"War is nothing but the continuation of state policy with other means."
Clausewitz.
"Trade is only the continuation of conflict with other means."
JMF
Central to the discussion contained in this blog is the notion of primus inter pares, first among equals, which describes an unresolved tension among states performing equal status but wielding unequal influence. It defines the Pax Americana in the West after World War II and in retrograde analysis of its effective absence, the whole of the Twentieth Century.
The early decades of the Twentieth Century can be accurately characterized as the Great Anarchy of Sovereign States which had been building since the Thirty Years War and was realized in the Long Depression of 1873 to 1895 and its boom and bust consequences. It was, as Yeats termed it, mere anarchy holding no higher ground than political slogans and it destroyed the world financial system.
The Bretton Woods agreement did not install the United States as primus inter pares. It recognized the reality of a rich, healthy America astride a war torn world by making gold and the dollar reserve currencies and dooming the United States to structural deficits due to the necessity of being a reserve currency and supplying the world with dollars (Triffin's Dilemma). It installed the United States as a fiduciary steward of a new world order with overwhelming responsibilities which it handled reasonably well. That is the context to the argument of this blog.
We have dealt with states as primary global actors since the exhaustion of the Thirty Years War caused a new rationalization of international relations. It is what drives the second of the two statements anchoring this blog. It is, simply put, that trade at significance requires a certain order, not exactly peace but order to function effectively. Contracts must be honored and enforced and currencies be reliable as preconditions to the creation of wealth that legitimate trade brings. Trade rationalizes the policies of governance into action. It reifies the tensions of foreign relations into cash transactions by requiring cooperation among sovereign states.
What begins as sovereignty and policy turns to conflict as it can be afforded and then continues in a lesser contest as trade when it cannot.
Trade is order. Order is trade.
As relations crystallize from conflict into a stable order, trade to mutual benefit becomes thinkable and cooperation becomes valuable. That is what drives the Pax Americana and increasingly the new world order.
Do Well and Be Well
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