countries watched Hollywood movies and wore T-shirts ad-
vertising American corporations. By the end of the decade,
the fall of the Soviet Union seemed to presage a truly global
economy and the worldwide spread of capitalism.
Although worldwide capitalist trade was under way
in the early twentieth century, globalization was
halted by the rise of a separate world socialist eco-
nomic system after the Russian Revolution of 1917
and, soon after World War II, the rise of socialist
economies from East Germany to North Korea and
Vietnam. Nevertheless, in 1947, capitalist countries
launched a process for developing a tariff-free world
economy by signing the General Agreement on Tar-
iffs and Trade (GATT) to encourage free trade
through several subsequent rounds of negotiation.
Up to the 1970’s and 1980’s, the wealthiest corpora-
tions accumulated such vast amounts of capital that
they established conglomerates with subsidiaries in
several poorer countries around the world, where
their financial power also served to control those na-
tions’ political elites.
In 1973, the Summit Conference of Non-Aligned
Nations called for a new international economic or-
der (NIEO) to end the exploitation and impoverish-
ment under which poor countries shipped raw mate-
rials to rich countries at low prices and then had to
buy goods made from those same materials at high
prices. Based on the concept of a right to develop-
ment, special sessions of the United Nations General
Assembly in 1974 and 1975 endorsed NIEO princi-
ples, which included a relocation of industries from
the wealthy industrial countries to the poorer coun-
tries, so poorer countries could gain control of the
new industries inside their borders. The richest
countries made nominal concessions to NIEO advo-
cates regarding foreign aid, but they were slow to im-
plement them.
When U.S. president Ronald Reagan took office in
1981, his advisers declared NIEO dead. They insisted
that the way to address poorer countries’ concerns
was to require those countries to privatize their indus-
tries. If the developing nations agreed to dismantle
government-run corporations and expand their pri-
vate sectors, the World Bank would then issue loans
directly to specific private corporations in the devel-
oping nations. Just as it did in the United States, then,
the Reagan administration insisted on shrinking gov-
ernments, deregulating industry, and trusting free
markets throughout the world.
Reagan and other economic conservatives em-
braced a model of global free trade, believing that
the industrialized nations of the world would benefit
from such trade. Those nations would gain access to
new markets for their industrial goods and techno-
logically advanced services, especially in the devel-
oping nations that had previously erected protec-
tionist tariffs against those goods and services in
order to nurture their own fledgling industries. Be-
ginning in 1986, the developed world vigorously
pursued an end to such tariffs and of all barriers to
global free trade. In that year, GATT’s Uruguay
Round of talks began to negotiate comprehensive
tariff reduction agreements.
In 1988, the Canada-United States Free Trade
Agreement was signed, as momentum built behind
all such free trade agreements and the development
of a global economy. Meanwhile, market economies
had been developing within such communist na-
tions as China, Eastern Europe, the Soviet Union,
and Vietnam. In 1989, the Berlin Wall came down,
the world socialist economic system disintegrated,
and Eastern Europe joined the world economy. The
1980’s also saw the rise of the Internet, and when
commecial interests were allowed to join the net-
work in 1985, the Internet began to evolve into an-
other tool or medium of global capitalism.Impact As more countries became industrial pro-
ducers, low-cost consumer goods were increasingly
sold worldwide. Transnational corporations acquired
smaller businesses in a wave of consolidations and
mergers, becoming truly global in scope. The diver-
sity of these global corporations’ holdings meant
that many different kinds of businesses, from manu-
facturing to services, were integrated inside the same
corporate entity. Demand steadily increased for un-
skilled labor to produce enough commodities to
take advantage of newly opened international mar-
kets. As a result, large rural populations in develop-
ing nations migrated to cities and to decrepit shanty-
towns to work in the factories that sprung up there.
If there were negative consequences within the
United States to the globalization of the 1980’s, they
were largely hidden by the celebration of Reagan-
omics and the “victory” of capitalism over commu-
nism in the Cold War. The U.S. economy grew tre-
mendously during the decade, driven in part by the
expansion of multinational corporations into new
markets. It would not be until the following decade420 Globalization The Eighties in America