Brexit Britain's Bridge To Nowhere - Part 17 of 27

The fact that the US and Britain were both bourgeois-democracies, (though as Trotsky set out, for the millions of colonial slaves in the British Empire, there was no sign of any freedom or democracy, bourgeois or otherwise) did not change the fundamental imperialist antagonism between them, leading to this increasing military build up, and drive to war. But, what the Kaiser failed to achieve, for German imperialism, Hitler sought to complete, as WWII, in Europe, resumed that same historical task of creating a large, single European state, capable of competing with that of the US.

As in WWI, the US stayed out of WWII, in 1939. A bit like the spivs and profiteers, it, again, took advantage of the war to sell to Britain, and, like a loan shark, to lend it money, thereby, impoverishing its main imperialist rival, whilst, of course, US corporations, like Ford and GM, continued to operate in Nazi Germany, now producing military vehicles, using forced labour.

WWII, created the conditions for post-war US hegemony, and the replacement of the Pound by the Dollar as world reserve currency, and all of the privileges that go with it. The Gold Standard meant that the Dollar was pegged at $35 an ounce, no matter how many paper Dollars the US printed to pay its bills to other countries. So, when the US sucked in large amounts of imports, in the 1950's, as its economy expanded rapidly, it could pay for them, simply, by printing more Dollars. As US industry was, then dominant, and the most advanced and efficient, this devaluation of the Dollar, was limited, and US exports continued to exceed imports, but, in the 1960's, the US engaged in The Vietnam War, as well as many other military conflicts, across the globe. As the long wave cycle entered the boom phase, around 1962, and the demand for labour grew faster than the supply, US workers' wages rose, and along with it, the US state responded, in the same way that social-democracy had done in Europe, with the creation of a welfare state, which, in the US took the form of Johnson's “Great Society”.

Increasingly, all of this was paid for, not by US exports, i.e. the creation of new value, by US workers – though the US, certainly, during this period, also, produced vast amounts of new value – but by reliance on its ability to print Dollars. US imperialism, during this period, via a tsunami of paper Dollars, which flowed into the world economy, as reserve currency, was the vehicle for the inflation that started in the 1970's, and carried through into the 1980's. In these conditions, European imperialism, in the form of President De Gaulle, demanded that France be paid not in paper Dollars, but in gold, at the official rate, under the Gold Standard, of $35 an ounce. That figure, of course, was a total fiction, due to the US's relentless printing of paper Dollars, which devalued them.

In response, President Nixon, in 1971, ended the convertibility of the Dollar to gold, and made it illegal for US citizens to own gold bullion. As the real value of the paper money tokens was then established, gold rapidly rose from the $35 an ounce artificial price, eventually peaking at over $800 an ounce in 1980. This is the underlying cause of the US trade deficit, today, that Trump is so animated by. After 1971, unable to pay its bills by simply printing paper Dollars without consequence for the value of the Dollar, and consequence for inflation, the US needed to pay its way from its exports, but, it had weakened that, as a result of relying on its printing of paper Dollars.

Moreover, in the meantime, the dominant position of US capital had been weakened by the fact that Japanese imperialism had resumed its pre-war ascent, now becoming the powerhouse of manufacturing in cars, electronics, and heavy engineering. It is a development alluded to in Back To The Future, where the 1980's Marty McFly, has to explain to the 1950's Doc Brown, that “nowadays all the best stuff is made in Japan.”

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