In social/political terms, the shift to floating exchange rates also shifted the "responsibility" for adjustment from governments who were often under fire for the consequences of the economic policies to a quasi-automatic mechanism. Put differently, the shift was a response to the crisis of the Keynesian state management of the economy and sought to escape democratic constraints. In the Keynesian period to correct a trade deficit the state would undertake restrictionary policies to increase the demand for the local currency as prices dropped and interest rates rose, making exports more attractive, imports less so and investment in the country in question more so. But restrictionary policies raised unemployment and caused social pain the resentment to which was aimed at the government. The shift to floating rates would supposedly diffuse resentment and make such problems seem unavoidable.
In reality, as opposed to expectations, people were no more ready to accept the consequences of adjustment from the foreign exchange market than they were from the state and demanded state intervention to offset things like high unemployment. Thus, states were forced to intervene in the "freely floating markets" in a way which made the system a "dirty float" rather than a free float. National governments largely failed to convince their populations to accept market results.
The forces at work involved both elements of the waged labor movement who were losing their jobs in the 1970s and 1980s, especially in Europe where unemployment became double digit, and grassroots movements of all kinds (e.g., pro-immigrant movements) who challenged the results of government policies and demanded changes. From the other side, you could say that the forces involved included the actions of speculative capital investment, especially speculative investment in the exchange markets that made them extremely volatile.
The social and political obstacles to the achievement of these plans have come from the usual source: workers and others threatened by the high unemployment (anti-inflation - wage programs) required by Maastricht as a condition of entry into the Community. The Maastricht Treaty terms have been seen by people at the grassroots to constitute a coherent attempt to achieve a fundamental redistribution of wealth and power from labor to capital and they have fought back. The degree of resistance, however, has varied from country to country and thus has the attitude and willingness of particular governments to hang tough and meet the terms of the treaty.
As for country examples, the most obvious are probably those who withdrew from the ERM in 1992 under tremendous domestic pressure to deal with high unemployment: England, Ireland, etc. In each case attempts to meet the treaty terms meant very high interest rates and reduced government spending (especially on social welfare) which together hit hard at the British working class. After a decade of defeat under Thatcher it began to fight back and raise hell. Fewer jobs and less money without a job is a killer combination and workers rebelled putting the government under pressure.
Differences: the most obvious difference is that in Mexico it was fairly easy to see the connection between the economic crisis and the political crisis set off by the Zapatista rebellion and the wave of pro-democratic demands it set off. But in Europe we didn't plumb this dimension in the case of the run on the dollar, neither in the US nor in Europe. There may have been such factors at work, especially because we do know that in this period workers were driving up wages faster than productivity, achieving social welfare gains, etc. But our examination was in general terms of the rupture of Keynesianism and thus of the untenability of Bretton Woods. Another suggestion of the possibility of similarities might be seen in the other measures taken. In Mexico the Zedillo government complemented its imposition of austerity with a massive military campaign against the Zapatistas. In the US Nixon complemented his freeing of the dollar from gold by a wage-price freeze (aimed at US labor) and a 15% import surtax which struck at European exporters and their workers. But we did not examine any material that suggests the kind of direct ty-in we have seen in Mexico.
Political repercussions: Mainly the massive military assault on Zapatista communities --with all the devastation to people and their communities brought by the Army to those regions. But also the austerity can be seen as a political response to the democratic upheaval in Mexico that was given impetus by the Zapatista uprising which was, after all, aimed at neoliberalism as well as indigenous rights. On the other hand, the increased austerity only contributed to swelling dissatisfaction with the PRI and the anger with neoliberal policies and undemocratic practices, so the secondary effect was probably the further "destabilization" of Mexico. Individual assessments can vary but should address the issues, and not just say yes or no, good or pbad.
Development as process refers to growth coupled with structural change, just as in biological development, babies get bigger and they change physically. So too with economies and societies in this view. Also called modernization by political scientists who sought changes in cultural conditions favorable to such growth and change. Underdevelopment, however, is no longer viewed as a situation in which people and countries find themselves but as processes to which they are subject. So just as investment may bring on development, so disinvestment may bring on underdevelopment. This view much applied to the impact on colonized countries who saw their existing economy shattered as their population and resources were integrated into imperial economies.
Development, or underdevelopment, as a strategy goes beyond the observation of processes to assert that it has often been the case that those processes are the direct result of policies and that therefore development and underdevelopment are general terms for sets of policies with radically different aims. In a development strategy business and the state foster investment and growth, generally offering increased income and standards of live (at least for some) in exchange for cooperation with business and state goals. Giving (Y) to get (work). Example: Keynesianism which wrapped capitalist development around rising wages. In an underdevelopment strategy, business and the state decide (policy) to disinvest (or to refuse to invest) in a way which lowers real income and they do this as coercive strategy to force compliance with their goals. Taking away (Y) in order to get (work).
Food production and distribution policies might be wielded within these more general strategies as one dimension in the "giving to get" and "taking away to get" described above. The history of American food aid makes this easy to see because "food aid" was the result of clear-cut policy decisions (no fuzziness about the net effect of diverse private decisions). In American food aid history we discussed, for example, Herbert Hoover who went around Europe after WWI giving and withholding food according to government's willingness or unwillingness to comply with American policy objectives. More generally in the post-WWII period, after Hubert Humphrey and others passed Public Law 480 the giving and withholding of food was wielded by American diplomats to achieve US goals. In the case of India and its famine in 1965, Orville Freeman told the Indian Minister of Agriculture that we would only provide food to relieve the famine if India opened its fertilizer to American companies and undertook population control measures. They agreed and food was given. Implicit in such deals is the local government undertaking to provide conditions which are profitable for American investment --which always involves the control of labor.
Strengths and weaknesses: Individual assessments can vary but should address both what was done and the methods used. Students should provide a thoughtful, reasoned response, not just it's good or bad.
Applicability to Ethiopian crisis: In Ethiopia there have been harsh conflicts between the central government --dominated by one ethnicity-- and several other regions. Government agricultural policies were wielded in part in response to such conflicts, with the government withholding help to antagonistic peoples and rewarding more cooperative ones. When the droughts came and eventually with them famine, these policies continued. The Ethiopian government sought to wield the Power given to it by command over scarce food to coerce compliance with its desires. The vivid article by Steingraber on resettlement and villagization demonstrated not only the antagonism but also the exercise in Power used by the state against those who resisted its command.
Discuss the applicability: Besides discussing the history within the context of the theory, the student should discuss the degree to which that theory is applicable and any shortcomings they see. Individual assessments can vary. Students should provide a thoughtful, reasoned response, not just it's good or bad.
Arguments con: US would determine all countries' monetary policy. Fed would dominate all. Participation of others on Fed would be racked with contrasting objectives. Countries would lose ability to devalue as indirect way of "spreading economic pain" (presumeably onus would fall on fiscal policy where people can see what's going on and complain about it more easily. Also US would push for tax regularization.
Weber's assessment: "Few in the Americas seem ready for a single currency. But if the euro gives the Europeans a competitive edge, the NAFTA dollar may be inevitable."
Conequences: Such periods are typical of those that have seen the bulk of the American people forced to abandon the land and move to the city. Along with this, of course, went not only the decline of family farming but the rise of agribusiness to domination of food production (and increasingly processing).
Surges: such abundant crops were, in part, bought by the government and redistributed as food aid, either domestically or abroad. Although there is still some of this, there was no indication in the article of any such program. Indeed, the article suggested that in an off-election year, politicians could care less. If recent pork prices are any indication, the surplus will just be dumped on the market and prices will decline according.