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The Neoliberal Revolution, alternately called the Trans-Central Ocean Neoliberal Alignment or the Blue Wave of the 1980s, was a political revolution that emerged across the world of Pardes in the late 1970s and the 1980s that was characterized by the election of neoliberals to the heads of many governments in Free Pardes. The rise of neoliberals in the leading powers of Free Pardes led to aggressive geopolitical confrontation with Communist Pardes as well as domestic restructuring of their countries' economies, sparking a wave of privatizations, deregulation, tax cuts, government spending cuts and tariff cuts. These countries enjoyed a late 1980s economic boom known as the '1980s Miracle.'
- 1 Origins
- 2 Impact of the 'Neoliberal Revolution'
- 3 Peripheral effects
- 4 Post-1980s Influence
- 5 Lasting Legacy
Many major powers in the early-to-mid-20th century Pardes aligned with the prevailing classically liberal political and economic world order. Starting with the global Recession of 1928 - 1933, governments in 'free Pardes' began to move towards larger public sectors while leftism and Communism sparked revolutions in countries such as Qaradamlar, Bogoria, and later in Anikatia and elsewhere.
By the 1940s, the two 'worlds' - countries that were capitalist-oriented with elected governments opposed by revolutionary Marxist regimes in KosCo - began to collide, leading to the emergence of the Cold War.
In the 1950s and 1960s, a Keynesian political-economic consensus had emerged. The shock of foreign and economic policy crises as well as a relaxation in the cold war sparked a conservative backlash. The so-called 'Blue Wave' - the color blue serving as an allegory for free, representative self-government and capitalism in reaction to the color red denoting revolutionary Communism and radical leftism - was led by a resurgent political right independently across Free Pardes.
The 'Blue Wave' is credited to have emerged independently across the world by the New Right, in reaction to both domestic crises as well as foreign policy, such the Myrdesia War and other conflicts against the Communist World.
In the early 1980s, the New Right's ascendance across the world began to have a domino effect. In 1980, Julian Settas was elected president of Belhavia and his Conservatives retook the Belhavian Senate with a historic majority. A year later in 1981, a neoliberal came to power in Eagleland. Following that, in 1982, the Republik and the Conservative Party gained control of the Estovnian parliament and finalized the 1982 Coup with the election of Anders Bjerregaard to chancellor. Subsequently in the mid-1980s, neoliberal heads of state and government were elected in Emmeria and Arthurista.
Impact of the 'Neoliberal Revolution'
Belhavia has had a long history of a tradition of synthesizing Jewish social conservatism with minarchy and right-libertarianism. In the middle-late 20th century, however, following the fall of the authoritarian Galarian autocracy in 1945, the country entered a roughly 35-year period of the so-called "Liberal Heyday", where Keyesianism was accepted as the mainstream view on political economy, the voting franchise was made functionally universal, and Imperial society began to secularize and move away from its ancient religious roots.
However, liberal overreach in the late 1960s and early-to-mid-1970s and late-1970s aggressive anti-Communism sparked a conservative backlash that fully materialized in the 1980 election. Imperial Senator Julian Settas, a young Conservative rising star, ousted sitting Liberal Democratic president Berel Levine decisively.
Throughout the 1980s, his Tory majority in the Senate - aided by a small Libertarian Party Senate caucus - were able to substantially downsize, privatize, localize, and abolish the large scope and size of the Imperial Government. Settas and his successors also continued the "Settas Doctrine", which aggressively countered and "rollbacked" the Communist World over the course of the 1980s and early 1990s.
Despite Settas' more moderate Tory and Lib Dem successors in the 1990s, his neoliberal reforms ultimately proved resilient and government spending never again exceeded 17% of GDP. In the 2000s and 2010s, consecutive Tory presidents and Senate majorities have been characterized with a neo-Settasian focus on continuing to heavily limit and curtail economic interventionism, aggressively challenging the remaining leftist powers in the world, and protecting Belhavian society's general social conservatism.
In 1974, the Eagleland Empire is dissolved and the Eagleland Empire became the Orthodox Federation of the Eagleland (a federal republic). Following the 1974 Civil War, the Eagleland Social Democratic Party (SDEKA) became the new government in 1975, promoting free enterprise but with stringent regulations and heavy taxes in return of increased welfare spending. Criticised by both the Eagleland Socialist Party (SKA) for doing too little "to alleviate the caste system" and by both the Eagleland Conservative Party (SYNKA) and the Liberal Party (FKA) for increasing the budget deficit, the SDEKA crumbled in 1980 due to the recession that followed. Although the SKA was a minor party, the two other political organisations were too divided and no single majority could be reached. President Eleutherios Velouchiotis resigned the following year and the Senate was dissolved.
The winner of the 1981 Political Crisis was the Eagleland Freedom Coalition (ASEL), a right-libertarian third-party which directly offered a "viable alternative" to the majority of the Eagleland populace. However unattractive with the relatively small leftist segment of the population, the ASEL presented themselves as the middle ground between the SYNKA and the FKA, a synthesis between social conservatism and libertarianism. President Maria Deligiannidi announced a programme to bring the Eagleland into a state of prosperity. The first stage was the reduction of government from an active economic player to a regulator of the private sector. The layoffs of civil servants, the privatisations of nationalised industries, the end of subsidies, the strict limitations set on the welfare system and the reduction in spending would be offset by a simplification and a tremendous reduction in taxes, with the elimination of taxes for the maritime industry and those industries situated within the Constantinople CBD area.
The transition was controversial, as riots that broke out led to the deployment of military forces to quell unrest, and were it not for the Communist Massacre of 1984, in which 17 Eagleland Army soldiers were killed by communist rebels, and the subsequent campaign against the People's Liberation Front that also facilitated from 1985 to 1995, it would have been unlikely that the Deligiannidi administration would be re-elected. However, her Presidency from 1981 to 1989 had brought about a spectacular economic growth, reduction in unemployment, and the initial fear of a total collapse was offset by a rapid increase in foreign direct investment. However, some industries were weakened or withered away because of the lack of subsidies. Competitiveness and productivity increased with the market liberalisations set in place, and efficiency was brought to "natural monopolies", operated under joint public-private ventures.
Although the state still makes up 25% of the Eagleland's GDP, the neoliberal experiment is considered to be one of the most successful in Pardes, although its extent was limited compared to other countries affected by it.
In the two decades since the collapse of the Belfrasian Empire, the Kingdom of Belfras had been focused on nostalgia for its lost Imperialism. The Royal government had gone bankrupt numerous times, and a sense of malaise had settled in on Belfrasian society. Campaigning against this social unease and political stagnancy in the early 1980s, the Century Party rose from political irrelevance to winning a strong majority in the Belfrasian Parliament in the 1985 General Election, and dominating the Cabinet under the Prime Ministership of Mark Andrews. Andrews and his party was not a neoliberal per se, but he was strongly influenced by many neoliberal ideas, which he brought to fruition once elected.
Business taxes were restructured and slashed, giving a powerful jolt to the Kingdom's businesses and corporations. This led to a late-1980s corporate climate of large consolidations, mergers and acquisitions, and leveraging. Heavy industry, which had been nationalized and largely state-owned since decolonization in a futile effort to sustain these dying sectors, were privatized and marketized across-the-board with the goal of increased productivity, increasing natural employment, and profits. By the early 1990s, many of these industrial giants were seeing record annual profits, with Belfrasian manufacturing and resource exports tripling between 1986 and 1995, and structural unemployment slowly inching down each year. BAU Systems, the iconic military contractor, saw its share of state ownership shrink from 100% to 51%, enabling it to become more productive and compete for Emmerian military contracts.
Besides heavy industry, the postal exchange was privatized and led to the emergence of several competing mail- and parcel-delivering companies. Military reforms were enacted, streamlining the Royal armed forces' size, structure, and capabilities, and each branch saw double-digit spending increases due to rising Communist threats in the East. Andrews also introduced "pay-as-you-go" regulatory fees, where companies paid the regulatory bodies that oversaw them in full for their oversight, helping to offset costs in the Royal budget.
However, despite these numerous neoliberal policies, Andrews also had some left-wing nationalist influences. He nationalized the Kingdom's private heathcare system, instituting universal health care funded by proportional tax according to one's use of heathcare resources. He likewise nationalized higher education, creating a regime of free textbooks and materials and a credit system where those with the ability to pay would repay over their lifetimes while those who could not would not be required to pay for books and materials. He levied a general tax to fund the education scheme, though the wealthy and others could still choose to send their children to private schools at all levels of education.
Andrews and his Century Party majority's policies were so widespread and shocking that Belfrasian society has never been the same since. Andrews' policy changes have ingrained large attitudinal changes to the Belfrasian population, with state-owned heathcare and education considered social rights but the population's general acceptance that light and heavy commerce should be private and lightly-taxed and -regulated. The Conservative Party in 1992 co-opted much of Andrews' agenda, leading to his and his party's defeat in that year's General Election.
In the late 1970s and early 1980s, Arthurista entered a deep depression. This sparked a volatile political climate, with the right-libertarian third-party Freedom Party riding a wave of popular disapproval and angst against the government in the polls in the months approaching the 1985 Arthuristan general election.
In an unusual move, the Labour Party and the Liberal Party decided to make a majority coalition government to stave off what they believed were the extreme policies of the 'Freedomites.' The 'Lib-Lab' Grand Coalition won the 1985 election handily, and they incrementally pursued a moderate programme of neoliberal reforms, include privatizations, welfare reforms, and other policy changes over the rest of the 1980s and into the early 1990s, until the 'Grand Coalition' collapsed.
However, the Grand Coalition-era cemented center-right neoliberalism as the mainstream political consensus, both as the primary platform of the Liberals as well as moving Labour towards the center and away from the Old Left command-and-control economics and towards a more economically centrist platform that the party's mainstay supports to the present.
The Neoliberal Revolution began to take effect upon the National Catholic Party, as previous economic reforms had only reinforced the pace of industrialisation and the emergence of an export led economy. Consul Corneliu Dobrițoiu, who had won the 1980 General Election felt that current NCP economic policies were not radical enough to uplift the Rodarian economy further. In 1981, he took great inspiration from the neoliberal position on private ownership and the dependence upon the market to regulate supply and demand. Corneliu Dobrițoiu believed that demand for cheap, light goods would outstripped the demand for heavy goods such as machinery. In 1983, he successfully led efforts to privatise three state-owned textile companies and one eletronics company.
In the same year his government set up the Falticeni Special Economic Zone, where all factories and chemical production plants were privatised and exports from the zone would be tariff free, growth in the zone reached 8.5% as vast numbers of investors began to pay into the new economic efforts of the government. In 1984, in preparation for the 1985 General Election, Dobrițoiu and his party produced a new manifesto promising massive economic reforms that open up vast areas of the Rodarian economy to privatisation and a reduction in government control over various sectors. However in November 1984, Dobrițoiu suffered a mild stroke and was forced to step down as Consul and leader of the National Catholic Party, he was succeeded by Nicolae Ponta on 2 January 1985, who secured a NCP victory at the 1985 election.
Nicolae Ponta proved to be a more aggressive economic reformer than his predecessor, upon the promises, Ponta's government also produced a reform paper that included the reduction of direct government control and instead the utilisation of indirect control through 'economic levers' such as strict monetary control. In 1989 the economy was reformed with a number of ineffecient state owned enterprises being privatised as well as some utility providers, the government's role became more indirect and operated mostly through dominance of monetary policies, the government also reduced its control over the agricultural cooperatives. The Ponta Reforms saw the privatisation of the State Rodarian Water Company, which resulted in each province seeing two new privately owned providers, however his efforts to privatise the main electricity company were defeated in the Senate, as many NCP Senators saw a the state owned energy company as the most reliable supporter for further industrialisation. Despite that setback, Ponta reformed the State Grid Corporation of Rodarion (SGCR), through a series of smaller pieces of legislation which formed sub-divisions of the corporation, with each sub-division supplying a singular province, the SGCR utility bills would no longer be fixed, meaning bills would represent the level of supply required by each province. However the Ponta government placed cost caps on bills for elderly citizens during winter.
The ineffecient SOEs that privatised immediately began to turn profits, as private ownership resulted in numerous streamlining efforts and the transfer of resources. However the reforms resulted in over 9.4 million workers becoming unemployed, in late 1989, the Ponta Government initiated further reforms of the SOEs, merging three into one singular entity, now called the National Construction Corporation, the NCC became the largest construction company in Pardes and of the 9.4 million unemployed, 3.6 million were hired by the NCC. In December 1989, the government also divided several SOEs into provincial based entities, streamlining costs and debt.
Privatisation and new government economic levers soon resulted in annual economic growth reaching 8-9% in the 1990s and early 2000s. NCP politicians and Rodarian economists state that the Neoliberal Revolution of the 1980s was a great inspriration and major cause of the dramatic improvements made under the Dobrițoiu and Ponta governments.
The Neoliberal Revolution in Rodarion however had more negative effects, with the economic reforms and the assumption by pro-democracy movements in Rodarion that the economic reforms would be followed by democratic reform. The movements were found to be wrong and the resulting anger escalated into the 1992 Voluntari Massacre, in which 1,229 protesters were gunned down by Papal Army Troops and police.
In 1972, the communist government of Tule was overthrown and replaced by a more economically and socially liberal government (though still nominally socialist and relatively authoritarian by Pardesi standards). Starting in 1981 the agricultural sector of the Tulese government was privatized, resulting in a large increase in productivity and economic well being. The success of the agricultural privatization resulted in further market-based economic reforms during the 80's and 90's with even greater economic prosperity. As of 2014, Tule's GDP has tripled since 1972 while the population has grown only 12% in the same period.
The Grand Empire of Ulthrannia started to become influenced by the global neoliberal movement. Having close ties to Belhavia, Rodarion, and other powers undergoing neoliberal policy experiments, Ulthrannic politicians, academics, economists, and businessmen started to study the policy changes in these nations. Agustín Conrado Salcedo, Professor of Economics at La Serena University, who had returned from an Emmerian academic conference attended by several leading neoliberal thinkers in early 1980, became a leading reformist figure in Los Reyes academic circles. Later, he would be called the 'Godfather of Ulthrannic Neoliberalism.'
The new Vicar, Paco Fernandez Tiera (1982 - 1991), and the reigning Emperor Julio V, agreed that Ulthrannia's political economy needed widespread reforms and overhauls to engender a return to prosperity and innovation, and started to introduce neoliberal policies in 1982, such as incrementally privatizing Imperial government functions and state-owned companies as well as transitioning the Free Cities from a Los Reyes, Imperial committee-driven hierarchy to more local autonomy and elected leadership-driven control. Military and broader government spending cuts were phased in, leading chronic budget deficits to fall and then be erased by the late 1980s.
In society, the Neoliberal Revolution sparked a renewed introspective evaluation among the Ulthrannic nobility and upper-tier, with the development of the idea of the 'Corporate Nobility' and 'Two-Sided Service' emerging by 1985. Juan Felipe Garrigues y Mercader, the Marquis of San Tyrio, promoted Salcedo's advovacy and heavily influenced the nobility, first in Los Reyes, then elsewhere in the Empire, to adopt these attitudinal changes. The development of the 'Corporate Nobility' legitimated the idea of the nobility engaging in productive commerce and modern business after centuries of passive management as land-based gentry. The concept of the 'Two-Sided Service' enabled such business involvement, calling for nobles to serve themselves and the Empire by making strong profits and building economic growth and success through the market. The nobility's new enrichment would allow them to give back to their Empire of blood and oath through large charity and other donation giving, investment deals in Ulthrannic industry and struggling communities, and other duty-inspired acts.
By the 1990s, the Blue Wave had thoroughly inundated Ulthrannic life, leading to the revitalized of Ulthrannic industrial giant Cortes Industries and the proliferation of PMCs such as Fortaleza Internacional.
In Davisholm, neoliberal reforms were enacted at a slower pace, beginning in the mid-1980s and continuing until the late 1990s. There were two main stages of reform: the first occurred under Michael Carter Phillips and Raymond Collins from 1986 to 1991 and the second occurred under Kenneth Sala and Hugh Askam from 1993 to 1997.
Carter Phillips came from the Davisian Socialist Workers' Party and by 1984 was a powerful figure in his party. In 1986, he became the chancellor and signed the Dalewich Agreement with the most powerful trade unions in the country. In return for passing a slew of left-wing social policies and public works projects, the Davisian Left tolerated the government's "No Experiments" economic policies, which included deregulation, privatisation and free trade. The 1986-1990 parliament passed more privatisation bills than any other before or since.
The second stage did not occur until the 1990s came under the Union-Liberal government of Kenneth Sala. However, it was Bursar Hugh Askam who was the architect of the government's "Askanomics" economic policies. These reforms reduced government spending, curbed the powers of trade unions, cut taxes and reformed the national monetary policy.
Collapse of Communist Anikatia
In 1993, General Secretary Choi Kyu-sik, and head of the Communist People's Party of Anikatia from 1993-1999, looked towards the efforts of the Rodarion, and took inspiration from the implementation of neoliberal ideas while maintaining single party rule. During his six-year term at that position, Choi implemented substantial, far-reaching market reforms to the Anikatian economy. The reforms and liberalisation of the Anikatian economic system and government were very successful and allowed the creation of an export led economy. However, many of these efforts were later attributed in many ways to the eventual fall of the single-party communist rule and its replacement with the modern Anikatian liberal democracy in 2001.