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Sargent - The United States An Globalization in The 1970s
Sargent - The United States An Globalization in The 1970s
Daniel Sargent
1973-74 oil crisis shifted the balance of power in the world economy away from the importing nations and
toward oil exports
American leaders had failed to perceive the power of petroleum as a political weapon, despite the warnings
of oil economists
- Kissinger: Realities of interdependence made the diplomacy of nationalistic rivalry almost suicidal
o It would provoke a desperate rush for bilateral barter deals with oil exporters
- In private: how could the US lead in a world in which economics was stronger than military force?
o Use economics to build a world political structure
1973, new limits to US => vulnerability to external economic shocks because of interdependence
- The greater level of international economic activity restrict the capacity for autonomous national
policies
o Reciprocal effects among countries
o The distinction between foreign and domestic policy, between economics and politics was
blurred
- Resurgence of long-term globalizing patterns among the nations of the advanced capitalist world
The position of the US as the international system’s leading power imposed on it special responsibilities for
managing globalization
- From the mid-1970s, American policymakers struggled to master the implications of the decade’s
integrative upheaval
o Managing structural change =/= being architects of it
1. Extent, scope and nature of globalization as the US experienced it during the 1970s
2. US officials did not pursue interdependence as a coherent objective
a. Result of exogenous structural changes
3. US as an object of globalization in the 1970s
a. National policy autonomy became circumscribed by global integration
Globalization as useful lens to look at American relations with the larger world in the 1970s
- Euromarkets, uncertainty
- Speculation and currency crises. Nixon administration
o 1971, Suspension of dollar convertibility in 1971
o 1973, abandonment of fixed exchange rates in 1973.
o 1974, abolition of capital controls
Trilateral commission: government in its classically territorial form was no longer competent to address
economic, social and political problems of transnational scale. Suggestion: Super-government
Without having been set in motion by American leaders, globalization transformed the context for public
policy in the 1970. However, US choices defined the terms of global integration.
1973, Oil Shock. How to finance the deficit of consumer country? Loans from the exporters to the
importers. How to proceed?
US government promoted the infrastructure of globalization after 1945 but because of Cold War security
imperatives
- Dollars, weapons and manufactured goods flooded from the US to the rest of the world
o Empire of production
After the rebirth of globalization in the 1970s, the US became an importer of foreign capital
- Carter administration worked to develop a multilateral solution to the stagflation crisis that
wracked the West.
o Foreign growth as an essential counterpart for domestic growth
US permitted the domestic prices for oil to rise towards world levels
Dollar depreciation
US coming to terms with globalization had consequences not only for its autonomy but also for its role as a
superpower