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We've all heard of "Bretton Woods", here is a very short description of what it is
and how it created global history up to now.
In the aftermath of World War II, the U.S. was so globally dominant that it could create a new economic order announced at Bretton Woods that relieved both allies and former enemies of much need for military defense and entitled them to free trade access to the rest of the world. It led to decades of global peace and the economic defeat of the Soviet Union. However, Zeihan argues that the cost of this arrangement to the U.S. has been high:
"[With the looming post-war threat of the Soviet Union,] what the Americans needed were not just allies to help carry the defense burden, but allies who were so eager that they would be willing to stand up against the awesome force of the Red Army, a Red Army that was still roused by the fact that it had single-handedly decimated the Nazi Wehrmacht at Stalingrad. That requires a special kind of motivation.
"Specifically, it requires a hell of a bribe. And what the Americans came up with was one of the great strategic gambits in history. They assembled a plan, and then assembled their wartime allies on July 1, 1944, for a conference in New Hampshire to lay out their vision for the new world ... [at] Bretton Woods.
U.S. Trade Balance (1895_2015)
"The three-point American plan was nothing short of revolutionary. They called it 'free trade':
Access to the American market. Access to the home market was the holy grail of the global system to that point. If you found yourself forced to give up the ability to control imports, it typically meant that you had been defeated in a major war (as the French had been in 1871) or your entire regime was on the verge of collapse (as the Turks were in the early twentieth century). A key responsibility of diplomats and admirals alike was to secure market access for their country's businesses. The American market was the only consumer market of size that had even a ghost of a chance of surviving the war, making it the only market worth seeking.
Protection for all shipping. Previously, control of trade lanes was critical. A not insubstantial proportion of a government's military forces had to be dedicated to protecting its merchants and their cargoes, particularly on the high seas, because you could count on your rivals to use their militaries to raid your commerce. As the British Empire expanded around the globe in the eighteenth and nineteenth centuries, they found themselves having constantly to reinvent their naval strategies in order to fend off the fleets of commerce raiders that the Dutch,
French, Turks, and others kept putting into play. The Americans provided their navy -- the only one with global reach -- to protect all maritime shipping. No one needed a navy any longer.
A strategic umbrella. As a final sweetener, the Americans promised to protect all members of the network from the Soviets. This included everything right up to the nuclear umbrella. The only catch was that participants had to allow the Americans to fight the Cold War the way they wanted to.
"Accepting the deal was a no-brainer. None of the Allies had any hope of economic recovery or maintaining their independence from the Soviets without massive American assistance. There really was no choice: Partner with the only possible consumer market, the only possible capital source, and the only possible guarantor of security -- or disappear behind the Iron Curtain.
"As the strategic competition of the Cold War took firmer shape, the Americans were able to identify critical locations in the geopolitical contest and invite key countries to join their trading system. Among the first postwar expansions, the Americans approached none other than the defeated Axis powers.
"[With the looming post-war threat of the Soviet Union,] what the Americans needed were not just allies to help carry the defense burden, but allies who were so eager that they would be willing to stand up against the awesome force of the Red Army, a Red Army that was still roused by the fact that it had single-handedly decimated the Nazi Wehrmacht at Stalingrad. That requires a special kind of motivation.
"Specifically, it requires a hell of a bribe. And what the Americans came up with was one of the great strategic gambits in history. They assembled a plan, and then assembled their wartime allies on July 1, 1944, for a conference in New Hampshire to lay out their vision for the new world ... [at] Bretton Woods.
U.S. Trade Balance (1895_2015)
"The three-point American plan was nothing short of revolutionary. They called it 'free trade':
Access to the American market. Access to the home market was the holy grail of the global system to that point. If you found yourself forced to give up the ability to control imports, it typically meant that you had been defeated in a major war (as the French had been in 1871) or your entire regime was on the verge of collapse (as the Turks were in the early twentieth century). A key responsibility of diplomats and admirals alike was to secure market access for their country's businesses. The American market was the only consumer market of size that had even a ghost of a chance of surviving the war, making it the only market worth seeking.
Protection for all shipping. Previously, control of trade lanes was critical. A not insubstantial proportion of a government's military forces had to be dedicated to protecting its merchants and their cargoes, particularly on the high seas, because you could count on your rivals to use their militaries to raid your commerce. As the British Empire expanded around the globe in the eighteenth and nineteenth centuries, they found themselves having constantly to reinvent their naval strategies in order to fend off the fleets of commerce raiders that the Dutch,
French, Turks, and others kept putting into play. The Americans provided their navy -- the only one with global reach -- to protect all maritime shipping. No one needed a navy any longer.
A strategic umbrella. As a final sweetener, the Americans promised to protect all members of the network from the Soviets. This included everything right up to the nuclear umbrella. The only catch was that participants had to allow the Americans to fight the Cold War the way they wanted to.
"Accepting the deal was a no-brainer. None of the Allies had any hope of economic recovery or maintaining their independence from the Soviets without massive American assistance. There really was no choice: Partner with the only possible consumer market, the only possible capital source, and the only possible guarantor of security -- or disappear behind the Iron Curtain.
"As the strategic competition of the Cold War took firmer shape, the Americans were able to identify critical locations in the geopolitical contest and invite key countries to join their trading system. Among the first postwar expansions, the Americans approached none other than the defeated Axis powers.
from the book The Accidental Super Power by Peter Zeihan
3 replies
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= new reply since forum marked as read
...and laid the building blocks of our current economic system. A key figure was the economist John Maynard Keynes, after whom the Keynesian economic theory and school thereof is named.
It is exactly this framework that the current "revolutionary" thoughts of the clearly brilliant thinker Steve Bannon wishes to undo... 
(I am an economist deeply involved with these institutions)
I love tidbits........
