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27 Cards in this Set
- Front
- Back
Standoff between isolationism and
internationalism in the United States - Differing views of the cause of the Depression: * Isolationists – American economy dragged down by disintegration of global economy * Internationalists – American economy of the 1920s insufficiently internationalized |
The 1930s Reversal of Globalization
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WWII important for understanding economy. Lack of resources led Germany and Japan to
undertake military conquest; and also led to their defeat (See “The Prize”, Clip 4, for this week) |
The Second World War
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Aviation technology during WW11 gave U.S. pioneered civilian aviation during the war; radar, sonar, atomic energy. all instrumental that bound U.S. together petrochemicals, plastics,synthetic rubber, 20th centruy for the American democracy
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The Second World War (continued)
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- War also generated intensive U.S. effort to obtain and control overseas sources of raw
materials - Technologies vital to late 20th century; globalization: digital computing; aviation; telecommunications; petrochemicals - Henry Luce declaration of “American Century” (Life, February 17, 1941) – announced defeat of isolationism in the U.S. and intention (unlike in the 1920s and 1930s) to assume leadership role in world political and economic affairs |
The Second World War (continued)
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- 1944. Gold-dollar standard system
- International Monetary Fund (IMF) - World Bank (IBRD) - General Agreement on Tariffs and Trade (GATT) |
Bretton Woods System
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- Every currency fixed in terms of dollars
- Dollar fixed in terms of gold at $35/ounce - In practice, a dollar standard system - Financial flows restricted by nationalcontrols over short-term capital - Nations given more flexibility than under gold standard to run trade deficits, increase money supply, pursue Keynesian policies |
Gold-Dollar Standard
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____ oversaw the Dollar-Gold Standard and wwas also a provider of short-term loans to countries. Would be international bank and would provide bail out moments. Get them through cyclical swings
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IMF
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Harry Dexter White (American Side) and British side - John Maynard Keynes.
"Governments need to be more active to even out cycles" |
Harry Dexter White
and John Maynard Keynes at Bretton Woods Conference |
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Long-term loans for development. Usually to governments to help develop big infastrucre
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World Bank Building, Washington, D.C.
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- Poorly equipped to help rebuild the world economy in the late 1940s
- IMF and World Bank too new and undercapitalized - During 1950s and 1960s, however, BWS would become mechanism for increasing production in capitalist nations and trade between those nations - BW institutions (IMF, World Bank) would live on as enforcers of late 20th century globalization |
Bretton Woods System
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- Annual 5% real GDP growth in developed market economies; no major recessions
- Nationally based economic expansion - Economic integration on a regional basis - Key international trade links established, especially between raw materials producers and consumers - But, getting ahead of the story |
Long Boom, 1950-1973
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1947-1948 Truman Admin Crisis from the Cold War. competition between Soviet Communism. Stalin, Western Europe and U.S.
- Millitarily USSR posed no threat and economically it was outside our system. Crisis was inside the capitalist system. |
Cartoon Depicting the Soviet Threat to Western Europe
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Europe was wiped out
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Bomb Damaged Buildings in Berlin, 1946
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- Post-WWII crisis
* Secondary crisis: Soviet expansionism - Primary Crisis: THE DOLLAR GAP. In order to restore Gremany and Europe they needed infastructure and reconstruction. The problem is Europe had no money. (There was a hige Dollar Gap) - The World Bank was inderfunided an djust started so it was too small. |
The Cold War
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- Western Europe had limited means to pay for imported factors of production – they lacked hard currency dollars
- Could not print money – already high inflation after the war - BW institutions too new and undercapitalized to provide needed lending - Major European nations could not rely on colonies and overseas territories – independence movements across Asia; remaining Latin American investments sold off to pay for war |
Crisis Within the Capitalist System
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Republican Party majority in
Congress opposed increasing aid or political commitments abroad. Senator Robert A. Taft (R-OH) “Mr. Republican” |
New Republican Congress, 1946
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Chief architect of
the Cold War. "There are only two powers left. The British are finished, they are through. And the trouble is that this hits us too soon, before we are ready for it. We are having a lot of trouble getting money out of Congress.” |
Dean Acheson – “Present at the Creation”.
Dean Acheson, February 1947 |
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"Containment Doctrine"
- $400 million in military and economic aid to Greece and Turkey - Proclaimed U.S. intention to “contain” communism everywhere in the world - Rhetoric of “supporting free peoples” and democracy, and anticommunism - Underlying strategy: easing the dollar drain from most valued U.S. trading partner (Great Britain) and taking over as regional policeman in the Middle East |
Truman Doctrine (1947)
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Chevron partnership (4) partners in new joint venture, MArch 12, 1947
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ARAMCO Oil Exploration, 1955
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Time Magazine, March 1947, on the Truman Doctrine:
“The loud talk was all of Greece and Turkey, but the whispers behind the talk were of the ocean of oil to the south.” In order to get money out of Congress, Truman officials felt they needed to “scare the hell of out the American people” (Republican Senator Arthur Vandenburg) Long-term domestic repercussions: anticommunist hysteria, use of fear to achieve consent for foreign policy objectives; “military industrial complex” |
Truman Doctrine Quote from Time
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Secretary of State, Truman Administration
(1947-1949) |
General George C. Marshall
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- Scaring the hell out of the American people allowed Truman Administration
to sell the Marshall Plan (1948 –Czech coup, Berlin blockade) - $17 billion in aid to European nations for postwar recovery and reconstruction - Gave American officials say in European domestic policies, undercut appeal of leftists parties and sustained Western alliance |
The Marshall Plan (1948)
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- Main purpose: shifting
Europe from coal-based to oil-based energy - 20% of Marshall Plan funds used to buy oil supplied by American oil companies from the Middle East - Mixed success – did not affect general European recovery |
The Marshall Plan Aid
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2 big events:
1) The soviets testing of nuclear device 2) The Chinese Communist Revolution 1949 Recovery stalled in Europe and Japan |
Renewed Crisis in 1949
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- Soviets exploded an atomic bomb.
- Chinese communist revolution - Continued resistance of Republican Congress to expanded overseas commitments |
Renewed Crisis in 1949
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U.S. had to remillitarize. June 25th 1950's - The Korean War allowed U.S to provide more money because it showed the world the "Global threat of Communism" and how it was expanding
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Map of Asia
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- Acheson: “Korea came along and saved us.”
- Staggering reorientation of American foreign policy in 1950; massive militarization under NSC-68 (Defense budget increased from $13 billion to $50 billion) - Japan, Germany – key regional industrial centers Remilitarization of Germany under NATO auspices jump-started the German economy, which became the anchor of Western European economic revival - U.S. military and economic commitments to East and Southeast Asia helped foster Asia-Pacific regional integration linked to Japan - “Military Keynesianism” – U.S. foreign aid in a politically palatable form; “priming the pump” of the global economy |
Revival of World Economy
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