The oil crisis gave rise to neoliberalism. I believe that the 1973 oil crisis was largely based on disinformation and exaggerated fear, something that both Clara E. Mattei and Sven Grassman have highlighted. Mattei describes how the crisis was used to legitimize austerity policies and neoliberal reforms, while Grassman showed how Sweden manipulated its national accounts. The bourgeois government painted a picture of a crisis in the trade balance that did not exist. There was also a lot of talk about the problematic inflation during this time. But inflation almost always peaked after each devaluation that was said to be the cure for the same inflation. This was the starting point for a new era where it was claimed that we were living beyond our means, even though there was a conscious political agenda behind it.
False environmental awareness
After the oil crisis, environmental awareness increased , but society's dependence on fossil fuels barely changed. Despite all the rhetoric about transition, we have continued to invest in an energy model that we knew was unsustainable back in the 1970s. It is as if the crisis was used to create fear and thus acceptance of cuts and austerity, rather than to promote real sustainability.
More sensitive psyche since the victory of neoliberalism
The neoliberalism that followed made our psyches much more sensitive on all fronts. Previously, we had a collective understanding of society's role in the well-being of the individual. But as the state began to retreat and the market became the solution to everything, society shifted from a place of solidarity to a place of competition and constant scrutiny.
Right-wing extremist and racist views
When the state cuts support for those who are struggling, many feel abandoned and unfairly treated. This can lead people to look for simple explanations for their problems and start blaming immigrants or minorities. Far-right groups exploit this by spreading racist ideas and promising tougher measures, which can attract those who feel let down. Some argue that democracy could collapse if we do not fight austerity policies, racism and the climate crisis as a whole.
Obesity
When people have less money and support, it becomes more difficult to have a healthy lifestyle. Stress and financial difficulties can lead to people choosing cheap fast food or processed foods over healthy foods or to resort to comfort eating. This leads to increased obesity, especially in vulnerable groups but also in more privileged ones . Reduced physical activity and increased sedentary activities also contribute to the problem.
Mental Health
Reduced resources for psychiatric care and social support increase the risk of mental illness . More people feel stressed, depressed and anxious. When support disappears, it is difficult for many to get the help they need, which leads to increased mental illness throughout society.
Social anxiety
As the gap between rich and poor widens, more social unrest is created . The rich withdraw and live more isolated, while those who are struggling feel even more excluded. This leads to a decline in trust in society and an increase in tensions between different groups.
But even the rich become more dissatisfied with their wealth in more unequal societies and seek even higher incomes. But there is always someone who earns more. For poor people or talented people who have not succeeded in their careers, there is always the knowledge that if you had only tried even harder, you could have become super rich. At the same time, it is harder for the more vulnerable in more unequal societies to succeed. This is what the book The Spirit of Equality by Richard Wilkinson and Kate Pickett writes about.
Shorter lives even for the rich
The book The Spirit of Equality by Richard Wilkinson and Kate Pickett shows how inequality negatively affects life expectancy for both the poor and the rich. In societies with large gaps between the rich and the poor, it is not only the most vulnerable groups who suffer from shorter life expectancies and poorer health, but also the affluent. Inequality creates social stress and insecurity that affects the entire population. The poor are directly affected by lack of resources and access to care, while the rich are indirectly affected through increased anxiety and stress.
Crime
When people feel economically and socially deprived, they can be lured into crime . The lack of work and meaningful activities means that young people in particular can be drawn into criminal gangs to gain an identity and security. At the same time, the fear of crime can increase among the rest of the population, creating a vicious circle of distrust and fear. Many who take a lot of drugs or have alcohol problems often do so to compensate for the social exclusion, mental ill health or stress that increases with austerity policies.
School results
School resources are often reduced by austerity measures , which affects students' opportunities to get a good education. The independent school system, where high-achieving and low-achieving children are separated, causes everyone to perform worse. Larger classes and less support for those who need it, mean that more students fall behind. Poorer school results lead to poorer opportunities in the labor market, which exacerbates economic inequality.
Productivity in working life
Stress and ill health also negatively impact productivity in the workplace. When people are worried about their finances and health, or when they lack support to manage mental health, they perform less well at work. This reduces the long-term efficiency and growth of companies and society.
Morality and self-criticism
We went from seeing ourselves as part of a collective to being judged on individual performance . The moral responsibility for success or failure was placed entirely on the individual. If you didn’t succeed, it was your own fault. This shift has made us more self-critical and self-judgmental than ever before. We have become trapped in a constant pursuit of perfection, where any deviation from the “right” way of being is seen as a personal failure.
Competition and our mental health
Neoliberalism has intensified competition, not only in the job market but also in our private lives. We constantly compare ourselves to others – how we look, what we own, what we achieve. This creates constant pressure to perform and surpass others, which creates a vicious cycle of stress and mental ill health.
The austerity that destroyed security
Social security was eroded when welfare systems were dismantled. Instead of having a basic security to lean on, we have been taught that there are no guarantees. This means that we are constantly on edge, constantly afraid that something unexpected will knock us off our feet. It has made us more sensitive to stress and anxiety, because it feels like we can never be truly safe.
Judgment and moralism
As society began to judge people by their economic success and adaptation to market demands, we also became more moralistic in our assessments of others. We no longer judge just actions, but entire people . “Are you unemployed? Then it’s because you’re lazy.” “Can’t you handle stress? Then you’re weak.” Such judgmental thought patterns have become common and are damaging to both ourselves and society.
Obsessive-compulsive disorder and mental illness
The constant pressure to fit in and succeed in the market has created a society where obsessive-compulsive disorder and mental illness have increased exponentially . Perfectionism has become the norm and any deviation is seen as a sign of personal failure. This means that many struggle with excessive demands on themselves, anxiety, depression and other mental health problems. We have gone from a society that encouraged collective responsibility to a society where the individual is expected to solve all their problems themselves, no matter how big or small they are.
Grass roots unite you
It is time we question these norms and realize that no person can stand alone in a society. We must once again begin to value solidarity, community and mutual aid in order to break the destructive spiral of demands, judgment and anxiety in which we are stuck. Grass roots, unite!
More reading
- Tetris can reduce trauma
- Optimism for skeptics
- Ethics in a brutal time
- Normal to not always have maximum happiness
- Treat yourself to rest and pleasure quite often
- Free time is productive and well-deserved
- Small changes in more equal societies good for longer, good lives
- Chomsky supports grassroots activism
The oil crisis led to a fundamental economic crisis, namely that the overproduction crisis of the 60s-70s became acute, says Alfred Chandler, see https://gemensam.wordpress.com/2024/07/22/om-hur-de-producerande-storforetagen-forlorade-sin-makt/ . They had become so incredibly efficient at producing in huge quantities that there was no outlet for everything, and when energy costs rose, it became too much for them. They fell into the hands of the financial mafia, of various rentiers who had no idea about anything other than that they had to have money immediately. Before that, they had been controlled by their technical staff who were less rabid when it came to profit demands.
Regarding the general human crisis of neoliberalism, I would like to recommend Peter Fleming: Sugar daddy capitalism. This means that we constantly have to advertise and sell ourselves 24 hours a day. Not only that managers can make any demands on their subordinates, including demands for sexual services (which the title refers to), but also that we always have to think more about how we "look" in the market than how we are or really want to be .
More about it at https://opus.lib.uts.edu.au/handle/10453/129331
Yes, but growth was still higher during the oil crisis than afterwards under neoliberalism. And Grassmann showed that the worst inflation in Sweden was after each devaluation. SVT's documentary "Lönesänkarna" showed that the price of Swedish exports was quite competitive even before the system change with the devaluations. The Swedish companies sold their products for the old price in foreign currency and exchanged the profit back to a huge exchange rate gain.
Growth, on the other hand, is a myth, it only consists of added accounting whose content can be anything.
The point, according to Chandler, was that the large, weight-bearing, global Western industrial groups suffered heavy losses due to increased energy costs. Therefore, they were forced to seek help from the financial industry, which thus gained a monopoly on interpretation in the world. Production became uninteresting (and thus also the disposal of production), the growth of the financial industry became everything.
At least that's Chandler's version, and he's widely regarded as the major expert on big industry at least in the West until about 2000. Well, by all means, he's written about the electronics industry in Japan as well and how the until then dominant RCA left walkover in the same vein to Sony and the others, probably for the same reasons.
The big dilemma begins when goals and means change places. Money is transformed into goals with people, communities and nature as means. The people and nature become suppliers for wealth in money.
With the neoliberal era, a paradigm shift takes place.
Just
Certainly. Actually, it is a general capitalist tendency, but when the financial industry took control, all other considerations disappeared.
I agree with that, but it is dangerous to present the financial capitalists' takeover as something given by the laws of nature, because then neoliberalism is also given by the laws of nature and the only, inevitable way. And history shows that this is not the case.
Natural law is the least of all, it is a routine, nothing else: https://gemensam.wordpress.com/2024/09/18/alla-misslyckanden-beror-pa-daliga-rutiner/
To say that the oil crisis was a real crisis is dangerous because it risks legitimizing the neoliberal system shift that threatens to shatter the world into competition, austerity and war. Of course, it was the rise in energy prices and the capitalists' ability to overproduce that triggered an economic transition, but it was above all a tool that capital used to strengthen its power and shift the balance from production to finance. This was not a necessary reaction to a "crisis", but a deliberate project to reintroduce inequality and power to a small economic elite.
Grassman, Mattei and Martinez show how elites manipulated the narrative to bring leading politicians on board in a game that benefited the richest 1% at the expense of everyone else. Instead of creating a sustainable economy for all or promoting a new, more progressive economic model, politicians chose to protect and strengthen the interests of capital. It was no coincidence that this shift occurred just as equality had strengthened after decades of Keynesian policies and union struggle. The richest, who since feudal times considered themselves demigods with the right to privileges, saw an opportunity to restore the old order of extreme income inequality.
During the 1970s, a Swedish CEO earned only 9 times more than an industrial worker, but today the difference is 49 times – and in the US often over 500 times. This development is not a law of nature, but the result of a strategy to undermine social progress and restore power structures to pre-capitalist levels. This return of class society is driven by the same logic as in the 1900th century, when capital managed to restore its power after great total upheavals of war. The oil crisis became a pretext for tightening control and pushing back every attempt to create a more just and democratic society.
The ideological shift from social progress to neoliberalism began long before the 1970s. As early as the 1950s, the elite prepared to undermine the Keynesian consensus. Paul Samuelson's "modern synthesis" and the Swedish bankers' "Nobel Prize" in economics brought forth a new generation of economists who were more interested in beautiful but false mathematical models unmoored in real economic history than real solutions. This created a breeding ground for an economy where accounts and growth became everything, and where the human dimension disappeared.
In this context, we must be extremely critical of any attempt to romanticize the capitalists of the 70s as victims. They could have been saved in other ways, for example by dropping the gold standard and introducing modern monetary theory (MMT). But instead they chose to blame "inefficient" government spending and workers' wage demands. What we see today is the result of a long-term project that began as early as the 1950s, and that used every crisis - real or fabricated - to consolidate the power of the richest. We must therefore question the entire narrative of the oil crisis as an "inevitable" crisis and see it for what it really was: an excuse to introduce a system that threatens both humanity and the planet.
The industrial capitalists of the 70s were not victims, they were bribed just as the employed company managers made alternatives, changed business ideas. But the crisis was certainly real for reasons I have mentioned above. A classic overproduction crisis exacerbated by rising spending.
What do you want, that people should lie for political reasons, because "people don't understand better"?
Then you can claim that it was solved in the absolute worst possible way. And it is something of an enigma. How is it that the political apparatus so easily believed that only politics commits suicide and everything will get better? Couldn't all politicians get high-paying consulting jobs? In other words, why did they become so amateurish?
Aurelien writes a great read about this at https://aurelien2022.substack.com/p/the-machine-stops
Of course you shouldn't lie, but economists or economic historians as knowledgeable as Chandler don't necessarily have the whole truth. Everything that is written is written according to historical source criticism with a tendency (a subjective purpose). Of course there was a real crisis at the bottom, but there was a lot of misinformation about the nature of it, the cause of it and the right measures against it. The oil crisis did not require the neoliberal system shift as the only possible solution. There were others. Then I notice how politicians from the lowest level take the side of power in order to get better positions or various favors. Grassmann writes that since the 80s, economic researchers and journalists had to start lying about the oil crisis and the danger of government deficits. And Clara E Mattei shows how the austerity politicians attacked the welfare and state influence every major war led to after this one. The victory for the austerity politicians after the oil crisis would only be so total. We must use every ounce of idea for truthful source criticism against every attempt by every eminent scholar to explain the neoliberal system shift as the only inevitable alternative. But we must always strive for the truth, but the Plation's cave example from antiquity already shows how difficult the truth is. Therefore, we must question even the most eminent left-wing thinkers if they do not with all their might defend welfare, freedom under responsibility and good enough for the people of the whole world and Sweden.
I mean that a period of inflation after a major war or a pandemic like Covid is inevitable . In that case, one should not panic and resort to austerity policies, but respond to the crisis according to the Keynesian method and wait until inflation subsides.
No, but I also did not say that the oil crisis "required" any particular solution. It simply increased costs for industrial companies without bringing in any increased revenue. The industrial companies then voluntarily chose to solve their problems by turning to the financial markets to borrow money and thus ended up at their mercy.
And this had consequences throughout society.
Classic industrial companies had been dependent on their customers and therefore had to negotiate with them and they were also interested in their development in the long term; financial companies are completely uninterested in their customers' customers, and they are only interested in the next financial statement. Yes, not even that - nowadays they run on instant profit. The profit today is the only important thing, if their clients are on the nose tomorrow, just cut them. They don't invest, they just milk.
As I have also pointed out, it is strange that the political establishment refused to stand for the long-term perspective in the way that the political establishment has always done in the past. They washed their hands, as they say. Which it now has to pay for by the audience increasingly seeing it as irrelevant.
Which is of course tragic; the last crisis in the 30s showed that where there were sensible alternatives, these were the ones that won, where there weren't, the completely grotesque alternatives won. Today, there don't seem to be any sensible alternatives because those who could stand for these are sticking to the small stuff, see https://znetwork.org/znetarticle/are-political-labels-a-farce-the-case-of-the-non-radical-left/
Important to remember that causal relationships in history are often voluntary.
Great insight but unfortunately true. The great crime is when the earth is destroyed. A consuming economy that destroys nature's economy to support us. A global balance is upset. The water depicts a cycle that is broken. Trees and vegetation with streams depict how water evaporates from them creating clouds. The clouds spread rain over the earth's surface. Rain brings new vegetation. Without it comes chaos with major floods.
The economy of nature depicts the earth as the house with its laws of life. If this is disrupted, there will be consequences.
Market laws cannot replace life laws. Market freedom does not give us freedom either.
Liberalism depicts freedom without responsibility. A road to total loss. What is true.? What is fake? What is good and what is evil? What is humanity? What is inhumane?
Brilliant