Changes In The 1970 Flashcards
(20 cards)
Q1: What global event in 1973 significantly impacted both Western and Communist economies?
A1: The Yom Kippur War, which led to the oil crisis of 1973.
Q2: What were the main economic problems in the Western bloc during the 1970s?
A2: Rising oil prices, high inflation (up to 16% in the UK), increasing unemployment (especially youth), and visible urban poverty.
Q3: What does UB40 refer to in the context of this economic period?
A3: It refers to unemployment benefits in the UK. Youth unemployment reached over 20%.
Q4: How did Western ideology shift in response to these economic challenges?
A4: There was a move away from Keynesian economics toward neoliberalism and monetarism, with leaders like Thatcher and Reagan promoting free-market reforms.
Q5: Who were some key economists whose ideas gained traction in the West during this time?
A5: Friedrich Hayek (Nobel Prize in 1974) and Milton Friedman (Nobel Prize in 1976).
Q6: What was the impact of the oil crisis on the Soviet Union’s economy?
A6: It exposed the inefficiencies of the Soviet system and led to increased reliance on global markets and energy exports, particularly oil and gas.
Q7: Why was Soviet agricultural productivity a problem?
A7: It was so poor that students and soldiers were used for harvesting; instead of reforming agriculture, the USSR imported grain from abroad.
Q8: By 1985, what percentage of Soviet exports were energy-based?
A8: About 53%, primarily oil and gas.
Q9: What major ideological shift occurred in the USSR in the mid-1980s?
A9: Mikhail Gorbachev came to power in 1985 and introduced reforms such as glasnost and perestroika, signaling a move away from rigid Communist structures.
Q10: What symbolic statement did Deng Xiaoping make to justify China’s new economic approach?
A10: “The colour of the cat doesn’t matter as long as it catches the mice,” meaning practical results mattered more than ideological purity.
Q11: What were some causes of global ideological and economic change during this era?
A11: Leadership changes (Gorbachev, Deng, Reagan, Thatcher), the 1973 oil crisis, worsening economic conditions, and the growing geopolitical role of the Middle East.
Q5: What was the youth unemployment rate in the UK during the 1970s?
A5: Over 20%
Q4: What were the inflation rates in Western Europe before and after 1973?
A4: 3.7% (1961–1969) → 10.9% (1973–1979)
: What was Deng Xiaoping’s approach to economic reform in China?
A: He argued that socialism and market economics could coexist, famously saying: “It doesn’t matter if a cat is black or white, as long as it catches mice,” and initiated economic liberalization.
What did Gorbachev say in his 1987 speech about the Soviet economy?
A: He admitted the country was stagnating, with outdated production and lack of innovation, and called for urgent reforms.
How were Communist systems affected by the economic changes of the 1970s–80s?
The USSR faced economic stagnation, poor agricultural productivity, and increasing dependence on oil and grain imports. It began integrating into the global economy, signaling the beginning of its decline.
What was the Yom Kippur War and what immediate global impact did it have?
A: In October 1973, Egypt and Syria attacked Israel on Yom Kippur. Israel, supported by the U.S., won. In response, Arab members of OPEC imposed an oil embargo on Israel’s allies, triggering a global oil crisis.
Why did Hayek call his lecture “The Pretence of Knowledge”?
Because he believed economists falsely claimed to understand and control the economy, when in reality the economy is too complex for anyone to fully grasp.
What was Hayek’s main criticism of Keynesian economics?
He argued that government interference through spending and planning distorted the natural functioning of the market, leading to problems like inflation and stagnation.
How did Hayek describe the market?
He saw it as an evolutionary system where successful behaviors naturally emerge and spread—too complex to be predicted or controlled by central authorities.
