in transferring control of world liquidity from private individuals to governments
Post scriptum
Great (for the first time)
There are profound differences that distinguish the two most striking cases of "global hegemony" in recent history: England between 1870 and 1914, and the United States between 1945 and 1970. In the English case, the "accidental" circumstances under which the English sustained their hegemony are quite striking: the privileged relationship between the English government and the City's financial capital, plus a specialized economy complementary to that of its trading partners, unlike what occurred with the North American economy. Even against its agrarian and industrial interests, England always remained faithful to "free trade," even during its most difficult economic times. The United States, on the contrary, when it did not make concessions in the name of the Cold War, managed its economic relations with the rest of the world by fully supporting the interests of all sectors of its economy, which placed it perhaps (sometimes) in a contradictory but much more competitive position with the economies of its allies. This is what made (generally speaking) America (truly) Great (for the first time).
Post script
In previous monetary systems, including the British, the circuits and networks of high finance had been firmly controlled by private bankers and financiers, who organized and managed them for profit. The world's money, therefore, was a byproduct of profit-making activities. In the world monetary system created at Bretton Woods, by contrast, the "production" of world money was undertaken by a network of government organizations, primarily driven by considerations of welfare, security, and power—in principle, the IMF and the World Bank, and in practice, the United States Reserve System, acting in concert with the central banks of the country's closest and most important allies. World money became a byproduct of state management activities. As Henry Morgenthau put it in 1945, "The security and monetary institutions of the new world order were as complementary as the blades of a pair of scissors" (quoted in Calleo and Rowland, 1973).
Post script
Roosevelt and Morgenthau, as the latter once boasted, did indeed succeed in transferring control of world liquidity from private individuals to governments, and from London and Wall Street to Washington. Bretton Woods was a continuation, by other means, of Roosevelt's earlier break with haute finance. Despite Roosevelt's internationalist background, which included the great work of Wilson and the support of the League of Nations, the primary goal of his New Deal was to free American policy toward national economic recovery.
Britain's role had been that of a leading economy, fully integrated into the global economic system and, to a large extent, enabling its successful functioning, thanks to Britain's dependence on foreign trade, the widespread influence of its commercial and financial institutions, and the fundamental cohesion between its national economic policy and that required for global economic integration. In contrast, the United States is a dominant economy, only partially integrated into the global economic system.
ResponderExcluirA dominant economy, only partially integrated into the global economic system and, to a large extent, enabling its successful functioning.
ResponderExcluirThe essence of the distinction is indeed correct. It corresponds to the distinction—introduced with entirely different objectives by Samin Amin—between "extroverted" and "self-centered" national economies. In Amin's scheme, the economies of the central countries are "self-centered" in the sense that their constituent elements (production sectors, producers and consumers, capital and labor, etc.) are organically integrated into a single national reality, in sharp contrast to extroversion (the unity of its constituent elements) that is not graspable within the national context—this unity is broken and can only be rediscovered on a global scale (Amin).
In my scheme, the distinction between an extroverted and a self-centered national economy is extremely useful in identifying a fundamental difference in structure, not between core and peripheral economies, but between the nineteenth-century British regime of accumulation and the North American regime that succeeded it. In the North American regime, the self-centered nature of the dominant and leading national economy (the North American one) became the basis for a process of "internalization" of the world market within the organizational framework of gigantic business corporations, while economic activities in the United States remained organically integrated into a single national reality, to a much greater degree than they had ever been in nineteenth-century Britain.
ResponderExcluirThe form of corporate capitalism that emerged in the United States during the Great Depression of 1873-96 was a much more effective and radical departure from the British system of market capitalism than the form that emerged in Germany around the same time. Both types of corporate capitalism evolved as a reaction to the excessive competition and disruptions arising from the UK-centered global market formation. The German form merely "suspended" this process; the American form actually superseded it!
ResponderExcluirThe market has only one promise for the commercial firm: the promise of more money. When the firm has no influence over its prices, it has no choice about the goals it pursues. It must try to make money, and as a practical matter, it must try to make as much money as possible. Failure to conform to this is not an option (Galbraith).
ResponderExcluirThe market is superseded by vertical integration. "The planning unit is controlled by the source of supply or the buyer's market; thus, a transaction that is subject to bargaining over prices and quantities is replaced by a transfer within the planning unit." (Galbraith). This internalization within the planning unit of transactions previously practiced in the market does not completely eliminate market uncertainty, because the planning unit still has to compete for primary inputs that it cannot itself produce and for the purchasing power of end consumers. It replaces the great and unmanageable uncertainty associated with the market regulation of sequential production subprocesses with the much smaller and more manageable uncertainties associated with obtaining primary inputs and placing final products (Galbraith).
ResponderExcluirIn Galbraith's scheme, the control, suspension, and overcoming of markets reinforce each other, providing the techno-structures of modern corporations with protection against market uncertainties, which is indeed essential to their own existence and expanded reproduction.
ResponderExcluirThis kind of mutual strengthening was indeed at the root of the global dominance of American-style corporate capitalism. The "specific differentia" of this capitalism, from the perspective of the world system, was its overcoming. But under British control, "from a defensive weapon of the weak," tariffs quickly transformed into an "offensive weapon in the hands of the powerful"—a means of realizing extraordinary profits in the domestic market, capable of subsidizing dumping abroad, or a means of negotiating, from a position of strength, the opening of foreign markets. The apparent overcoming of competition in the domestic market and its intensification in the world market were two sides of the same coin: "Capital detests the anarchy of competition and wants organization, if only to resume competition at an even higher level." (Hilferding)
ResponderExcluirPost script
ResponderExcluirIn an analysis published on Monday (28/7), The Budget Lab, a research center at Yale University, predicted, with all tariffs announced up to that date, an increase in American inflation of 1.8% in the short term (before consumers change their habits in reaction to the tariffs, according to the parameter used by the research), the equivalent of a loss of US$ 2,400 (around R$ 13,400) per household in 2025.
https://g1.globo.com/economia/noticia/2025/08/08/7-produtos-que-podem-ficar-mais-caros-para-os-americanos-com-tarifa-de-trump-ao-brasil.ghtml
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Excluir"Given that Brazilian coffee can have a unique flavor profile, American producers cannot simply produce 'Brazilian coffee' in the U.S. In this situation, some consumers may choose to simply pay the higher import price for Brazilian coffee, rather than switching to another type," the text says.
In an analysis published on Monday (28/7), The Budget Lab, a research center at Yale University, predicted, with all tariffs announced up to that date, an increase in American inflation of 1.8% in the short term (before consumers change their habits in reaction to the tariffs, according to the parameter used by the research), the equivalent of a loss of US$ 2,400 (around R$ 13,400) per household in 2025.
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