Extracts from his Book the Road to War by Dickson Igwe
By 1950, owing to its backing of its allies with its industry and military might, and then financing the rebuilding of a war-devastated world through the provision of US debt and financing, defined and denominated in Dollars, the USA was 50% of the global economy.
Germany and Japan, the two main adversaries of the Second World War, were powerful military and industrial machines in their own right after a determination to match the USA in terms of industry and enterprise. Japan had started this process as far back as the late 1800s, when imperial ambitions began. Japan had been an industrial power from the early 1900s.
The reason Japan was able to completely subdue the Asian Pacific, including China, Malaysia, Hong Kong, Singapore, Burma, Indonesia and the islands of the Pacific, such as the Solomon Islands
However, unlike the USA, Germany and Japan were limited in the scarce natural resources such as oil and iron ore that fueled war-making machines of the time.
The USA, on the other hand, was a self-sufficient country in terms of energy, minerals, and agriculture that are critical in war. In fact, the USA was so abundant in its providence it could supply its allies with everything they could possible need to exist in a time of war.
After the war ended with victory for the USA, Britain, France and Russia, the USA rebuilt the war-devastated world through Dollar debt.
Countries borrowed heavily from the USA that in turn supplied them with Dollars produced by the Federal Reserve. This debt to the world was valued in Dollars and repaid with interest using Dollars produced by the USA.
The USA could afford to take on the debt that it lent to others. This it did by adopting vast deficits. The difference between the US cost of borrowing and the cost of borrowing of alien states was the profit margin of the Dollar.
The US furthermore had the power to produce this debt currency, as foreign governments post the 1945 War were desperate to have the US backing for their economies. They therefore borrowed from the US, which in turn borrowed from investors and consumers in the form of US debt stock.
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4 Responses to “Extracts from his Book the Road to War by Dickson Igwe”
Moreover, after the war, the US emerged as the major economy. Whatever it produced sold regardless of the quality, for it had little to no competition. US businesses and producers had a chip on their shoulders, believing they were the best for whatever they produced sold like hot bread and cheese. However, the other countries, ie, Germany, Japan, etc., focused and built quality into their products. They reversed engineered US products, asked US customers what they wanted, ie, smaller, fueled efficient,,quality automobiles. etc. For example, the Japanese recruited Dr. W. Edward Deming to teach/,build quality into their products using Statistical Quality Control, Total Quality Management (TQM), etc. Workers were empowered to stop the line when products were not meeting set minimum quslity control standards. They were providing competition for the US. However, the competition driove US to get more competitive. The West, including the US, Canada, Central America and Caribbean was the new world. Nonetheless, the New World has shifted; it is now the global South..The US fighting, clamoring, etc,,to bring some industries it lost to more economical offshoring( cheaper labor, globalization) back on shore. But is proving to be challenging. The US is trying to force feed on shoring.