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Crisis, Realignment, and the Dawn of the
Post–Cold War World, 1975–1991
CHAPTER OUTLINE
I. Postcolonial Crises and Asian Economic Expansion, 1975–1990
A. Revolutions, Depressions, and Democratic Reform in Latin America
1. The success of the Cuban Revolution both energized the
revolutionary left throughout Latin America and led the United States to
organize its political and military allies in Latin America in a struggle to
defeat communism.
2. In Brazil a coup in 1964 brought in a military government whose
combination of dictatorship, use of death squads to eliminate opposition, and
use of tax and tariff policies to encourage industrialization through import
substitution came to be known as the “Brazilian Solution.” Elements of the
“Brazilian Solution” were applied in Chile by the government of Augusto
Pinochet, whose CIA-assisted coup overthrew the socialist Allende government in
1973 and in Argentina by a military regime that seized power in 1974.
3. Despite reverses in Brazil, Chile, and Argentina, revolutionary
movements persisted elsewhere. In Nicaragua the Cuban-backed Sandinista
movement overthrew the government of Anastasio Somoza and ruled until it was
defeated in free elections in 1990. In El Salvador the Farabundo Marti National
Liberation Front (FMLN) fought a guerilla war against the military regime until
declining popular support in the 1990s led the rebels to negotiate an end to
the armed conflict and transform themselves into a political party.
4. The military dictatorships established in Brazil, Chile, and
Argentina all came to an end between 1983 and 1990. All three regimes were
undermined by reports of kidnapping, torture, and corruption; the Argentine
regime also suffered from its invasion of the Falkland Islands and consequent
military defeat by Britain.
5. By the end of the 1980s oil-importing nations like Brazil were
in economic trouble because they had borrowed heavily to pay the high oil
prices engineered by OPEC. The oil-exporting nations such as Mexico faced
crises because they had borrowed heavily when oil prices were high and rising
in the 1970s, but found themselves unable to keep up with their debt payments
when the price of oil fell in the 1980s.
6. In 1991 Latin America was more dominated by the United States
than it had been in 1975. This may be seen in the United States’ use of
military force to intervene in Grenada in 1983 and in Panama in 1989.
B. Islamic Revolutions in Iran and Afghanistan
1. Crises in Iran and Afghanistan threatened to involve the
superpowers; the United States reacted to these crises with restraint, but the
Soviet Union took a bolder and ultimately disastrous course.
2. In Iran, American backing and the corruption and inefficiency of
Shah Muhammad Reza Pahlavi’s regime stimulated popular resentment. In 1979
street demonstrations and strikes toppled the Shah and brought a Shi’ite
cleric, Ayatollah Ruhollah Khomeini, to power. The overthrow of an ally and the
establishment of an anti-western conservative Islamic republic in Iran were
blows to American prestige, but the United States was unable to do anything
about it.
3. In the fall of 1980 Iraqi leader Saddam Hussein invaded Iran to
topple the Islamic Republic. The United States supported Iran at first, but
then in 1986 tilted toward Iraq.
4. The Soviet Union faced a more serious problem when it sent its
army into Afghanistan in 1978 in order to support a newly established communist
regime against a hodgepodge of local, religiously inspired guerilla bands that
controlled much of the countryside. The Soviet Union’s struggle against the
American-backed guerillas was so costly and caused so much domestic discontent
that the Soviet leaders withdrew their troops in 1989 and left the rebel groups
to fight with each other for control of Afghanistan.
C. Asian Transformation
1. The Japanese economy grew at a faster rate than that of any
other major developed country in the 1970s and 1980s, and Japanese average income
outstripped that of the United States in the 1990s. This economic growth was
associated with an industrial economy in which keiretsu (alliances of
firms) received government assistance in the form of tariffs and import
regulations that inhibited foreign competition.
2. The Japanese model of close cooperation between government and
industry was imitated by a small number of Asian states, most notably by South
Korea, in which four giant corporations led the way in developing heavy
industries and consumer industries. Hong Kong and Singapore also developed
modern industrial and commercial economies. All of these newly industrialized
economies shared certain characteristics: discipline and hard-working labor
forces, investment in education, high rates of personal savings, export
strategies, government sponsorship and protection, and the ability to begin
their industrialization with the latest technology.
3. In China after 1978 the regime of Deng Xiaoping carried out
successful economic reforms that allowed private enterprise and foreign
investment to exist alongside the inefficient state-owned enterprises and which
allowed individuals and families to contract agricultural land and farm it as
they liked. At the same time, the command economy remained in place and China
resisted political reform, notably when the Communist Party crushed the
protests in Tiananmen Square in 1989.
II. The End of the Bipolar World, 1989–1991
A. Crisis in the Soviet Union
1. During the presidency of Ronald Reagan the Soviet Union’s
economy was strained by the attempt to match massive U.S. spending on armaments,
such as a space-based missile protection system. The Soviet Union’s obsolete
industrial plants, its inefficient planned economy, its declining standard of
living, and its unpopular war with Afghanistan fueled an underground current of
protest.
2. When Mikhail Gorbachev took over the leadership in 1985 he tried
to address the problems of the Soviet Union by introducing a policy of
political openness (glasnost) and
economic reform (perestroika).
B. The Collapse of the Socialist Bloc
1. Events in eastern Europe were very important in forcing change
on the Soviet Union. The activities of the Solidarity labor union in Poland,
the emerging alliances between nationalist and religious opponents of the
communist regimes, and the economic weakness of the communist states themselves
led to the fall of communist governments across eastern Europe in 1989 and to
the reunification of Germany in 1990.
2. The weakness of the central government and the rise of
nationalism led to the dissolution of the Soviet Union in September 1991.
Ethnic and religious divisions also led to the dismemberment of Yugoslavia in
1991 and the division of the Czech Republic in 1992.
C. The Persian Gulf War, 1990–1991
1. Iraq invaded Kuwait in August 1990 in an attempt to gain control
of Kuwait’s oil fields. Saudi Arabia felt threatened by Iraq’s action and
helped to draw the United States into a war in which American forces led a
coalition that drove Iraq out of Kuwait but left Saddam Hussein in power.
2. The Persian Gulf War restored the United States’ confidence in
its military capability while demonstrating that Russia—Iraq’s former ally—was
impotent.
III. The Challenge of Population Growth
A. Demographic Transition
1. The population of Europe almost doubled between 1850 and 1914,
and while some Europeans saw this as a blessing, Thomas Malthus argued that
unchecked population growth would outstrip food production. In the years
immediately following World War II Malthus’s views were dismissed as Europe and
other industrial societies experienced a demographic transition to lower
fertility rates.
2. The demographic transition did not occur in the Third World, where
some leaders actively promoted large families until the economic shocks of the
1970s and 1980s convinced the governments of developing countries to abandon
the pronatalist policy.
3. World population exploded in the twentieth century, with most of
the growth taking place in the poorest nations due to high fertility rates and
declining mortality rates.
B. The Industrialized Nations
1. In the developed industrial nations of western Europe and Japan
at the beginning of the twenty-first century, higher levels of female education
and employment, the material values of consumer culture, and access to
contraception and abortion have combined to produce low fertility levels. Low
fertility levels combined with improved life expectancy will lead to an
increasing number of retirees who will rely on a relatively smaller number of
working adults to pay for their social services.
2. In Russia and the other former socialist nations, current
birthrates are lower than death rates and life expectancy has declined.
C. The Developing Nations
1. In the twenty-first century the industrialized nations will
continue to fall behind the developing nations as a percentage of world
population; at current rates, 95 percent of all future population growth will
be in developing regions, particularly in Africa and in the Muslim countries.
2. In Asia, the populations of China and India continued to grow
despite government efforts to reduce family size. It is not clear whether or
not the nations of Asia, Africa, and Latin America will experience the
demographic transition seen in the industrialized countries, but fertility
rates have fallen in the developing world where women have had access to
education and employment outside the home.
D. Old and Young Populations
1. Demographic pyramids generated by demographers illustrate the
different age distributions in nations in different stages of economic
development.
2. The developed nations face aging populations and will have to
rely on immigration or increased use of technology (including robots) in order
to maintain industrial and agricultural production at levels sufficient to
support their relatively high standards of living and their generous social
welfare programs.
3. The developing nations have relatively young and rapidly growing
populations but face the problem of providing their people with education and
jobs while struggling with shortages of investment capital and poor
transportation and communications networks.
IV. Unequal Development and the Movement of Peoples
A. The Problem of Growing Inequality
1. Since 1945 global economic productivity has created
unprecedented levels of material abundance. At the same time, the
industrialized nations of the Northern Hemisphere have come to enjoy a larger
share of the world’s wealth than they did a century ago; the majority of the
world lives in poverty.
2. Regional inequalities within nations have also grown in both the
industrial countries and in the developing nations.
B. Internal Migration: the Growth of Cities
1. Migration from rural areas to urban centers in the developing
world increased threefold from 1925 to 1950 and accelerated rapidly after 1950.
2. Migrants to the cities generally enjoyed higher incomes and
better standards of living than they would have had in the countryside, but as
the scale of rural to urban migration grew, these benefits became more elusive.
Migration placed impossible burdens on basic services and led to burgeoning
slums, shantytowns, and crime in the cities of the developing world.
C. Global Migration
1. Migration from the developing world to the developed nations
increased substantially after 1960, leading to an increase in racial and ethnic
tensions in the host nations. Immigrants from the developing nations brought
the host nations the same benefits that the migration of Europeans brought to
the Americas a century before.
2. Immigrant communities in Europe and the United States are made
up of young adults and tend to have fertility rates higher than the rates of
the host populations. In the long run this will lead to increases in the Muslim
population in Europe and in the Asian and Latin American populations in the
United States, and to cultural conflicts over the definitions of citizenship
and nationality.
V. Technological and Environmental Change
A. New Technologies and the World Economy
1. New technologies developed during World War II increased
productivity, reduced labor requirements, and improved the flow of information
when they were applied to industry in the postwar period. The application and
development of technology was spurred by pent-up demand for consumer goods.
2. Improvements in existing technologies accounted for much of the
world’s productivity increases during the 1950s and 1960s. The improvement and
widespread application of the computer was particularly significant as it
transformed office work and manufacturing.
3. Transnational corporations became the primary agents of these
technological changes. In the post-World War II years transnational
corporations with multinational ownership and management became increasingly
powerful and were able to escape the controls imposed by national governments
by shifting or threatening to shift production from one country to another.
B. Conserving and Sharing Resources
1. In the 1960s, environmental activists and political leaders
began warning about the environmental consequences of population growth,
industrialization, and the expansion of agriculture onto marginal lands.
Environmental degradation was a problem in both the developed and developing
countries; it was especially severe in the former Soviet Union. In attempting
to address environmental issues, the industrialized countries faced a
contradiction between environmental protection and the desire to maintain rates
of economic growth that depended on the profligate consumption of goods and
resources.
2. In the developing world population growth led to extreme
environmental pressure as forests were felled and marginal land developed in
order to expand food production. This led to erosion and water pollution.
C. Responding to Environmental Threats
1. The governments of the United States, the European Community,
and Japan took a number of initiatives to preserve and protect the environment
in the 1970s. Environmental awareness spread by means of the media and
grassroots political movements, and most nations in the developed world
enforced strict antipollution laws and sponsored massive recycling efforts.
2. These efforts, many of them made possible by new technology,
produced significant results. But in the developing world, population pressures
and weak governments were major obstacles to effective environmental policies.
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