nvm
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ParkCungHee
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Now...what was going on in 1919 that the government was spending money on? Class? Anyone?
amadeus
Bishop of Bio-Dome
A welfare program for France and Belgium.
GinandTonic
Saphire w/ Schweps + Lime
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The US made a fortune from ww1, transforming it to the leading industrialised nation. The war was very, very good for american business. The war ending was bad for an economy that had exploded first to sell goods to allies and belatedly to mobilise for war itself, however all good things must come to an end.
Obviously rather the opposite experience was true of most of the world.
Obviously rather the opposite experience was true of most of the world.
Small correction. The U.S. became the leading industrial nation in the late 1880s, and the leading industrial and financial nation in the mid-1890s. What WWI did was transform the U.S. from leading industrialized nation to hegemonic industrialized nation.
ParkCungHee
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Woah. Britain was certainly the leading financial power in the world at the time of the war breaking out. Their investments worldwide, in their colonies, Latin America, China, and our own railway system, far outstripped our own. It was the war that caused them to liquidate all that and lose their leading financial position.
Untrue. Britain did indeed have massive foreign investments, but that only partially makes up for the much smaller size of their overall economy. Consider that foreign/colonial investment never made up more than 10% of British GNP. U.S. GNP outstripped British GNP only a few years after U.S. GDP did. Britain did have far more influence over the global financial system than the size of its economy would suggest thanks the existence of British investments in every economy that mattered, and the central position of London, but in sheer size, they could never compete with the U.S. after the U.S. industrialized.
ParkCungHee
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If it did have far more influence over the global financial system thanks to "investments in every economy that mattered", how was it not "the leading financial nation."
That's because the global financial system does not equal the sum of all financial systems, even now, and most definitely back then. Controlling the international flow of money doesn't mean also controlling the internal money flows of each nation that participated in international trade. And in some cases, such as the U.S., internal money flows were of a scale that dwarfed the international market.
In other words, the U.S. had a lot more money total, but it was less of it was liquid, and far less of it was international compared with Britain.
, if you want to start playing semantic games like that, all the British investments aren't money either. Perhaps you'd like wealth better? In fact, do you actually have a point to go along with the quip?
Neonanocyborgasm
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The Forgotten Depression of 1920, when the economy sank in 17% in one year, government did nothing to stop it(expenditures was in fact cut in half) and Federal reserve manned no helicopter drops. And yet, no one other than the Austrian Business Cycle Theory can explain it
See for yourself
http://mises.org/daily/3788
Right, and there had been many panics, recessions, and brief depressions of this kind for over 100 years. All of them were followed by recoveries but only after painful recessions, because that's the nature of the business cycle. Just as in 1920, hardly anything was done about them because this was not viewed as the prerogative of government. After Keynesian economic principles began being adopted in the 1930's, these recessions still continued to happen, but were less severe and more brief. Probably even the Great Depression would've recovered in time, but it would've taken much longer, and would've led to a longer period of impoverishment and resulting civil and social upheaval.
LightSpectra
me autem minui
This stupid "Hoover was a laissez-fairist that did nothing" myth needs to die in a fire. Hoover had an unprecedented amount of government funding devoted to relief, and the Depression only got worse under his wing. FDR originally campaigned on a platform of free-market capitalism as a response to this.
aelf
Ashen One
The Forgotten Depression of 1920, when the economy sank in 17% in one year, government did nothing to stop it(expenditures was in fact cut in half) and Federal reserve manned no helicopter drops. And yet, no one other than the Austrian Business Cycle Theory can explain it
See for yourself
http://mises.org/daily/3788
Have you become a bot?
LightSpectra said:
You sir are on the money. Hoover was not all that fond of laissez faire, considering he was, you know, all for volunteerism complete with wage fixes and job sharing. That's also ignoring his, at that stage, unprecedented manipulation of the market via the FCC. Then there's that really big deficit under the last year of Hoover's Presidency. But let's not get in the way of a bit of 'common sense' now aye LightSpectra?
aelf said:
I'm seriously starting to suspect so.
ParkCungHee
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Well to demonstrate that, you'd have to demonstrate that American GNP dwarfed the GNP of the rest of the planet.
ParkCungHee said:
I don't think he would have to if all he is talking about is international flows of currency and not internal flows. That's supposition on my part but if he is indeed talking about what you think he is then you would happen to be right.
Naskra
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Indeed I do - it is that your post is far from clear.
What, for example, is meant by a "sum of financial systems"? "Financial system" alone is a sufficiently vague concept without bestowing additive properties on it.
And what is "controlling the international flow of money"? Some functionary in London deciding how much money goes where? Or do you mean the kind of capital controls that did not exist in the time period in question?
Actually, all I have to demonstrate is that U.S. GNP is higher than that of Britain. That's it, since GNP includes all income from foreign investments and does not include income from foreign holdings in one's own country. Or I can point out that British foreign investments never made up more than 10% of British GNP, which makes it a tiny, tiny proportion of the GDP of the rest of the planet.
Or I can point out what I already said, but you seemingly did not see, where the international market is not equal to the sum of all national markets, not now, and most definitely not then.
