialist world does experience sort of thickening interdependence with the West during the 1970s but it's more of a one-way street. And from a Western point of view it's relatively marginal in terms of its consequence. Most of the developing world is still committed to you know vary nationalistic economic policies. Tariff barriers throughout most of the developing world are still very high during the 1970s.

[17:02]

So the developing world doesn't really participate in this globalizing system that is taking shape. We'll talk much more about that you know when we come to talk about globalization in two weeks time but let me just sort of clarify the point today that in the 1970s interdependence as it accelerates and takes shape is very much an intra-Western phenomenon.

[17:25]

But it's still marks a you know sort of radical departure from the assumptions of the sort of 1950s and 1960s in which economic activity had been primarily you know national -- to be sort of organized and managed by national governments.

Economic Shocks and the Oil Crisis of 1973

[17:41]

Besides the acceleration of interdependence in the 1970s there are new developments, new shocks, that the economies of the capitalist world have to deal with.

[17:52]

And none is more consequential than the oil shock of 1973↗. We're going to talk about the sort of geopolitics of the oil crisis -- the Middle Eastern crisis of 1973 next week. So my purpose today is not to talk about the political aspects of this crisis. The Arab-Israeli conflict and so on. We'll come to that next week. We're going to simply focus upon the economics today.

[18:14]

What had been the role of oil in the era of postwar affluence that extends from sort of the end of the Second World War to the early 1970s?

[18:25]

Oil played a central role in the remarkable prosperity that the industrial capitalist economies enjoy after the Second World War. This is because oil was cheap and abundant in the '50s and the 1960s.

[18:41]

Moreover oil became during this period the primary sort of energy base for industrial economies in the capitalist world.

[18:51]

What had been the principle source of energy for European industry before the Second World War? Where did the Europeans get their energy from?

(student response)

[18:58]

Coal. Well, the sun is also correct as an answer because that's where it all comes from in the first place. But you're right. Coal is the fossil fuel that powers European industry through the Industrial Revolution and into the 20th century.

[19:11]

But during the 20th century oil displaces coal as a sort of, as the fossil fuel, on which European industry, on which European, you know, power consumption depends.

[19:25]

And this is in part because oil is a better fuel than coal. It's cleaner. It doesn't produce you know sort of the same kinds of toxic pollutants that coal produces. It's also because oil is more efficient as a fossil fuel. It's more -- it's easier to generate electricity from oil than it is from coal.

[19:42]

You can generate more electricity with a comparable amount of the fossil fuel.

[19:47]

But it's also because oil is cheap and abundant.

[19:50]

And during the sort of 1950s and the 1960s the economies of Western Europe make the transition from being sort of coal based economies to being oil based economies. Japan experiences a massive increase in its demand for oil after the Second World War.

[20:08]

I'm just going to give you some statistics which I wrote down so these are actually accurate. Between 1949 and 1972 the US demand for oil increases from 5.7 to 14.1 barrels per day.

[20:23]

That's million barrels per day.

[20:26]

That's an increase of about five and a half fold. During the same period, 1949 to 1972, the West European demand for oil increases from under a billion -- under a million -- barrels per day to about 14.1 million barrels today. Which is almost exactly as much as the US is consuming. This is an increase of over 14 fold.

[20:48]

The Japanese demand for oil increases from 0.03 million barrels per day to 4.5 million barrels per day. This is an increase of about a hundred and fifty fold.

[21:01]

So the West's demand for oil increases dramatically. I mean it's a really stunning increase in the amount of oil that Western industrial economies are consuming.

[21:11]

Now what would you expect to be the effect of this massive increase in demand on the price of oil?

(student response)

[21:21]

That's right. You would expect that this remarkable surge in demand to produce an increase in price. But that's not what happens. After the Second World War the price of oil falls. It doesn't just fall in real terms it falls in nominal terms. Like this is...really, really impressive. Between 1949 and 1969 the price of oil falls from about you know a little -- I should -- no -- I'm sorry this is in real terms. The chart is wrong.

[21:52]

It falls from under a little bit under 16 dollars per barrel to under 12 dollars per barrel of oil. So the price of oil declines in terms of what West Europeans and Americans are actually paying for this stuff. You can understand why Americans were purchasing gas guzzling automobiles in the 1960s because oil was really, really cheap.

[22:12]

And it looked like it was becoming cheaper. Now this is bad news if you are a country that exports oil. If you're a Venezuela or a Saudi Arabia and your primary source of export earnings is oil the cheap oil regime is bad news indeed. It seems to represent a sort of whittling away of your, you know, primary natural endowment.

[22:37]

And leaders of oil producing states are cognizant of this. They realize that the cheap oil era is you know bad news. It doesn't serve their interests. And as early as 1960 influential oil ministers in the sort of oil producing countries begin to discuss the possibility of creating a sort of producer cartel that will reduce production of oil so as to raise the price of oil on world markets.

[23:04]

The two men who are most influential in the creation of this cartel concept are Juan Pablo Alfonzo↗ who's pictured in the top of the slide and Abdullah Tariki↗ who's pictured on the bottom part of the slide.

[23:20]

They are respectively the Venezuelan and Saudi Arabian oil ministers. Venezuela and Saudi Arabia being two of the most important oil producers in the developing world at this time.

[23:32]

At their instigation, OPEC, the Organization of Petroleum Exporting Countries, is created in 1960. And OPEC's guiding mission from the outset is to coordinate production so as to raise the price of oil on world markets.

[23:48]

But this is very difficult to do in practice. It's not as easy as you might imagine. Organizing a cartel is difficult. How many of you have seen The Wire? TV series?

[24:01]

Okay, not enough of you for me to take this very far. But think about Proposition Joe↗, right, and what happens to him. It's difficult to sustain a workable cartel organization. And during the 1960s OPEC struggles to achieve the results that Tariki and...Alfonzo wanted to have.

[24:24]

This is because coordination is harder to achieve in practice than it is in theory. Let's say that you are the leader of a you know oil producing state like Libya. King of Libya. Well, you might be able to see the benefits of cooperation in theory but to reduce your production, so as to you know serve the purposes of you know producer coordination is also to reduce your own import earnings at least in the short-term.

[24:51]

The leaders of developing world oil producing states who are you know thirsty for export earnings -- export earnings that can fund modernization projects and can fund lavish consumption depending upon your preferences -- will compete with each other to export oil to the world market.

[25:09]

So the natural, you know, dynamic in a market economy, is towards competition amongst producers and this is what happens in the 1960s. Is for all of the you know work that Tariki and Alfonzo do to produce you know sort of cartel coordination amongst the oil producing countries, the oil producing countries continue to compete with each other to put oil, to bring oil, to the world market.

[25:33]

Because it's by bringing oil to the world market that export earnings are generated. It's also important to remember that the OPEC countries are not the only oil producers in the world.

[25:43]

What's the biggest oil producer in the world in 1960?

[25:46]

(student response)

[25:48]

No. But you're very, very close.

(student response)

That's right the United States of America is the biggest oil producer in the world. It remains the biggest oil producer in the world into the 1970s. So the US is the sort of historic center of the global oil economy.

[26:03]

You know where is oil first pumped for commercial purposes? Where in the world? In the sands of Saudi Arabia? The Azerbaijani Desert?

(student response)

Even closer to home than Texas.

(student response)

Southern California is the historic heart of the American oil economy. Of course there's very little oil left now but Southern California was where it all began.

[26:29]

And the United States remains the dominant producer in the world oil economy through the 1960s.

[26:35]

However from the late 1960s things begin to change. And what changes can be you know represented fairly easily you know in sort of graphical representation?

[26:49]

Basically what happens is that US production of oil begins to taper off from the beginning of the 1970s. In 1970 the US pumps more oil than in any other year before or subsequent. That means 1970 marks the peak of domestic oil production in the United States.

[27:14]

After 1970 domestic production begins to decline. Now why is that happening?

[27:19]

Why would domestic production start to fall?

(student response)

[27:25]

I'm sorry. That's right. We're running out of oil. There's a finite amount of oil underneath the you know soil of the continental United States -- a finite amount of oil to be you know pumped and refined.

[27:37]

In 1970 the United States hits the point of peak oil. After that point the returns on investment, the returns on exploration, begin to decline. What oil there is becomes you know harder and costlier to extract. So we end up pumping you know oil from deep water wells in the Gulf of Mexico, and we know where that story led a couple of summers ago.

[28:02]

But in essence the low hanging fruit is picked and what oil remains in the United States becomes you know more difficult and costlier to extract. Meanwhile what is happening to American oil consumption?

(student response)

[28:21]

That's right. It's continuing to expand. Because you know Americans haven't yet got the message that oil is a you know finite resource and that they ought to use less of it. You know people are still driving around in...do I have a... I don't if I I have a picture...but there's still driving around in gas guzzling automobiles which get you know what six miles to the gallon and so on and so forth.

[28:41]

These are often very beautiful automobiles but they're not particularly you know sort of fuel efficient or economically rational automobiles. So Western demand for oil continues to grow. The West's capacity to produce oil begins to decline.

[28:56]

Just as a footnote Western Europe and Japan really don't produce any oil of their own. They're will be some exploration in North Sea oil during the 1970s so Europe does become an oil producer, a small oil producer, but in 1970 when I talk about the West's oil output I'm really talking about North America because that's where the deposits are.

[29:17]

So the West's capacity to produce oil goes into decline. The West's demand for oil continues to increase. This you know logically enough empowers the oil producers of the developing world. Because these are the countries that are producing you know vast amounts of oil in excess of their own demand for it. It's in -- it's a transitional shift that is empowering to developing world oil producers.

[29:43]

The United States to put in simply is no longer able to play the role of swing producer to the world economy. The US can no longer increase oil production to meet rising demand for oil. That demand for oil will have to be met elsewhere.

[29:59]

And political events in the developing world from you know as early as 1969...begin to sort of reveal the capacity of developing world oil producers to set the terms on which oil will be brought to market. In 1969 there's a coup in Libya. It brings to power the late Colonel Gaddafi↗. Gaddafi is a sort of revolutionary socialist. And he very quickly goes about, after seizing power, goes about renegotiating Libya's contracts with Occidental Oil.

[30:33]

Occidental is one of the main foreign companies that extracts oil from Libya's territory. And Gaddafi sort of unilaterally demands that Occidental raise the price of oil that it is bringing to market, so that Libya gets more money for the oil that Occidental is you know pumping and marketing on its behalf.

[30:51]

The sort of...relationships between the Western oil companies that do most of the extraction and marketing of oil and the producer governments on whose you know soil these operations are taking place is complex and I don't want to delve into it too deeply because you know that would take the rest of the lecture.

[31:08]

But suffice to say that the rise in Western demand for oil empowers the producer governments. And Libya, after Gaddafi's revolution, begins to take advantage in that by...unilaterally increasing the price of Libyan oil as it goes to world markets.

[31:28]

The major price increase comes in 1973 however. That fall, at the beginning of the fall of 1973, OPEC ministers meet in Geneva to orchestrate a major price increase in the price of oil. And they're able to do this in part because the United States is no longer able to increase production so as to reduce global oil prices. US production is maxed out at this point. There's simply no slack left for expanding Western oil production to you know reduce global oil prices.

[32:01]

The 1973 oil crisis will be inflected by you know a sort of powerful political aspect. That, later that fall, in October 1973, Egypt attacks Israel and the third Egyptian-Israeli War begins.

[32:16]

In the context of this war the oil crisis assumes the character of a political embargo, and we're going to talk about that in due course. But the underlying you know sort of economic forces that empower the oil producers of the developing world and render the West increasingly vulnerable are totally independent of the Arab-Israeli War.

[32:39]

The Arab-Israeli War, you know, provides a trigger that makes the oil crisis even more severe than it might otherwise have been. But the underlying economic forces which are you know rising demand and falling Western supply are you know separate from the political crisis.

[32:57]

But as a consequence of this you know sort of underlying economic shift and a political crisis that gives the you know sort of 1973 oil crisis the character of an embargo oil prices increase very, very rapidly. They quadruple between sort of 1972 and 1974. So in the space of just a year oil prices increase about four fold.

[33:20]

What are we paying for gasoline now? A little over four dollars. So imagine that gasoline prices go up to sixteen dollars over the next year, and think about what the economic consequences of that might be.

[33:32]

The consequences aren't pretty, particularly for those of you who drive to campus. Probably fewer of you would be driving to campus and it would be easier for me to park if...(laughter from the class). Though I might not be driving to campus either I would have to ride my bike.

[33:45]

So the economic consequences of this oil crisis are predictable. The oil crisis helps to bring an end to a long era of extensive growth. What is extensive growth? Let's recapitulate.

(student response)

[34:06]

That's right. It is growth that is accomplished by increasing the factors of production.

[34:12]

What is energy if not an important factor of production? Cheap energy facilitates extensive growth. So the oil crisis is one of the factors that brings to an end a long era of extensive growth. But it's by no means the only factor that you know marks the crisis of a long era of extensive growth.

[34:30]

The sort of dwindling of the surplus labor pool is another really, really important factor. Unemployment throughout Western Europe had been relatively high during the 1950s. But during the 1960s unemployment falls in Europe -- virtually all of the available surplus labor is used up, as extensive production, as extensive growth expands.

[34:59]

The returns on investment begin to diminish; productivity increases slow. An era of sort of extensive growth which had taken advantage of existing industrial technologies and available surplus labor and capital is by the early 1970s coming to a decisive end.

[35:19]

And there a whole range of you know sort of symptoms that indicate that an era of extensive growth is closing. Wages begin to rise in relation to production or at least demands for wages begin to rise. This in part reflects the fact that labor markets are tightening. That unemployment has you know sort of withered away throughout much of the Western world.

[35:42]

There are very few unemployed workers who might do the jobs that salaried workers and you know unionized labor are doing. So it's easier for workers who have jobs to demand wage increases from their employers.

[35:57]

But this is a you know problem insofar as productivity is beginning to slow the opportunities to give wage increases are diminishing. Where are wage increases going to come from if productivity is slowing?

[36:12]

Well, they can only come from profits, right. They can only come from future investment. So demand for, you know, wage increases, you know, is sort of one of the factors that marks...is one of the symptoms that marks the end of a long era of extensive growth, but it also contributes to the crisis. There's a sort of feedback mechanism as it were whereby...unions press for wage increases, wages rise you know faster than growth which slows productivity because the you know return on investment necessarily diminishes.

[36:44]

What is government to do in this circumstance in which there's a spiral of sort of wage increases and price increases? Governments try to encourage employers, sorry, to negotiate wage restraints with workers. Governments engage in sort of triangular negotiations with employers and unions to negotiate sort of national guidelines for moderating wage increases.

[37:09]

But this is very difficult to do. Labor militancy increases as workers demand a larger sort of slice of the economic cake. There are dramatic strikes in France in the spring of 1968 and these mark a you know sort of turning point for the West. For you know decades, two decades, prior to 1968, economic growth had proven to be essentially capable of satisfying worker's demands for you know salary increases.

[37:37]

By 1968 growth is slowing. Increases in productivity can no longer assure workers rising wages, so workers go on strike. First in France they build barricades and smash things. Elsewhere labor unrest is more genteel. But labor unrest is you know symtompatic of an era of extensive growth that is you know coming to its historical conclusion.

[38:01]

The rising demand for wages that workers you know sort of manifest in the late '60s and early '70s combines with the oil crisis to produce an epidemic of inflation. If the price of labor is increasing, if the price of energy inputs is increasing, then firms are going to rise the price of you know manufactured products in order to compensate. So across the economy prices are waging, sorry, prices are rising.

[38:30]

This is price inflation. And price inflation becomes a sort of epidemic in the Western capitalist world during the 1970s. What do governments do to suppress price inflation? The answer is not very much. On the contrary governments make price inflation worse. Because the oil crisis and the end of extensive growth also have recessionary consequences. They slow growth and in some cases plunge economies into recession.

[39:02]

Governments try to respond to recession by stimulating their economies, by printing money and by spending, sometimes by deficit spending.

[39:13]

Now of course the end of Bretton Woods makes it easier for governments to print money. Because Bretton Woods had imposed a certain discipline on monetary expansion. Insofar as you know currencies were linked to the dollar which was linked to gold there was a mechanism that inhibited money creation under the Bretton Woods era. With the end of Bretton Woods and the advent of floating currencies the inhibitions to monetary creation are much looser than they had been.

[39:39]

So it's easier to try to stimulate your economy by printing cash. And this is what governments across the Western capitalist world do. And what is the consequence? Consequence is rising inflation throughout the West.

[39:53]

Through the 1950s and into the 1960s inflation in the Western world had been relatively low. After the late '60s from the -- particularly into the mid-1970s inflation begins to spike.

[40:06]

In some contexts inflation is really dramatic. In Italy and in, you know, Britain inflation approaches you know 20% -- annual price inflation. Germany is something of an outlier. The German government does a much better job of keeping inflation under control. Elsewhere inflation reaches sort of double digit rates.

[40:27]

And this is consequential. Inflation sort of undermines our expectations for the future. Inflation has corrosive consequences for social stability. And during the 1970s Western countries have to sort of grapple with the kind of sustained price inflation that has not been seen since before the Second World War.

[40:51]

All of this raises capacity, raises questions about the capacities of governments to discipline you know their societies, to impose restraint on expectations, to impose restraint upon wages in particular.

[41:06]

One of the most influential analyses of the sort of crisis of you know governance in the capitalist world that emerges during the 1970s is published in 1975 by the Trilateral Commission↗.

[41:18]

The Trilateral Commission is an informal sort of organization of experts, business leaders and political elites from Western Europe, Japan and North America -- hence the designation Trilateral. It refers to the sort of triangular geopolitics of the industrial capitalist world.

[41:36]

And the Trilateral Commission during the course of its sort of long career publishes a series of reports on you know common issues and problems that are afflicting the Western capitalist world as a whole.

[41:52]

One of the most influential of these reports is published in 1975 and it's titled The Crisis of Democracy↗ it's collaboratively authored by a Japanese political scientist Joji Watanuki an American political scientist, Sam Huntington↗, and a French political scientist, Michel Crozier↗.

[42:09]

And this report concludes that liberal democracies are in a sense becoming ungovernable. Modern economies, it argues, are too complex for governments to be able to manage them easily. Citizens are becoming alienated from political institutions. Traditional sources of social authority such as religion have all but withered away.

[42:29]

And inflation more than any other phenomenon represents the ungovernability of democracy in an era you know sort of complex economic circumstance.

[42:40]

Inflation is an easy answer to slowing growth. Rather than you know -- it's very difficult when extensive growth begins to slow to find new ways to expand an economy. Doing that requires you know making a transition to intensive growth: investing in new technologies, reskilling workers to labor in new industries and so on and so forth. When you know the opportunities for one kind of growth begin to diminish finding new areas, new ways in which to grow an economy, is difficult.

[43:13]

Easier to print money, right. It's much easier simply to you know to mint unemployment checks. And this you know in essence is what the Western capitalist countries do. And it contributes to the kind of sustained epidemic of inflation that is experienced during the 1970s.

[43:33]

But of course inflation itself has social costs. Inflation is particularly costly for people who save. You know for middle classes. If you're earning a sort of monthly salary and your employer is you know willing to match the price inflation by increasing your salary. Inflation is relatively tolerable. If you earn an annual salary which is you know harder to renegotiate because you're not represented by a collective bargaining agreement then inflation is much more costly.

[44:03]

So the middle classes suffer in particular as a consequence of you know sustained price inflation during the 1970s.

[44:10]

Think about what price inflation does you know for example to a Cal professor. Cal professors are not represented by collective bargaining agreements. We don't have a union to represent us. So if prices increase what's going to happen to our salaries?

(student response)

[44:26]

That's right. They're going to stay more or less the same in nominal terms, which means in real terms, our salaries are going to decline.

[44:32]

Now let's saw that you're a unionized you know worker, and you're represented by an activist union. Of course maybe such things you know no longer so active as they were in the 1970s. But in the 1970s there was still you know active and effective labor organization in the United States.

[44:48]

And labor unions able to negotiate wage increases for their members so as to match price inflation. But this has you know sort of...this divergence in the fortunes of the you know working class and the middle class has political consequences. I mean it's one of the factors that will inform say the anti-tax revolt in California in the late 1970s. You know people who own property are sick of paying you know taxes on it as those taxes rise in line with price inflation.

[45:20]

So the social and political consequences of this are really important. But perhaps even more profoundly the sustained inflation of the 1970s, the apparent specter of democratic ungovernability, raises questions as to the future prospects of liberal democracy itself.

[45:39]

Democracies in the 1970s appear unable to discipline themselves. They appear unable to suppress price inflation, to hold down demands for higher wages, and they instead resort to printing money and to stimulative spending.

[45:53]

This raises questions in the you know eyes of the authors of the Trilateral Commission's report as to the future prospects of democracy. Can democracy continue to flourish or might authoritarian regimes be better able to discipline themselves?

[45:08]

The authors are not proposing you know an authoritarian alternative to democracy but they you know pose the question of whether voters, you know, frustrated by inflation, frustrated by slowing rates of growth, may eventually you know resort to more authoritarian alternatives than liberal democracy.

[46:29]

What the Trilateral Commission proposes, you know insofar as it has a coherent solution to the crisis of sort of governance in the liberal democratic world, is cooperation between technocrats -- cooperation between sort of the leaders of the United States, Japan and Western Europe to devise common solutions.

[46:50]

This has an anti-democratic or an undemocratic aspect to it, right. If leaders are cooperating via G7 summits then they are acting according to some sort of technocratic definition of the West's you know collective best interests. They're not necessarily acting in accordance with the you know expressed preferences of domestic voters.

[47:11]

So cooperation at the international level between policy elites is you know undemocratic. But it is for the you know members of the Trilateral Commission sort of the least bad response to the crisis of democratic self-governance that the sort of 1970s manifests.

[47:31]

But these are questions in a sense that will remain to be debated into the future. What will the you know future prospects of liberal democracy be in a world in which the sustained growth and the remarkable affluence of the postwar era has come to a close?

[47:48]

You know what is to follow now that this you know sort of era of affluence, prosperity and social stability sustained by extensive growth has come to an end. This is a question that we will turn to in a couple of weeks time.

Crises in the Postcolonial World in the 1970s

Growth and Stagnation under ISI

[48:04]

Let's talk now about the postcolonial world.

[48:08]

The postcolonial world during the 1970s experiences tensions and fissures that are not so different from those that manifest themselves in the capitalist West. To understand this we might start by talking about the political economic regime that establishes itself in the developing world in the aftermath of the Great Depression.

[48:34]

And this is a political economic regime that is often characterized as an ISI regime. What does ISI stand for?

[48:42]

(student response)

[48:44]

That's right import substituting industrialization. And this is a sort of shorthand for a political economic strategy that...aims to industrialize and develop within the context of the nation-state.

[49:01]

It's a legacy of the Great Depression. The Great Depression breaks apart the global economy. Latin American countries like Argentina which had you know gotten fairly wealthy in the late decades of the 19th century and in the early 20th century by exporting you know agricultural products to the industrialized world lose export markets.

[49:25]

And they are you know impoverished as a consequence. In the absence of a you know sort of functional world economy in which you know agricultural countries like Argentina can produce for the world market these countries embrace domestic industrialization strategies.

[49:42]

Argentina becomes urbanized after the 1930s. It becomes industrialized. And this is in part a consequence of the breakup of the world economy in the 1930s.

[49:54]

But it's also a consequence of self-conscious policy choices. Economists like Raúl Prebisch↗ advocate import substituting industrialization as as a way for developing countries like Argentina to become modern you know prosperous and affluent.

[50:11]

There's an ideological aspect to this too, right. Insofar as factories and conveyor belt production seem to evoke the accomplishments of modernity, whereas agriculture looks you know backward by comparison, the leaders of developing countries like Argentina or India want to transform themselves into industrial behemoths.

[50:33]

The idea that agriculture might be Argentina's comparative advantage is not a very appealing one for you know Argentinean leaders. So ISI policies are embraced. Both as a legacy of the Great Depression which sort of forecloses upon opportunities for export led growth and as a consequence of self-conscious ideological and policy choices.

[50:58]

ISI is not the same in every context. In India the government plans proactively on a model that is almost quasi-socialist. India however is a democracy. It's a democracy in which you know millions and millions of peasants have votes, and exercise those votes. So in India economic planning is always implemented with a view to the interests of the peasantry, with some consideration for the interests of agriculture. In Latin America the story is really somewhat different.

[51:34]

Import substitute... substituting industrialization strategies are less solicitous of the interests of agriculture in Latin America. They're more heavily focused upon the needs of heavy industry.

[51:47]

It's also the case that ISI led growth in Latin America is somewhat less socialistic than it is in India. Though the governments of Latin American countries like Brazil and Argentina and Chile will construct infrastructure and build public utilities their economies remain more capitalistic than does India's economy in the sort of era of Indian planned growth.

[52:11]

So ISI has different accents in different contexts. But the basic you know sort of macroeconomic framework is a consistent one from place to place. It's a framework in which governments throw up barriers to circumscribe the national economy, to prevent foreign trade or at least make is prohibitively costly, and in which governments seek to generate domestic growth through the allocation of capital resources.

[52:38]

So governments channel savings to particular you know sort of investment opportunities. Governments will invest in roads, they'll invest in railroads, they'll invest in a variety of factories and so on.

[52:52]

For a period of time ISI seems to be you know sort of a beneficial productive kind of economic strategy. It sustains high rates of investment. You know governments are good at mobilizing savings and investing them in productive enterprises.

[53:09]

It produces high growth rates -- at least for the first couple of decades. It successfully transforms agrarian societies into industrial societies. So industrialization is one of the major accomplishments of ISI led growth. But by the mid-1960s the returns on the investment are beginning to decline.

[53:30]

ISI strategies are starting to atrophy. There are diminishing returns on investment. Moreover ISI led growth strategies struggle to move you know sort of upstream. It's relatively easy for governments to orchestrate and plan basic industries.

[53:48]

You know basic extractive industries like mining are not all that you know technologically complex. Once you move beyond you know extracting metal from the earth and smelting steel into more sort of complex kinds of industrial project like manufacturing automobiles or you know washing machines are tasks which you know require some...precision and knowledge it's harder for small...developing countries like Argentina to excel.

[54:22]

As production moves upstream from you know low-tech tasks to more you know technologically intensive manufacturing the opportunities for you know sort of comparetive advantage and specialization expand.

[54:36]

It becomes you know less and less logical for a country to try to make everything itself in a technologically you know sort of complex world.

[54:46]

So ISI led strategies struggle to sort of make the transition from you know relatively simple heavy industrial production to more you know sophisticated, more technologically intense, more consumer oriented production.

[55:02]

The Indians might you know be able to manufacture motor bikes but they will struggle by comparison to manufacture automobiles.

[55:13]

You know there are other countries like Japan which have comparative advantages in the manufacture of automobiles that India simply does not have. At least not at this point in its history. For India to try to manufacture cars at home rather than importing them from Japan and paying for the imports with the earnings from agricultural exports is not economically rational.

[55:33]

But it's a choice that is made and justified for you know a variety of sort of ideological reasons which we've discussed.

[55:41]

Besides forfeiting the opportunities for specialization in comparative advantage that trade bestows ISI led strategies can involve a misallocation of capital. Who allocates capital in an ISI world?

[55:56]

(student response)

[55:57]

The government. And is the government always the most efficient allocator of capital?

(student response)

No, I mean the government's not. It's very difficult to predict which opportunities for remunerative investment will reap dividends over the long term.

[56:13]

What are the alternatives to government as...mechanisms for allocating capital?

[56:20]

If capital's not to be allocated by the state then what is to allocate it?

(student response)

Private sector, markets. So markets you know over the long term do a better job of allocating scarce capital than does the state.

[56:37]

And that may seem like an ideological point but the lessons of history I would argue sustain it pretty well.

[56:44]

So...ISI led growth leads over time to a misallocation of capital which forefits opportunities for growth. So ISI economies begin to slow during the 1960s. The returns on investment diminish. Capital is squandered; production struggles to move upstream.

Political Tumult, the Fall of Democracies, and the Rise of Dictatorships

[57:04]

But that is not all. The Third World, the developing world, is by the 1960s experiencing a sort of global wave of political tumult as well. The Third World's democracy, in particular, is by the late 1960s in crisis.

[57:23]

We ought to remember that most postcolonial states are initially democracies. When Africa decolonizes it decolonizes in a democratic...direction.

[57:35]

India is a democracy when it's born and remains a democracy through to the present day. But India's experience is exceptional. Elsewhere in the developing world postcolonial regimes experience, especially you know from the mid-1960s onwards, a series of coup d'etats and authoritarian transformations that have a corrosive effect on postcolonial democracy.

[58:01]

There seems to be something like a general trend, a generalizable trend, towards authoritarian consolidation in the developing world.

[58:09]

Social scientists in the late 1960s, pay a lot of attention to this trend: a trend that seems adverse to democracy. Sam Huntington, the Harvard political scientist and one of the most influential political scientists of the era, suggests that so-called bureaucratic authoritarian regimes are emerging as a new kind of regime in response in part to the challenges of economic development in sort of...social and historical contexts of nations that are struggling to sort of make the transition from you know traditional agrarian societies to modern industrial societies.

[58:49]

But let's just you know take a panorama of the landscape. What do the prospects for democracy look like in the developing world by the end of the 1960s? They don't look very good. Let's look first at Latin America.

[59:04]

Peru experiences a coup in 1962. This a major turning point. In 1961 Latin America was widely democratic. The Peruvian coup of 1962 marks a turning point and it augurs a series of coups that will follow in other Latin American countries.

[59:22]

Brazil and Bolivia both experience military coup d'etat in 1964. Argentina experiences a coup d'etat in 1966. The early 1970s will bring further right-wing authoritarian coups in Uruguay and in Chile. Latin America, a continent which had been you know fairly democratic at the end of the 1950s, looks to be almost wholly authoritarian by the mid-1970s. This a major shift.

[59:50]

Similar developments proceed elsewhere. In Indonesia, which became independent as a democracy, it's born as a democracy, authoritarianism is on the rise as early as the late 1950s. Sukarno↗ the great anti-colonial leader transforms Indonesia into a so-called guided democracy in 1957.

[1:00:12]

Sukarno↗ struggles to sustain you know economic growth and development and will be overthrown in 1965 in another military coup.

[1:00:25]

In Indonesia military rule is especially brutal. Communists are singled out for persecution and punishment. Regional separatists as in East Timor are suppressed. This is not a particularly pleasant regime.

[1:00:38]

But similar developments sort of manifest themselves elsewhere. Martial law is introduced in the Philippines in 1972 under Ferdinand Marcos↗. Even India which is the sort of exemplar of postcolonial democracy experiences a two year period in the mid-1970s between 1975 and 1977 in which democracy and the rule of law are temporarily suspended by Indira Gandhi↗.

[1:01:03]

This is the era of the so-called emergency. You know thankfully India emerges unscathed or relatively unscathed from this experience. But the fact that democracy would be suspended, even in India of all places, shows the strains, reveals the strains, that postcolonial democracies encounter more broadly.

[1:01:25]

Probably no single figure exemplifies the failure of postcolonial democracy so dramatically and so gratuitously as Idi Amin↗ -- the gentleman pictured on the slide. Idi Amin is a sort of military despot who overthrows Uganda's postcolonial democracy in 1971.

[1:01:45]

Uganda, a central African republic, became independent from Great Britain in 1962 as a democracy, and it remained a democracy for nine years until Idi Amin overthrew it.

[1:01:57]

Idi Amin is a military officer will little experience in politics. But he's shrewd enough to realize that massive and irrational brutality will sustain his own personal power.

[1:02:08]

He rules in Uganda during the 1970s through the instruments of political terror. As many as 300,000 Ugandans die as a consequence of the political violence that Idi Amin wields. Idi Amin is a racist to boot. He expels the South Asian community from Uganda. You know simply on the grounds that South Asians have no you know role to play in the Ugandan society that he is struggling to build.

[1:02:42]

Despite the you know gratuitous abuses, which are well documented and well known at the time, the international community continues to recognize Idi Amin as Uganda's legitimate ruler and continues to accord Idi Amin the dignities of sovereign responsibility.

[1:03:00]

You know here Idi Amin is pictured addressing the United Nations in 1975. So this man who is a fairly brutal dictator is accorded sort of the rights and privileges associated with sovereignty.

[1:03:14]

And this is you know a sort of interesting point because it reveals sort of some of the tensions that the international community will face in the 1970s when confronted with human rights abuses in the developing world.

[1:03:27]

What do you do with a country like Ugandan which is clearly you know a very brutal veries abusive country domestically but which is nonetheless a sovereign nation-state? What prerogatives does the international community have to address the crimes of a dictator like Idi Amin?

[1:03:45]

He is after all the legitimate ruler of his country. So this is one of the you know sort of issues that Idi Amin's dictatorship presents for the larger international community.

[1:03:56]

But let's pause you know sort of momentarily on the question of explanations. Insofar as the developing world, the postcolonial world, experience an authoritarian turn from the mid-1960s onwards, how are we to explain it?

[1:04:12]

Are there sort of general hypotheses or explanations that we might invoke to understand the setbacks of democracy across this you know variety of very diverse national contexts?

[1:04:28]

What does Indonesia have in common with Uganda? What does Uruguay have in common with...Argentina?

[1:04:44]

To some extent Cold War politics facilitate the destabilization of democracy. It's certainly the case that you know Brazil is a good example, in Brazil the United States signals a certain approval for the coup that overthrows you know President Goulart↗ in 1964. Goulart is a you know leftist...there is a you know sort of calculation to be made in Washington that an authoritarian regime might be more stable, perhaps more sympathetic to American interests, than an elected left-wing regime.

[1:05:20]

But to explain the authoritarian turn in the developing world in terms of Cold War interventions, in terms of Cold War interventions on the part of the United States would be crudely reductionist, and you know I would argue it would be wrong.

[1:05:34]

If there is a common thread that ties these very diverse cases together then it has to do with the shortcomings of development -- with the struggles that countries face as they try to make you know the transition from being you know predominantly agrarian traditional societies to being you know centralized, bureaucratic modern states.

[1:05:59]

The transition to modernity is a very difficult transition for a society to make. And it's all the harder when you try to make it very quickly. Which is what leaders of developing countries try to do after the Second World War.

[1:06:13]

Perhaps the fundamental dilemma of development is the need to establish instruments and mechanisms of power.

[1:06:24]

Right a traditional society is characterized by the absence of centralized power -- by the absence of institutions, bureaucracies, and so on that enable leaders to wield power and to orchestrate the resources of society in pursuit of development.

[1:06:42]

In order to fulfill the tasks of development, you know that postcolonial elites define for themselves subsequent to the achievement of independence, mechanisms and institutions for wielding power and orchestrating power are constructed. And often these are undemocratic or anti-democratic. It's even harder to wield power in a democratic framework than it is to wield power in an authoritarian manner.

[1:07:10]

Hence the sort of...notion which Huntington proposes that developing world leaders are creating structures of bureaucratic authoritarianism in order to navigate the transitions which they have to make from tradition to modernity.

[1:07:28]

The crises of the postcolonial state are you know perhaps most dramatically demonstrated in Nigeria of all the cases which, in which postcolonial democracies struggle and falter, the Nigerian case may be the most dramatic and perhaps the most tragic too.

[1:07:49]

So we should dwell briefly upon the Nigerian case at least insofar as it is illustrative of larger trends. Nigeria becomes independent in 1960. It's Africa's largest country. It's also a country that contains extensive regional and ethnolinguistic diversity. Nigeria's intra-ethnic relations are characterized from the outset by tensions between the two dominant tribal groups: the Igbo↗ who predominate in the southeast and the Yoruba↗ who dominate in the southwest.

[1:08:18]

In 1967 a civil war begins. The origins of the civil war are complex. What happens in a nutshell is that a group of Igbo military officers launch a coup d'etat. A bunch of Yoruba officers launch a counter coup and this struggle for power in Lagos results in the creation of a breakaway separatist republic in the Igbo part of the country.

[1:08:44]

And this a republic that calls itself the Republic of Biafra. It's named for the Bight of Biafra↗ sort of in the corner of southeast Nigeria.

[1:08:55]

The struggle between the breakaway Republic of Biafra which is a small essentially landlocked territory and the Nigerian nation-state becomes a brutal war of attrition↗. And it's a war that is also internationalized, and the internationalization is really important.

[1:09:12]

Western journalists and humanitarians travel to Biafra and return with harrowing pictures depicting you know sort of starving Biafran children. The human costs of the Biafran war are widely discussed as images of you know human suffering, particularly the suffering of children, are widely disseminated -- at least in the Western world.

[1:09:36]

The specter of you know sort of humanitarian catastrophe that Biafra represents is at least at the time a relatively novel phenomenon. This is the first sort of major African crisis in which Western viewers tune in to see images of starving African children on their television sets.

[1:09:55]

It's not the first African crisis by any means. We could think about the crisis that the Belgians created in the Congo in the late 19th century. But of course back then there weren't television sets on which you know the suffering of African children could be you know vividly almost pornographically displayed for the edification of Western audiences.

[1:10:14]

But the Biafra crisis becomes a global phenomenon, a global cause, and this has consequences for the crisis itself.

[1:10:25]

Western NGO groups, nongovernmental organizations, rally to bring aid to the Biafrans. They provide food aid. Some also provide weapons of war. This international assistance, which is all nongovernmental assistance, because governments, Western governments, support Nigeria, not the Biafrans, but Western NGO assistance helps to keep Biafra's rebellion alive.

[1:10:49]

As a consequence the civil war drags on for about three years, and about two million Biafrans die. Two minute Nigerians die. The conflict is consequential in terms of its human catastrophe which is tragic. But it's also consequential because of what it reveals about a -- sort of the tension in international relations between...the claims that individuals might make to you know the exercise of sort of basic human rights and the claims that nation-states want to make to collective self-determination.

[1:11:22]

The Nigerians argue that the Biafran War is nobody else's business. They say look, you know, this is Nigeria we're a nation-state, if one of our provinces tries to secede then we have the right to reintegrate it by force if necessary.

[1:11:37]

Is this not what Abraham Lincoln did in 1861? When the South tried to secede Lincoln used force of arms to reintegrate the United States. And that is in essence what the Nigeria government under General Yakubu Gowon↗ tries to do in the context of the Biafran crisis.

[1:11:56]

But the Biafrans make a different set of arguments. They appeal to universal norms. They appeal to the norms of universal human rights as laid out in the Universal Declaration of 1948. And they invoke a universal right to collective self-determination.

[1:12:12]

They argue that it is their prerogative to determine their own fate. And moreover they argue that the Nigerians by besieging the Republic of Biafra are imperiling the human rights of you know ordinary Biafran men and women.

[1:12:26]

So the Biafran War pits two very different you know sort of concepts of justice against each other. It pits the Nigerian claim to the justice of self-determination against a sort of Biafran claim to the justice of universal natural rights -- universal human rights, as it comes to be construed.

Human Rights and National Sovereignty

[1:12:49]

The Biafran crisis thus sort of embodies and expands a larger debate in international society as to the sort of relationship, the proper relationship, between the rights of nation-states and the rights of individual men and women.

[1:13:10]

And this is a tension, a tension between rights and sovereignty, which has in a sense been hardwired into the postwar international system from you know the very moment of departure.

[1:13:21]

The United Nations Charter, the Charter of the United Nations, includes in its opening clauses a series of references to human rights. The advancement of human rights is identified by the Charter of the United Nations as one of the fundamental purposes of the United Nations organization.

[1:13:39]

At the same time the institutional form of the United Nations is that of an international organization comprised of nation-states. And there is potentially a tension between these two objectives. The UN on the one hand want to advance and uphold individual human rights. On the other hand the UN is an organization of nation-states that exists to provide for collective security.

[1:14:02]

What right does the United Nations have to interfere in the domestic affairs of individual nations? It's a very difficult question and the UN Charter offers sort of ambiguous guidance on this question. The UN Charter does carve out a you know potential role for the United Nations to intervene in the domestic affairs of nation-states when those domestic affairs pose a threat to the peace of the world. But it includes no specific provision to intervene in -- within individual nation-states to defend human rights.

[1:14:37]

So if a sovereign government, like the government of Idi Amin, chooses to murder 300,000 people in cold blood in or to sustain the rule of a despot, what right does the United Nations have to do anything about it? Does the international community have the prerogative to intervene within a sovereign nation-state when there is no threat to international peace involved?

[1:14:59]

This is a really fundamental question for the UN system. And it's a question that UN -- to which -- and UN institutions provide no clear answer to that question. The Charter is ambiguous. Because it could be interpreted either way.

[1:15:13]

The Universal Declaration of Human Rights does seem to suggest a more far reaching commitment to the realization of a, you know, human rights agenda, an agenda whose realization would presumably involve some intervention in the domestic affairs of nation-states. But the Unversal Declaration is just a declaration.

[1:15:32]

There's no enforcement mechanism associated with it. There's no actual you know capacity in the Declaration for acting to defend individual human rights. Moreover the United Nations in 1960 passes a landmark declaration on collective self-determination which argues, just to complicate matters, that the collective rights of you know sort of nations or peoples to determine their own affairs is a human right.

[1:15:58]

So the argument becomes you know circular in a sense. That the United Nations will defend human rights against you know all threats, but the right to collective self-determination which might preclude international defense of human rights within nation-states is in itself a human right.

[1:16:16]

So the language of human rights can be utilized for a...to sustain a variety of agendas. It can be used to justify international interventions in places like Biafra to protect starving children but it can also be used to defend the sovereign rights of people like Idi Amin -- you know who are grotesque abusers of human rights.

[1:16:36]

So the UN system is...sort of delicately balanced in such a way that equips it to do very little when confronted by actual abuses of human rights within sovereign nation-states. But during the 1970s this you know sort of delicate balance becomes contested with increasing ferocity.

[1:16:57]

One of the factors which contributes to this contestation is the rise of a nongovernmental human rights movement. International organizations like Amnesty gain membership during the 1970s. They gain prominence. Amnesty wins the Noble Peace Prize in 1977. The rise of NGO politics seeks to influence the international community to respond more proactively to abuses of human rights within authoritarian countries like Uganda.

[1:17:27]

It's also the case that the Western democracies: Britain, the United States, France, and so on begin to pay more attention during the 1970s to human rights as a foreign policy objective. And this is novel. It's sort of a new departure.

[1:17:43]

By the end of the 1970s the United States will have established a special bureau within the State Department for advancing human rights objectives through foreign policy. So the growing inclination of the great powers to act upon human rights considerations is one of the factors that begins to tilt the balance in this you know sort of contest between human rights and sovereignty towards human rights.

[1:18:07]

But the balance will be a fiercely contested one. Spokespeople for the developing world, vigorously defend the prerogatives of national sovereignty.

[1:18:16]

When a UN international conference on human rights is held in Iran in 1968, and this is the first international conference on human rights, the Shah of Iran, Shah Mohammad Reza Pahlavi↗, gives the keynote address.

[1:18:29]

And he uses this as an opportunity to disparage the idea of human rights. He says well this Western idea about human rights. It has very little relevance to the circumstance of a country like Iran. Iran needs a strong and dynamic state, a state that will be able to develop the Iranian economy, that will modernize Iranian society. And if that means locking up a few dissidents, well, so be it. This is really not a you know major concern. And in any case it's none of your business.

[1:18:55]

Jamil Baroody, the Saudi Arabian ambassador to the United Nations, makes much the same argument, you know, in meeting after meeting of the United Nations General Assembly -- human rights, they're, you know, a fiction, whose business is it how Saudi Arabia, treats its you know political dissidents? Besides, many of these political dissidents are dangerous people and you wouldn't much like it if we didn't you know lock them up in prison.

[1:19:21]

What's at stake is very fundamental. What's at stake is the question of whether the international community will exist as a society of sovereign states, essentially autonomous and self-determining, or whether the international community will extend some protections to individual men and women regardless of you know citizenship or political affiliation.

Conclusion: The Role of the Nation-State

[1:19:44]

The rise of human rights, much like the atrophy of ISI led growth, much like the you know sort of crises that the liberal economy experiences during the 1970s, signifies a certain erosion of the nation-state's capacity to govern its own affairs.

[1:20:02]

Of course the role of the nation-state is still very much contested in the 1970s. There are those like Baroody and Pahlavi who vigorously defend the nation-state's legal prerogatives vis-à-vis its own citizens. But groups like Amnesty International are contesting the legitimacy of you know sort of national jurisdiction over crime and punishment.

[1:20:22]

And the parallels the corrosive influence of you know sort of transnational financial flows on economic self-determination. By the end of the 1970s the capacity of states to determine their own affairs, politically as well as economically, is under you know sort of rising scrutiny. Questions are being asked and they're very profound questions that have to do with the structural future of the international system and of the nation-state within it.

[1:20:50]

And to these questions we will return after we've talked about the Cold War next week.