Page 190 - Critical Political Economy of the Media

Globalisation, transnationalisation, culture 169

Western European social democracies sought to secure welfare states, by sup-
porting macroeconomic intervention including state-run industries to provide
‘full employment’, social and health provision for all. In advanced capitalist
economies the period from the 1950s to the early 1970s had been marked
by economic growth and rising living standards. Western liberal democracies
established welfare systems providing unemployment and other benefits, free or
heavily subsidised healthcare and state pensions. Such policies drew on the
organised strength of the labour movement and the support of the industrial
working class. Europe had fascist and authoritarian states during this period but
in democratic systems even mainstream conservative parties, such as the Christian
Democrats, supported key tenets of welfare state provision. Demand for labour-
saving consumer electronic goods helped to create a ‘golden age’ for Western
capitalism in the 1950s and 1960s, as well as fuel the expansion of East Asian
economies.
A global financial regulatory system was established following the Bretton
Woods reforms of 1944–46. This organised an international system to manage
cross-border capital flows, fix exchange rates (to the dollar standard), gradually
reduce protectionism by removing trade tariffs, and make credit available to
countries facing economic difficulty. This system of global governance was
organised primarily through national governments. The influence of sovereign
states was highly unequal, but the system ‘enabled the governments of developed
economies to give precedence to employment and social welfare over those of
global financial interests’ (Curran 2002: 176). From the late 1960s this system was
strained and gradually undermined. In what Brenner (1998) calls the ‘long down-
turn’, the advanced capitalist economies suffered a series of shocks, such as the
OPEC oil price rise of 1973, and severe recessions, in 1974–75, 1979–82 and
1991–95. Profit rates fell across all sectors but especially in manufacturing,
causing waves of unemployment. Growing competition to US manufacturing
output from Germany, Japan and the newly industrialised ‘tiger’ economies in
East Asia, led to a crisis of overproduction in the automobile and other industries.
Capitalist states responded by attacking the labour movement with states and
private businesses reducing pay levels for the majority of workers, although wage
cuts and increased labour productivity proved insufficient to sustain growth
(Harvey 2011). At a domestic level this encouraged a shift away from forms of
state intervention that had prevailed since the 1950s. Keynesian policies to
maintain growth through state spending failed in recessionary conditions and
were repudiated by an increasingly assertive ‘new right’, who advocated deep
cuts in public spending. Within international financial governance, the fixed
exchange rate system was abandoned in 1971–73, capital controls were relaxed
or abandoned amongst OECD countries in the 1980s and 1990s, financial
deregulation increased in the European Union and in other ‘free trade’ areas.
Where the earlier settlement had broadly reflected the strengths of social
democracy in curbing market liberals, the latter regained their ascendency with
the rise of a neoliberal agenda. During the 1970s multinational corporations