The dollar’s dominance is *not* the result of American military strength. Other countries don’t use the dollar because we bully them into it. They do it because it in their own interest. Period.
The US provides an open capital account of enormous size and liquidity, stable legal system, and a vast export market. None of those things are dependent on empire. In fact, insofar as “retaining a market for our exports” was traditionally the reason for empire, we are actually providing an anti-empire.
I find all your arguments here unconvincing but if there is one stupid idea I wish I could extirpate forever from the right wing commentariat it’s the economically illiterate “hurr durr King Dollar because air craft carriers!!” nonsense.
Military dominance is absolutely not the only factor (you pointed out several that are arguably more important), but it absolutely is *a* factor. To say otherwise, you’d have to completely ignore the historical context in which it formally became the global reserve currency.
Plus, this analysis ignores that the *dollar itself* is the export for which the empire retains markets. Trump has been making this more explicit with investment deals with regional allies, but it’s been the case for decades.
You could definitely argue it’s a bad way to run our economy (Dutch Disease, etc), and I’d be inclined to agree to a large extent, but that doesn’t change that exporting dollars (and US bonds, equities, etc) is the primary engine of American wealth at present with energy and MIC exports as ancillary drivers.
military dominance (US Navy) is why trade/commerce flows smoothly. the dollar being the export is how foreign countries maintains US as the consumer of foreign over production and foreign wage suppression
Yes, the system as it exists absolutely has detrimental impacts on Americans as workers (at least when it comes to traditional manufacturing), but it does give Americans cheaper imports and more valuable assets, so it benefits Americans as consumers and as asset-owners.
There are good arguments that’s a bad exchange for us as a nation (though I think that becomes less the case as our core native population ages and shrinks), but it’s important to makes the upsides as well as the downsides explicit when arguing the pros and cons of our present system.
"cheaper imports and more valuable assets" yes many consumed goods are cheaper but you mentioned more valuable assets which means inflated assets and HOUSING PRICES THROUGH THE ROOF.
There's a reason we feel the economy is hollowed out and its because we are forced to consume. For foreigners its because their wages and consumption are suppressed. Not to mention mass migration to the US (other countries give special carve outs to attract foreigners
Yes, but this is where it’s a trade off. American Boomers (the whitest living generation besides the rapidly dwindling Silents) benefit hugely from inflated housing prices and equity prices (via their 401ks).
Much of that is at the expense of younger generations, but it’s not only, or even primarily, foreigners benefiting from this arrangement. It’s the same basic problem we have with Social Security and Medicare.
There are some other benefits too beyond just wealth for the Boomers. Their inflated stock prices give American companies the resources to throw tons of capital at R&D which plays a major role in our technological dominance.
No, this has no economic economic validity at all. The engine of American wealth is the productivity of its economy.
If it were actually true that a country could export its currency to increase its own wealth, places like Venezuela or Argentina would be by far the richest countries on Earth. But currency is merely a claim on the production of a national economy - and to the extent our currency is artificially strong due to our economic policies, the “wealth” it produces is a temporary mirage with significantly deleterious long term consequences.
What is the "productivity of our economy" as it actually exists today? It's first of all the consumer economy and the capital markets (i.e. the things that are turbocharged by dollar dominance) and secondarily it's energy (thanks to the fracking revolution, which to a large extent is actually another product of our capital markets!) and MIC exports (symbiotic with military dominance).
And the examples of Venezuela and Argentina are obviously silly, because the value of something isn't determined by how much of it you produce. The value or price of a product is primarily determined by the demand for it, how much people are willing to pay for it, and that's what US currency, treasuries, equities, etc, have that third world currencies and markets don't have.
You're absolutely right that there are deleterious effects of this system, but just like the argument that we should crash the housing market, so young people aren't priced out of housing, it's very important to think about second-order consequences of extreme changes to an existing system, even when it has significant downsides.
True. Britain got China addicted to British opium to balance their trade balance with them, that should be the purpose of an empire. Not the case in the current US-China relationship.
the current relationship or at least until chinese exports to the US plunged as of late, is one where China suppresses its own wages/consumption, overproduces then pours that capital into the US so that the US can consume what China overproduces
You're forgetting something, Scott. In America there are two empires: a RW one, and a LW one. The RW one gives us macho quips from Pete Hegseth and the LW one gives us BLM flags in Seoul. Both give us stupid wars thousands of miles away.
Furthermore, our LW and RW empires will accept migrants as much or more than "weak France" does. We just went through 25 years of a RW and then LW empire and we were not better off; quite the contrary. In little France's case, she is under no obligation to say "oui" to anyone, powerful or not. If the French people don't want foreigners, they will get none. Or else it really is war.
At this point in time, the French are simply too libtarded or worn out to say "non". Power is irrelevant. Will is what matters. Ask the Ancient Greeks or the Ottoman Greeks. Would you die for a cause, even if you were the weaker party? Of course you would. It could even be glorious. The Iranians are facing that now.
This doesn't mean that the US needs to run the empire as it presently does at extortionate expense.
Yes, the petrodollars argument is valid, though it has been shaken this past week. But outside of pricing minerals in Dollars there is no need for 700 bases across the globe.
These costs make the US economy weaker, as do badly conceived military expeditions.
The dollar’s dominance is *not* the result of American military strength. Other countries don’t use the dollar because we bully them into it. They do it because it in their own interest. Period.
The US provides an open capital account of enormous size and liquidity, stable legal system, and a vast export market. None of those things are dependent on empire. In fact, insofar as “retaining a market for our exports” was traditionally the reason for empire, we are actually providing an anti-empire.
I find all your arguments here unconvincing but if there is one stupid idea I wish I could extirpate forever from the right wing commentariat it’s the economically illiterate “hurr durr King Dollar because air craft carriers!!” nonsense.
Military dominance is absolutely not the only factor (you pointed out several that are arguably more important), but it absolutely is *a* factor. To say otherwise, you’d have to completely ignore the historical context in which it formally became the global reserve currency.
Plus, this analysis ignores that the *dollar itself* is the export for which the empire retains markets. Trump has been making this more explicit with investment deals with regional allies, but it’s been the case for decades.
You could definitely argue it’s a bad way to run our economy (Dutch Disease, etc), and I’d be inclined to agree to a large extent, but that doesn’t change that exporting dollars (and US bonds, equities, etc) is the primary engine of American wealth at present with energy and MIC exports as ancillary drivers.
military dominance (US Navy) is why trade/commerce flows smoothly. the dollar being the export is how foreign countries maintains US as the consumer of foreign over production and foreign wage suppression
Yes, the system as it exists absolutely has detrimental impacts on Americans as workers (at least when it comes to traditional manufacturing), but it does give Americans cheaper imports and more valuable assets, so it benefits Americans as consumers and as asset-owners.
There are good arguments that’s a bad exchange for us as a nation (though I think that becomes less the case as our core native population ages and shrinks), but it’s important to makes the upsides as well as the downsides explicit when arguing the pros and cons of our present system.
"cheaper imports and more valuable assets" yes many consumed goods are cheaper but you mentioned more valuable assets which means inflated assets and HOUSING PRICES THROUGH THE ROOF.
There's a reason we feel the economy is hollowed out and its because we are forced to consume. For foreigners its because their wages and consumption are suppressed. Not to mention mass migration to the US (other countries give special carve outs to attract foreigners
and that my friend is what we call neoliberalism
Yes, but this is where it’s a trade off. American Boomers (the whitest living generation besides the rapidly dwindling Silents) benefit hugely from inflated housing prices and equity prices (via their 401ks).
Much of that is at the expense of younger generations, but it’s not only, or even primarily, foreigners benefiting from this arrangement. It’s the same basic problem we have with Social Security and Medicare.
There are some other benefits too beyond just wealth for the Boomers. Their inflated stock prices give American companies the resources to throw tons of capital at R&D which plays a major role in our technological dominance.
No, this has no economic economic validity at all. The engine of American wealth is the productivity of its economy.
If it were actually true that a country could export its currency to increase its own wealth, places like Venezuela or Argentina would be by far the richest countries on Earth. But currency is merely a claim on the production of a national economy - and to the extent our currency is artificially strong due to our economic policies, the “wealth” it produces is a temporary mirage with significantly deleterious long term consequences.
What is the "productivity of our economy" as it actually exists today? It's first of all the consumer economy and the capital markets (i.e. the things that are turbocharged by dollar dominance) and secondarily it's energy (thanks to the fracking revolution, which to a large extent is actually another product of our capital markets!) and MIC exports (symbiotic with military dominance).
And the examples of Venezuela and Argentina are obviously silly, because the value of something isn't determined by how much of it you produce. The value or price of a product is primarily determined by the demand for it, how much people are willing to pay for it, and that's what US currency, treasuries, equities, etc, have that third world currencies and markets don't have.
You're absolutely right that there are deleterious effects of this system, but just like the argument that we should crash the housing market, so young people aren't priced out of housing, it's very important to think about second-order consequences of extreme changes to an existing system, even when it has significant downsides.
True. Britain got China addicted to British opium to balance their trade balance with them, that should be the purpose of an empire. Not the case in the current US-China relationship.
the current relationship or at least until chinese exports to the US plunged as of late, is one where China suppresses its own wages/consumption, overproduces then pours that capital into the US so that the US can consume what China overproduces
You're forgetting something, Scott. In America there are two empires: a RW one, and a LW one. The RW one gives us macho quips from Pete Hegseth and the LW one gives us BLM flags in Seoul. Both give us stupid wars thousands of miles away.
Furthermore, our LW and RW empires will accept migrants as much or more than "weak France" does. We just went through 25 years of a RW and then LW empire and we were not better off; quite the contrary. In little France's case, she is under no obligation to say "oui" to anyone, powerful or not. If the French people don't want foreigners, they will get none. Or else it really is war.
At this point in time, the French are simply too libtarded or worn out to say "non". Power is irrelevant. Will is what matters. Ask the Ancient Greeks or the Ottoman Greeks. Would you die for a cause, even if you were the weaker party? Of course you would. It could even be glorious. The Iranians are facing that now.
This doesn't mean that the US needs to run the empire as it presently does at extortionate expense.
Yes, the petrodollars argument is valid, though it has been shaken this past week. But outside of pricing minerals in Dollars there is no need for 700 bases across the globe.
These costs make the US economy weaker, as do badly conceived military expeditions.
"No Empire, No Welfare." And Welfare isn't just for the underclass, despite what PMC types think.
I still think that a debate/discussion between you and Tom Woods on this question would be outstanding!