The 1970's (jan 1, 1970 – jan 1, 0)

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The 1970’s was a time period characterized by recession and high inflation occurring simultaneously, otherwise known as “stagflation.” Oil embargos on America and other European countries resulted in the price of oil quadrupling, thus causing gas shortages and rationing. Subsequently, this increased the cost of production and the rate of inflation, as well as causing the economy to stagnate. Furthermore, stagflation also occurred in the British economy. As a result, Western countries discovered that inflation was increasing the cost of supporting welfare programs and that governments collected less tax revenue because of the economic downturn. Resultantly, these were the circumstances that caused a shift in economic thinking away from collectivism and government spending, and back towards classical liberalism, which gave rise to the economic policies of Monetarism, Reaganomics, and Thatcherism. Moreover, this movement towards ideas of individualism and minimal government intervention were heavily believed to be the solutions to the welfare state that caused stagflation.

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