BOOK REVIEW

God and Gold
by
Walter Russell Mead

FUTURECASTS online magazine
www.futurecasts.com
Vol. 10, No. 12, 12/1/08

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Anglo-American Liberal Capitalist Modernity

Peace in our time:

 

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  The Anglo Saxon powers have been victorious in every major conflict for more than three centuries. Walter Russell Mead, in "God and Gold: Britain and America and the Making of the Modern World," notes that after every major conflict, hopes have arisen that now at last men would put war aside and live in peace in an increasingly free and prosperous world.
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  This vision appeared in the 18th century poetry of George Berkeley in "On the Prospects of Planting Arts and Learning in America" (1752) - just before the Seven Years War. Alfred Tennyson, in "Locksley Hall" (1842), expressed similar hopes just before revolution swept areas of Europe in 1848. George Angell wrote an immensely popular book, "The Great Illusion" (1910), arguing that economic integration and interdependence had made war too economically disruptive and costly for rational men to contemplate. He was right - but the two world wars that followed were not the result of rational leadership.
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  In the aftermath of The Great War there were many like Pres. Woodrow Wilson who firmly believed that mankind could never again even contemplate another major conflict. The famous Kellogg-Briand Pact declared war illegal. It was ratified 85-1 by the U.S. Senate. It still technically outlaws war eight decades later, during which time WW-II, the Cold War and myriad lesser conflicts have broken out and run their course. It was not the last time that men of good will put their faith in a piece of paper to protect them from aggression. When the Evil Empire collapsed, once again there were hopes for universal peace. An "end to history" was predicted.

  "No doubt when and if the last fanatic terrorist in the Middle East lays down the last bomb, we shall hear once again that war is a thing of the past, and that the parliament of man is about to assemble and inaugurate the Federation of the world."

  There is, of course, a difference between rationalization and reason. Rationalization involves the shaping of facts and logic to support conclusions already adopted - rather than the process of drawing conclusions only after analysis of the facts as best they can be discerned.
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  Because of the dominance of vested interests of various sorts, there is far more rationalization within intellectual circles than reason. The talking heads that shout at each other from your television are far more likely to be involved in rationalization on behalf of political, business, ideological or other interests than in reasoning. Those who support military action predict that the boys will be home by Christmas. Those who oppose it predict a blood bath. By shear coincidence, they are each sometimes right.

  What, then, has been achieved by three centuries of struggle and impressive victories? How was it achieved? Is a peaceful world even possible? To provide answers to such questions, Mead begins logically by examining the past - extending back actually over 400 years starting with the struggles between England and Spain.
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  Mead provides a broad brush review of modern history and the forces that have shaped it, analyzes the success of the Anglo-American powers during the last few centuries and how they have interpreted that success, explains the role of their "maritime order," the dominance of liberal capitalism, and the cultural resistance that it generates.

 A broad brush approach is, of course, unavoidable in a book of this type and at no point is in actual error, but a vast array of explanatory texture and detail is inevitably omitted.

A history of triumph:

 

 

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  Since the late 17th century - since the "Glorious Revolution" of 1688 when the Dutch under William III conquered England - the Anglo-Saxon powers have increasingly fought under the banner of political and economic freedom and always against despotisms of various sorts. Thus the conflicts were presented as a battle between good and evil, freedom and slavery. In winning, the Anglo-Saxon powers "changed the way the world lives, thinks and organizes itself."
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Liberties are often constrained while nations fight to preserve their liberties.

  Their major opponents - France, Germany, Japan and Russia - have viewed the Anglo-Saxon powers as "cold, cruel, greedy and hypocritical." An "anti-Anglophone" ideology has gained considerable support worldwide.
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  There is much, of course, in Anglo-American history on which to draw in behalf of such beliefs, as Mead reviews at some length. He dedicates 20 pages to 300 years of ideological failings involving repression of Catholics, communists, radicals and other dissidents during the often lengthy periods of conflict. He notes the many times that tactical needs drove the Anglo-Saxon powers into alliances with brutal dictatorships.

  There is no virtue in tactical stupidity! If Stalin is fighting Hitler, you provide support for Stalin.

  Also carefully noted are the brutalities with which wars are fought - on all sides. He examines the wartime propaganda of the Anglo-Saxon powers. He sheds a critical light on that propaganda that it of course can not stand up to. He notes how liberties are often constrained while nations fight to preserve their liberties.
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  Whether Spanish Hapsburgs, French Bourbons, French radicals or Napoleon, the enemy was viewed as seeking world domination - as enemies of liberty and human freedom worldwide - with a hatred for English values and culture - and unwilling to be bound by any restraining influence or even by treaties. The fight was thus for the benefit of all mankind. Nevertheless, in the fight against Napoleon, the Hapsburgs and Bourbons became valued allies - along with the Czar of Russia and other assorted absolute monarchs. Even the Catholics were rehabilitated. (Against Napoleon, Britain needed all the help it could get.)
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Anglo-Saxon moralizing is often trotted out to the advantage of Anglo-Saxon interests.

  In their 20th century conflicts, the Anglo-Saxon powers again drew on the "evil empire" theme for their wartime propaganda. Wilhelm, Hitler, Hirohito, Stalin and Brezhnev made good propaganda targets. Thousands of people of German and Japanese descent were interned during WW-II. Restrictions were quickly broadened to cover domestic radicals and other dissidents. Criticism of government was censored.
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  The same propaganda techniques are today being used against al qaeda and other Muslim militants. (However, the Anglo-Saxon governments have moved aggressively to protect the rights of Muslim residents, and radicals and other dissidents have received widespread press coverage.) Beyond actual conflict, Anglo-Saxon moralizing over third world "sweat shops," tuna nets that kill dolphins, protectionism, bribery, smoking, workplace sexual harassment, ethnic cleansing, excessive use of saturated fats, is often trotted out to the advantage of Anglo-Saxon interests.
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The American Revolution was based, after all, on asserting "the rights of Englishmen."

  After WW-II, the U.S. accepted the burdens of world leadership. It has attempted to reduce the risks of atomic conflict by encouraging the spread of economic and political freedom - capitalism and democracy - with order and justice under law. The Anglo-American relationship has remained a feature of international politics.
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  Mead goes at length into the cultural similarities between England and the U.S. and their similarities as offshore European powers of mixed immigrant descent. The American Revolution was based, after all, on asserting "the rights of Englishmen."
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   Because of waves of immigration, the term "Anglo-Saxon" refers today to a common culture rather than to an ethnic heritage. By broadly accepting the mix of Anglo-Saxon values and participating in civil society, immigrants and their descendants assimilate as Englishmen and Americans. They become indistinguishably rowdy and litigious, "surly, snarky, enterprising, self reliant and free."
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  There were an increasing number of English and American commentators during the 19th century who believed that the Anglo-Saxon powers were destined to reform the world in their image.

  "Commerce, the English language, democratic political institutions, and the Christian religion: these were the blessings the Anglo-Saxons would bring to the world; these were also the instruments that would allow them to rule it."

Anglo-Saxon capitalism is presented as producing only winners and loser, with no social safety nets.

  Anglophobia is the ideological opposition to this vision. "Anglo-Saxon capitalism" is the most common epithet. Viewed from afar, it is presented as producing only winners and loser, with no social safety nets. Mead reviews the long history of French rivalry and its accompanying propaganda themes. From the late 19th century, these were turned equally against the U.S. These themes are now picked up around the world by religious traditionalists, populists and socialists. It is a propaganda that promotes "a fear and hatred of the political, social, and economic basis of Anglo-American civilization." It is today employed against democracy and market capitalism regardless of the ideological type of the adversaries.

  "One can see the same pattern in Iran and throughout the Arab world, where secularists, socialists, and Islamic radicals have sought to shape a resistance to British and American power." - - -
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  "Cruelty and greed in the service of an inflexible, absolute, and utterly inhuman will to power, made more formidable in an insolently arrogant hypocrisy and exuding an irresistible but intolerable vulgarity: that is what our enemies since the seventeenth century have seen when they looked our way."

  Opponents have for centuries accentuated all the political and social sins of the Anglo-Saxons and interpreted their cultural virtues as hypocrisy or even heinous criminality. Mead presents an extensive account of this effort. The twisted logic of Marxian propaganda provides rich pickings for all manner of Anglophobes. The cruel greed of the "New Carthage" was a common theme.

  "Lenin's analysis of imperialism, Hitler's analysis of global politics, the political strategies of Stalin and Mao all incorporated these core views as surely as they inform the speeches of Venezuela's Hugo Chavez or Zimbabwe's Robert Mugabe."

Anti-Semitic propaganda was stirred into the pot based on the acceptance that Jews received in the Anglo-Saxon world.

  As American populist culture spread out across the world, it was quickly recognized as a challenge to the cultural dominance of elites and traditionalists everywhere. It thus found everywhere those who reviled it. Again, French critics led the attack. In modern times, anti-Semitic propaganda was stirred into the pot based on the acceptance that Jews received in the Anglo-Saxon world.
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  There have been several modern strains of opposition to the liberal capitalist modernity of Anglo-Saxon culture. Mead notes anti-Americanism, Occidentalism, and Waspophobia. It matters not that the propaganda supporting this opposition is incoherent. Mead provides a few examples from opposition propaganda.

  • America is a contemptible, exhausted, decadent society - but it is also voraciously dynamic and expansive.

  • American men are reckless, quick-drawing cowboys trampling over all restraints and civilized norms - but they are also feminized weaklings under the thumbs of domineering wives.

  • Noble American blacks are oppressed and suppressed - but American blacks degrade and mongrelize American society and spew cultural filth over the world's vulnerable youth.

  • America is evil because it is fundamentalist and Christian - but it is also evil because it is ruled by Jews.

  "It appears today that some elements among the remnants of the Marxist left, radical Greens, miscellaneous postmodern radicals of various hue, and radicalized Muslims are searching for a way to unite around the only issues that connect them: hatred of liberal capitalist modernity, Israel, and the United States of America."

  In the rants of Osama bin Laden, one can readily recognize the rich history of centuries of anti-Anglo-Saxon propaganda. Muslim militants - from Sunni al qaeda to Shia Iranian fundamentalists today build their propaganda against liberal capitalist modernity from this rich historic vein.
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  Thus, both Anglophiles and Anglophobes both claim to be serving God. "They can't both be right."
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  There are elements of truth in Anglophobe propaganda, of course. In 400 years of history during numerous conflicts and considerable social change, much has occurred that nobody today would be proud of. Yet, there are few advocates for the restoration of the vanquished Anglophobe illiberal opponents of the Anglo-Saxon powers. Catholic absolutism, Napoleonic megalomania, Prussian militarism, Nazi Germany and Imperial Japan, vicious Leninist party absolutism, the murderous paranoia of Stalin and Mao, the "mind-numbing sterile bureaucratic repression" of the Leonid Brezhnev communist regime, have all been consigned to the dustbin of history with few regrets.

  "The Anglo-Saxon powers have established the most extensive, powerful, and culturally significant hegemony that history records -- and this in the teeth of bitter opposition by rich and powerful states capable of waging both military and ideological campaigns against the Anglo-American order. The Anglo-Americans have gone from strength to strength, from riches to riches, while their opponents suffered ignominy and humiliation until they learned to accommodate themselves to the Anglo-Saxon order."

  Indeed, just listing the primary enemies of the Anglo-Saxon nations is the greatest justification for their efforts and sense of accomplishment. Even today, their enemies are their greatest strategic advantage. Indeed, Muslim militants have been rejected by Muslim electorates from Indonesia to Pakistan's Northwest Territories to Afghanistan and Iraq.

Many of these opponents still stupidly await the imminent collapse of liberal capitalist modernity that was promised by Karl Marx and has been so "unaccountably delayed."

  This history of triumph enrages Anglophobes. Incredibly, many of these opponents still stupidly await the imminent collapse of liberal capitalist modernity that was promised by Karl Marx and has been so "unaccountably delayed." Instead of the expected imminent collapse, the Anglo-Saxon powers keep growing stronger after each turn of the business cycle as their adversaries perish.

  "Underneath the screams of hatred and defiance from men like Osama bin Laden and Abu Musab al-Zarqawi lurks the knowledge that the tide of history has flowed toward the English-speakers for a long time now."

  This is viewed by the people of the Anglo-Saxon powers as proof that God is liberal and supports their struggle against the variety of illiberal opponents. For the secular minded, it is viewed as proof of the natural superiority of liberal capitalist modernity. (Indeed, it must have something to do with the strengths of liberal virtues since - although great leadership has occasionally and providentially appeared - political leadership has more often been weak.) A strategy of persistently tearing down economic and political walls seems to be irresistible over time. "Something there is that doesn't like a wall," Robert Frost famously observed.

Gold

Strategy:

Great Britain and America simply followed the logic of their geography, culture and society.

  The essence of Anglo-Saxon grand strategy remains essentially unchanged through three centuries of extensive and accelerating change in almost every other sphere. That strategy was originally a reflection of geographic and social circumstances rather than conscious choice. Great Britain and America simply followed the logic of their geography, culture and society.
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Maintaining a superior navy is far less burdensome than a standing army and offers the huge strategic and commercial advantages of command of the seas.

 

An open society, with world trade and worldwide maritime power allowed the tiny Dutch nation to flourish while maintaining its independence during the brutal wars of the Reformation.

  As offshore European powers, Great Britain and the U.S. had extraordinary advantages. The English Channel and Atlantic Ocean have been marvelous moats and tank traps. Maintaining a superior navy is far less burdensome than a standing army and, as Admiral A. T. Mahan explained, it offers the huge strategic and commercial advantages of command of the seas.

  Japan had similar advantages but, until the last 150 years, it chose to pull up the draw bridge instead of engaging in continental affairs. Perhaps that is because there have been so few periods when China was not a huge unified continental power.

  It was actually the Dutch, in the 16th and 17th centuries, that developed the winning formula. An open society, with world trade and worldwide maritime power allowed the tiny Dutch nation to flourish while maintaining its independence during the brutal wars of the Reformation. For 80 years, the Dutch beat back the assaults of the mighty Spanish armies.
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  Early in the 18th century, England became the top maritime power. It assumed leadership of alliances in fending off the rising power of France. The War of the Spanish Succession followed the War of the League of Augsburg, during which England was allied with the Netherlands, Austria and some German states against France and Spain.
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  The Dutch were not an offshore European state, and so had to pour resources into their armies, surrendering their maritime predominance. France, too, was primarily a land power. Its maritime commerce was ruined during these early wars with England. It all ended in 1713 with the Treaty of Utrecht, which left England dominant at sea and France weakened on land. Britain picked up Gibraltar, Minorca and vast territories in Canada, increased its influence in India, and gained trade openings in Spanish Latin America. This included the lucrative triangular slave trade. As an opponent of Spain,  Britain gained Portugal as a valuable ally.
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The navy was also useful in extending maritime commerce, worldwide influence and empire.

 

Creation of a favorable worldwide commercial and military architecture that facilitates economic prosperity and military security is far better than constant engagement in conflicts over bits of territory.

  The strategic concept of the balance of power in Europe was added by the British to the Dutch model.  "Countries had a right and indeed a duty to act when necessary to preserve [the European balance of power]." By keeping the dominant European power from subjugating the other continental states, England could rely on the Royal Navy for its protection. This was handy since the navy was also useful in extending maritime commerce, worldwide influence and empire. (A navy was also conveniently less of a threat to personal liberties than a standing army.) Britain's continental rivals would always have to divide their military resources between land and sea forces.
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  Anglo-American strategy has ever since included support for "coalitions of weaker countries against the strongest." Of course, today, the balance of power is global.

  "The balance of power is a universal factor in international relations; all countries, not merely the British, the Americans, and the Dutch, have used it. What makes its use unique in the maritime system, however, is the way that the maritime powers have linked and leveraged it with a global strategy that, over time, has brought increasing rewards."

  The rewards are not just territorial. They include "the construction of a global system that meets [Anglo-American] economic and security needs." Holdings in India and Canada are more useful than in Normandy and Anjou. Creation of a favorable worldwide commercial and military architecture that facilitates economic prosperity and military security is far better than constant engagement in conflicts over bits of territory.
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  During the Seven Years War - of which the American French and Indian War was a part - Prime Minister William Pitt brought all three strategic forces into play to defeat France. Taxes and credit provided the financial resources to build navies and armies and to support Prussia.

  In "The Wealth of Nations," Adam Smith would express alarm over these vast debts - only to express even greater alarm in later editions over the far greater debts of the American Revolution. Of course, the debts of the Napoleonic Wars dwarfed all prior debts - to the great consternation of David Ricardo. In each event, Britain simply grew out of its wartime debts - something it could no longer do in the 20th century as increasingly a welfare state.

"The American economy became a decisive weapon of war, as Britain's had been against France under Pitt."

  France was thwarted everywhere. It could not dominate Europe and it lost territory in North America and India. Its commerce at sea was attacked and blockaded. In the 1980s, Ronald Reagan would essentially apply the same strategy against the Soviet Union.

  "Reagan attacked Soviet economic interests by placing sanctions on its economy and the economies of its satellites; he sent military aid to the USSR's enemies and opponents from Central America to Afghanistan. And while doing all this, he inaugurated a high-tech arms race that the Soviet Union could not win. The American economy became a decisive weapon of war, as Britain's had been against France under Pitt."

  Reagan could do all this only because he supported Federal Reserve Chairman Paul Volcker's efforts to strengthen the dollar. A weak dollar weakens the U.S. and strengthens its adversaries. Whenever the dollar strengthens, the U.S. strengthens and its adversaries weaken. As FUTURECASTS has repeatedly explained, given the limitations on the application of military force, it is the dollar that is today the decisive weapon.

  Napoleon upset this strategy for awhile. Britain was not able to sustain a continental balance of power against him. He defeated all the neighboring European powers. Once he had secured his continental rear and taken Belgium and its vital ports, he could command all the resources of Europe and channel them into building a naval force that might defeat the Royal Navy and support an invasion of Britain. "Britain now faced something new: a single great land power that dominated the European continent."
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  Napoleon had defeated two European coalitions raised against him, but each time British gold supported their recovery and renewal, and British manufacturers rearmed them. England was the heart of his imperial problems. In 1803, Napoleon planned to push the Royal Navy aside and invade England. An alliance with Spain - still a formidable naval power - gave him superiority in heavy ships of the line. Although outnumbered 22 to 33, Admiral Nelson, at Trafalgar, captured or sank 27 of the French and Spanish ships without loss of any of his own.
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  Napoleon's Plan B was to dominate all of Europe and turn it against Britain by cutting off all British commerce with its vital European markets. Britain responded by supporting a third and then a fourth coalition against Napoleon only to see them smashed at Austerlitz, Ulm, Jena, Auerstadt and Friedland. Napoleon closed off Britain's European markets, but he could not close off its global markets. Only tiny Portugal at one end of Europe and vast Russia at the other end were not under his control. Napoleon turned against them - and together they proved to be battlefields too far even for Napoleon.
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  Neither Russia nor Portugal posed any danger to Napoleon. However, they had extensive commercial ties to Britain. Failure to cross the English Channel forced Napoleon into Russia and Portugal. Hitler would react the same way in attacking Russia and Suez by way of North Africa. They, too, would prove battlefields too far.
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Spain, France, Germany and the Soviet Union all won many victories, but ultimately went bankrupt and declined due to the financial strains of their conflicts and the crushing of their overseas commerce.

 

Britain created "a new kind of world" around maritime commerce, self-governing English dominions, vast imperial holdings, the spread of English as the dominant second language, the spread of the protestant religions, and English values.

  The war enhanced Britain's worldwide position while it exhausted its much stronger continental adversary. Not until the end of the 19th century would another continental challenger arise.

  "Time and time again, the Anglo-Americans have suffered terrible defeats in Europe and Asia; time and time again, they have turned to their command of the global system to deny its resources to their enemies -- and to acquire the resources they need to raise up new coalitions to replace the ones that have fallen apart."

  Spain, France, Germany and the Soviet Union all won many victories, but ultimately went bankrupt and declined due to the financial strains of their conflicts and the crushing of their overseas commerce by the Anglo-Americans. The North used the same strategy against the South in the American Civil War. The finances of the Anglo-American powers were always rejuvenated by their global commerce. During the American Civil War, this strategy was called the "Anaconda Plan." In the Cold War, its was "containment."
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  With victory over Napoleon, Britain didn't just create an empire. It created "a new kind of world" around maritime commerce, self-governing English dominions, vast imperial holdings, the spread of English as the dominant second language, the spread of the protestant religions, and English values.
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Britain backed the Monroe Doctrine to assure British access to Latin American markets.

  "The Empire was becoming an Anglosphere." Its vast resources supported Britain's 19th century surge in living standards and military power. The opportunities in the "white dominions" attracted immigration of the most talented people in the world who created commercial wealth on an unprecedented scale. This supported British sea power and increased its security even as it made it more enviable.
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  None of the other European empires had possessions of even remotely equal commercial or military value. British support aided independence movements in Spanish, Portuguese and Ottoman territories, thus opening them up to British commerce. Britain backed the Monroe Doctrine to assure British access to Latin American markets. "For the next century, British capital would take the lead in building the railroads and industries and developing the resources of much of the region, and even today the mark of British influence remains clear."
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  Towards the end of the 19th century, continental European powers were again rising to challenge Britain's dominant position. Russia vied for influence in "The Great Game" on India's Northwest Frontier, and Germany became an industrial giant and military threat.
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  As British power and influence declined in the 20th century, it was U.S. power and influence that expanded. All over the world, British and then U.S. ambassadors had the most powerful voice and their business leaders dominated commerce. British capital built the modern world.
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How much better it is to have the markets and commerce without the expense of holding the territory.

  Bringing additional nations into a global commercial system is the fourth element of strategy that has been added by the U.S. The difference for the U.S. since WW-II is that there is no imperial component. The chief benefit of a modern empire is its markets and commerce. How much better it is to have the markets and commerce without the expense of holding the territory.
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The Anglo-American financial system:

  Financial strength was always a key for Anglo-American victories.
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Alexander Hamilton copied the English financial system, and the young United States enjoyed similar financial and economic success.

  Britain fought a series of wars with France for a century and a quarter. France was a far larger and wealthier foe - the strongest power on the continent. The conflicts repeatedly left France financially exhausted and bankrupt. Britain's debts mounted astronomically as we have seen, but Britain went from one peak of economic and financial strength to ever higher peaks after each conflict. The secret financial weapon was public credit and the Bank of England which managed the debt.
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  A million pounds were borrowed in 1692 to fight the French. By the time Louis XIV died, the debt was over 50£ million. The War of the Austrian Succession pushed the debt to 140£ million. It was almost 250£ million by the end of the wars that included the American Revolution, and 800£ million by the time Napoleon was safely ensconced on St. Helena. These were HUGE sums. They have been calculated as 222% of GDP after the American Revolution, and 268% of GDP at their peak in 1822.
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  Mead explains how the Bank helped finance these wars. It sold government bonds that became assets in private hands and facilitated the development of the financial system that aided commerce. Influential people came to rely on government bonds and Bank notes and Bank shares for income and liquid wealth. The nation's civil and business leaders thus quickly had a stake in the success of the new monarch, William III, who had recently chased James II from the throne. "Government debt, historically a source of weakness, had been transformed into an instrument of strength." Alexander Hamilton copied the English financial system, and the young United States enjoyed similar financial and economic success.
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The monarchy had been forced to rely on an increasingly sophisticated financial system and the prosperity of its people. Thus, government efforts were directed at facilitating them both and both prospered accordingly.

  Rule of law, liberty, Parliamentary control, and faith in government supported this public credit. An efficient tax system produced copious flows of revenues from a rapidly expanding commerce. The monarchy had been forced to rely on an increasingly sophisticated financial system and the prosperity of its people. Thus, government efforts were directed at facilitating them both and finances and people prospered accordingly. Britain was repeatedly able to grow its way out of its wartime debts.

  The King couldn't access Bank resources without Parliamentary authorization, and the Bank notes were tied to gold. Thus, there was no risk of anything more than temporary inflation during emergency periods when gold payments were suspended. After WW-I. a welfare state and then a socialist England had much more trouble dealing with its debts.

  The Anglo-Saxon financial system has increasingly shaped the commercial world as it has spread geographically and increased in sophistication. It brings the allocation of resources to the highest levels of efficiency. Mead provides a sketch of its history and complexity. It has been a history of financial development, use and abuse and the extension of the regulatory framework. British finance greatly contributed to the 19th century construction of U.S. infrastructure and major industries. It poured into other nations, too, but many of them had not the skills and institutions to use it so well. Mead relates some interesting episodes in the financing of Anglo-American economic development.

  "[This financial system] is rooted in character and morality, and [is] inconceivable except under free and accountable government. The depositor must believe that the bank which receives his or her savings is soundly managed; lenders must seek individuals who are committed to repaying their loans. A law of contract, accepted and obeyed as legitimate, and enforced by honest and reasonably swift justice administered in reasonably honest and competent courts, is even more important for a mass business dealing with hundreds of thousands of individual customers than it is for a great institution dealing with well-known firms."

  The securitization of debt instruments arranged by brokers with no stake in the outcome has been a shortcut that has fared badly. Responsibility can only be assured if all the players have "skin in the game."

Democratic capitalism has facilitated the individual enterprise and innovation that put the Anglo-American economies in the forefront and kept them there.

  The advantages of economic and political freedom - capitalism and democratic political systems - are stressed by Mead. As foreign trade expanded during the 17th and 18th centuries, middle class lifestyles began to develop and spread. By the end of the 18th century, observers like Adam Smith were already aware that English middle class standards of living already far eclipsed aristocratic standards at the beginning of the century. Democratic capitalism has facilitated the individual enterprise and innovation that put the Anglo-American economies in the forefront and kept them there.
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  This trend has continued unabated into modern times. The industrial revolution provided an increasing cornucopia of mass produced products. In each financial and industrial sphere, Mead demonstrates how freedom - economic and political - facilitated the development that pushed Anglo-American economic strength ahead of other European nations. Regulation has generally, though unfortunately not always, been "intended to heighten and sustain competition, rather than to check and hinder it." It is a broad-brush sketch of economic history (a much neglected subject).

  "The combination of a financial system that was ready and eager to facilitate the fast growth of both the new technology and the ancillary businesses that sought to capitalize on it, a social climate that put few obstacles in the way of the rapid and unpredictable changes that the new technology ushered in, and a widespread spontaneous public eagerness to participate in the brave new world being created and to take risks to find ways to take advantage of the new possibilities opening up all meant that the Anglo-American world made the most of its opportunities."

  Along the way, Anglo-American cultural elements became robust economic commodities that penetrated and shaped cultural development worldwide.
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Competition:

 

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  The precursors of modern capitalism can be seen in Genoa, Venice, the Hanseatic city-states, and especially Holland. Holland built a worldwide empire while fighting off first Spain and then France - the continental super powers of the 16th, 17th and 18th centuries. In its spare time, it also tussled at sea with England a few times, generally getting the better of the engagements.
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Europe was a ferment of competing principalities and states.

 

"War and economic competition drove European civilization to innovate and improve."

  Competition was the driving force of European development. Europe was a ferment of competing principalities and states. China, Japan and the Ottoman Turks might rest content with the status quo, but the European states that failed to stay abreast of innovation quickly experienced relative economic, commercial and military decline. The products of the printing press could and often were stifled in some European states but never in all of them. If Columbus failed to interest one monarch in his enterprise, he could always try another one. In China and the Middle East, there were no such alternatives.  

  "War and economic competition drove European civilization to innovate and improve. Europe's failure to unite allowed a multipolar civilization to develop, one where more than one line of thought, more than one cultural impulse, could flourish and develop; where scholars, artists, inventors, and soldiers could leave one master for another. These same divisions put a premium on the dissemination of successful techniques. These states were at each others throats; if one country improved the crossbow or found a more effective method of fortification, the others had to adopt it or improve upon it."

  England, behind its magnificent moat - the English Channel - was superbly positioned to take part in European innovation and development without being trampled by invading armies.

  "Holland, Germany, and Italy all suffered in this period because they were so vulnerable to foreign invasion. Countries on the mainland had to maintain large standing armies and build massive fortifications to defend themselves. This required a strong centralized state; few could imitate the Alpine-dwelling Swiss and reach modern times without building a crushing bureaucracy and an absolutist central government."

Five of the thirteen colonies that became the U.S. were established for religious minorities.

  Religious strife in England was at times as bloody as one might expect, as clerisies preached intolerance and hatred of those who chose other means to give thanks to their maker. However, it never went so far as to eliminate all dissent.
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  Christians of varying beliefs were able to prosper and contribute to the development of England. Five of the thirteen colonies that became the U.S. were established for religious minorities. Spain simply expelled its Moors and Jews, and France ultimately forbade Huguenot emigration to its colonies, constraining their colonies while British colonies grew and thrived.
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  Efforts by monarchs to centralize power were repulsed in England. (The English monarchs, after all, did not command a standing army.) A mélange of associations created often competing - often cooperating power centers in a vibrant civil society that supported development of democratic institutions. In the North American colonies, "clubs, chapels, philanthropic and benevolent associations, and other organizations gave a large and growing number of people new kinds of experience and self confidence." (This remained a feature of the U.S. See, Tocqueville, "Democracy in America.") Yet, there was no anarchy or splintering in England. The system as a whole had the ability to coalesce to meet the challenges of the day.

  "Latin societies in both Europe and the Americas would suffer greatly from the eighteenth through the twentieth centuries from an oscillation between too-rigid states and too-radical oppositions."

Earning the support of the people by facilitating their commerce and meeting their needs was a constant preoccupation

  Dependence on popular support was always recognized by Anglo-American governments. Earning the support pf the people by facilitating their commerce and meeting their needs was a constant preoccupation after the "Glorious Revolution" in 1688 that brought William III to the throne. Except for the American Revolution (and the U.S. Civil War), the U.S. and Great Britain and the British dominions have been models of constitutional stability and responsible reform. France, on the other hand, has had five republics, three monarchies and two empires, while other European states have similarly vacillated between anarchy, weak political institutions and repressive central power.

  "Some of [Britain's] rivals were hobbled by religious establishments that successfully prevented the wave of social and intellectual innovation that capitalism required. Others were crushed by powerful neighbors, or used up so many of their resources in defending themselves that they lacked the ability to compete. Some labored under governments that overawed the private sector and crushed initiative; some fell victim to anarchy and endless warfare because their governments could not keep order."

  As a result, we now have a "maritime hegemony based on global capitalism," where competition drives accelerating innovation and change. Anglo-American society has been more tolerant of this challenging system and has been rewarded accordingly.

God

Religion:

 

 

&

  Mead emphasizes the strong spiritual component in Anglo-American democratic capitalism. England during its 19th century prime was a profoundly religious nation, as is the U.S. today. Indeed, the 20th century decline of British power and influence has been accompanied by a secularization of its society. In accordance with its title, Mead dedicates a considerable portion of the book to religion.
 &

The Anglophone spiritual drive has predominantly favored increasingly open social structures that compliment democratic capitalism.

  Religion has not only been a conservative force reinforcing the constraints of closed societies, it has also been an inspirational force driving people into new realms, some of which have been increasingly open and productive. Somehow, in the Anglophone nations, the spiritual drive has predominantly favored increasingly open social structures that compliment democratic capitalism. That has not so frequently been the case on the continent or in other regions of the world.
 &

  Faith in god is not necessarily undermined by skepticism towards clerics. Having broken free of Catholic absolutism, people in the Anglo-Saxon nations were free to choose their faiths and churches. From the end of the 17th century, Anglophone nations have permitted a widening array of churches to compete for the souls of the faithful.

  "As Voltaire first noted, where there is one religion, there is despotism; where there are two, civil war. Let there be thirty religions and they will all live together in peace."

  Competition, it turns out, is as good for churches as for economic and political entities. It directs the efforts of clerisies towards service to their flocks rather than towards domination. It makes clerics dependent on their flocks while reducing clerical influence over them. Clerics have to attract followers, they cannot command them.

While the Pope insisted on Papal infallibility, the Church of England recognized in its Articles of Religion that all churches are prone to error.

  The "static" religion of the Catholic Church was thus replaced by the "dynamic" religions of Protestantism. While the Pope insisted on Papal infallibility, the Church of England recognized in its Articles of Religion that all churches are prone to error. The official Church of England "changed doctrines almost as often as it changed sovereigns." Clerics must face and convince a skeptical congregation. No church is an infallible source of God's "eternal truth."
 &
  However, faith in a divine providence was supported by the success of England itself. Skepticism did not lead to anarchy in England. Faith in god always supported the maintenance of order - often brutally.

    "[The] chasm between religion and secular reform and modernization that dominated politics in much of Europe until the twentieth century -- and dominates life in Israel and many Muslim countries today -- was never as deep in the English-speaking world. Two ideas in creative tension have coexisted for half a millennium in the Anglosphere. On the one hand, God exists and reveals his will regarding moral rules and religious doctrine to human beings; on the other hand, human understanding of these revelations remains partial and subject to change."

After so many centuries of clerical tinkering, it "was no longer possible to know what the early church had been like, or what Jesus intended for it."

 

What is left is a healthy skepticism toward sectarian clerics and secular dogmatists. Reasonableness and compromise works better than zealotry of any type.

 

England has become quite comfortable with a constitution full of inconsistencies but adaptable to the needs of the moment.

  The development of Protestantism from the absolutism of Lutherans and Calvinists to the tolerance of the 18th century Church of England is covered at some length by Mead. Reformation Protestant sects sought not liberal religious faith but an absolutist replacement for a flawed Catholic absolutism. England tried both scripture and tradition as guides to religious truth, but both failed.
 &
  After so many centuries of clerical tinkering, it "was no longer possible to know what the early church had been like, or what Jesus intended for it." Much of God's revelation was "irrevocably lost." Clerics and theologians were "as shortsighted as - - - everyone else; human willfulness, vanity, and greed were triumphant, and the church itself could not be protected from them."
 &
  This left only "reason," which also failed.
As the French Revolution degenerated into terror, despotism and war, faith in Enlightenment reason suffered. Mead points out that fundamentalist zealots and Papists balanced each other out and both keep radicals and their faulty logic in check. Competition is good. What is left is a healthy skepticism toward sectarian clerics and secular dogmatists. Reasonableness and compromise works better than zealotry of any type.

  "By the end of the seventeenth century, England's many Protestant, biblicist sects recognized that no single one of them could reasonably expect to occupy the ground of the old Catholic Church. Each could still believe that it was in possession of the full and only gospel truth, each little chapel could glory in the knowledge that beneath its humble eaves were gathered the earthly representatives of the One True Church of God -- but this was a primacy that the secular world would never acknowledge."

  The replacement of Catholic James II by Protestant William III from Holland was defensible neither on constitutional nor on theological grounds. The Glorious Revolution of 1688 was simply a pragmatic solution to a sticky problem. The King no longer ruled by divine right, but a King acceptable to the people still ruled, avoiding civil war.
 &
  England has become quite comfortable with a constitution full of inconsistencies but adaptable to the needs of the moment. Britain, the engine of modernizing change, hangs on to a mélange of delightfully archaic customs and traditions.
 &

Since no one ideal can hold all the answers, it is best that many "doxies" find a place and a cherishing following. Society must be secular and sectarian, dogmatic and free, "and the catfights between them can never end."

  Religion adjusts to the needs of social and economic change in England. It does not constrain them. Anglo-American religion is thus dynamic - as often driving change or at least accommodating it as obstructing it. This dynamic religion - composed of the religions the people chose for themselves - was nevertheless more strongly felt than those on the continent. With its malleable constitution and dynamic religion and culture, England is well disposed to deal with the conflicts, tensions, and radical uncertainties of a dynamic democratic capitalist system. 

  "Religion no longer opposes the modernization process. It provided the psychological strength and social support that eventually allowed tens of millions of bewildered, hopeful, frightened peasants to find a place in the teeming cities and crowded industries of the new capitalist world."

  Since no one ideal can hold all the answers, it is best that many "doxies" find a place and a cherishing following. Society must be secular and sectarian, dogmatic and free, "and the catfights between them can never end."
 &

  There is a spiritual basis for capitalism, Mead explains, and it is poorly understood by outsiders. This spiritual drive towards accomplishment drives the Anglo-American capitalist and democratic system forward.
 &

  The "Protestant ethic" supports capitalist systems and is reinforced by an "Abrahamic" sense of "calling" that often drives individual action. Christianity in America involves a personal relationship with God and often a personal response to a "calling." There is a widespread sense of responding on an individual basis to God's "call" to perform in some beneficial manner.
 &
  Mead likes to divide social influences up into broad general categories for analytical purposes. He sees a balance of societal forces influencing domestic policy. He labels them "traditional," "revelation," and "rationalism."

  See, Mead, "Special Providence," in which he divides the influences affecting American foreign policy into the Hamiltonians, the Jeffersonians, the Jacksonians and the Wilsonians. That system of characterizations has its strengths and weaknesses, and so does the system employed by Mead in this book. These groups are far from monolithic. There is a wide spectrum of differences within each of them and considerable overlapping among them. They evolve over time. It does, however, provide a workable vocabulary with which the intelligent lay public can think about and discuss the subject.

  • Tradition has changed from support for monarchy and hierarchy to popular nationalism - the sense of the uniqueness and superiority of Anglo-American values.
  • Revelation has waxed and waned in influence. Religion as a guide to domestic policy is stronger in the U.S. among immigrant groups than in the assimilated mass, stronger in some regions than in others, and differentiated by particular religious beliefs.
  • Reason - (all too often amounting to just propaganda myths, or the rationalization of irrational beliefs or self-serving interests) - gains influence from the accomplishments of science and technology. Its influence reached its heights during the 1960s when English socialism and U.S. Keynesians sought to abolish poverty and all manner of societal weaknesses on the basis of their "scientific" methods. Since the 1970s, it has lost much ground to religious and traditionalist influences.

    Mead attributes most of this reversal to controversial Supreme Court decisions that outraged and energized the religious and traditional camps.

  This is just partially true. The professionals, experts and other custodians of "the rational state" have been shown to be deeply flawed. In the 1970s, "scientific" Keynesians in the U.S. and socialists in Britain and elsewhere around the globe failed spectacularly - failures not lost upon the broad public that had to bear the brunt of the costs. 

Anglo-American societies remain dynamic "precisely because no one vision controls them."

  Many of those who moved away from sectarian guides moved towards a moral traditionalism - the "Puritan Ethic" - rather than a system of cynical disbelief. In the U.S., there has been a shift from mainline Protestantism towards more populist religious sects - Evangelical and Pentecostal. Catholicism, Judaism and Muslim trends have been towards the orthodox. Reform movements have trouble sustaining their active congregations. All orthodox groups join in insisting that the revealed laws of God should influence politics.
 &
  Anglo-American societies remain dynamic "precisely because no one vision controls them," Mead asserts. A dominant religious vision would result in theocracy, a dominant traditionalist system would result in a conservative populism that fights social and economic change, and a dominant rationalism would be anti-democratic and accepting of societal constraints deemed necessary for rationalist programs (many of which would indeed be unsupported by reason and some of which would be catastrophic).

  There is a HUGE difference between rationalization and reason. Much of what poses as reason is just dogma, superstition or self-interest. Rationalization - the acceptance of a propaganda myth - is often a shield for ignorance.

  These influences, themselves, are subject to dynamic forces that help to transform them in productive ways. Mead goes at some length into the profound changes recently experienced within religious and traditionalist elements. They provide the societal support and moral basis that permits the Anglo-American nations to maintain balance while riding the accelerating wave of change.
 &

  The religious influence includes the "Abrahamic" master narrative, Mead points out. This narrative includes monotheism, widespread conflict over differences in sectarian beliefs, and the belief that human beings "possess the earth" and can understand and shape it. This latter belief supports scientific and cultural dynamism. It supports a view of history as the account of human progress and purposive existence.
 &

  Secular humanism is a fourth Abrahamic faith - in addition to Judaism, Christianity and Islam. It is a faith without God, but it is a faith nevertheless. It is based more on rationalism than reason, although it often absurdly claims scientific certitude (as do some religious sects). It has a moral component and a narrative of progress through history, just like the other Abrahamic faiths. Recently, its Marxist and Socialist sects have suffered notable failures, but all religions suffer occasional disappointments.

  "To create a future world of perfect justice and freedom that no one has ever seen, and that can be envisioned only through faith, millions have been slaughtered -- and hundreds of thousands have gladly done the slaughtering. The freedoms of liberal society also have their martyrs: men and women without any theistic convictions whatever who have lived and died for their version of political faith."

The object of policy - foreign as well as domestic - is increasingly seen as "making basic changes in the human condition" to improve living conditions and eliminate conflict.

  Capitalism drives the master narrative of accelerating change. The capitalist narrative of change and the Abrahamic narrative are mutually reinforcing, demonstrating the existence of progress and purpose and spreading that narrative globally. The object of policy - foreign as well as domestic - is increasingly seen as "making basic changes in the human condition" to improve living conditions and eliminate conflict.

  "The optimism rooted in Anglo-American culture and strengthened by the long record of Anglo-American political and economic success unites with the biblical roots of Anglo-American religion to create a distinct grand narrative that ties the Abrahamic story of Israel and Christ together with the intuition that capitalist modernity represents a new call from God."

The invisible hand: 

 That the free interplay of random self-interested forces automatically creates orderly development in economics, politics and law is a widely held Anglo-American insight.
 &

"The cult of the invisible hand, uniquely intense, uniquely widespread and all-pervading, may be the chief difference between the English-speaking world and the rest of the world."

  In organizing the modern state to channel the flow of change, the Anglo-American nations trace their institutions back to England's Glorious Revolution. However, most of the world has preferred the precedents of the French Revolution and Napoleonic system of governance. This is a more centralized system that is more protective of prevailing interests and values. It has less faith in the "invisible hand" that lends societal purpose and progress to the disparate acts of capitalist markets and common law courts.

  "The cult of the invisible hand, uniquely intense, uniquely widespread and all-pervading, may be the chief difference between the English-speaking world and the rest of the world; it is both one of the principal reasons for the Anglo-Saxon rise to world power and a leading influence in how the Anglo-Saxons have understood and interpreted their rise and their role."

  The decentralized development of common law gained deep public support based on the obvious benefits and a natural skepticism of centralized government.

  "This development did not take place because of a plan; it was the slow accretion of results, the outcome of tens of thousands of law cases and decisions stretching over all centuries. No single controlling intelligence orchestrated this growth, and there were blind alleys and poor decisions all along the way, but by the seventeenth century, English jurists and public opinion saw great value in the unplanned, organic growth of their common law.

  Of course, there are innumerable times when legislative action directs, codifies and rationalizes the body of common law and establishes new law.

Development could proceed because the social environment enjoyed inherent cohesion and orderliness.

 

These systems were an accretion of individual solutions to concrete factual problems. "Theory came after experience, not before it."

 

 

  Parliamentary government with an increasingly limited monarchy seemed to have developed in a similar manner - through trial and error and the interminable clash of domestic interests. In both cases, development could proceed because the social environment enjoyed inherent cohesion and orderliness.
 &
  These systems were not shaped by "grand and sweeping abstractions." They were an accretion of individual solutions to concrete factual problems. "Theory came after experience, not before it," Francis Bacon explained. This was the scientific method. "Behind the apparent disorder of the physical universe were great and stately truths that could be learned by carefully observing small and particular things."
 &
  The tolerant Anglican Church emerged from the vicious conflicts of the Reformation. An orderly parliamentary democracy arose out of the  vicious conflicts of the English civil war. The hand of god, acting in a purposive if mysterious way, was there for all to see.
 &
  Isaac Newton was explaining how nature had organized itself in accordance with natural laws that created order out of the primordial chaos of energy and matter. "Change was not a defect; it is part of the process by which God's plan is fulfilled." Change suddenly was viewed as progress rather than as decay.
 &

With freedom, people produce an orderly and affluent society without much guidance or restraining human authority.

 

Madison's checks and balances were devised to prevent any individual powerful interest from gaining dominance and constraining this development.

  Adam Smith's "Wealth of Nations," first published in 1776 and republished with modifications several times thereafter, was based on the virtues inherent in human nature. (See, Adam Smith, "The Wealth of Nations," Part I, "Market Mechanisms," and Part II, "Economic Policy.") With freedom, people produce an orderly and affluent society without much guidance or restraining human authority.

  "The world has been made in such a way that if we leave well enough alone, its inherent order will emerge in human economic interactions -- just as it emerges in the heavens as physical bodies obey the laws of gravitation and motion." (See, Government Futurecast  for a review of the plusses and minuses of the government role.)

  Jefferson's political views were an adaptation of Smith's "invisible hand." Individuals pursuing their own interests will produce an orderly and harmonious society. Development and change will produce good order. Madison's checks and balances were devised to prevent any individual powerful interest from gaining dominance and constraining this development.
 &
  Darwinian biology, too, reinforces the view of natural progress from chaotic struggle for survival. "Every piece of order and beauty that we see has been brought out of a chaotic, ungoverned struggle of selfish interests" seeking to survive and reproduce.
 &

"Believers in the invisible hand are confident that the historical process is carrying forward some great if unknown purpose."

  This has become a guiding principle in Anglo-American society. It reinforces the toleration of the "creative destruction" that Joseph Schumpeter identified as an essential element of capitalism.
 &
  A free "marketplace of ideas" reinforces academic and political freedom. Free choice and market solutions are proposed for problems with pollution and basic education. There is much disagreement among various groups about individual applications of invisible hand policy, but the benefits over time have been obvious and support a general acceptance of it.

  "We cannot understand God's -- or Nature's -- hidden purposes; we cannot fathom the mysterious ways in which God's providence -- or Nature's cunning -- has ordained that good and evil must feed off each other and live side by side. Yet believers in the invisible hand are confident that the historical process is carrying forward some great if unknown purpose."

Whig history:

 

&

  This sanguine history of liberal capitalist economic and political development is sometimes called "Whig history." It provides support for Anglo-American institutions and inspiration for those seeking to improve them.
 &

Societies that lack a "loyal opposition" constrain change until change shatters the existing society.

  Anglo-American conservatism doesn't reject change. It rather imposes a skeptical challenge based on the practical effects of reforms and seeks to confine them within an orderly process of reversible trial and error. Prohibition in the U.S. and socialism in England, the testing of new legal precedents in common law courts, creative destruction within the capitalist market economy, all provide prominent examples of this process.

  "For three hundred years, the great political and cultural struggles within the English-speaking world have almost always been struggles within a framework which both sides accept -- not struggles over the framework itself. The exceptions, like the American Civil War, only show how much the English-speaking world has gained by achieving broad consensus on key issues."

  Contesting political parties, toleration of religious differences - these apply beneficial competition and the orderliness of the invisible hand to politics and religion. Competition in the marketplace of ideas limits the excesses of political and clerical authorities. "The great competitive constitutional parties marginalize the minorities who wish to overthrow the social order." They absorb the stresses of change and permit it in an orderly fashion. Societies that lack a "loyal opposition" constrain change until change shatters the existing society.

  "Three hundred year of almost unbroken domestic peace and prosperity, combined with three hundred years of almost constantly growing success in reshaping the international environment, have helped make Whig history the default history for most Americans today."

  "This is more than just confidence," Mead points out. It is a widely held faith that the Anglo-American nations have a special role in the world - a role to facilitate the spread of freedom - of capitalism and democracy - so that all mankind can benefit from their blessings. Anglo-American advocates of other perceived virtues - women's rights, unions, rule of law, etc. - also perceive a global role. Whether secular or sectarian, such advocacy is viewed as a calling.
 &

Resistance:

  Yet instead of the worldwide peace and prosperity and spread of freedom expected by many Anglo-American intellectuals after each victory, new and even more frightening rivals have arisen.
 &

"The Anglo-American world tends to forget how hard it was and how long it took to build institutions and develop the habits needed to make capitalism work."

 

This human and social capital is by far the most valuable to have -- and by far the hardest to get."

  The world has been resistant to receipt of the blessings of Anglo-American virtues. Much of the world "rejected and loathed" the effort to spread them. Liberal capitalist modernity was viewed as "both morally and culturally repugnant."

  "The Anglo-American world tends to forget how hard it was and how long it took to build institutions and develop the habits needed to make capitalism work." (The same can be said about democracy - which suffers frequent failures before becoming established.)

    It took centuries to develop modern capitalist markets and domestic political systems, with frequent stumbles and excesses experienced and overcome along the way. Now, backwards villagers in Russia, China or Africa are expected to move helter-skelter into the modern world without any of the institutional or civil society arrangements that make it work. Their corruption and incompetence is criticized without considering the corruption and incompetence in 18th and 19th century English and American government.
 &
  Mead provides some amusing vignettes of government failings and not-so-amusing examples of squalid and unsanitary conditions in London and N.Y. City during those centuries. His list of ecological, economic and political miseries experienced by rapidly developing nations fills several pages. Developing nations "must change and adjust much faster and in far more difficult circumstances than the Anglo-Saxons ever had to do." They face nationalist impulses far stronger than those that have blocked some foreign investment in U.S. economic icons.

  "The greatest wealth of countries like the United States and Great Britain is not their mineral deposits or their agricultural land. It is not the money that they have in the bank. It is the mentality and habits of the nation at large. These are peoples accustomed to governing themselves, accustomed to promoting enterprise, ready to join in spontaneous and private activities of all kinds -- but also accustomed to an ordered liberty whose roots now are many centuries old. This human and social capital is by far the most valuable to have -- and by far the hardest to get."

  There are, of course, also many advantages for late developers. Among many other things, they can access massive flows of eager capital investment and leapfrog certain phases of technological development, send students to Western schools, and with a few exceptions enjoy secure borders. Western history provides a variety of examples of what works and what doesn't in capitalist markets and democracy. Above all, they can export into relatively open global markets and import from the world's most efficient sources. The Asian Tiger economies have demonstrated the cornucopia of benefits that flow from even the first steps of any conscientious program of economic reform.
 &
  However, Mead is certainly correct in emphasizing the importance of human capital and a responsible civil society. There are few shortcuts for developing these assets.

  People in nations starting out without such advantages have experienced widespread "failure, marginalization, defeat, and frustration" even as many prosper from the new economic opportunities. For those nations that have refused to participate in the economic globalization, there is precious little prosperity.
 &
  Culture still matters, Mead explains at some length. There is widespread resentment and even rage among those whose deeply felt religious beliefs and cultural arrangements mark them for permanent backwardness in the global system that liberal capitalism has created and continues to develop at an ever accelerating pace.

  Slowly, but perceptibly, peoples outside the Western orbit are adapting in positive ways to the cultural needs of the capitalist game. Encouragingly, important developing nations as different as Indonesia, Pakistan, Brazil and Columbia are experiencing a series of reasonably fair electoral cycles, and extremists are getting little more than 10% of the vote. Bombs, after all, are bad for business.
 &
  The aggressive oil autocracies - Russia, Iran and Venezuela - are more resistant because their governments are not dependent on public prosperity for government revenues. However, even oil cannot adequately sustain such sizable economic systems. The price of oil took a severe tumble during the recent credit crunch recession. It may scale even greater heights during the next recovery, but will be kept down for longer periods whenever the U.S. is forced to get serious about ending the debasement of the dollar.

    Examining future prospects, Mead easily skewers both declinist and triumphalist extremes among popular scholarship. Great civilizations are far more likely to wax and wane and wax again like China and India than to rise and fall like Rome. The U.S. may indeed by "Western," but it is not tied to a declining Western Europe - and Western Europe may yet prove to have more life left in it than declinists expect.

  Mead totally neglects the possibility that autocratic capitalism - not just as applied in the small Singapore model but also as applied to the vast Chinese economic system - may prove to be equal or even superior to the liberal capitalist model. Both liberal and autocratic capitalist systems have their strengths and weaknesses.
 &
  Broadly speaking, autocratic capitalism has weaker defenses against corruption, and liberal capitalism is more vulnerable to economic demagoguery. This competition - hopefully not translated into military conflict - is the primary challenge of at least the first half of the 21st century.

    Mead also casts doubt on debt as a driving force in decline. As noted above, "prosperity and power in the shadow of debt" has a three century history in the Anglo-American financial system. Where the fears of Adam Smith and David Ricardo have proven wrong, why should those of modern declinists prove any better? The power of flexible and sophisticated financial markets to deal with colossal debts has been repeatedly proven.

  There are many differences that increase the seriousness of current debt problems.

  • Anglo-American finances are no longer subjected to the disciplines of a gold standard. The dollar and pound are no longer fixed to gold or determinedly restored at previous levels after being forced off gold by wartime expenses.
  • The monetization of debt has become routine even in peacetime. This has removed all budgetary discipline and brought on inflationary surges in the 1970s and today sufficient to threaten widespread financial decline. Rationalizations justifying these ultimately ruinous budgetary and monetary policies have been enthusiastically created and adopted in influential intellectual and academic circles, increasing the difficulty of restoration of peacetime budgetary discipline.
  • The entitlement welfare state has replaced socialism as the primary utopian threat to liberal capitalist modernity. Great Britain, after all, did indeed decline to a substantial degree under her unsustainable socialist burdens until they were overthrown by Margaret Thatcher. The U.S. managed to reject the siren song of socialism but keeps moving deeper into the financial morass of entitlements. This type of demagoguery is a classic danger for democratic systems. It threatens the dynamism that is the basis for Anglo-American success and strength.

The European Union constitutes a triumph for American foreign policy - not a competitor for leadership.

 

Russia has unfortunately not transformed into a democratic system but into a resentful thugocracy lead by KGB operatives.

  The European Union is a bulwark of the globalized economic system. It constitutes a triumph for American foreign policy - not a competitor for leadership. Its internal political and cultural differences prevent coalescence along continent-wide nationalistic lines.
 &
  Russia has transformed, also. However, it has unfortunately not transformed into a democratic system but into a resentful thugocracy headed by KGB operatives. It can cause trouble, but its demographics and failure to implement economic reforms dictate considerable decline. It will experience future troubles with Muslim minorities in the Caucasus and Chinese minorities in Siberia.
 &
  That leaves only China as a potential great power competitor for the U.S. However, China is not the only rising Asian power. It will not readily be accepted as an Asian hegemon by such nations as Japan, Vietnam, Indonesia and India, all of whom have historic reasons to resist Chinese influence. They will be happy to accept U.S. assistance in maintaining a balance of power in the region.

  The development of cordial commercial relations may be more attractive - and more profitable - for China than establishment of dominance. China and Japan have already made commercial arrangements for the cooperative development of contested offshore oil fields. However, powerful economic considerations did not prevent either WW-I or WW-II.

  The greatest danger, in Mead's view, is if either India or China suffer an economic and political collapse under the extraordinary pressures of their rapid transformations. It is in the most profound interests of the U.S. that all major developing nations continue to make progress.
 &
  Remaining an unchallengeable super power is not nearly so important for the U.S. as arranging a world order that engages in and supports the global economic system - the "maritime system." The advantages of being an offshore maritime power able to extend influence worldwide remain even if relative military power declines.

  "The interests of key Asian powers appear to be aligned with those of the United States and of the liberal capitalist order; American interests are never more secure than when multiple pillars support the system. This ability to match strategic and economic interests with those of important countries around the world is one of the core advantages of sea-power strategies. The offshore balancing power that is interested in an open global trading system poses less threat and offers more opportunity to more partners than traditional land powers can usually match."

  Mead sums up the sea power strategy successfully employed for three centuries by the Anglo-American powers. Policy debates must be set against this strategic background to give them greater coherence and to inform the electorate of what is at stake.

  "Develop and maintain an open, dynamic society at home; turn the economic energy of that society out into world trade; protect commerce throughout the world and defend the balance of power in the world's chief geopolitical theaters; open the global system to others, even to potential competitors in time of peace; turn the system against one's opponents in war; promote liberal values and institutions wherever one can." (Still omitted by Mead is the need for a hard currency and disciplined government peacetime budgets that do not impose constraining burdens on the economy.)

Without U.S. engagement, the world would quickly spin out of control, and all that has been gained at such great cost could be lost.

 

The facilitation of international trade - globalization - remains in the most profound interest of the U.S.

  This is a strategy that works. The Anglo-American powers have despite many stumbles experienced repeated advances in the maritime system of international commerce, and in domestic democracy, affluence and openness. The U.S. must sustain and defend the "maritime order." It must stay engaged with the world. Isolationism is not an option. (Isolationism and protectionism in the U.S. after WW-I were major factors in the disasters of the Great Depression and WW-II.) Without U.S. engagement, the world would quickly spin out of control, and all that has been gained at such great cost could be lost.

  The U.S. thus remains the essential nation - the last best hope for mankind. Its grand strategy must be focused on the maintenance of global stability, the growth of global commerce, the spread of prosperity, and "the spread of liberal and democratic institutions and practices around the world."
 &
  Tactics are always debatable, but not the strategic objectives. The U.S. must maintain an open and dynamic society that facilitates change and commerce. It must engage globally at all social levels "economically, culturally, religiously, and politically," as well as diplomatically. The facilitation of international trade - globalization - remains in the most profound interest of the U.S.
 &

The diplomacy of civilizations:

  Mead draws sharp analogies between the 16th and 17th century Protestant fundamentalists like the Lutherans, Calvinists and Puritans and the Muslim Wahhabi and Salafist fundamentalists of today. Catholic fundamentalism, of course, was just as bad.
 &

  The broad resistance to Puritan theocracy provided the foundation for increasingly liberal and tolerant alternatives. The Wahhabis, too, will fail to dragoon all the Islamic world into their fundamentalist theocratic system. There are numerous competing strains of belief in the Muslim world. Increased literacy and the internet make all manner of competing Muslim theology broadly available.

  "Theological diversity within Islam seems bound to increase; as it does, we shall see whether growing pluralism within Islam leads to an acceptance of that pluralism, however grudging, and from there to a gradually widening recognition of the positive value of pluralism in human life."

  Unfortunately, the battles of the Muslim reformation are being fought with modern weapons.

  Christian tolerance and liberalism is of very recent vintage, Mead reminds us. He reminds us of the narrow-minded theocratic tendencies of Christian clerics and how remarkably similar they were to modern fundamentalist Muslim attitudes. Intolerant and theocratic clerisies have caused massive human suffering throughout history. There has been a long history of orthodox Jewish and Christian clerical opposition to the separation of church and state, insistence that legal codes be based on divine revelation, and belief "that religion mandates different roles and different rights for women and men."
 &
  There is no reason to believe that Islam will be any less dynamic and adaptable than Christianity. It is already finding ways to accommodate modern finance and commerce. While still quite fragile, democratic election cycles continue on Indonesia and Pakistan. There are no certainties, of course, but there is much reason for hope.
 &

American diplomacy must build on appreciation for the peace and prosperity offered by the maritime system that it promotes.

  However, the resentment and often rage of those whose beliefs and cultures have suddenly collided with the expanding maritime system is real and will require delicate handling for some time to come. The dynamic liberal capitalist realm has created a global "maritime system" based on sea power and global ocean commerce. The rest of earth's cultures and civilizations "have no choice but to address the challenges posed by a shrinking world." Managing the relationships may be the primary task of American diplomacy. Mead calls this "the diplomacy of civilizations."
 &
  That will require tact, and a light touch that has been missing since 9/11/01. It is in the most profound interests of the U.S. not to arouse fear and loathing of American power. American diplomacy must build on appreciation for the peace and prosperity offered by the maritime system that it promotes.
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To Muslims, the last three centuries of European success and development have been a disaster.

  Relationships with Muslims is especially fraught. To Muslims, the last three centuries of European success and development have been a disaster. They have lost vast stretches of territory in Europe and entire empires on the Indian subcontinent. They have been marginalized. Even the nations of East Asia are moving beyond them. They have not been able to develop the means to flourish in this new maritime system. All they can do is sell oil, while Israel flourishes on a narrow strip of land without resources.
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  Many Muslim intellectuals respond with resentment, frustration and rage. They view American liberal rhetoric as hypocritical propaganda. All the U.S. is interested in is oil and Israel. Managing the relationships with Muslims will thus require a deeper, defter diplomacy. In Africa and Latin America and parts of Asia, there are other peoples that have not developed "the ability to surf the waves of global change" and that keep falling further behind.
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While dealing delicately with group sensibilities, the U.S. must maintain a capacity for action and assertion.

  This diplomatic problem is considered at some length by Mead. He refers to the concepts of Reinhold Niebuhr concerning the dynamics of group identity. Group humiliation and lack of respect breed a witches brew of victimization, including anger, resentment, blindness and bigotry. For religious groups, this is especially potent since positions appear non-negotiable.
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  Yet, while dealing delicately with group sensibilities, the U.S. must maintain a capacity for action and assertion. Action will not always be without error or without failure, but this is an inherently imperfect world and the U.S. must not be rendered impotent by its own imperfections. While it must take into account the aspirations of others and strive to build a better world, it must also unapologetically act to further its own essential interests.

  "The Anglo-American Whigs, caught up in enthusiasm for their global project of liberation and development, cannot lose sight either of the ways their project affects others, or of the roots of their ideology in their own cultural values and, indeed, their interests. And yet their awareness of the conditionality of that project and of its actual and potential drawbacks and limitations cannot and should not affect their core commitment to their values -- and those values continue to power the global activities and transformational agenda of the maritime order."

  Mead has great hopes that the U.S. is in fact moving away from simplistic neo-conservative, nationalist and isolationist viewpoints to accept nuanced views such as those of Niebuhr, and to hopefully support a more subtle and sometimes paradoxical diplomacy of civilizations.
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  Mead suggests that civic groups actively engaged in influencing national policy should throw their weight behind policies such as those based on Niebuhr's work. Most will probably never actually encounter his work, but many groups, like whole nations in this modern world, increasingly interact internationally. They cannot help but gain a broader perspective on life and policy. As more Americans broaden their perspective, there is real hope for improvement in American foreign policy.

The Modern World

The maritime system:

  The benefits and accomplishments of the Anglo-American maritime system have indeed been impressive and widespread - and there is no indication as yet that this story is near an end. 

  "They may not have built a utopia, but even so, the Anglo-Saxon era has produced changes that are as profound as they are enduring. For all its injustices and imperfections, the creation of the first truly global society is a substantial achievement; the maritime powers have effected a transformation of international relations whose consequences will be felt as long as the current civilization endures."

  There are natural limits to the maritime system, of course. Competing nationalisms and religions remain and there are even differing intellectual rationalizations of how the system should work. No single viewpoint can triumph in this intellectual mélange - even though the realities of the system continues to force modifications. Thus, the international institutions of the global maritime system "will be built in such a way that they can be interpreted and justified from opposed points of view."
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  Like the common law, maritime system practices are based more on particular precedents and historical accident than rational principles consistently applied. This is untidy and is frequently deplored by many analysts, but it is probably more effective and capable of being more widely accepted than centralized rational codes.

  "Looking ahead, the path to a more effective and just international society is likely to be at least as crooked and devious as the road the English-speaking societies took toward the development of their own unique blending of values of reason, tradition, and religion."

  Intellectual criticism of the Anglo-American maritime system as mere materialism - (mere "consumerism" in current politically correct terminology) - is obviously shallow, Mead concludes. The American drive remains an adventuresome exploration of the future, a dynamic ride upon the wave of technological advance and a welcoming attitude towards the accelerating change that it brings.
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  The maritime system is open to all - globally. The future of mankind will be determined by those in every society that fully engage in the maritime system - not by those that hunker down in fearful defense of archaic social and religious systems and prerogatives. As the maritime system keeps spreading and deepening in Asia and elsewhere, the human effort behind mankind's commercial development and technological advance will increase exponentially, driving mankind ever faster into the future.

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  Copyright © 2008 Dan Blatt