By Jeffrey A Hart
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Extra info for The New International Economic Order: Conflict and Cooperation in North-South Economic Relations, 1974–77
Uncertainty About Trade-Offs Uncertainty increased during the 1970s for a number of reasons. Within the major industrial countries, for example , there was increased uncertainty about how much importance to attribute to domestic or external factors in explaining domestic economic conditions. Demand management theories (offshoots of the macroeconomic theories of John Maynard Keynes) worked on the assumption that domestic price levels were primarily a function of aggregate domestic demand. Demand affected the supply of labour, the major determinant of domestic wage rates (a crucial determinant of overall price levels) .
But that . on the whole. j" That is. OPEC would merely attempt to stabilize world oil prices around a price that would have increased even if OPEC had not existed . Here the main policy implication was to wait for the world price of petroleum to rise to a level at which it became profitable to exploit alternative energy resources (for example. coal. nuclear. synthetics. and so on) . While the third view began to prevail in the 1980s. in the 1970s there was still great uncertainty (or. in the views of observers.
In other words. the rather abstract defence of sovereignty, with its overtones of redressing the abiding problems posed by the inequality of nations through legal mechanisms. was displaced by more urgent and specific issues centring around problems raised by increased foreign investment in the developing world . Control over Foreign Investment Foreign investment in raw materials production and extractive industries characterized North-South economic relations even before the Negotiations for (/ NIEO 35 era of global colonization .
The New International Economic Order: Conflict and Cooperation in North-South Economic Relations, 1974–77 by Jeffrey A Hart