Once Upon A Time in the WEST!

Once Upon a Time in the West

Once upon a time, the West had it all: the money, the political
nous, the military might; it knew where it wanted to go, and had
the muscle to get there. Be it Portugal, Spain, the Netherlands
or England, this held true for 500 years. However, the story of
the West's dominance in the second half of the twentieth century
is the story of America.
Whether it was the US troops pouring on to the shores of Normandy
with the Allied forces or the Enola Gay dropping the bomb on
Hiroshima, by the end of the Second World War the baton of global
power (economic, political or military) passed from Great Britain
to the United States. While it took almost fifty years for the
Cold War to play itself out, for the most part the US firmly
maintained its paramount position for the next five decades and
into the twenty-first century.
Of course, in the prelude to the Second World War, the United
States had suffered the consequences of the 1929 Great Depression
(by 1933 the value of stocks on the New York Stock Exchange was
less than zo per cent of what it had been at its peak in 1919,
and US unemployment soared to around 25 per cent) and the trauma
and casualties of the First World War. Although it did not end
the economic crisis of the 1930s, President Franklin Roosevelt's
New Deal was an attempt to reconstruct American capitalism, and
give the not so invisible hand of the government a new and more
dynamic role. At its core America would remain a supporter of
free enterprise, but the plan was for government to play a key
role in orchestrating, supervising and directing the faltering
economy, leading, not following, private enterprise and
administering large-scale endeavours. All this would prepare
America for and enable it to capitalize on the war that would
break the back of Western Europe.
Thus, despite any remaining weaknesses, with the advent of the
Second World War America was in a unique position to direct the
industrial, military and manufacturing sectors to its best
economic advantage. In this sense, the Second World War was not
seen simply as a political and military necessity, but as an
economic opportunity to which it was ready to respond.
For example, in 1941, President Roosevelt signed into law the
Lend-Lease Act which would sell, exchange, lease or lend to
America's allies any military equipment deemed necessary. From
1941 to 1945, under this programme, materiel worth US$50bn
(equivalent to US $700bn at 1007 prices) - battleships, machine
guns, torpedo boats, submarines and even army boots - were
shipped across the waters to its beleaguered allies. Europe took
on a heavy burden of future debt repayments to the US through the
Lend-Lease programme (Britain made the final payment of its
Lend-Lease loan of US$83.83m on the last day of 2006 - fifty
years later), and America peaked economically after the war, in
the 1950s, as a result. Because of Lend-Lease (the Marshall Plan
was, of course, a wholly different proposition) the US had become
the best-in-class manufacturer.

America's actions were a marriage of political imperative and
economic savvy. The manufacture of goods to be shipped abroad was
not just a political act to help the Allies; it also helped boost
the US economy. Indeed, the results of this `great American
intervention' were staggering on almost every level. Thanks to
the global need for US production, America's sluggish economy was
transformed into a manufacturing powerhouse.
By the end of 1944, US unemployment had shrunk to just 1.1 per
cent of the civilian labour force - a record low in its economic
history which has never been bettered (at the worst point of the
Depression more than 15 million Americans - one quarter of the
nation's workforce - were unemployed). The US GNP grew from
US$88.6bn in 1939 to US$135bn in 1944 - an 8.8 per cent
compounded annual increase in half a decade. All this meant that
everything was geared to manufacturing - and scientific and
technological changes intensified. By the end of the war, the
rest of the world was broke: Japan destitute,
Europe bankrupt and United Kingdom penniless, leaving the United
States as unquestionably the economic force.

In its crudest form, the only thing that America lost in the
Second World War was men. And even then, their losses compared to
those of other warring countries were small. Out of the more than
72 million people who lost their lives in the war, the United
States lost 416,800 - o.32 per cent of its population. But,
politically, militarily and economically America won hands down.
The war was, in the most perverse sense, a resounding success.
America came out of the Second World War hugely rich. As the
economic historian Alan Milward notes: "the United States emerged
in 1945 in an incomparably stronger position economically than in
1941 ... By 1945 the foundations of the United States' economic
domination over the next quarter of a century had been secured
... [This] may have been the most influential consequence of the
Second World War for the post-war world."

By the middle of the 1950s America was financing the rebuilding
of post-war Europe and beyond, while at the same time
establishing itself as the foremost exporter of cultural norms
and technological know-how. It was going to be America's century,
and indeed it was.

Not only had the USA avoided direct collateral damage on its own
soil (saving the outlay of potentially billions of dollars to
rebuild its own infrastructure), the very fact that America could
win the war, bankroll its allies during the war and institute the
Marshall Plan (aid to Europe worth US$I00bn in today's terms,
which was around 5 per cent of the 1948 US GDP) demonstrates) ust
how enormously wealthy the country had become.

Christopher Tassava wrote: `economically strengthened by wartime
industrial expansion ... possessed of an economy that was larger
and richer than any other in the world, American leaders
determined to make the United States the centre of the post-war
world economy.' The Cold War would continue for the next fifty
years, but it was this strategy that ultimately prevailed. Barely
scathed, fantastically rich, no country could come close to the
United States. The world was hers.

Rising America infused all aspects of society. Such was its
strength, its confidence, its energy, that it permeated and
infiltrated every sphere of Western-influenced human activity.
The ensuing decades, the 1950s and 1960s, seemed to bear this
theme out. Politically this was the era of social conscience and
the civil rights movement, culturally there was a revolution in
music, literature and art, and American innovation dominated in
science and technology, putting a man on the moon and further
developing the atomic bomb.

The success of the Manhattan Project and advances in the nuclear
arms race heralded an age when America's scientific and
technological mastery seemed unassailable in the West. United
States exports increased from US$9,993m in 1950 to US$19,626m in
1960. This expansion in exports in just one decade was supported
by the increase in US gross fixed capital formation, which grew
from US$58bn in 1950 to US$104bn in 1960.
The three decades from the 1950s saw America wield its influence
in every quarter. From the great industrial complexes such as
General Motors, Ford Motor Company, Mobil Oil, International
Business Machines, United Fruit Company and Dow Chemicals, to the
Hollywood film industry and the music business exemplified by
Motown, all came to symbolize the power of Americana, at home and
abroad. It did not just stop at business.

Through the Peace Corps, established in 1961, America stamped its
moral authority as it exported its values via its youth to
everywhere Americans believed was not like them; with a remit to
`promote world peace and friendship through a Peace Corps, which
shall make available to interested countries and areas men and
women of the United States qualified for service abroad and
willing to serve, under conditions of hardship if necessary, to
help the peoples of such countries and areas in meeting their
needs for trained manpower. And, of course, American values were
not just exported through the Peace Corps. Militarily, the US
invaded Korea, and Vietnam to this day remains the great blot on
America's conscience. The fact that America was growing bolder,
and wielded unparalleled power outside its borders, was
unquestionable.

All in all, this was the era that belonged to what the American
journalist Tom Brokaw calls the `Greatest Generation': the
generation of Americans who fought in the Second World War and
returned to build America into the greatest country in the world.
For the next five decades they appeared to have succeeded -
America was the epitome of wealth, power and cultural dominance,
its tentacles reaching to every part of the globe. The rest of
the West was firmly held in America's orbit - how could you not
be in its grip, mesmerized by its power and brilliance? It was
the sun around which other countries all revolved.
Good times, bad times, America was undeterred. From the oil
spikes of the 1970s, the debt burdens and the Wall Street crash
of the 1980s, and even the fall of communism in the 1990s, which
would spawn its fiercest economic competitors, America seemed
unassailable. Through its military might, its industrial
capability, helped by free-market capitalism, and its cultural
monopoly, America had planned it that way - Made in America was
the logo of the times.

But fast-forward to today. See how much has changed. Western
states are facing untold financial calamity, their populations
ageing with few resources to sustain them, much of the necessary
political reform remaining politically unpopular, and their
economic supremacy susceptible to challenges from around the
globe in a way never envisaged before. And while there have been
setbacks before, such as America's savings and loans crisis of
the 1980s and 1990s, the recent financial crisis and the policies
the USA continues to pursue are proof positive that America is
fast losing the hold it once had over the rest of the world. It
has become a region of financial weakness and economic
vulnerability in this, the first decade of the twenty-first
century, to such an extent that, like bad blood, it has infected
the rest of the Western body politic, making the story of
economic decline necessarily one of the West versus a number of
emerging upstarts. However, among the countries of the West,
there remain good reasons to bet on the US being economically
stronger than European countries in years to come.
But what exactly, in economic terms, drives growth?

THE PILLARS OF GROWTH

Much ado has been made of the seemingly inevitable economic
decline of the industrialized West - the United States, in
particular - and the rise of the rest, led by China......
..........

FROM THE BOOK  "HOW THE WEST WAS LOST"  BY DAMBISA MOYO - ***A BOOK
YOU NEED TO READ*** - AN EYE OPENER THAT TELLS YOU HOW THE SO-
CALLED "EDUCATED" DUMB LEADERS AND FINANCE GEEKS BROUGHT THE WEST
CRASHING TO ITS KNEES IN 2008.
..........