Previously on this blog I discussed the manner in which America, as part of the global economy, failed to lead said economy into a new age of prosperity in the wake of World War I. This failure can be attributed to several different historical causes: for example, the economic consequences of the Treaty of Versailles (nations being unable to pay reparations without depending on U.S, securities), instability in financial markets originating from New York’s Stock Exchange, and so on and so forth.
Interestingly, Rauchway elaborate on this failure in international economic leadership, arguing that it continued during the Great Depression during the presidency of FDR. After the global financial system collapsed (very much because of American political failures) American credit and banking policies strove for recovery. However, these recovery efforts were not aimed at stabilizing the world economy, just as the pro-business policies were not aimed at building a fundamentally sound world economy. Rather, these enterprises, although enacted in different time periods with different economic standings, were undertaken for the same sole purpose: American prosperity and well-being.
The policies FDR developed early during his presidency were aimed only at preserving American economic sanctity. Monetary policy expansions brought gold into the nation, thus allowing FDR to inject new sources of wealth into the economy and create jobs for Americans. But this policy did not aid take into consideration the economic impacts felt by other nations whose citizens were individually contributing to a net outflow of wealth; as such, other countries began to feel the financial pressure of dwindling money supply in a time of rampant Depression.
Could it have been that Roosevelt was not actually aware of what affect this had on the world economy? It is possible, as economic knowledge was not nearly as pronounced as it is today, but altogether unlikely. Rather, FDR made a point of establishing to the world, whether explicitly or implicitly, that his primary goal was to reinvigorate the America even if at the necessary expense of worldwide economics, regardless of how dire others’ situations were. In fact, Roosevelt himself conveyed this sentiment to the international community in 1933 by stating his professed belief that the internal system of any nation is the greatest factor in it’ well-being, not the international linkages it might develop with other countries.
The rest of the world, then, was left to search for answers in the darkness of the Depression. Some countries left the gold standard, as FDR did in 1933; others sought to reimpose themselves on their historical colonies, thus invoking older economic mercantilist practices. In addition, radical political developments emerged: fascism and nazism sprung up in Europe promising socioeconomic and racial order, while communist movements such as the one in Russia used the worldwide scare to strengthen their own statehood and dominion. We see, then, that America’s failure to lead the global economic system that so desperately needed leadership manifested itself in the coming worldwide strife of World War II. But it should be noted that World War II also presented a chance for the United States to repent for those failures, a chance it readily took. Whether or not those failures have actually been amended forever is a matter of debate.
An American Inquiry 