The World in 2050_ Four Forces Shaping Civilization's Northern Future - Laurence C. Smith [11]
Up until the demise of the Bretton Woods monetary regulatory system in the early 1970s, it presided for three decades over what some have called the “golden age of controlled capitalism.”29 But by the 1980s, “controlled capitalism” had fallen to a revolution of “neoliberalism”—the deregulation and elimination of tariffs and other controls on international trade and capital flows. The neoliberalism movement was championed by British prime minister Margaret Thatcher and U.S. president Ronald Reagan, but was rooted in the ideas of Adam Smith.
Throughout the 1980s and 1990s the IMF, WTO, and World Bank aggressively pursued agendas of liberalizing (deregulating) trade markets around the world, vigorously urged on by the United States.30 A common tactic was to require developing countries to accept neoliberal reforms to qualify for IMF or World Bank loans. This practice was exemplified by the “Washington Consensus,” a controversial list of hard-nosed reforms including trade deregulation, opening to direct foreign investment, and privatization of state enterprises.31
In the United States, presidents from both political parties also worked to dismantle international trade barriers. Of particular importance to this book was the North American Free Trade Agreement (NAFTA), proposed in 1991 by President George Herbert Walker Bush to remove trade barriers between the United States, Mexico, and Canada. Two years later, President Bill Clinton made NAFTA the cornerstone of his legacy. In his speech at the signing ceremony Clinton pressed the need “to create a new world economy,” with former presidents Bush, Jimmy Carter, and Gerald Ford nodding in attendance. Clinton’s successor also agreed: Fifteen years later, citing a near-quintupling of U.S. free-trade agreements under his watch, outgoing president George W. Bush stated that global trade expansion had been one of the “highest priorities of his administration.”32
Notice that the origins of today’s great global integration are at odds with one of its most widely promulgated myths: that globalization has emerged organically, born from fast Internet technology and the “invisible hand” of free markets. In truth, this global force owes its existence to a long history of entirely purposeful policy decisions, championed especially by the United States and Britain, dating to the waning days of World War II. Many who write about globalization see it as exploding suddenly in the 1970s or 1980s, thus missing the institutional groundwork laid first under Bretton Woods, pressed upon the developing world by its daughter institutions the IMF, WTO, and World Bank, and subsequently advanced by U.S. presidential administrations of both political parties ever since. Its foundations are now codified into decades of historical precedent and a plethora of free-trade treaties. They are engrained in generations of politicians and business CEOs, and were reaffirmed even during the turmoil of the 2008-09 global financial crisis.33 This megatrend has roots going back more than sixty years and is now a deep, powerful global force already shaping the twenty-first century economy.
The fourth global force is climate change. Quite simply, it is observed fact that human industrial activity is changing the chemical composition of the atmosphere such that its overall temperature must, on average, heat up.
The power of greenhouse gases is simply beyond dispute. Their existence was deduced in the 1820s by the French mathematician Joseph Fourier, who noticed that the Earth is far