Bottom Line: We will not return to Normal. I think that what’s coming, after the West’s self-inflicted shut down in response to something less impactful than the Flu Season of 2018-2019, will be a new normal potentially every bit as tough as the Great Depression of the 1930s and World War II.
That said, this is worth analysis and history.
International Strategist Peter Zeihan in his phenomenal tome, The Accidental Superpower summarizes: 1 July 1944, 730 delegates from the 44 Allied Nations and their respective colonial outposts met in Bretton Woods, New Hampshire. Their mission was nothing less than to decide the fate of the post-war world. On the eve of the conference, all delegates knew the upper hand the Americans possessed. At this point, the United States ran the allied side of the war. Everything from Sicily to Saipan was in essence an American effort fought with American equipment, American fuel, and in terms on Manpower, the fronts were largely American efforts.
Read Peter Zeihan for the fascinating specifics but two things came from Bretton Woods. First was the American declaration that we were not going to establish a Pax Americana. With that declaration, the other delegates could have been knocked over by a feather. Many of our Allies would not have been this charitable had they held the upper hand. The second was equally surprising as the United States opened up its markets to the allies, and even the defeated nations of Germany and Japan, after World War II ended. To support that, the United States promised to use its immense Naval capabilities to protect ALL merchant shipping, not just US flagged shipping.
As Colin Powell said in a speech, the only thing the US asked for at the end of World War II was enough land to bury our dead Soldiers, Sailors, Marines and Airmen who fought for liberty.
The results, 70 years after Bretton Woods, are surprising in spite of the statistical immensity of the US negative trade deficits.
Back to Peter Zeihan again: At Bretton Woods in 1944, the United States produced one quarter of world GDP. It was the same in 2014. At Bretton Woods in 1944, the United States was responsible for 50% of defense outlays, roughly the same in 2014. At Bretton Woods, the United States commanded about half of naval tonnage, the same as 2014. At the time of Bretton Woods, the United States was the only country in the world that hadn’t had foreign boots on its soil in over a century, and that continues to today.
American Business and production produced a far less intrusive Pax that the world enjoyed, as opposed to an imperial Pax Americana.
That engine is now in quarantine. Too many small to medium businesses – perhaps a number of large ones – will not reopen their doors once COVID is ‘defeated.’ I put quotes around that because COVID is something all of us will eventually get. Then comes COVID 20.1, 22.4 and even 25.7. Are we shutting down for those as well?
At any rate, we see hints of the next Great Depression beginning in China. One of the purposes of economic Depression / Recession is liquidation of debt and there is a lot of debt ranging from personal to corporate to national.
The United Kingdom suffered Economic Depression after what we call the French Indian wars. What followed was our first Great Awakening and the American Revolution. The thing that followed the American second Great Awakening was a field exercise called the Civil War. After our third Great Awakening came the Great Depression then the worldwide conflagration called World War II.
It is my theory that what comes after COVID will reduce that virus to a historical footnote. There is a curve of lethality associated to COVID but that is not the most important one.
I seriously hope we have one more Great Awakening but what follows in a world no longer framed by Bretton Woods? A world in which one already collapsing nation – China – has nuclear weapons? Another one of my theories is that what we call Industrial Revolution 4.0, and the convergence of cognitive and digital, will see introduction and use of weapons and warfare that will take the curve of lethality to even more exponential extremes. In my opinion, the most important Curve of Lethality, far worse than the COVID curve, will be T.N. Dupuy’s historical laydown on the number of men a man can kill in and hour. It ranges from 20 or so with swords, bows, and arrows, to hundreds with tanks and machine guns, and finally to millions with nuclear weapons. Industrial Revolution 4.0 will take that to even greater extremes as the 70-year economic boom of Bretton Woods dissolves in the wake of COVID. Yet, Industrial Rev 4.0 will not just be an exponential add-on to the curve of lethality. It will also be asymmetric.
Inman – Looking at Snow Covered Pikes Pike and wondering what kind of world my kids and grandkids will inherit after our international foolishness in facing COVID.
I’m currently working on my next book, God is Woke – particularly chapter two, the Domains of War in the Unseen Realms.
2 thoughts on “COVID, Bretton Woods, and Industrial Revolution 4.0”
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