Cheap energy, security, and the industrialized nations, 1960-73
With the industrialized states far in advance, the world economy experienced exponential growth rates between 1950 and 1970. Cheap food, raw materials, and energy nourished a boom in the advanced economies and spurred rapid industrial progress in such modernizing nations as South Korea, Brazil, and Argentina. World population growth, a mixed blessing, averaged 2 to 4 percent annually while economic output advanced at an annual rate of 4 to 5 percent. Sustained growth in the industralized states seemed assured; green revolutions and expectations of steady economic growth promised unprecedented prosperity in the lesser developed countries. The failure of the LDCs to realize their hopes further embittered relations between the so-called North and South. In the West, where performance appeared to satisfy wants, a confident atmosphere prevailed.
However, the dominant position of the USA in the world economy, the product of its industrial and military might, sagged during the late 1960s. The cost of war in Vietnam and new social programs at home swelled budgetary deficits just as stiff competition in international markets and accelerating foreign penetration of domestic markets occasioned worrisome balance of payments deficits. A weakening US dollar triggered an import spree; wages and interest rates rose and labor productivity fell. The global consequences of American economic and political frailty were manifest during the 1970s and 1980s.1
The energy policies of the industrialized states reflected the conviction that rapid economic growth was the norm. Within those states, such