The Dollar's Role in American Empire, with David Adler and Daniel Bessner (PODCAST 2-04-2020)
Feb 4, 2020
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In this discussion, David Adler from the Democracy in Europe Movement and Daniel Bessner from the University of Washington delve into the U.S. dollar’s significant global influence. They explore how dollar diplomacy intertwines with military strategy to maintain American power. The conversation highlights historical expansionism and its evolution towards economic dominance, particularly in Latin America. They also call for a shift in focus for activists to include economic factors in challenging systemic power dynamics, advocating for a progressive rethinking of dollar power.
The U.S. dollar's role as the global reserve currency enables the U.S. to impose extensive extraterritorial sanctions on foreign entities.
Historically, military action and economic strategies have intertwined in U.S. foreign policy, reinforcing America's global dominance and reducing direct military intervention.
There are growing concerns about the effectiveness of sanctions, prompting discussions on multilateral monetary systems to challenge U.S. financial hegemony and promote global equity.
Deep dives
The Power of the Dollar in Global Affairs
The dollar serves as the primary global reserve currency, granting the United States significant leverage over international financial transactions and the ability to impose extraterritorial sanctions. This means sanctions do not solely apply to American individuals or companies; they can affect entities worldwide, limiting their access to the dollar and creating severe economic consequences. For instance, countries that wish to engage in international trade often find themselves bound by the need to conduct transactions in dollars, leading to ramifications that can hinder their economic operations and even travel. The implications of this dominance extend beyond mere economics, shaping foreign policies and international relationships as countries navigate the complexities of U.S. influence.
Dollar Diplomacy and Military Control
Dollar diplomacy, initiated under President Taft, emphasized the use of financial influence rather than military intervention to protect American interests abroad. However, a historical perspective shows that military action often coincided with financial strategies, as seen in U.S. intervention in Nicaragua when initial financial approaches failed and troops were sent to impose American control. This synergy between economic and military power fosters a system where the two reinforce each other, ensuring U.S. dominance in global affairs while attempting to minimize on-ground military presence. The continuous link between financial control and military force demonstrates that economic tools are integral to sustaining American hegemony.
Consequences of Overusing Sanctions
The overreliance on sanctions has prompted discussions about their effectiveness and unintended consequences in shaping global dynamics. There are concerns that excessive sanctions can push countries toward seeking alternatives to the dollar, thereby destabilizing the established financial order. The experiences of countries like Iraq, as seen during and after its conflict with the U.S., highlight the coercive power of sanctions that can effectively limit a nation's sovereignty. This reality illustrates how the threat of financial penalties is often sufficient to undermine political ambitions and complicate international relations.
Surveillance and Control over Foreign Policies
The U.S. dollar's position as the dominant currency enables American authorities to exert control over economic activities globally, necessitating that even adversarial nations maintain ties to the U.S. financial system. Countries like Russia and Iran must keep accounts at the Federal Reserve to facilitate trade, thereby giving the U.S. unprecedented insight into foreign financial operations. Such surveillance capabilities can be weaponized, as the U.S. has previously cut off access to these financial systems in response to perceived threats, thereby coercing even reluctant governments to align with American interests. This dynamic brings to light the extent of systemic control that dollar hegemony affords the U.S. in managing not just its allies, but also its rivals.
Rethinking Global Monetary Relationships
The interdependence of dollar power and military force calls for a reassessment of existing financial frameworks and their implications for global governance. Moving towards a multilateral monetary system offers a potential pathway for reducing U.S. dominance and fostering a more equitable global economic landscape. However, this transition necessitates robust discourse among progressive political actors about the conclusions and consequences of utilizing dollar power for social justice initiatives. The ongoing struggle to redefine international relations emphasizes the importance of crafting a shared vision for a more just financial architecture that counters the existing hegemonic structures.
David Adler of the Democracy in Europe Movement and the University of Washington’s Daniel Bessner join me to discuss the US dollar’s global influence and how that it with the more overtly military aspects of Empire USA. Their recent The New Republicpiece is called “To End Forever War, End the Dollar’s Global Dominance.” Enjoy!
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