Preview The Globalisation of War Volume 5 – Italy surrenders. France invaded. Allies advance in Europe, West and East, Burma and the Pacific.
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Two key figures emerged: Harry Dexter White, a US economist, and John Maynard Keynes, a British economist, who would shape the post-war economic order.
Like anything worthwhile the economic solution to the problems of the world wars had a long genesis. A major problem was the role of gold, another problem was the role of the dollar. By 1944 US was supreme. It held five sevenths of the world’s gold reserves and was overwhelmingly the world’s creditor nation.
Britain, however, was a debtor nation which reduced its influence. Economics is an esoteric subject with little popular appeal. This resulted in two protagonists having overwhelming authority- Harry Dexter White for the United States and John Maynard Keynes for the British Empire. Harry White’s family came from Lithuania, were Jewish, and left because of the pogroms. They established themselves in the US in the hardware business. Harry White gradually made his own way to Washington via academia.
He knew exactly what he wanted. Fixed world wide exchange rates controlled by the US and a quota system which would allow the exchange rates to be stable. He was a believer in gold and with the US holding five sevenths of the reserves and being the world’s creditor nation would lead to the US controlling world trade through the dollar. White was a globalist. He saw the whole world included in his system, including Russia with whom he negotiated via a representative who had to report back to Moscow which made for difficulties. White worked with Keynes who was much more a colleague than a protagonist. They worked in tandem and mostly in agreement. Two institutions came out of Bretton Woods which exist to this day, the International Monetary Fund and the World Bank.
Here there was a profound disagreement with White wanting world trade to be controlled by the US and the dollar. Keynes wanted a more neutral system which he called bancor and excluded the dominance of any one nation. White with the backing of the President and Morgenthau, his Secretary of State, won. There was nothing that Keynes, the representative of an important debtor nation could do. 80 years after Bretton Woods the fixed exchange rates have gone in 1971 as the US become a debtor nation with the Vietnam War. However the importance of the IMF remains. The problem is that the dollar has advantages in world trade which are being challenged by Russia and China who claim with some justification that US is a debtor nation out of control. Russia and China have their problems but they are probably right that a more neutral system, as advocated by Keynes, be created.
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Nations, Nation States and Empires
Introduction
The Atlantic Charter was a clever document that revealed, in a subtle way, Roosevelt’s antagonism to the British Empire. It offended his sense of democracy. On the other hand, he had a blind spot in that he did not recognise that the United States was an empire forged by conquest and territorial acquisition. The Soviet Union was equally in denial about its empire to the east and was scathing about the imperial pretensions of the British and French. How then did the British Empire come about? After all it was about this empire that Churchill was fighting the war.
Robinson Crusoe
There were two books that gave inspiration to the formation of the British Empire. The first and most important was the King James Bible, which could now be read in the native tongue and provided belief and a guide to behaviour. Robinson Crusoe was less important but was still an inspiration. It was one of the first English novels and was published in 1719 when Daniel Defoe, its author and a well-known journalist, was fifty-nine.
The story starts during Cromwell’s rule in the mid-seventeenth century, when Crusoe, a young man, goes to sea and, through the acquisition of gold dust, returns a rich man. He divides it up, two-thirds going to a widow for safekeeping and one-third retained for his further adventures. These are exciting, for he is captured by the Moors and made a slave. He is well treated but escapes and eventually finds a ship to take him to what is called the Brasils. There he purchases land, which after a few years leads to the production of tobacco. This is easily transported to Europe and is a lucrative crop. However, the Brasils lack manpower, so Crusoe and his friends determine to sail a ship to the west coast of Africa to transport slaves to the Brasils. As chance would have it, Crusoe’s ship is shipwrecked. He is the only survivor and finds a deserted island where he lives for the next twenty-seven years. His only intellectual comfort is the Bible and his only contact with any other human beings are escapes from cannibal feasts.
At long last Crusoe is rescued and returns to England, where he would still has his remaining fortune. Frustrated in England, he returns to the Brasils and recovers his estate, increasing his wealth. In the end, he returns to England, marries and has children.
Such adventures were not the norm of empire but they encompassed its substance and style. Shipwrecks, piracy, slavery, the purchase of land, the fruitful tilling of the soil, the conversion of the pagan, the bonding of men through Christianity, the rule of law through political organisation, the payment of taxes for the common good were the core endeavours of empire. Defoe’s creation, Robinson Crusoe, experiences them all in the seventeenth century and stirs the minds of mankind.
Capitalism
In days of old, piracy was universal. On the high seas, one man’s gold was another man’s gold if it could be captured. Francis Drake, who lived in Elizabeth I’s time, was a great pirate on the Spanish Main and enriched Good Queen Bess’s England with his booty. In time a different system evolved on the high seas as ships criss-crossed the ocean. Trade burgeoned as new lands were discovered by those who were claiming mastery of the sea, although this was superficial, as the sea was a powerful force that for centuries only allowed a surface symbiosis. Great battles were fought off the coast of Europe to establish the pecking order of navies and in time that of Britain became the champion. This led to an authority that for a while became unchallenged.
Piracy was not tolerated and the trade in slaves was stopped. This allowed trade to develop and men went to foreign lands from Europe to find their fortune. It was rampant capitalism. On small islands in the Caribbean, Europeans created sugar plantations and brought in their slave labour from
The Globalisation of War Volume 5 – Italy surrenders. France invaded. Allies advance in Europe, West and East, Burma and the Pacific.
£9.99The economic solution to the problems of World War II had a long development. By 1944, the US held a dominant position, with 5/7 of the world’s gold reserves and was the world’s largest creditor nation. The British Empire, a debtor nation, saw its influence decline. Two key figures emerged: Harry Dexter White, a US economist, and John Maynard Keynes, a British economist, who would shape the post-war economic order.