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The Soviet Union may have invested in war heavily but failed to take control of global commerce. The United States invested more and "won" the cold war. It ge

The Soviet Union may have invested in war heavily but failed to take control of global commerce. The United States invested more and "won" the cold war. It gets more complicated when you look at where the money went. The U.S. built up a massive global navy to control commerce and the shipping lanes. Meanwhile, the Soviets focused large on the European theater and ultimately could not compete with the U.S. Navy. Eventually you wind up considering a philosophical question about money, especially modern fiat currency, where there is a big question about why we continue to value it the way we do. Sure, we have all agreed on some common exchange rate for goods using it, but this is backed by the "full faith and credit of the U.S. government". It can be argued that faith and credit is ultimately backed by the war machine behind it. Even in older times, if you traded in a currency, and you had to go collect a debt in that currency from another nation, what are you going to use to collect it? Angry letters? No, you're going to send the military.

nickik 6y ago
Britain never excluded German or Russia from Global Trade when they were controlling it when they were not trying to take over everything. Germany and to a lesser extend Russia were perfectly able to grow rich in a British controlled world. The same goes for China in the American controlled world. The reason the Soviet Union did not have access to global commerce is that they spent inordinate amounts of money telling everybody how they would destroy their countries, had a communist party controlled by Moscow in every country, were refusing to pay Russian debt and were questioning the concept of private property. Russia neither had the sea ports or the shipping industry or the international partners to control commercial trade. I am sure they would have loved to do so. > Sure, we have all agreed on some common exchange rate for goods using it, but this is backed by the "full faith and credit of the U.S. government". It can be argued that faith and credit is ultimately backed by the war machine behind it. It is not backed by the war machine, but rather by the Federal reserve controlling its supply, or at least the effect of its supply in the market and by the US economy as a whole. To some extend that economy is secured by a military, but even if 90% of the US military went away tomorrow, the $ would not lose its value. The $ would lose its value if China decided to blockade the US from international trade and destroy its economy, but we are pretty far into the world of hypothetical and ignoring nukes besides. Britain controlled global trade with small % of its budget, and an even smaller % of the budget of the whole empire. The US could do so to, but for political reasons it spends like crazy on the military, but that does not make the most of the military necessary to keep up the value of the $.
- Threeve303 6y ago
  While I agree to an extent about Russia, perhaps it's a bad example since they have always been a land power. Meanwhile, China is returning to its status as a global sea power, by investing heavily in its navy. And we can see the sort of domino effect this will have on global commerce and most importantly protecting trading routes. The crux of my argument is that a nations currency is only as good as the gun behind it. Do you think the European powers after WW2 would have even gone along with the Bretton Woods agreement without the U.S. having been the first nuclear power? France in particular did not want to go along with it, referred to it as America's "exorbitant privilege", then proceeded making nuclear weapons a national priority. Then in 1965, Charles De Gaulle sent the French Navy to the U.S. to pick up the French gold reserves. This lead, along with other factors, to the Nixon Shock and ending the gold peg. There are numerous historical examples. When you run a global empire, even a benevolent one, you still have to enforce it. Otherwise, you're just left with worthless pieces of paper.

nickik 6y ago

Britain never excluded German or Russia from Global Trade when they were controlling it when they were not trying to take over everything. Germany and to a lesser extend Russia were perfectly able to grow rich in a British controlled world. The same goes for China in the American controlled world. The reason the Soviet Union did not have access to global commerce is that they spent inordinate amounts of money telling everybody how they would destroy their countries, had a communist party controlled by Moscow in every country, were refusing to pay Russian debt and were questioning the concept of private property. Russia neither had the sea ports or the shipping industry or the international partners to control commercial trade. I am sure they would have loved to do so. > Sure, we have all agreed on some common exchange rate for goods using it, but this is backed by the "full faith and credit of the U.S. government". It can be argued that faith and credit is ultimately backed by the war machine behind it. It is not backed by the war machine, but rather by the Federal reserve controlling its supply, or at least the effect of its supply in the market and by the US economy as a whole. To some extend that economy is secured by a military, but even if 90% of the US military went away tomorrow, the $ would not lose its value. The $ would lose its value if China decided to blockade the US from international trade and destroy its economy, but we are pretty far into the world of hypothetical and ignoring nukes besides. Britain controlled global trade with small % of its budget, and an even smaller % of the budget of the whole empire. The US could do so to, but for political reasons it spends like crazy on the military, but that does not make the most of the military necessary to keep up the value of the $.

Threeve303 6y ago
While I agree to an extent about Russia, perhaps it's a bad example since they have always been a land power. Meanwhile, China is returning to its status as a global sea power, by investing heavily in its navy. And we can see the sort of domino effect this will have on global commerce and most importantly protecting trading routes. The crux of my argument is that a nations currency is only as good as the gun behind it. Do you think the European powers after WW2 would have even gone along with the Bretton Woods agreement without the U.S. having been the first nuclear power? France in particular did not want to go along with it, referred to it as America's "exorbitant privilege", then proceeded making nuclear weapons a national priority. Then in 1965, Charles De Gaulle sent the French Navy to the U.S. to pick up the French gold reserves. This lead, along with other factors, to the Nixon Shock and ending the gold peg. There are numerous historical examples. When you run a global empire, even a benevolent one, you still have to enforce it. Otherwise, you're just left with worthless pieces of paper.