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Stirling Newberry: Neo-Victorian America?

Neo-Victorian America?

By Stirling Newberry
t r u t h o u t | Perspective

Sunday 22 May 2005

In 1776 Americans revolted, less against taxes than against what those taxes were designed to enforce: triangular trade. Americans were required to sell raw materials to England, and buy from the rest of the world from British monopoly companies. The Tea Tax sparked the Boston Tea Party, not because it increased the price of Tea, but because it blocked Americans from entering into the lucrative tea market. Americans resented selling raw materials to England, having the English manufacture them into more valuable goods that were sold around the world, and then use the profits to buy spices, slaves and tea for sale in America. England became addicted to triangular trade, preferring war with its American colonies to negotiated peace.

In the end, Americans separated from England, politically and monetarily. The British system of triangular trade fell apart. This, along with the wars that Britain fought to keep the system together, touched off an inflationary wave that would end only after the defeat of Napoleon and the re-minting of the entire British coinage system.

The British, ever resourceful, came up with a new system of trade, in which the Pound Sterling became a currency based on gold, with the intent of making it the world's anchor currency. The British would fight wars to secure resources, cheap labor, and to open markets. But it meant they had to find gold for currency, and coal for their industry, and later, their navy. The navy built with gold, and run on coal, was used to find more gold and coal. India and Ireland were used to grow food and cotton, allowing more people in Britain to be employed supporting "The Empire" without creating inflation. On the contrary, Victorian England was under deflationary pressure.

This "first era of globalization" expanded trade, but it also created misery in Britain, as wages raced down to parity with colonial wages, and it caused famines in Ireland and India, as the price of food raced upward to the price that the British were willing to pay for it. The Irish potato famine was one example: even as people starved, food continued to be sold to Great Britain. Famine is not caused by a shortage of food for people, but by the people having a shortage of money to buy the food they need.

In the wake of World War II, America set up its own system of triangular trade, because we had most of the working industrial base of the world. In the 1960s and early 1970s, the modern post-war triangular trade system fell apart, in no small part because the exporters of cheap resources rebelled against it. OPEC is the most well-known example of this, but the entire era was one of colonies that had had triangular trade imposed on them rebelling against the nations of Europe. As with the British system of triangular trade, its disintegration left behind high inflation and the collapse of the monetary basis of the old currency. What happened to the pound in the 1790s happened to the dollar in the 1972, with the failure of the Bretton Woods agreement.

As with the British before us, when triangular trade failed, we turned to hegemony, and the implementation of it came to have a name, "The Washington Consensus." This system used the dollar, and the access to oil that it brought, as a lever to open the capital markets and economies of developing nations. The profits from this would be used to keep the dollar as the gateway to a commodity which was both the gold and the coal of the new system: petroleum.

In the larger picture, Iraq was to be our India, not merely a client state, but the place where Americans would go to earn high wages in turning a country into a mirror of ourselves. We were to build hotels, oil infrastructure and other assets. Just as the British had done, this created rivals who yearn for a place in the sun.

The Neo-Victorian world that is trying to emerge is being driven by "Conservative" parties much like the "Conservative" parties that created the imperial conflicts of the late 19th century. Social conservatism creates society that concentration of economic power through hegemony requires. Every prop that people might have that is not part of the hegemonic enterprise is taken away; instead, incentives to buy land and to pour retirement money into the stocks of large corporations are being given, so that each individual is bound to it by personal interest.

Thus, the political fights over Iraq, Social Security, and now the filibuster are not isolated, they are about whether we are going to create the kind of society that a military hegemony requires to sustain itself: filled with people who are desperate for work, a stone's throw from poverty, and feeling themselves surrounded and beset by terrors and disaster. People who, therefore, cling zealously to arbitrary rules and partisan passions. Each fight is not about the margins of a few court decisions, nor a few dollars in a monthly check, nor over how much testing to do in schools - instead, it is over what kind of people we are to become, and what kind of nation we are to be, now, and for a century to come.


Stirling Newberry is an internet business and strategy consultant, with experience in international telecom, consumer marketing, e-commerce and forensic database analysis. He has acted as an advisor to Democratic political campaigns and organizations and is the the co-founder, along with Christopher Lydon, Jay Rosen and Matt Stoller, of BopNews, as well as being the military affairs editor of The Agonist.

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