Hi, welcome back. In this presentation, let's look at how bad things were getting in the 1970s. Take the big picture on this. There are systemic crises in the 1970s. The social democracy model, big government, big unions, big companies, it doesn't seem to be working culturally or economically. Those problems are evident on the surface. For instance, on this cover of Time magazine in 1975. Can Capitalism Survive? Now they have this cartoon of Adam Smith saying, Don't count me out. But think, that the question is even being posed in a mainstream American news magazine tells you something. In 1976, Time is also noticing the rise of communist parties now in Western Europe. The Communist Party in Italy is coming very close to being able to take power in Italy in a free election, which Time regards as a red threat. But notice that here we are, this is April 1980. And again, the fundamental question on people's mind is: Is capitalism even working? The machine, as you can see, is grinding. Smoke is coming from the gears. The problems of state socialism actually are there, but they're not as evident to the outside world. During the 1970s, it looks like the Soviet Union and its allies are doing pretty well in international politics. Also, the higher price of oil tended to favor the Soviet Union in the short run because they produce a lot of oil. It gives them some hard currency, they can use that hard currency to provide more subsidies to their friends to help keep them afloat. They in turn are borrowing money to import things they need, more consumer goods to keep their countries happy. They can pile up debts because the Soviet Union can help them pay those debts with the money it's earning from its oil production. So internationally, economically, the �70s it looks like state socialism may be working. But there are a couple of big alternatives that are emerging. One really important set of ideas in the 1970s is an answer to this question. Are they all alike? And in the West, this is the rise of a human rights movement. It's partly inspired by the progress towards civil rights in the United States and other countries in the 1960s. But partly a broader sense that there needs to be something more involved in world politics than just a balance of power. It hearkens back to issues of the early part of the 20th century, a symbol for some of this was the American president Jimmy Carter, who took office at the beginning of 1977 in the aftermath of the resignation, from his domestic abuses of power, of Richard Nixon. Here's Time mocking Carter, a little bit, in August of 1977. You see him as Daniel in the lions' den, surrounded by these more cynical lions, like Helmut Schmidt of Germany, and Hua Guofeng in China, Anwar Sadat of Egypt, and Menachem Begin of Israel, and Leonid Brezhnev over there in the Soviet Union. But beneath this bit of satire, there is something serious going on. Human rights posed as an alternative to continued superpower confrontation just about military issues. In this contest of ideas, think about this from the perspective of world history. Suppose this is an election about a battle of ideas. Using the American metaphor of looking at the map of the states and figuring out what the swing states are, or the battleground states, look at the map of the world in the 1970s and ask yourself: What are the swing areas that could decide this world election, choosing among the struggling ideas? My argument to you is that the two real swing areas, the areas that are in play in the 1970s and early 1980s are really Western and Central Europe, and China. The fate of China. Choices made in those two parts of the world, as we've seen through a couple of hundred years of world history, are going to help change the flow. And, they are pretty important regions to keep your eye on in the 1970s and early 1980s. We do have an interesting historical problem in understanding the great shift in Europe and China in the 1970s and early 1980s. You can read this, for example, as a tale of two U-turns. The first one, pretty well known to students of British politics, in 1972, that's when the conservative prime minister, Edward Heath, is going to try to take on the labor unions. He's going to stop inflation. In 1972, he throws up his hands, he surrenders. He has to make a complete U-turn, give into the unions, increase government spending, and worsen Britain's inflation. That's one U-turn. He was bitterly denounced for this by his rival within Britain's conservative party, a rising young Politician, seen here, named Margaret Thatcher. Thatcher, famously stated, this lady is not for turning. Here you see her in 1975 as Edward Heath, her longtime enemy, looks on with his usual expression of quizzical hostility. In 1982, there's another U-turn that's kind of a benchmark for this period. Francois Mitterrand, the leader of the French Socialist Party, has taken charge of France. He's a leader of a democratic socialist party. He's taken charge of a government in partnership with the communists. Aha, there is going to be a decisive move towards the left in Europe. But no, in 1982, Mitterrand, after his '81 election, he'll do a U-turn. He'll join a new kind of economic and political consensus emerging in Europe. So those are two U-turns. Heath giving way and turning to the left, Mitterrand giving way and turning to the right. We can look back on this as historians and somehow see all this as predestined and inevitable. It seems like, well sure, it was bound to happen. Socialism was bound to lose out in the battle of ideas. But I urge you to examine your own assumptions. Don't just go into this assuming that capitalism is bound to bounce back from all these troubles of the 1970s. Why didn't democratic socialism become the alternative chosen in the key battleground states of Western Europe or in China? So, to do that, it's going to be important to examine the alternatives they were looking at in the 1970s. Let's look hard at the alternative of democratic socialism, take it seriously as an option people are considering in the battle of ideas of the 1970s. It's already creeping its way into government and the Labour Party that's ruling England between 1974 and 1979 and in the coalition that will take charge in France in 1981. But for better or worse, the cause of democratic socialism became powerfully identified with the cause of the power of unions-- unions like the one that had caused Ted Heath's U-turn in Britain in 1972, unions like the National Union of Mineworkers, paralyzing Britain with a strike to shut down the coal fields when new Prime Minister Margaret Thatcher, at the end of 1970s, said she would take them on and close those fields if necessary. It was Thatcher versus Scargill, versus the head of the unions. The public had to decide, which side are you on? On the side of the striking miners, or on the side of the conservative Prime Minister? From the union perspective, they had a lot to argue about. The Great Inflation was hitting their workers hard. The unions are pushing hard for wages to keep up with inflation. But from Thatcher's perspective, the only way to combat the inflation will be to make some very painful decisions that the unions will reject. The British public had to take sides. The majority of the British public end up taking sides with Thatcher. Another facet of the democratic socialism was the surge in popularity of the Communist Party in Italy and the Communist Party in Spain. Spain had been under the dictatorial rule of the right wing guy who won the Spanish Civil War, Francisco Franco. After Franco finally passed away in 1975, a lot of people wondered what would happen to Spain. Would it remain a dictatorship? But Spain turned toward democracy. It created a constitutional monarchy. And in that constitutional monarchy, the leading democratic faction were democratic socialists. The general alienation from the political parties of the powerful -- unions or big business -- also creates a proliferation of single issue parties about the environment, about ethnic nationalism. But a major problem for the left is that a lot of the people in places like Germany, Italy, France, England are more and more seeing basic concerns about governability and public order. They feel like their societies are breaking down, held hostage by unions, plagued by domestic terrorists, like the Red Brigades in Italy putting up pamphlets like this one, strike one to educate 100, having kidnapped this Italian prime minister and leading politician, Aldo Moro, whose body would later turn up on the streets of Rome. Images like these, from 1979 and 1980, of the American employees at the U.S. Embassy in Iran held hostage by the Iranian revolutionaries who would overrun their embassy. And the reaction to this sense that society is coming apart is: We need stronger public order. The Eurocommunists and the democratic socialists have another problem: They can't quite free themselves from the taint of association with socialism as defined and exemplified by the Soviet Union. And as you can tell by the late 1970s, the Soviets are getting a pretty bad press, the invasion of Afghanistan sure doesn't help. Hard to look at the Soviet Union and see anything there that looks like a model for the future. But for the Eurocommunist parties in France, in Italy, in Spain, it's so hard for them to make a clean break from the Soviet Communist Party. Since the Soviets don't feel any incentive to reboot socialism back in Moscow, it just becomes so much harder to reboot democratic socialism in the communist parties of Western Europe, too. The result then is that democratic socialism doesn't become the wave of the future. People turn, instead, to some different ideas. We'll look more at those next time. [BLANK_AUDIO]
