An Italian Prime Minister at the Versailles Conference at the end of the Great War of 1914-18 was shocked to find that the British believed their own war propaganda and were therefore incapable of making a peace settlement based on fact.
The Versailles Settlement was a punitive arrangement, based on a morality generated by wishful thinking, and therefore it could not hold.
The British, who were then masters of the world, denied that they were motivated by self-interest in launching that War or in making a punitive peace, within a few years found that self-interest impelled them to begin subverting the punitive settlement they had made and begin dealing with the factual consequences it had led to.
That led to a second Great War, 1939-45, which was even more moralistic than the first. But the fund of moralistic fanaticism that raised an army of millions for the first Great War had been all used up and could not be regenerated for the second!
Britain had sufficient leverage in the world to bring about the Second World War, but lacked the power to fight it to a conclusion. The conduct of the War therefore passed into other hands: Russian and American.
For that reason the War ended in a factually-based settlement of the world that lasted for close on half a century. Russia and America divided the world between them on the basis of accomplished fact.
Russia, in the course of defending itself against the assault on it by an alliance of European States, came into possession of many of them, and then held them in subordination as its sphere of influence instead of withdrawing and leaving them free to renew their assault.
The United States held the rest of Europe by right of having conquered it in 1944/5.
Europe had for about 500 years been an active force in the world, ‘discovering’ the rest of it.
All corners of the world were brought into play by the two Great Wars of the 20th century. The more or less agreed division of Europe in 1945 was in effect a division of the world.
The great change that has happened since then is that the states of the world today are rivals, tending towards enemies, in a world market, while in 1945 the world was not yet a market.
The economic force which fuelled the destruction of fascist Europe [communism] had been constructed on non-market principles. It was constructed outside the world market created by the British Empire and in defiance of it.
It is an open question whether, if Britain had refused the American demand to open a Second Front against Hitler Germany in
1944, and the Russian defensive action had carried through into France, whether Europe would have made a rapid transition from Fascism to Communism.
Fascism developed as an intermediary system between Communism and Capitalism which enabled the strong Communist development in the post-Versailles chaos to be held in check. Such evidence as there is suggests that it could co-exist with either of them. The unstable element was free capitalism—whose mode of existence was such that it must expand continuously or break down, and could not rest in a political settlement.
Britain had been in a condition of political drift since its Great War moral frenzy wore off and its War Coalition regime was defeated in 1922.
It collaborated actively with Hitler from 1934 to 1938 and seemed to be on the way to adopting a more genteel form of Fascism. But then, in March 1939, it suddenly changed course in a way that pointed to another War on Germany.
At the end of that War it was politely treated by Russia and Germany as a third Great Power. It still had most of its Empire. And, despite virtual bankruptcy in two World Wars, it still had its own world money system, sterling. But it seems unlikely that it had the resources or the acumen to put Europe back on a capitalist footing. It was America that took the half of the world that was to be capitalist in hand, and made it work.
The day of real national currenciescurrencies not based on State policy—was over. New states were being created in a new way. They were not the product of an internal dynamic that was making its own way in the world. They were products of external forces which laid everything on for them—including a money system.
The money system supplied for postFascist Europe was based on the dollar. The BBC, apparently groping for a non-American account of things, has described the dollar-based currency of the world as having been established by swindle. J.M. Keynes, the magical British economist had, in negotiations with Harry Dexter White, a Communist in Roosevelt’s administration, got agreement for a gold-based universal currency, when Keynes collapsed with a heart attack. When he recovered he found that White, in his absence, had changed gold to dollar as the basis for the new currency.
It is an unlikely story! But that is what we were told by David Dimbleby on BBC Radio 4! (See “https:// www.bbc.co.uk/mediacentre/2026/daviddimbleby-new-series-invisible-hands-theamerican-century” Invisible Hands: The American Century.…”
Keynes certainly seems to have had the notion of an autonomously functioning world currency in which gold played a part. But his main business in Washington was to keep Britain and the Empire afloat with American loans, and beg for an enormous gift so that Britain could play a part after the War in restoring the world it had led to destruction.
He tried to play on American guilt feelings over being two years late in coming into “the War” and asked for 6 billion dollars as compensation! But America didn’t believe in “the War”. Britain and France had resented its interference in the post-1914-18 War settlement imposed on Germany in 1919. So America left them to their own devices. But they made a mess of things again, and it again pulled their chestnuts out of the fire in 1946, with a loan of $4 billion—but with strings attached. (I suppose a billion then would be a trillion now.)
Keynes was a ‘Bloomsbury’ socialist with liberal yearnings for the free-ranging Capitalism of Cobden and Bright, and sought to reproduce it in a medium of a World Bank conducted by detached economic technocrats. But his material base was Britain and him immediate wider concern was its Empire. And America knew just what
Britain was at the end of its second adventurist World War. It was living on American life-support. So Harry Dexter White—economic adviser to US Treasury Secretary Henry Morgenthau Jr.—decided that Europe should be restored to capitalist life in the medium of the American dollar.
It seems that President Roosevelt was willing to accept the outcome of Britain’s unnecessary war as determining what the future should be, and to base a system of joint Washington/Moscow dominance on a civilised relationship. But he died, and his nondescript successor, inspired by Churchill, launched the Cold War. And Harry Dexter White was to be accused of un-American activities.
The IMF was what emerged from those Washington negotiations. The pressure of the non-capitalist half of the world kept American policy relatively honest. But the Soviet collapse of 1990-91 disorientated the US—left it without an environment.
President Obama worked out what the new order of the world was. He said that America was the only indispensable nation, and that American sovereignty followed the dollar around to world to all the currencies based on it under Harry Dexter White’s system. And President Trump has based himself entirely on President Obama’s insight.
President Trump has now ordered the world to stop trading with Iran so that Iran will perish. He says that any country that disobeys will itself be punished. He thinks it would be a pity if America had to destroy the global economy it created but, if it becomes the Manifest Destiny of the moment, so be it.
Meanwhile Europe is undergoing its own little sideline development!…
As a result of British prompting, the European Union created by France and Germany as a way of limiting Britain’s interference in European affairs, the Union started to expand beyond its original members. It now contains many entities which have no real history as independent polities. They are motivated by atavistic hatreds and have little capacity for statecraft.
This debased European Union has reverted to being a tool of British foreign policy. And, unfortunately, Britain has reverted to its traditional war-making trajectory. It is hard to see any outcome in coming years but an attempt to have a third World War—this time directed against the Russian Federation. It will be Germany’s Third Great War against Russia!
The British plan is to stay out of the fighting, while promoting the War by all possible means. And eventually the populace will be brought to regard it as ‘their’ War: the Third World War is looming on the horizon. Will America permit it?
Such is the world today.
Brendan Clifford
