"If the first world after World War II were the developed countries, the second world was the socialist world, the world first forged by Lenin and Stalin in the wake of World War I. The second world remained cut off economically from the first world until the fall of the Berlin Wall in 1989 and the end of the Soviet Union in 1991. At its peak, the second world included around 30 countries, and included about a third of humanity. The overriding characteristic of the second world were state ownership of the means of production, central planning of production, one-party rule by communist parties, and economic integration within the socialist world (through barter trade) combined with economic seperation from the first world.

The third world included the rapidly rising number of postcolonial countries. Today we use the term ‘third world’ simply to mean poor. Earlier on, the third world had a more vivid connotation as a group of countries emerging from imperial domination that chose neither to be part of the capitalist first world nor the socialist second world. These were the true third-way countries. The ideas at the core of the third world were: ‘we will develop on our own. We will nurture industry, sometimes through state ownership, sometimes by giving subsidies and protection to private business, but we will do it without foreign multinationals. We will do it without open international trade. We do not trust the outside world. We want to stay nonaligned. The first world countries are not our heroes; they were our former colonial powers. The second world leaders are not to be trusted either. We do not want the Soviet Union to swallow us. Therefore, politically we are nonaligned, and economically we are self sufficient.’

Thus, the post-World War II world evolved on three tracks. The fundamental problem, however, was that the second world and third world approaches did not make economic sense, and they both collapsed under a pile of foreign debt…."

From the book, "The End of Poverty"

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