#54 1914-1945 The Unforeseen Consequences: The USA Takes World Power part II
USA: The Richest Country in the world 1900
By 1913, America was the richest nation in the world in terms of total and per-capita output. By 1918, she dominated the global financial structures by becoming the world's creditor nation. Her banks had provided the money to fight the war. She was preparing to take over world power; although that had to wait until the Bretton Woods conference in 1944.
How had she generated such wealth at incredible speeds? The wealth generated by the USA came out of industrialisation which had begun early in the 19th century. As in Britain, industrialisation had originated out of cotton. Racial chattel slavery provided an efficient way to produce the world’s most important crop at the time. In 1790, the USA did not export any raw cotton. On the eve of the civil war, in 1865, the USA supplied cotton to the world. Although Britain and the USA outlawed the slave trade in 1807 and 1811 respectively, slave labour grew hugely in the USA. By 1861 the number of slaves in the USA had increased five times compared to 1790, despite high infant mortality. Slave labour camps stretched west from South Caroline to Arkansas in the west. Slave-grown cotton was exported to Britain up to the civil war in 1875; the income from exports provided the base from which the USA was able to import the machine goods it needed to industrialise. The growth of the export of cotton provided the means through which the northern USA was able to industrialise. Slave capital was therefore the necessary condition through which the USA industrialised and was able to grow her wealth.
The railways integrated the continent - north and south, east and west. The economy grew fast. By 1890 the USA was the largest national economy in the world.
I argued in an earlier blog that the USA had the 'easiest' of tasks in creating a capitalist economy, with private property as its base. Few people in the USA today have any realisation that private property is a special characteristic of capitalism. In the USA, there were no ancient values to stand in the way. For the people of the USA, in comparison to the majority of the world’s peoples, creating an urban industrialised capitalist economy was simplicity itself. Private property appeared as the natural order. Through destroying and removing the indigenous peoples, there were no ancient values to overcome. The people of the USA were considered "settler peoples", with no deeply held historical values to hold them back.
It was an extraordinary feat that the USA should have become the largest and wealthiest global nation by 1914. She had achieved this economic growth almost from a standing start 100 years earlier. The US immigrant population had been a mere 5 million in 1800 and although it had grown rapidly to 23 million by 1850 and added a further 23 million immigrants by 1900, it was still relatively small compared to Europe or China.
The Creation of the USA
During the 19th century the USA had:
Integrated the entire landmass of today’s USA into a single state. This included the purchase from the French of Louisiana in 1803 (828,000 square miles)
Added Texas in 1845
Fought and defeated the Indigenous Peoples by 1900
Endured a massive and bitter civil war between 1861 and 65
Settled land across the continent by 1890, and created urban areas from scratch
Created the necessary infrastructure by 1900 to build an urban and capitalist world
The USA has two oceans, the Atlantic and the Pacific, on both sides to protect her against external invasion. This proves a huge advantage. Her growth as a domestic power began after the end of the Napoleonic wars in 1815. The territories in the southern half of the continent asserted their rights for political independence. Mexico, which had been ruled by Spain since the 1490s, won her independence between 1810 and 1821. In 1846 the US army invaded Mexico. This war ended in 1847, giving the US full control of Texas, California, Nevada and Utah, plus parts of Colorado and Arizona, New Mexico and Wyoming. In return, Mexico received 18 million dollars (roughly $627 million today). The significance was not just a much larger territory for the United States, but two critical new ports: San Francisco and San Diego, for a Pacific presence and dominance of the West Coast. These ports ensured that the USA developed her navy on the West Coast and was able to trade with Japan and China.
The development of the West Coast was as important as the East in terms of the USA as a global naval power. The initial problem had been accessing from the east to the west and vice versa. Part of the solution was the transcontinental railway which was completed in 1869. The other solution was a sea route and naval supremacy in the seas that Europeans called the Caribbean …the American Mediterranean.
The original Caribbean islands that had been colonised in the 16th and 17th centuries had provided huge wealth from slavery, sugar, cotton, and cocoa. The United States needed to achieve military and naval supremacy in these seas and involved a long struggle with Britain. The idea of a canal between the Caribbean and the Pacific had been considered since the 1840s. Both Britain and France had the means to dig such a canal, and both attempted to carry the idea into reality. Equally, as the USA grew in strength over the 19th century, so she too wished to own and control a passageway from the Atlantic to the Pacific. Such a canal affected the USA strategy to keep safe from foreign invasion. The Panama Canal was completed in 1914.
The USA as a World Power before 1914
As I discussed in the previous blog, in the end, Britain stepped down - she did not have sufficient resources to rule the entire world. She allowed the USA supremacy in the Caribbean, in the so-called “American Mediterranean”. Britain had been deterred by her exposed position of Canada, and at the of the 19th century Britain was embroiled in conflict in China in the Boxer Rebellion, with the growing might of Japan in Asia, The Jameson Raid and Boer War in southern Africa; plus continued strained relations with Russia. And in Europe, there was the naval build-up and the conflict with Germany. Britain simply withdrew her naval forces from the Caribbean and left the area to the USA.
In 1823, the US had asserted the Monroe Doctrine, which became the cornerstone of US policy in the region of the entire American continent for the next 100 years. The doctrine asserted that the USA would not interfere with the affairs or wars of Europe and would recognise the existing colonial edifice of the western countries on the condition that the Western hemisphere was a matter for the USA. The Americas were to stay free of European influence.
The ideological framework which held the USA together was first the European “racial" framework with its Darwinian scientific additive. The idea of ‘manifest destiny’ and white supremacy were American additives conceptualised by 1845. US settlers were supposedly ‘destined’ and ‘blessed by God’ to spread capitalism and democracy across the US continent. As settlers moved westwards, the ideology of ‘manifest destiny’ and white supremacy provided the extra ideological framework to remove the existing indigenous people and to settle the land. The same framework of ideas has stayed with the USA as they expanded externally into other people’s lands and today is often never far from the surface. The Americans saw themselves as a 'race apart', superior in every sense. This ideological self aggrandisement was given substance in both wars.
It was the USA's intervention in 1917 into the European wars which finally brought her onto the world stage. She was to play a significant and ongoing part with the Balfour Declaration, she attempted to play a role in the peace negotiations after 1918 which came to nothing. As we will see in later blogs, her military companies played a significant part in the growth of the Nazi war machine in the 1930s. By 1918 US expansion was all set to continue from her control of the American continent to control of the whole world after 1944/45. As her first geopolitical analyst Nicolas John Spykman saw the situation:
“The First World War made the question (intervention or isolation) once more a burning issue. In April 1917, we became a full belligerent and the argument was temporarily suspended... with the armistice, the debate entered a new phase and this time the isolationists won..... The Second World War presents the issue of intervention versus isolation in a new phase". He goes on, "A sound foreign policy for the United States must accept this basic reality of international society and develop a grand strategy for both war and peace based on the implication of its geographic location in the world.”
Spykman, American Strategy in World Politics, Harcourt Brace and Company (1942).
Suggested Reading
American growth and dominance:
John Nicholas Spykman, Americas Strategy in World Politics, 1944.
The importance of Spykman is that this book is sympathetic to US growth and that he envisages the world from American rather than European eyes. For the first time, a book that envisaged the “USA as a world power”. In it, he asks what it would take for the USA to rule the world?
Carroll Quigley, Tragedy and Hope.
This is also a sympathetic book for USA world power, even though there was an attempt to destroy the book; the plates were destroyed by the Publisher MacMillan and Co soon after publication.
See previous blogs on North American colonisation; the USA Holocaust, and her transformation to urban capitalism.
Financial Chaos:
Much of the analysis has been taken from Carroll Quigley above, but these 20 years have also been deeply studied by many economists and economic historians. These 20 years have been seen as the ultimate in capitalist chaos, remembered and referred to whenever there is a global downturn.
J.M Keynes’ first important work The Economic Consequences of the Peace (1919) and then The General Theory of Employment, Interest, and Money were written as a testament to the importance of this period of history, and how to avoid in future the horrors of the 1920s and 30s. His theory is still debated by economists today. His ideas were put into practice after 1945 and accepted by politicians until 1970 when they were discarded.
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Ideology alone was of course not enough for Hitler to rise to power. The question remains: how was Hitler able to revive the German economy sufficiently to fight a global war in a mere six years? Hitler had taken political power in Germany in 1933. Once this question has been asked, the direction of the answer is obvious: the German economy would have to be supported by the great powers, France, Britain or America; there was no other way.