The general trajectory of US History since the Federalist Era has been characterized by the rise of what I have been referring to throughout the SMP Compendium as the “Empire of Liberty,” a world order where Liberal Capitalist Parliamentary Democracy reigns in most countries. It has sometimes been referred to by political scientists and international relations scholars as the “Liberal International Economic Order (LIEO).” Much of the Western world in the late 20th century was dominated by the Empire of Liberty, the end of the Cold War expanding it to encompass almost the entirety of the planet. The 1990s was marked by a Unipolar Moment where Jeffersonian America stood unchallenged in its promotion of Neoliberalism around the world.
The early 21st century has thus far shown that the hegemony of the Empire of Liberty is not going to last. Even if it survives this century, there are no guarantees that it will persist into the 22nd century, especially given how Neoliberalism has been performing since the 2000s. Monetarily speaking, today’s world order is more precarious and less stable than it was prior to the 1970s. One of the lasting achievements of Jeffersonianism after 1945 was the establishment of a worldwide arrangement in which the US Dollar, backed by a reformed Gold Standard vis-à-vis the Bretton Woods System, is considered as the World Reserve Currency. The US Dollar’s hegemony remained supreme in spite of the Death of Bretton Woods, which occurred during the Presidency of Richard Nixon.
1971-1973: Nixon’s Jubilee
When the SMP Compendium was originally written, 2021 marked the jubilee of the President Nixon’s decision to unpeg the US Dollar from the Bretton Woods. When I began writing this Compendium, 2021 became the jubilee of President Richard Nixon’s decision to unpeg the US Dollar from the Gold Standard. The demise of the Bretton Woods System was set into motion between 13 and 15 August 1971. An important speech, “Address to the Nation Outlining a New Economic Policy: ‘The Challenge of Peace,’” was delivered by Nixon at the time which can be reinterpreted with the Work-Standard in mind. Below are the relevant portions which I feel to be the most important:
“America today has the best opportunity in this century to achieve two of its greatest ideals: to bring about a full generation of peace, and to create a new prosperity without war.
This not only requires bold leadership ready to take bold action–it calls forth the greatness in a great people.
Prosperity without war requires action on three fronts: We must create more and better jobs; we must stop the rise in the cost of living; we must protect the Dollar from the attacks of international money speculators.
The time has come for a new economic policy for the United States. Its targets are unemployment, [Attrition], and international speculation.
We are going to take that action–not timidly, not half-heartedly, and not in piecemeal fashion. We are going to move forward to the new prosperity without war as befits a great people–all together, and along a broad front.”
“In the past 7 years, there has been an average of one international monetary crisis every year. Now who gains from these crises? Not the workingman; not the investor; not the real producers of wealth. The gainers are [Liberal Capitalists]. Because they thrive on crises, they help to create them.
In recent weeks, the [Liberal Capitalists] have been waging an all-out war on the American Dollar. The strength of a nation’s currency is based on the [Arbeit] of that nation’s economy–and the American economy is by far the strongest in the world. Accordingly, I have directed the Secretary of the Treasury to take the action necessary to defend the dollar against the [Liberal Capitalists].
I have directed Secretary Connally to suspend temporarily the convertibility of the Dollar into Gold or other reserve assets, except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.
As a result of these actions, the [Total Productive Potential] of American [Totality] will be more competitive, and the unfair edge that some of our foreign competition has will be removed. This is a major reason why [the Balance of Power in Trades and Payments have] eroded over [since 1956].”
“The purposes of the [Federal Government’s] actions I have announced tonight are to lay the basis for renewed confidence, to make it possible for us to compete fairly with the rest of the world, to open the door to new prosperity.
But government, with all of its powers, does not hold the key to the success of a people. That key, my fellow Americans, is in your hands.
A nation, like a person, has to have a certain inner drive in order to succeed. In economic affairs, that inner drive is called the competitive spirit.Every action I have taken tonight is designed to nurture and stimulate that competitive spirit, to help us snap out of the self-doubt, the self-disparagement that saps our [Quality of Arbeit] and erodes our confidence in ourselves.”
This was one of the Nixon speeches which I have found to be favorable to the Work-Standard. After all, the SMP Compendium was written in light of the great economic and financial tragedies that have occurred since the First World War. The US Dollar is still not being pegged to the Gold Standard, the only thing backing the Currency now is Schuld (Debt/Guilt). Problems like trade and fiscal budget deficits, excessive taxation, government and consumer spending, out of control Sovereign Schuld, Currency Depreciation, and economic stagnation continue to plague the Union. Not much has changed; what Nixon announced was the decision to open the door to the possibility that no nation, not even America, can subsist on Bimetallism or Chartalism.
The Death of Bretton Woods was recognized by central banks in the Western world in 1973. The Fractional-Reserve Banking Systems of the world had decided that there would no longer be any more Fixed Exchange Rates. Entire Fiat Currencies were allowed to float or adopt Floating Exchange Rates. The rest of the Empire of Liberty followed suit in 1976, when the dissolution of the Bretton Woods System was formally ratified in the Jamaica Accords. To understand Bretton Woods, we need to realize why it is related to the rise of the Empire of Liberty.
1945: The Empire of Liberty’s Birth
The Empire of Liberty is a philosophical concept that originated from Thomas Jefferson, hence its associations with Jeffersonianism. The concept has gradually expanded over the centuries. At first, it meant the belief that America should expand beyond the Mississippi River. It was elaborated further to insinuate that North America and Latin America should fall under an American sphere of influence, as established by the Monroe Doctrine of James Monroe. The Monroe Doctrine coincided with the Democratic-Republican Party’s insistence on invading Canada and Cuban and Venezuelan attempts to keep themselves out of the Empire of Liberty.
Modern conceptualizations of the Empire of Liberty would occur during two Jeffersonian Presidencies in the early 20th century, guiding the foreign policy decisions of Woodrow Wilson and Franklin Delano Roosevelt. The Empire of Liberty was almost born after First World War but was curtailed by the geopolitical climate of the 1930s. The events of the Second World War would later reverse those misfortunes by the Jeffersonians, resulting in Bipolarity between the Jeffersonians and the Soviets, and allowing much of Europe and Asia to become extensions of the Empire of Liberty through a series of intergovernmental organizations established after 1945. The EU/NATO, the United Nations, the IMF and World Bank, the OECD, WTO, and the whole alphabet soup of intergovernmental organizations in the Empire of Liberty were made possible because of some pivotal Jeffersonian policy decisions in the Second World War.
The Cold War was in final analysis the continuation of the Second World War under a different name. Legally speaking, World War II in Europe did not end on 2 September 1945. It actually ended on 12 September 1990 with the signing of a new Versailles Treaty that brought about German Reunification. Some would argue that German Reunification was nothing more than a shotgun annexation of East Germany by West Germany with the full backing of the old Allied Powers. This new Versailles Treaty was called the “2+4 Agreement,” its official title being the “Treaty on the Final Settlement with Respect to Germany.”
The legal end, as opposed to the ‘official end’, of World War II signaled the Empire of Liberty’s ascendance to Unipolarity. Francis Fukuyama, in typical Hegelian fashion, captured its historical implications early on when he wrote The End of History and the Last Man. Although Fukuyama would later distance himself from the thesis of that work in the 2010s, there is something instructive about it that deserves mention here. In a world order where most nations are Liberal Capitalist Parliamentary Democracies, one might be tempted to think that recent events in the 2000s and 2010s have brought that thesis in open doubt. One could cite the conclusions of a philosopher like Slavoj Žižek, who has maintained for years that there is a growing rift between Parliamentary Democracy and Liberal Capitalism, with the economic failures of the latter undermining the integrity of the former. One could also cite conclusions of various international relations scholars that the steady resurgences of Russia and China are undermining the Jeffersonians’ hegemony over the Empire of Liberty. One can even cite the Great Recession, the populist wave of the 2010s, the Brexit Referendum, and the Coronavirus Pandemic as other signs pointing to the Empire of Liberty in a state of decline.
All of those arguments are valid ones but they do not underscore an important issue: What shall replace Neoliberalism, if one has arrived at the conclusion that it should be overcome in the 21st century and perhaps beyond? There is no doubt that the Empire of Liberty and the American Union are two separate political entities that have grown to depend on each other since 1945. But the Empire of Liberty is in fact an empire beholden to the American Union and, like all other empires, will eventually collapse under the weight of its own contradictions. When that happens, either the American Union collapses with the Empire of Liberty or the American Union survives without the Empire of Liberty.
It is difficult to ascertain exactly when the Empire of Liberty will collapse in the 21st century. The collapse might come as quickly and suddenly as a Third World War or it might be a slow and protracted one like the dissolution of the British Empire. A “Sino-American War” between the American Union and the People’s Republic of China is only going to be a stalemate for both sides of that hypothetical conflict. It is far more realistic to expect the Empire of Liberty to undergo a gradual decline and eventual collapse over the course of the 21st century. The British Empire’s demise throughout the late 20th century occurred gradually as Great Britain lost control and influence over its own colonies, resulting in those colonies declaring their independence.
In the Empire of Liberty’s case, its collapse will be the result of entire nations deciding to abandon Neoliberalism and adopting whatever Ideology and Worldview happens to be on hand. That may coincide with the US Dollar being removed from its loft position as the World Reserve Currency. It may coincide with any number of catastrophes that could force the American people to openly question and challenge the political legitimacy of Jeffersonianism, compelling to replace the Jeffersonians with Hamiltonians.
When Hamiltonianism is finally given its chance to reassert itself in America, the question of what comes after the Empire of Liberty will be in order. The new-old Federalist Party will never settle for Jeffersonian Internationalism and Jeffersonian Isolationism for the two concepts have served as the opposing poles of foreign policy decision-making for the Democratic-Republican Party. Instead of trying to sustain the Empire of Liberty through its own Life-Energy, the new-old Federalist Party will try to implement its own world order, a world order where America exists as one world power among several prominent world powers. Multipolarity, rather than Bipolarity or Unipolarity, would be capped by the World State Organization (WSO).
The WSO will be responsible for helping to facilitate the Work-Standard. It will replace the Empire of Liberty’s entire post-1945 intergovernmental organizations. The WSO presides over the International Internet that all National Intranets are connected to, acts as the medium to promote peace, cooperation and prosperity among nations, and lay the foundations for a “Socialist World Order” where Corporatists, Syndicalists and State Capitalists are allowed to exist.
Categories: Compendium
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