What Is America? by Ronald Wright

Author:Ronald Wright
Language: eng
Format: epub
Publisher: Perseus

8.

THE WINDS OF FEAR

Leaders like wars because wars remind people they need leaders.—Plato, ca. 400 B.C.

The history of the United States is not the story of triumphant anti-imperial heretics. It is the account of the power of empire as a way of life, as a way of avoiding the fundamental challenge of creating a humane and equitable community or culture.

—William Appleman Williams, 19801

What think you of Terrorism, Mr. Jefferson?

—John Adams, 18132

PROBABLY THE BEST MIND at the 1919 Paris Peace Conference had belonged to “a very clever, rather ugly” young member of the British team who was no team player—the economist John Maynard Keynes.3 He’d foreseen that the crippling reparations imposed on Germany would lead to further conflict, and he’d had the courage (or arrogance) to resign when his warnings went unheeded. Twenty-five years later, as the Great War’s sequel came to an end, Keynes was in demand. If the world didn’t want more Nazis and Bolsheviks, something had to be done to prevent mass unemployment and poverty.

Keynes’s ideas for smoothing out the boom-bust ride of free markets had already influenced the New Deal, and his General Theory of Employment, Interest and Money (1936) is still widely regarded as the twentieth century’s most important work of economic thought. Simply put, Keynesianism argues that governments should tax during the good times and spend during the bad. It doesn’t always work and is subject to temptations and abuses, but no one has ever had a better idea. Even Richard Nixon would proclaim himself a Keynesian, though with fingers characteristically crossed behind his back.4

In July 1944 Roosevelt invited Keynes to a three-week conference at Bretton Woods, New Hampshire, to plan the postwar economic order.5 From these meetings—and others among the Allies—emerged the United Nations, the World Bank and the International Monetary Fund. The latter institutions were intended to act like national treasuries at the world level: as counterweights and stabilizers of the market cycle. Three years later the United States and other countries agreed on the Marshall Plan for economic reconstruction, especially in war-torn Germany and Japan. The big mistake of 1919 was not repeated: instead of trying to bleed the vanquished for their sins, the Allies helped them rejoin the world economy.

In financial terms, the “Allies” meant the United States. America had emerged from the war with no damage on its home turf, and an industrial capacity greater than the rest of the world’s put together.6 The war economy had shown that planning worked, that government provision of jobs and basic needs could eliminate the underclass. Keynes had found a balance between capitalism and socialism. Even Britain—bombed, broke and rationed—saw a steady improvement in nutrition and health throughout the war and a narrowing gap between rich and poor.7 Almost all western democracies used their wartime experience to build modern welfare states along Keynesian lines in the 1940s and 1950s.

This was the high-water mark of American prestige, the moment at which the United States, admired for bravery in war and generosity in peace, eclipsed Britain as world leader.

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