Chapter 30: Life in an Age of Globalization

Reshaping Russia and the Former East Bloc

Economic Shock Therapy in Russia

• Politics and economics were closely intertwined in Russia after the dissolution of the Soviet Union.

• To implement the plan, the Russians abolished price controls on 90 percent of all Russian goods, with the exception of bread, vodka, oil, and public transportation.

• President Yeltsin and his economic reformers believed that shock therapy would revive production and bring widespread prosperity.

• Rapid economic liberalization worked poorly in Russia for several reasons.

• Soviet industry had been highly monopolized and strongly tilted toward military goods.

• Runaway inflation and poorly executed privatization brought a profound social revolution to Russia.

• Under these conditions, effective representative government failed to develop, and many Russians came to equate democracy with the corruption, poverty, and national decline they experienced throughout the 1990s.

• Yeltsin became increasingly unpopular; only the support of the Oligarchs kept him in power.

Russian Revival Under Vladimir Putin

• This widespread disillusionment set the stage for the “managed democracy” of Vladimir Putin  (b. 1952).

• First elected president as Yeltsin’s chosen successor in 2000, Putin won re-election in a landslide in March 2004, and, after a four-year stint as prime minister, returned to the presidency in 2012.

• This combination of autocratic politics and economic reform— aided greatly by high world prices for oil and natural gas, Russia’s most important exports— led to a decade of strong economic growth.

• During his first two terms as president, Putin’s domestic and foreign policies proved immensely popular with a majority of Russians.

• Putin’s government moved decisively to limit political opposition.

• The 2003 arrest and imprisonment for tax evasion and fraud of the corrupt oil billionaire Mikhail Khodorkovsky, an Oligarch who had openly supported opposition parties, showed early in his rule that Putin and his United Russia Party would use state powers to stifle dissent.

• Putin also took an aggressive and at times interventionist stance toward the Commonwealth of Independent States, a loose confederation of most of the former Soviet republics.

• Despite nominal Russian control over Chechnya, the cost of the conflict has been high.

• Thousands on both sides have lost their lives, and both sides have committed serious human rights abuse.

• Putin stepped down when his term limits expired in 2008.

• His handpicked successor, Dimitri Medvedev(b. 1965), easily won election that year and then appointed Putin prime minister, leading observers to believe that the former president was still the dominant figure.

• Tensions between political centralization and openness continue to define Russia’s difficult road away from communism.

Coping with Change in the Former East Bloc

• Developments in the former East Bloc paralleled those in Russia in important ways.

• New leaders across the former East Bloc faced similar economic problems: how to restructure Communist economic systems and move state-owned businesses and property into private hands.

• The methods of restructuring and privatization varied from country to country.

• As noted earlier, Poland’s new leaders turned to “shock therapy,” the most rapid and comprehensive form of economic transformation, advocated by neoliberal Western institutions, including the International Monetary Fund and the World Bank.

• Other countries followed alternate paths.

• Czechoslovakia took a more gradual approach.

• As in Russia, the Czechoslovak state issued vouchers to its citizens, which they could use to bid for shares in privatized companies.

• Economic growth in the former Communist countries was varied, but most observers agreed that Poland, the Czech Republic, and Hungary were the most successful.

• Poland, the Czech Republic, and Hungary also did far better than Russia in creating new civic institutions, legal systems, and independent media outlets that reinforced political freedom and national revival.

• Romania and Bulgaria lagged behind in the postcommunist transition.

• Western traditions were much weaker there, and both countries were much poorer than their more successful neighbors.

• The social consequences of rebuilding the former East Bloc were similar to those in Russia, though people were generally spared the widespread shortages and misery that characterized Russia in the 1990s

• Though few former East Bloc residents wanted to return to communism, some expressed longings for the stability of the old system.

• Even the everyday consumer goods produced during the Communist years, which vanished, for the most part, after 1990, became objects of affection. Germans coined the term Ostalgie— a combination of the German words for “East” and “nostalgia”— to label this fondness for the lifestyles and culture of the vanished East Bloc.

• At the same time, many East Bloc citizens had never fully accepted communism, primarily because they equated it with Russian imperialism and the loss of national independence.

• The question of whether or how to punish former Communist leaders who had committed political crimes or abused human rights emerged as a pressing issue in the former East Bloc.

• The search for fair solutions proceeded slowly and with much controversy, an ongoing reminder of the troubling legacies of communism and the Cold War.

Tragedy in Yugoslavia

• The great postcommunist tragedy was Yugoslavia, which under Josip Broz Tito had been a federation of republics under centralized Communist rule.

• The revolutions of 1989 accelerated the breakup of Yugoslavia.

• In 1992 the civil war spread to Bosnia-Herzegovina, which had also declared its independence.

• Serbs— about 30 percent of that region’s population—refused to live under the more numerous Bosnian Muslims, or Bosniaks.

• The new goal of the armed factions in the Bosnian civil war was ethnic cleansing, or genocide: the attempt to establish ethnically homogeneous territories by intimidation, forced deportation, and killing.

• While appalling scenes of horror not seen in Europe since the Holocaust shocked the world, the Western nations had difficulty formulating an effective, unified response.

• The Albanian Muslims of Kosovo, who hoped to establish self-rule, gained nothing from the Bosnian agreement. Frustrated Kosovar militants formed the Kosovo Liberation Army (KLA) and began to fight for independence.

• When Milošević refused to withdraw Serbian armies from Kosovo and accept self-government (but not independence) for Kosovo, NATO began bombing Serbia in March 1999.

• The war-weary and impoverished Serbs eventually voted the still-defiant Milošević out of office, and in July 2001 a new pro-Western Serbian government turned him over to a war crimes tribunal in the Netherlands to stand trial for crimes against humanity.

Crisis and Change in Western Europe

• Contemporary observers often assert that the world has entered a new era of globalization.

• Though the term is difficult to define, such assertions do not mean that there were never international connections before.

The Global Economy

• Though large business interests had long profited from systems of international trade and investment, multinational corporations grew and flourished in a world economy increasingly organized around policies of free-market neoliberalism, which relaxed barriers to international trade.

• The development of sophisticated personal computer technologies and the Internet at the end of the twentieth century, coupled with the deregulation of national and international financial systems, further encouraged the growth of international trade.

• At the same time, the close connections between national economies also made the entire world vulnerable to economic panics and downturns.

• A decade later, a global recession triggered by a crisis in the U.S. housing market and financial system created the worst worldwide economic crisis since the Great Depression of the 1930s.

The New European Union

• Global economic pressures encouraged the expansion and consolidation of the European Common Market, which in 1993 proudly rechristened itself the European Union (EU)

• Membership in the monetary union required states to meet strict financial criteria defined in the 1991 Maastricht Treaty, which also set legal standards and anticipated the development of common policies on defense and foreign affairs.

• Western European elites and opinion makers generally supported the economic integration embodied in the Maastricht Treaty.

• Support for the Maastricht Treaty was not universal, however.

• Ordinary people, leftist political parties, and right-wing nationalists expressed considerable opposition to the new rules.

• Above all, many citizens feared that the European Union was being created at their expense.

• Joining the monetary union required national governments to meet stringent fiscal standards, impose budget cuts, and contribute to the EU operating budget.

• Then in 2002, brand-new euros finally replaced the national currencies of all Eurozone countries.

• This rapid expansion underscored the need to reform the EU’s unwieldy governing structure.

• In June 2004 a special commission presented a new EU constitution that created a president, a foreign minister, and a voting system weighted to reflect the populations of the different states.

• Though the constitution did not go into effect, the long postwar march toward greater European unity did not stop.

• Yet profound questions about the meaning of European unity and identity remained.

• The EU struggled to shape institutions and policies to address these complicated issues.

Supranational Organizations

• Beyond the European Union, the trend toward globalization empowered a variety of other supranational organizations that had tremendous reach.

• The United Nations (UN), established in 1945 after World War II, remains one of the most important players on the world stage.

• A trio of nonprofit international financial institutions have also gained power in a globalizing world.

• Like the United Nations, the World Bank and the International Monetary Fund (IMF) were established in the years following World War II.

• The third economic supranational, the World Trade Organization (WTO), is one of the most powerful supranational financial institutions.

• The rise of these institutions, which typically represent the shared interests of national governments, was paralleled by the emergence of a variety of nongovernmental organizations (NGOs).

• Though financed by donations from governments and private citizens, NGOs’ annual budgets can total hundreds of millions of dollars and their work can be quite extensive.

The Human Side of Globalization

• Globalization transformed the lives of millions of people, as the technological changes associated with postindustrial society remade workplaces and lifestyles around the world.

• The outsourcing of manufacturing jobs dramatically changed the nature of work in western Europe and North America.

• The deindustrialization of Europe established a multitiered society with winners and losers

• In the bottom tier— in some areas as much as a quarter of the population— a poorly paid underclass performed the unskilled jobs of a postindustrial economy or were chronically unemployed.

• Geographic contrasts further revealed the unequal aspects of globalization

• The human costs of globalization resulted in new forms of global protest.

• Critics accused global corporations and financial groups of doing little to address problems caused by their activities, such as social inequality, pollution, and unfair labor practices.

• The general tone of the antiglobalization movement was captured at the 1999 meeting of the WTO in Seattle, Washington. Tens of thousands of protesters from around the world, including environmentalists, consumer and antipoverty activists, and labor rights groups, marched in the streets and disrupted the meeting.

• Similar feelings inspired the Occupy movement, which began in the United States in 2011 and quickly spread to over eighty countries.

• Though it was unclear whether the diverse groups in the Occupy movement could mount a sustained and successful challenge to the public officials and business leaders who profited from globalization, their calls for greater social equality and democracy showed that the struggle for reform continued.

Life in the Digital Age

• The growing sophistication of information technologies— a hallmark of the globalizing age— has had a profound and rapidly evolving effect on patterns of communications, commerce, and politics.

• Leisure-time pursuits were a case in point.

• The arrival of cable television, followed swiftly by DVDs and then online video streaming, enabled individuals to watch full-length movies or popular television shows on their personal computers or smartphones at any time and greatly diversified the options for home entertainment.

• Digitalization transformed familiar forms of communication in a few short decades. Many of these changes centered on the Internet, which began its rapid expansion around the globe in the late 1980s.

• Entire industries were dramatically changed by the emergence of the Internet.

• With faster speeds and better online security came online shopping; people increasingly relied on the Internet to purchase goods from clothes to computers to groceries.

• The rapid growth of the Internet and social media raised complex questions related to personal privacy and politics.

• A number of authoritarian states from North Korea to Iran to Cuba, recognizing the disruptive powers of the Internet, strictly limited online access.

Toward a Multicultural Continent

The Prospect of Population Decline

• Population is still growing rapidly in many poor countries but not in the world’s industrialized nations.

• In 2000, families in developed countries had only 1.6 children on average; only in the United States did families have, almost exactly, the 2.1 children necessary to maintain a stable population.

• If the current baby bust continues, the long-term consequences could be dramatic, though hardly predictable.

• The number of people of working age would fall, and longer life spans mean that nearly a third of the population would be over sixty.

• Research has shown that European women and men in their twenties, thirties, and early forties still wanted two or even three children— as their parents had wanted.

• By 2005 some population experts believed that European women were no longer postponing having children.

• Europeans may yet respond with enough vigor to reverse their population decline and avoid societal disaster.

Changing Immigration Flows

• As European demographic vitality waned in the 1990s, a surge of migrants from Africa, Asia, and the former Soviet Bloc headed for western Europe.

• Historically a source rather than a destination of immigrants, western Europe saw rising numbers of immigration in postcolonial population movements beginning in the 1950s, augmented by the influx of manual laborers in its boom years from about 1960 until about 1973.

• Though many migrants in the early twenty-first century applied for political asylum and refugee status, most were eventually rejected and classified as illegal job seekers.

• Undocumented immigration was aided by powerful criminal gangs that smuggled people for profit.

• These gangs contributed to the large number of young female illegal immigrants from eastern Europe, especially Russia and Ukraine.

Ethnic Diversity in Contemporary Europe

• By 2010 immigration to Europe had profoundly changed the ethnic makeup of the continent, though the effects were unevenly distributed.

• For centuries the number of foreigners living in Europe had been relatively small.

• Now, permanently displaced ethnic groups, or diasporas, brought ethnic diversity to the continent.

• The new immigrants were divided into two main groups.

• A small percentage were highly trained specialists who could find work in the upper ranks of education, business, and high-tech industries.

• A variety of new cultural forms, ranging from sports and cuisine to music, the fine arts, and film, brought together native and foreign traditions and transformed European lifestyles.

• The multiculturalism and ethnic diversity associated with globalization have inspired numerous works in literature, film, and the fine arts.

• The growth of immigration and ethnic diversity created rich social and cultural interactions but also generated intense controversy and conflict in western Europe.

• Immigration is a highly charged political issue.

• By the 1990s in France, some 70 percent of the population believed that there were “too many Arabs,” and 30 percent supported right-wing politician Jean-Marie Le Pen’s calls to rid France of its immigrants altogether.

Europe and Its Muslims Citizens

• General concerns with migration often fused with fears of Muslim migrants and Muslim residents who have grown up in Europe.

• Worries increased after the September 11, 2001, al-Qaeda attack on New York’s World Trade Center and the subsequent war in Iraq.

• The vast majority of Europe’s Muslims clearly support democracy and reject violent extremism, but these spectacular attacks and lesser actions by Islamist militants nonetheless sharpened the European debate on immigration.

• Secular Europeans at times had a hard time understanding the depths of Muslim spirituality.

• French attempts to enforce a ban on wearing the hijab (the headscarf worn by many faithful Muslim women) in public schools expressed the tension between Western secularism and Islamic religiosity on a most personal level and evoked outrage and protests in the Muslim community.

• Admitting that Islamic extremism could pose a serious challenge, some observers focused instead on the problem of integration.

• This argument was strengthened by widespread rioting in France in 2005 and again in 2009, which saw hundreds of Muslim youths go on a rampage.

• A minority used such arguments to challenge antimigrant, anti-Muslim discrimination and its racist overtones.

• This recognition might open the way to political and cultural acceptance of European Muslims and head off the resentment that can drive a tiny minority to separatism and acts of terror.

Confronting Twenty-First-Century Challenges

Growing Strains in U.S-European Relations

• In the fifty years after World War II, the United States and western Europe generally maintained close diplomatic relations.

• The growing gap between the United States and Europe had several causes.

• For one, the European Union was now the world’s largest trading block, challenging the predominance of the United States.

• A values gap between the United States and Europe contributed to cooler relations as well.

• Ever more secular Europeans had a hard time understanding the religiosity of many Americans.

• Hardball geopolitical issues relating to NATO further widened the gap.

• American-led wars in Afghanistan and Iraq, undertaken in response to the September 11 terrorist attacks against the United States, further strained U.S.European relations.

• Immediately after the September 11 attacks, the peoples and governments of Europe and the world joined Americans in heartfelt solidarity.

• Over time, however, tensions between Europe and the United States re-emerged and deepened markedly, particularly after President Bush declared a unilateral U.S. war on terror— a determined effort to fight terrorism in all its forms, around the world.

• The U.S. invasion of Iraq and subsequent events caused some European leaders, notably in France and Germany, to question the rationale for and indeed the very effectiveness of a “war” on terror.

• American conduct of the war on terror also raised serious human rights concerns.

• The election of Barack Obama, America’s first African American president, in 2008, and his re-election in 2012, brought improvement to U.S.-European foreign relations.

• In the long run, though ties with the United States remained solid, European states increasingly responded independently to global affairs.

Turmoil in the Muslim World

• Residents of North America and Europe expressed surprise and shock at the vehemence of the September 11 and other terrorist attacks, but radical Islamist hostility toward the West had a long history.

• Radical political Islam, a mixture of traditional religious beliefs and innovative social and political reform ideas, was at first a reaction against the foreign control and secularization represented by the mandate system established in the Middle East after World War I.

• Groups like the Muslim Brotherhood, founded in Egypt in 1928, called for national liberation from European control and a return to shari’a law (based on Muslim legal codes), and demanded land reform, extensive social welfare programs, and economic independence.

• Decolonization and the Cold War sharpened antiWestern and particularly anti-U.S. sentiments among radical Islamists.

• U.S. policies in the Middle East at times produced “blowback,” or unforeseen and unintended consequences.

• As a result of these policies, the United States, along with western Europe, became the main target for Islamist militants.

• The Bush administration hoped that the invasions of Afghanistan— a direct response to the September 11 attacks— and Iraq would end the terrorist attacks and bring peace and democracy to the Middle East, but both instead increased turmoil there.

• With heavy fighting still under way in Afghanistan in late 2001, the Bush administration turned its attention to Saddam Hussein’s Iraq, arguing that it was necessary to expand the war on terror to other hostile regimes in the Middle East.

• The U.S.-led invasion quickly overwhelmed the Iraqi army, and Saddam’s dictatorship collapsed in April, but America’s subsequent efforts to establish a stable pro-American Iraq proved difficult.

• In early 2011 an unexpected chain of events that came to be called the Arab Spring further destabilized the Middle East and North Africa.

• In summer 2013, as this was being written, the outcome of the Arab Spring was difficult to predict.

• The initial protests were not organized by radical Islamists, but by young activists who sought greater political and social liberties from West-backed authoritarian regimes.

• U.S.-led campaigns against radical Islamists had weakened terrorist groups, which were for the most part disorganized and scattered in remote areas.

The Global Recession and the Viability of the Eurozone

• While chaos and change roiled the Muslim world, economic crisis sapped growth and political unity in Europe and North America.

• The recession quickly swept across Europe, where a housing bubble, high national deficits, and a weak bond market made the crisis particularly acute.

• This sudden “euro crisis” put the very existence of the Eurozone in question. The common currency grouped together countries with vastly divergent economies.

• Germany and France, the zone’s two strongest economies, felt pressure to provide financial support to ensure the stability of far weaker countries, including Greece and Portugal, though they did so with strings attached.

• If bailouts troubled wealthy Germans, deep cuts to benefits coupled with ongoing hardship from the recession infuriated the citizens of poorer countries.

• The euro crisis shook general faith in European unity, especially among conservatives.

• In Britain in January 2013, Conservative Party leader and prime minister David Cameron (r. 2010– ) pledged to hold an “in/out” popular vote on Britain’s membership in the EU within five years.

• It remained to be seen whether economic troubles would persist and lead to political disintegration.

Dependence on Fossil Fuels

• One of the most significant long-term challenges facing Europe and the world in the twenty-first century is the need for adequate energy resources.

• Struggles to control and profit from these shrinking resources often resulted in tense geopolitical conflicts.

• The global struggle for ample energy has placed Russia, which in 2011 became the world’s number one oil producer (surpassing Saudi Arabia) and the number-two natural gas producer, in a powerful but strained position.

• Beyond military action, Russian leaders readily use their control over energy to assert political influence.

Climate Change and Environmental Degradation

• Even setting aside the question of the supply of fossil fuels, their use has led to serious environmental problems.

• Burning oil and coal releases massive amounts of carbon dioxide (CO2 ) into the atmosphere, the leading cause of climate change or global warming.

• Environmental degradation encompasses a number of problems beyond climate change.

• Overfishing and toxic waste threaten the world’s oceans and freshwater lakes, which once seemed to be inexhaustible sources of food and drinking water.

• Though North American and European governments, NGOs, and citizens have taken a number of steps to limit environmental degradation and regulate energy use, the overall effort to control energy consumption has been an especially difficult endeavor, underscoring the interconnectedness of the contemporary world.

• ? In December 2012 representatives of 192 nations met at the annual United Nations Climate Change Conference, in Doha, Qatar.

• They extended the Kyoto Protocol on climate change, set ambitious goals for the reduction of CO2 emissions by 2020, and promised to help developing countries manage the effects of climate change.

Promoting Human Rights

• Though regional differences persisted in the twentyseven EU member states, Europeans entering the twenty-first century enjoyed some of the highest living standards in the world, the sweet fruit of more than fifty years of peace, security, and overall economic growth.

• European leaders and humanitarians believed that more global agreements and new international institutions were needed to set moral standards and to regulate countries, leaders, armies, corporations, and individuals.

• In practical terms, this mission raised questions. Europe’s evolving human rights policies would require military intervention to stop civil wars and to prevent tyrannical governments from slaughtering their own people.

• Europeans also broadened definitions of individual rights.

• Having abolished the death penalty in the EU, they condemned its continued use in China, the United States, and other countries.

• Europeans extended their broad-based concept of human rights to the world’s poorer countries.

• Such efforts often included sharp criticism of globalization and unrestrained neoliberal capitalism.

• The record was not always perfect. Critics accused the European Union (and the United States) of selectively promoting human rights in their differential responses to the Arab Spring— the West was willing to act in some cases, as in Libya, but dragged their feet in others, as in Egypt and Syria.

• Attempts to extend rights to women, indigenous peoples, and immigrants remained controversial, but the general trend suggested that Europe’s leaders and peoples alike took very seriously the ideals articulated in the 1948 UN Universal Declaration of Human Rights.