#60 World Power: the Birds-eye View of Major Change
The "Big Three" at the Yalta Conference: Winston Churchill, Franklin D. Roosevelt and Joseph Stalin. February 1945.
Preface
After 1945 everything changed, or at least most historians and commentators think so. There is no doubt that on a global scale, as well as domestically, people’s lives changed significantly after the end of 30 years of global warfare. My job in these blogs is to assess what altered and what stayed the same. As the reader, you must also make this judgement.
One item of change was the written word. As the years progressed writing and analysis about contemporary events increased exponentially. Written knowledge had been in short supply across the world until the digital era, approximately from 2000. The last 20 years have seen an explosion of the written word. The consequence for historians is we have chosen from a vast volume of written records, books, articles etc. My choice of what is of greatest importance may not be yours. I have attempted to illustrate what I understand as the key events of the period around wealth and power; also, the changes, the transformations and destructions that have occurred.
This and the following four blogs will outline major changes that were to affect the world after 1945:
1. World power
2. Structural changes to the global scene,
3. The end of colonisation and all that that meant for millions of peoples
4. The importance of old Mesopotamia to the post-1945 global scene
5. And finally, the Chinese Revolution in 1949
I’ve chosen Mesopotamia and China as key areas of the world, for the following reasons. The Arab speaking world and the old Ottoman Empire were the last part of the globe to be colonized; this occurred after 1918.
The Americas had been colonized in the 17th and 18th centuries; Asia followed in the latter part of the 18th and 19th centuries, and Mesopotamia only after 1918. It is significant that the last peoples to experience colonization – the Islamic peoples of today’s Middle East – are now in deep turmoil.
Then China’s amazing rise from the depths of world poverty in 1949 to the latest contender for world power in the 21st century.
These 5 elements of the global scene were undoubtedly major changes compared to the events that went before.
World Power
Perhaps the most important historical global change after the defeat of Germany and Japan in 1945 was the USA taking over world power.
Between 1815 and 1945, the British had been widely considered to be the world’s dominant nation-state. The British were a small island people whose power had rested on defeating all competing European powers, especially the Spanish and then the French first in the Seven Years War, and then finally in 1815.
As in the 1914\18 conflict, the USA entered the 1939/45 war well after the war was two years old in December 1941, when the Japanese bombed Pearl Harbour. Both before and during the war, the USA financed both sides and when it ended all the combatants owed her large sums of money. She held the world’s largest share of gold bullion, lost fewer men (hundreds of thousands against Russia 27, million). The USA in 1945 was the only economy that was left intact: in fact, the only economy other than Britain that had not been invaded and left in ruins. The USA had benefited economically from the war like no other society at the time.
The USA willingly took over world power; it is as well to understand how she benefited. In part, it was hubris to know that your people and their institutions were the most powerful in the world. From 1944, she began to build up a new global institutional infrastructure through which she planned to rule the world. This included the United Nations, the World Trade Organization, and a wide range of other global institutions which she financed and thus, dominated and through these organizations, she straddled the world.
From day one the American global elite planned to not just become the only global power. Her leading cadres and think tanks consciously took on the role of global imperial power. This was not modelled on the old colonising powers, Britain, France the Netherlands; rather they set themselves up to rule the world through a wide array of dependent States. Dependent on the USA. Each country’s rulers were expected to obey the rules laid down by the USA. We will come to these rules in later blogs.
The USA created a new distinctive branch of imperialism, laid out in honeyed words of ‘freedom’ and American ‘democratic values’. Behind the words was an iron fist which began with a new war in Korea soon after the end of hostiles with the Japanese in later 1945. The American military iron fist has continued with wars on every continent ever since.
Montage of images from the Korean War. Clockwise from top: U.S. Marines retreating during the Battle of the Chosin Resevoir, U.N. landing at Incheon, Korean refugees in front of an American M46 Patton tank, U.S. Marines, led by First Lieutenant Baldomero Lopez, landing at Incheon, and an American F-86 Sabre fighter jet. From Wikipedia, public domain.
From day one, the Americans decided to dominate the world exchange currency; set out at the 1944 meeting between Britain and the USA at Bretton Woods. The dollar was to become the key trading currency. Any firm wishing to trade internationally had to possess US dollars. Immediately the role of the dollar put the US in a unique global position:
The US had to print excessive dollars to supply international trading demand. She charged interest on each dollar printed which provide a huge income flow into Washington.
Every other country had to balance their exports and imports, except the USA due to this inflow.
Each country needed a US bank account in Washington, and soon the US government realized they could cut off supplies of new dollars for trade and freeze existing dollars in Washington. This system was called sanctions.
Because of the lack of the need to balance her annual payments and the huge inflow of dollars, the USA was able to build the largest armed forces the world had ever seen. No longer dependent on other armed forces (like the British dependency on Indian armed men) her own were awe-inspiring, enough to threaten any peoples wherever she wished from then until now.
Of course, the USA might have chosen to spend a part of that spare cash on a welfare state. Her spare cash had developed out of world trade using the dollar as the exchange currency. But instead for 70 years, spare cash has been spent on building up the most formidable armed forces across the world. There were many unintended consequences, not the least was that instead of relying on private enterprise to develop technology, the armed forces spent large sums keeping ahead of the world in every aspect of the digital world. The worldwide web for instance originated from US armed forces research.
Initially, in 1944-1945 the dollar was tied to gold. But when her gold reserves were dissipated after the Vietnam War, the US dollar continued to be the world’s trading currency.
When looking at these events in hindsight, it is perhaps not difficult to understand why the USA was pleased to become the world’s most dominant power. Yet at the time in the 1950s and 60s, most people believed they were free to choose whatever form of government they wished. Leaders who believed in ‘independence’ had to learn the hard way.
A birds-eye view of major change
For the sake of clarity, let summarise the key changes that occurred after 1945.
Global Changes to the Structure of the Political Economy:
1945 to 2000 saw the rise of the United States as the undisputed World power
The USSR was seen by the USA as the contender for world power between 1945 and 1989
The USSR’s economy collapsed in 1989 and for approximately 10 years the USA was the undisputed world power
By 2000, China had become the new contender for world power. The Chinese Communist Party took power by force of arms in 1949. At that time China was considered to be one of the poorest countries in the world. She then grew rapidly year on year and by 2000 onwards was playing a global role.
By the 21st century the two world powers, the USA and China, were vying for control of the globe. Both had hugely different conceptions of their past and the future.
The USA was less than 250 years old. Actual control of the North American continent began in the middle of the 19th century. China. on the other hand, had a written history of her civilisation from 2000 to 3000 years ago.
During the fall of the old contenders for world power, the French, British, and Dutch had their empires taken away from them by the USA after 1945. They retained strong economies and became close allies to the USA.
Between 1917 and 2000, the people of Russia had experienced invasion and famine on three occasions: 1918/19-1924 invasion and famine from UK and US troops, 1942-45 invasion and famine again from Nazi Germany, 1989-2000 a different sort of invasion, from the USA, wild inflation, and food shortages a third time.
Throughout these 75 years, the old colonised states in Africa and Asia, and the previously colonised states in Latin America, all struggled to retain their independence and to industrialise.
Three nations "got away": China, Vietnam, and Cuba. Despite wars and turbulence directed at the latter two, all three managed to survive and be free enough to develop according to axioms and ideas outside the framework of development determined by the dominant powers.
One new nation, specially created in 1948 – Israel - implanted into the Arab world of Mesopotamia, had consequences for the entire region.
Changing Mechanisms of Industrial Capitalism:
Alongside all of the above were these key elements:
Inequality: which has continued to grow between and within states
Technologies: the establishment of digital tech in every home and workplace. Digitalisation has affected every individual on the planet as communication technologies have rapidly developed.
Ideology: the growth and change that had justified and structured colonisation was abandoned. Racial ideas, previously the core reference were discarded by all the powers large and small and replaced by new ideological formulations: neoliberalism, anti-communism, terrorism, and so on. Nonetheless, the ideas that sustained past social and political change was the most difficult to change by government decree. Ideas of the past have always been kept alive by new generations. Racism is perhaps the most obvious but is by no means alone. Nationalism appeared as we saw in past blogs, and this remains alive and well. Around nationhood stood many axioms of the past to stiffen people against change into a new era.
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The peoples of Western Europe had risen from one world of relative poverty and had learnt how to take the wealth from the Americas and transfer it to their own countries. This was slavery and latterly until 1920, indentureship. A whole set up of banks, shipping companies, and insurance companies had arisen to make these transfers possible. From the 1750s the European invaders turned their attention to Asia and systematically began the colonisation process anew. At the same time, as they attempted to colonise and extract the wealth of Asia, the colonising countries began the process we now recognise as industrialisation alongside the rapid growth of cities. The surplus resources extracted through colonisation were used to finance the growth of new industries.