It Could Happen Here - Neoliberalism Part 2: The Trade World War: G7 vs G77

Episode Date: December 10, 2021

In part 2 of our series on Neoliberalism we look at the economic crises that plagued the 1970's and the forgotten conflict between the G7 and the G77 that shaped the modern world Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

You should probably keep your lights on for Nocturnal Tales from the Shadowbride. Join me, Danny Trejo, and step into the flames of fright. An anthology podcast of modern-day horror stories inspired by the most terrifying legends and lore of Latin America. Listen to Nocturnal on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. What? I mean, that's all I got today.

Who's taking over? Come on. I did my part. I guess it's me. I guess it's all I got today. Who's taking over? Come on. I did my part. I guess it's me. I guess it's me. All right. Well, then what show is this and what do we do? This is It Could Happen Here.

We talk about things being bad and also what you can do about them. But this is a things are bad episode and not a what you can do about them episode. Specifically, this is part two of what i guess you could call our mini series on neoliberalism and so you know yesterday we talked a lot about who the original neoliberals are they they have a bit of power in germany in the 50s but for the 50s and 60s and up to the 70s they're kind of nobodies they're you know they're they're they have a couple of think tanks but they're kind of they're kind of nobodies. They're, you know, they have a couple of think tanks, but they're kind of just siloed off in the corner,

and they yell at people, and people kind of ignore them. And what they're waiting for, essentially, is the right crisis. And in the 1970s, they finally find that crisis. Now, I think it's kind of hard to remember in a lot of ways because of how

the 80s went went but in the early 1970s things are not looking good for capitalism i mean you have so you know i and i end a wins election 1970 uh we'll talk about what happened there in another episode but you know it's not just that in 1940 1974 well so through the whole early 1970s, Amalcar Cabriel is just absolutely annihilating the Portuguese army. And he, you know, he wins, he fights one of like one of history's greatest guerrilla wars. And this basically destroys the entire Portuguese state and causes the Carnation Revolution. The Portuguese colonies get free.

The Derg takes power in Ethiopia. And then 1975, the North Vietnam just wins the war in Vietnam. And now, you know, the product of this is that Cambodia falls, Laos falls. There's now, there's five socialist states in East and East Asia, in Southeast Asia. And, you know, also Mongolia, but nobody really cares about them. And as all of this is happening, as these sort of, as the anti-colonial armies are sort of marching their way through the world there's an enormous economic crisis and you know i mean there's a lot of things happening at the same time one of the ones i think is probably the thing that people remember the most is there's just unbelievable inflation and you know and economic growth starts to slow down

although something i think that we do need to keep in mind is that when I say economic growth slows, so economic growth from 1969 to 1979 is 3.2%. From 2000 to 2007, it was 2.3% in the US. and so you know when i say there's an economic crisis going on here like economic growth in the 70s is better than any decade since but it's still considered the crisis decade because there's much inflation and you know everyone has their own theory as to why this is happening because the the sort of keynesians who've been in power whose thing is oh well we can you know if there's an economic crisis we can sort of we can spend money we can spend money and the government spending money will drag everyone out of the crisis. But in Keynesian theory, there's not supposed to be

inflation if unemployment is increasing and there's an economic crisis, there's not supposed to be inflation. And suddenly there's both. So the Keynesians have nothing and they're sort of just running around like just basically like chickens with their head cut off going, oh god, we have no idea what's happening. We don't know what what's happening and so into this gap steps a bunch of weirdos

and so i'm just gonna i'm gonna go through a few of the theories as to why this crisis happened because i don't know and i think there's elements of truth in most of the stories ish kind of but you you know, it's, this is extremely complicated and there's still no consensus on it. So I'm going to start with the most crank, which is, uh, so,

so the, the, the, the Ron Paul people, it's a whole thing is, yeah, uh, every,

everything went to shit. It has been shit ever since because the U S abandoned the gold standard. And like, they're right into the extent that this happens. So basically, Nixon's been trying to pay for the Vietnam War, and he can't. And the U.S. dollar has been pegged to a certain amount of gold, right? And you can do this thing where if you have an American dollar, you can exchange it for that amount of gold. And so Charles de Gaulle just is like, okay, we're going to take all of this gold.

And so he does, and the US starts running out of gold. And so in the early 70s, Nixon is like, fuck this, you can't actually exchange dollars for gold anymore. And now every single libertarian starts every rant with fiat currency. But this does have an effect on the economy, which we'll talk about more in a bit. There's a lot of other explanations for this. The modern monetary theory people, if you listen to them, and also Peter Thiel, weirdly, will argue, oh, it's all because of the oil shock, because oil prices increased. neoliberals will spend neoliberals essentially they blame too much government spending, welfare programs

and then wages being too high and also bad monetary policy there's like an entire there's like 17 different Marxist explanations for it some of which are I'll talk about like one and a half of them

that are more plausible. One of the explanations has to do with how essentially, so the other thing that's happening in the 60s and 70s is that minorities and women are entering the workplace and they're, you know, actually demanding to be paid the wages that white men have been being paid. And corporations essentially just can't afford this and so you know they have two choices it's either we pay these people actual wages or we

just murder everyone and they uh took the second one so it's something that that has also been happening through this whole period is that profit rates of manufacturing just keep collapsing and there's there's a whole thing here about some marxist theory stuff but the thing that's important is that and this this does happen in the 70s eventually you hit a point where manufacturing growth becomes zero sum and you know so you can have manufacturing growth in one country but you can't have it in another because at a certain point you're producing too much stuff and people start getting kicked out of the labor process and this has a bunch of effects one is it means you get a bunch of people who are unemployed and two it means that there's just a bunch of money floating

around that nobody can actually invest in places and this is you know like all of the weird stuff the saudis do is just is basically from this this money there's all these whole piles of oil money that are just sitting around that nobody can invest in anything and that's going to cause you know that that that that's that's going to cause a lot of stuff down the road but for now yeah we'll talk about the debt crisis as causes next episode, but for now, I'm going to try to pull all of these together and have a coherent thing that makes sense, which is essentially, by the end of the 70s, profit rates are declining, and then Nixon pulls the dollar off the gold standard. And this causes the value of the dollar to just plunge. And this is the thing that sets off the 1970s oil crisis so the 1970s oil crisis is weird because it's not an oil crisis everyone looks at the global crisis and it goes oh it's an oil crisis the crisis because there wasn't enough

oil and it's it's not it's nothing to do with that it has literally nothing to do with supply of oil at all what actually happens is that so you have opec right opec is this sort of is the alliance of oil producing cartels um and they have this extremely complicated system where they they sell oil to oil companies and then the oil companies sell that oil they refine it and sell it to you and they have this incredibly convoluted tax structure on it and eventually so the oil companies are having like the price of oil starts to rise and the oil companies are basically just taking it all off the profit from this and so opec goes okay you guys are going to pay taxes and the oil companies just refuse and so opec just unilaterally just you know opec just unilaterally is okay, you guys are going to pay taxes and we're going to make you pay taxes by just increasing the price that we sell you oil at.

And this gets remembered as OPEC increasing the price of oil, even though it was literally just them saying you're going to pay taxes. Now, this is the part that's very weird which is that okay so if you do you do heard of the oil crisis like the story oh yeah yeah yeah i mean i i are the way it's always gone in textbooks as you talk about like the stagflation of the 70s and the fucking you know lines of of cars at gas stations going back blocks because of OPEC fuckery. And yeah, that's how it's always framed, is that there was this big political crisis over OPEC that led to the gas supply getting throttled,

and it came at a time when the economy had already slowed down, and everything got terrible. And then a few years later, we got RoboCop. Yeah, well, we did get RoboCop. But the important thing about the story is that every single thing about that story is wrong every part of it well i mean there were lines at gas stations yeah yeah i mean there are lines of gas stations but the lines at the gas stations have literally nothing to do with opec it's just nothing so on october 16th 19 1973 the arab members of opec

are like fuck it we're gonna make the oil companies pay more for oil and then the rest members of of opec are like fuck it we're gonna make the oil companies pay more for oil and then the rest of rest of opec follows them now two days later or is it yeah the the next day there is a completely unrelated thing to all of this which is that while while this is going on the yom kippur war starts and so egypt and syria attack israel um basically attack the israel occupation forces in their country and the war is going really badly for them they're i mean it's i mean it's not going it's not going as badly as like the previous wars had gone for the arab powers but it's not going great and so on october 17th uh six arab oil producing countries declare that they're cutting the amount of oil they export by 5% per month until Israel returns its territories.

They had occupied since 1967 and they have an embargo on the US. But, and this is the very important part, this has nothing to do with OPEC. This is not OPEC at all. It's not, this is just a couple of random Arab countries are like, we're going to do this. And, you know, and i think what i think is interesting about robert what you're talking about is is opec fuckery you know is how this gets remembered and this this is one of the things that neoliberals use to sort of push their model of the world right which is that everything functions off supply and demand and oh look hey the arabs

cut the supply of oil and that's why the prices rose but it's just it's just wrong it's empirically wrong the price cut happens i mean the price increases happened the day before the the the the the the price increases the day before the embargo and the embargo and the oil price people are different groups they have nothing to do with each other but you know this this gets sort of system like this this is this is how it's it's remembered and you know it's not even just how to remember like like the encyclopedia britannica has the date in which all of this stuff happens wrong they have the sequence of events wrong like all of the most of the people who write about this remember this whole thing wrong and and this is this is part of the sort of an enormous propaganda effort that the neoliberals are able to do at this

moment which is they convince everyone that oh yeah the price increases and the gas specifically the gas shortages are are about opec but again also like the u.s only imports like seven percent of its oil from from the countries who are doing the embargo at this point so the actual thing that's going on has to do with price it's a weird thing as with price controls and gas companies are hoarding gas because they don't want to sell it at price control levels and stuff like that but you know the the oil price increases you know yeah like it is bad like the price of oil does go up and there are shortages but it has nothing to do with like it has nothing to do with the embargo it has nothing to do with you know like the supply of oil going down it's just companies didn't want to pay taxes and so they started hoarding the oil instead of selling it

and they passed the price the tax increase on to the consumers instead of just paying it welcome i'm danny thrill won't you join me at the fire and dare enter? Nocturnum, Tales from the Shadows, presented by iHeart and Sonora. An anthology of modern day horror stories inspired by the legends of Latin America. From ghastly encounters with shapeshifters, to bone-chilling brushes with supernatural creatures. I know you. Take a trip and experience the horrors that have haunted Latin America since the beginning of time.

Listen to Nocturnal tales from the shadows as part of my cultura podcast network available on the iheart radio app apple podcast or wherever you get your podcast and as we talked about before once this sort of like tax increase goes that opec that well some of the opec countries want to do goes into place like the price of oil does increase and this does fuck the economy even more but the economy had already been sort of a mess before this and it has one other very important effect and you know this is you know i guess i guess the theme of this episode is that the oil embargo matters, but the oil embargo matters because people think it matters, not because it did anything. And the other – so it matters in the US because everyone thinks that, oh, the scary Arab nations are coming for us. because everyone else looks at this and goes,

wait, hold on, you can actually use commodities, essentially, you can use commodity prices. Countries that have raw commodities can use this control to actually go fight, to go fight the West, to go fight the capitalists, and go get money for themselves. And this leads us into something. Robert Garrison, have you ever heard of the G 77?

Is that like the 77 countries that have the most money? Well, that, that that's the, that's the G seven. Well, yeah, I was,

I was assuming the 77 might be just a longer list. I know. So, yeah so yeah so so this is this is the other thing from this period that just is is completely lost that's almost completely lost to history and the g77 is actually still around but what they are was so in in the 60s you know you have all of these countries that have recently gained independence in 60s and 70s all these countries have gained independence um from their sort of colonial overlords and they start to band together into basically a voting block in the un and also this is the other the other weird part about the story is that so in the 1970s and 60s 70s particular the un actually matters like it's it's a it's a thing that people yeah there was that like 20 years years after World War II where people were like maybe – I mean a good example of the degree to which the UN actually used to be meaningful is watch the first Street Fighter movie.

Because the good guys in that are clearly based off the UN and nobody thinks it's ridiculous that the United Nations are actually doing something. ridiculous that the united nations are actually doing something um it's fine to have jean-claude van damme be the leader of the united nations fist fighting a guy that that makes total sense in the early 1990s and you know and so in in part of we'll talk about this more next episode but basically so the reason the un is a joke right now is because of what the u.s was doing to stop the g77 from doing anything i mean i would would argue that massive failures in Rwanda and Bosnia had a huge impact on that, too. That, too, yeah. A couple of genocides go down, and people are like,

well, what are these guys doing? But yeah. Yeah. Yeah, well, this is how they got dysfunctional to the point where you can get that. Yeah. Which is, so, okay, so you have, you know, you have a bunch of countries that call themselves

you know the the term they use for themselves is the third world and they come together to form this group and it's it's a really weird ideological mixed bag like i mean you have you know you have you have like actual socialists like tanzania's julius nere and michael borley in jamaica you've also got like gaddafi and the bathists and like both gaddafi was a socialist come on yeah leftist paradise gaddafi's libya libya you know okay my my my my most contrarian hot take is that salak jadid was like actually kind of an ml who was that he was he was briefly the the the bathist in charge of syria and then he got overthrown by uh hafiz al-assad but both of them are part of this there's definite

like actual like marxist you know lenin there's some like especially in the old school bathest like there were aspects of that there was socialism kind of within it it just it would be nonsense like for example call saddam hussein's both oh yeah no socialist yeah no um yeah and you know and you can already see like this this is this is this is a real grab bag and you have there's also just a bunch of random latin american countries like none of whom you can call socialist and then there's also saudi arabia and thailand are in this group okay to get a sense of how fractious this is india and pakistan are also both part of this and they fight two full-scale wars while they're both in the g77 actually

that's not even true there's two full-scale wars and then there's like another half war they fight in the 90s yeah this yeah like all the people in this thing are fighting are literally fighting wars against each other it's kind of a mess and you know it's fun it's fun in in the mid-60s and until 1974 it's kind of their whole thing is we have moral authority like we're yeah like we're you know we're we're like we we have the authority of all of these nations have colonized us for a long time and we're going to use that but in in the 70s you know the oil embargo happens. And I think most of the OPEC states are in the G77. And they look at the oil embargo, and they look at OPEC raising prices. And they go, wait, we can do this too.

And the OPEC states are like, oh, hey, we can use this to push the whole, you know, we can use it to like push the whole power of like of the third world. And they, their plan to do this is something called the new international economic order, which is also something that no one has ever heard of that is extremely important that has just. So I guess the spoiler alert is that this this movement gets crushed so thoroughly that nobody knows what the new economic order is and the third world is now a slur but you know the thing that they're trying to do is create a new area calls the new international economic order a trade union of the poor and so it's it's this thing they're trying to get passed through the un that would in you it's designed to sort of ensure the economic sovereignty of these developing nations. I'm going to read a list of the stuff that's in here.

So A, an absolute right of states to control the extraction and marketing of their domestic natural resources. B, the establishment and recognition of state-managed resource cartels to stabilize and raise commodity prices. C, the regulation of transnational corporations. D, no strings attached technology transfers from north to south. E, the granting of preferential trade preferences to countries in the south. And F, forgiveness for certain debts that states in the south owe to the north. Forgiveness for certain debts that states in the South owe to the North. So this is like – this thing, if the new international economic order had ever been implemented at all, it would have completely reversed – basically completely reversed the balance of economic power, shifting it basically from countries like the US, like Western Europe, like Japan, that are these giant manufacturing powerhouses two countries that produce you know raw materials and there would have you know and everything that would have happened from this is you have these the no strings you have a debt relief for the global south and also these technology transfers and the plan is basically to create a bunch of mini opex for just or not even many of us create opex basically for every commodity so you know you'd have like an opec but it's for like bauxite

or like copper and you know they would use they would you know you have all these opex and each one of them uses their power and they all cooperate to to to make sure that there's a stable price for for all these commodities and another part of this is that it's supposed to basically enshrine the right of countries to be able to just like nationalize resource companies so you know you have like a british oil company i was like well we just take it out now it's ours and the threat of this is great enough that if you read conservatives in the era, they will say things like the Soviet union is no longer a threat. The greatest danger to the West today is the G 77.

Yeah. Yeah. And this is this. Yeah. It's, it's these, these people are enormously right past that. Yeah.

No, no one even remembers this anymore. And it's, it's because largely it's because of how just unbelievably badly these guys got stopped. Um, you know, and one of the other things that happens out of the product of this is this is where the g7 comes from and it's originally and i think this is another thing yeah the other funny part about this so the g7 is originally a

secret alliance like through this whole through the whole 70s nobody knows g7 exists it's basically it starts as this like secret meeting of a bunch of uh finance ministers eventually they they add uh canada and i think japan to and it goes up to seven members and you know they have a couple things they're trying to deal with they're trying to deal with the economic collapse but one of the big like one of the biggest things they're dealing with is the g77 and opec and this this the result of this is this these enormous series of fights in, implausibly, the United Nations Conference on Trade and Development, which is, I think, this is the last time ever that the fate of the entire world would be decided in a battle in a subcommittee of the UN. years and years of negotiations between well the g7 hasn't like openly declared itself as g7 it's sort of just it's basically the the the the rich european countries so it's canada france germany italy the uk the us and and japan like for form this alliance and are like locked in together in

order to stop the g7 from g77 from doing anything and this is this is the this is the other the other crisis that the neoliberals are responding to is it's it's not just and in many ways this is the one that scares them more because you know it's not just that there's an economic crisis it's not just that like capitalists are afraid because they're losing money it's if this stuff goes through the entire balance of power in the entire global economy is going to change and it's going to swing into the favor of a bunch of non-western countries and probably more most importantly for neoliberals they're going to enshrine the right of states to take things away from corporations and regulate them and this is just absolutely completely unacceptable

to both the neoliberals and just every single other organization that's even tangentially involved with sort of the western nations welcome i'm danny thrill won't you join me at the fire and dare enter Welcome. I'm Danny Thrill. Won't you join me at the fire and dare enter Nocturnum, Tales from the Shadows, presented by iHeart and Sonora. An anthology of modern day horror stories inspired by the legends of Latin America. From ghastly encounters with shapeshifters. To bone-chilling brushes with supernatural creatures.

I know you. Take a trip and experience the horrors that have haunted Latin America since the beginning of time. that have haunted Latin America since the beginning of time. Listen to Nocturnal Tales from the Shadows as part of my Cultura podcast network, available on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. So the neoliberals, I talked about this a bit in the last episode which is that they've been working on a strategy in order to take power that doesn't rely on states and so what they've been doing for about 20 years is essentially infiltrating and working their way

up through like take basically basically taking over uh the international monetary fund and the world bank who in this period and this is everything i think is very weird and hard to remember which is that the imf and the world bank like there was a time when they weren't completely evil like like the imf was basically set up to make sure that countries wouldn't just run out of money right it was supposed to give people like yeah and the world bank was okay and it's it's turned into sort of this like international debt system for yeah or countries where they're yeah always yeah and being forced into austerity measures and the like yeah yeah and and that but that that didn't used to be true it used to be

you know the imf had a bunch of keynesians in it and same with the world bank and both both the imf and the world bank's leadership for a lot of this period wanted to negotiate and you know and i think this is this this is this is this is where we're going to leave it here with basically the the the the entire world is in an epochal crisis there is the the all the economies are collapsing the the sort of the the the armies of the anti-colonial like world are moving and the the g77 looks like it's it's literally on the verge of of you know completely restructuring the economic system in a way that actually would have been slightly more fair and just than what the system that existed then which was also infinitely more just and fair than the system that exists now and next episode we're going to talk about how this

all fell apart and how there was a choice in the 70s between either corporations can make money or people can have things and the the the product of what the neoliberals are going to do in the next episode is that they're going to their solution to this problem is to tell the entire rest of the earth to eat shit and die and yeah that's that's that's That's the episode. It's, yeah. Ah, history. Yeah, it's a time. Okay. Well, we got any pluggables? What do we do at the end of episodes?

Sophie, where are we? Who are we? Thank you for listening. We'll be back on a day at a time maybe we're not hearing you sophie i think you're muted i'm not muted i'm not muted oh there we go i'm not muted i haven't been muted the whole time we didn't hear you yeah i just randomly halfway through just that's so weird uh i i said we'll be back on a day or a time

yeah at some point we'll be back find us then and find us tomorrow unless this comes out on Friday I think this is coming out Friday be with your family this is dropping on Friday adopt a cat

adopt two cats adopt three cats adopt four cats get a adopt four cats yeah get a number of cats greater than the number you have and put them in your house we'll see you on monday it could happen here is a production of cool zone media for more podcasts from cool zone media visit our website coolzonemedia.com or check us out on the iHeartRadio app, Apple Podcasts, or wherever you listen to podcasts. You can find sources

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