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destruction of World War II. Some of
the rigid laws and regulations that
had been put in place to protect
consumers were now considered to
be interfering with free enterprise.
The global push for deregulation
resulted in the adoption of new
markets, greater competition, and
openness, especially as the world
adapted to the end of the Cold War
and the collapse of the Soviet Union.
The example set in east Asia
influenced policy makers in other
Asian countries, such as India and
China. Mexico and Brazil loweredtheir barriers to trade and embarked
on economic reform, leading to a
dramatic improvement in living
standards. As East and West
Germany reunited in 1989, after the
fall of the Berlin Wall, the European
Union (EU), an economic union of
28 European countries, emerged as
a major force in the world economy.
Also in the 1980s, China opened
up to foreign trade, and huge sums
of foreign investment poured in,
leading to extraordinary growth.Global economy
The world economy is now far more
open. Internet use allows people to
order goods in one part of the world
and have them delivered elsewhere
within a matter of days. World trade
is made up of global partnerships,
with multinational companies that
boast huge turnovers. Across the
globe, people tend to migrate to
cities to find work, resulting in
an increase in urbanization.
One complaint that is often
aimed at globalization is that some
companies exploit cheap labor and
behave unethically in their bid for
profit. Another is that globalization
has contributed to the extraordinary
accumulation of wealth by a fewTHE MODERN WORLD
individuals and, thus, increased
inequality. Some countries have also
remained extremely poor—areas of
sub-Saharan Africa, for example
have fared badly and been left
behind, in debt to wealthier nations.
Economic recessions have
occurred throughout history, but the
financial crisis of 2008–11 was the
worst—at least since the Great
Depression of 1929—and maybe
the worst ever. Many felt it was
an avoidable disaster caused by
widespread failures in government
regulation and heedless risk-taking
by investment bankers. Only
massive monetary and fiscal stimuli
prevented catastrophe. Household
and business debts remained high,
and there was widespread fury
directed at bankers, whom many felt
had survived relatively unscathed.
Austerity measures provoked civil
unrest. Demonstrations were held
against capitalism; the Occupy
Movement spread, with tens of
thousands marching in New York,
London, Frankfurt, Madrid, Rome,
Sydney, and Hong Kong. While
financiers argued over the causes of
the Global Recession, the impact
on the lives of ordinary people had
profound, lasting consequences. ■September and October
of 2008 was the worst
financial crisis in global
history, including the
Great Depression.
Ben Bernanke
Former head of the Federal ReserveAn era of protest
The global economic crisis that
began in 2008 generated much
anger at institutional symbols of
power and greed, and there was
an upsurge of popular protest.
Demonstrations united those
venting at bankers and capitalists,
anti-globalization protestors, and
environmentalists. There was
growing anger at the level of
inequality, corporate greed,
and the lack of jobs.
When the G20, an international
forum for finance ministers, met
in the financial heart of Londonin 2009, they were faced with
thousands of angry protestors.
Social media became critical
in the organization of large
gatherings and the occupation
of physical spaces. As protests
spread throughout Europe, they
used the banner of “Occupy,”
a movement set up in New York
to protest against social and
economic inequality. There were
riots in Rome, strikes in Greece,
demonstrations in Portugal,
and occupations in the public
squares of Barcelona, Moscow,
Madrid, New York, Chicago,
and Istanbul.People took to the streets to
protest against the actions of banks
and multinationals, which were seen
as the trigger of the financial crisis.US_330-333_Financial_crisis.indd 333 26/02/2016 15:49