LEOTHEPANTHERA The Oil Shock and Neoliberalism - Martin Daunton
Feb 20, 2022
Martin Daunton, a historian and economic expert, dives into the turbulent 1970s, exploring the oil shocks and the emergence of neoliberalism. He discusses the Nixon shock and the end of the Bretton Woods system, highlighting currency tensions and the subsequent rise of floating rates. Daunton explains OPEC's impact on global economics, the cultural shift toward individualism, and the pivotal roles of Thatcher and Reagan in neoliberal policy. He concludes with reflections on the long-term changes in capitalism and the looming energy risks today.
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End Of Bretton Woods Changed Global Money
- The Bretton Woods system collapsed because the dollar's gold peg and capital controls couldn't handle postwar liquidity shifts and political choices.
- Nixon's 1971 closure of the gold window accelerated a shift to floating rates and market-driven currency regimes.
Triffin Dilemma Put Dollar In Impossible Role
- The Triffin dilemma forced the dollar into an unstable role: providing global liquidity while undermining confidence in its value.
- The US couldn't devalue effectively without disrupting all pegged currencies, creating political and economic deadlock.
Nixon’s 1971 Policy Mix And Controls
- Nixon closed the gold window on 15 August 1971 and imposed a 10% import surcharge while introducing price and wage controls.
- Donald Rumsfeld ran those controls inside the United States at Nixon's direction.
