We need new dreams

Posted by John Mullin on Apr 11, 2011 in Politics | 0 comments

America then and now

PETERBOROUGH, CANADA

“[I assert] with some confidence that our own period is one of decline; that the standards of culture are lower than they were fifty years ago; and that the evidence of this decline are visible in every department of human activity.”

-T.S. Eliot, Notes Towards the Definition of Culture (1948)

My understanding of international aid in the immediate post World War Two era is admittedly limited. I am informed, perhaps most heavily, by the historian and public intellectual Tony Judt, who argues in his majestic book PostWar that Marshall Plan aid to Europe represented a significant break with the traditional model of strictly self-interested interventionist aid in American foreign policy. Judt makes the persuasive case that Marshall Plan aid was premised on a take-it-or-leave it basis, and that this was what made it unique. Not unlike the Troubled Asset Relief Program (TARP) monies in the United States, if a European state were to take Marshall Plan aid, it would come with strings attached.

The premise of the Marshall Plan was to provide the provision of cheap money to shattered European nations in the aftermath of World War Two (including, as Judt astutely notes, Eastern European nations which were rapidly falling under the Soviet sphere of influence) with cheap money in order to spur demand and to create the conditions for future prosperity. As Judt argues, 1947 would come to represent the modern point of departure for European relations –– the point being that the Marshall Plan would shape the Europe of the future, generate the conditions for unprecedented economic growth, and set the tenor of the modern Cold War.

The scale of the Marshall Plan was unprecedented; the sum of monies sent from the United States to Europe was colossal, and the impact of the effort was transformative for both parties. It was, perhaps, the first shot across the bow of the modern international economic system, and it lead to structures and institutions that still govern how states behave with respect to the global economic system.

What fascinates me about the Marshall Plan and the whole of post World War Two economic integration and planning is that, in spite of the very different international context in the present day (re: circa 2008) and the last major international depression – circa 1929-1931 – the results have been very similar: Huge crashes in equity markets, a global slowdown of trade and commerce, much more poverty, and the rise of extreme politics. How did we get here – wasn’t the whole point of economic integration and the post-war ethic of planning supposed to avoid major catastrophes? Sure, we have had economic ups and downs since the 1930s – but nothing as traumatic as 1929: until the summer of 2008, that is.

The question that has emerged in the wake of the devastation of the 2008 economic collapse has been, basically: has America entered into the nadir of its global economic, military, and political domination? The question of American decline – almost inconceivable in polite conversation not even twenty years ago – is now a central frame for looking at international relations, politics, and even global culture.

Central to the debate question is the fundamental difference between America-now and America-then. In the post-war era, America was a lender-nation – the only nation on Earth lending on such a major scale – but, now, America is a debtor-nation. In the post-war era, the United States sent abroad approximately 14 billion USD, mostly to Western European states in the form of aid, grants and loans – nearly the same amount that the Soviet Union extracted from Eastern Europe.

At the end of the Second World War, the last great global empire, the British, were a debtor-nation to the global power that would emerge – America. The contours of international power are now reshaped – it is America who is the debtor to the next potential great power – China.

The question, then, remains: Has America entered into the nadir of its global economic, military, and political domination? The answer is far from obvious, but the discussion is worth having.

 

John Mullin is a co-founders of Thought Out Loud. He currently lives in Peterborough, Ontario and North Bay, Ontario. He writes most often about politics, current events, culture, and history. He will be moving to Kuwait in September of 2011 for two years, where his Masters in Canadian history will prove useful in teaching Grade 5 math, English and science.