World realignments, shifting balance of forces
Starting in the 1970s, and accelerating in the 1990s after the collapse of the USSR and the Eastern European socialist states, international capital led by U.S. imperialism embarked on a campaign to impose neoliberal policies at home and across the world - “free” trade which is really trade rigged in favor of the transnational corporations, privatization of the public sector to benefit transnational corporations and local oligarchies, slashing public services like education and health care, and deregulation of private sector activity, including banking and finance.
It is important to note that imperialist foreign and military policies are driven by the most powerful sectors of capitalism, including finance capital and the military-industrial-energy complex. These policies are in direct conflict with the interests of the working class worldwide.
This period also saw incredible new levels of global capitalist integration. With the Soviet Union and the socialist bloc no longer a world counterbalance to imperialism, finance capital felt free to roam the earth gobbling up resources and smashing resistance to its neoliberal policies.
In the emerging capitalist economies of Eastern Europe and in the developing countries of Asia, Africa and Latin America, these policies led to massive national debt, denationalization of industries and wholesale elimination of essential social programs. The major exception was China which refused to follow the neoliberal directives of the World Bank etc. China, a socialist state and socialist-oriented economy but still a developing country, not only got through the Asian crisis relatively unharmed but also shows signs of strength in the current crisis. But many developing economies were pushed to the verge of collapse. The neoliberal policies also spurred massive new patterns of labor migration from the poor countries to the rich ones.
In Western Europe as well, leading capitalist countries adopted the same privatization and financialization policies. Now Europe, along with the U.S., is at the center of the global economic crisis, with countries like Iceland narrowly avoiding a complete economic breakdown.
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