War has always been the driver of history, economics and industry. Western prosperity is a product of the battlefield.
The United States became the supreme world power after World War II. That was not chance. After the Japanese attack on Pearl Harbor in 1941, US industry transformed to a war model. War drove a huge innovation beast that delivered American industrial supremacy from 1945 onwards.
Out of the battlefields and bombed-out cities came the jet plane, the jeep, the modern tractor, new civil and mechanical engineering ideas, mass production, maritime innovation, and a telecommunications revolution that has led to cell phone technology including the internet and digitisation.
US brands led the world after the war ended. That, again, was not by chance. While bombs and tanks turned Allied lands in Europe to rubble, war never touched the US mainland. The country therefore had room to breathe, to innovate and to produce the arms the allies in Europe required to prevail over Hitler.
Power shift
Today, conflict and war continue to drive capital growth and innovation. Ukraine, Iran and the South China Sea spur capitalists in the armaments industry to innovate and produce to maintain supremacy.
Meanwhile, there has been a power shift within the capitalist model. The new capitalist owns and adopts digital capital as the path to wealth and power. The traditional capitalist owned factories and outlets. Today’s capitalist uses digitisation to pull all the factors of production together for his control and exploitation. Modern digitisation drives all aspects of business.
The new capitalist has been termed oligarch or techno-feudalist. Digitisation is driving even greater wealth inequality in the west as the middle class declines.
One reason for anaemic economic growth in the west has been the contraction of the middle classes. It has often been said that the rich save and the middle class spends. This axiom is correct. However, a middle class is vital for a growing economy. It, not the super wealthy, is the key engine of economic growth.
‘Mighty US dollar’
The roots of modern US power stretch back to the late 1800s. That power manifests in the lives of present-day humanity through the ubiquitous presence of the mighty US dollar. The dollar is the manifest tool of American power.
The dollar is not simply the world’s reserve currency. It is a critical logistics and intelligence asset of the US. With every transaction — especially the use of digital dollars like credit card transactions and money transfers — US banks know where we are, who we are, what we are doing, and what are our habits. They therefore know what trends to assess. That is huge hegemonic power.
Movements of cash across borders show up on computer screens in various institutions in the US that manage the dollar such as banks and money-transfer organisations. This may be a tool in the fight against fraud, terrorism and international crime. But the dollar is why the US is the global hegemon — not its vast military network.
