zlacker

You just made a long circle to come back to the same fundamental point which is that the backing of the currency is tangential to the main issue: industrial capitalism in the west was heading into a new phase. Really a kind of return to the "normality" of the pre-war, 1930s, really. Because after WWII the US especially got paid a huge dividend by being able to capture and control all sorts of of the world market. But there were natural limits to how far this could go before it was saturated.

Reconstruction of Europe, huge population boom, control over new overseas territory, massive reduction in competition from European nations which had lost their colonies (and a large part of their own native labour force), huge investments in housing & infrastructure, it's hard to overstate just how massively growth focused the years from 1945-1965 or so were. The closest comparison would be the massive growth that China has from the mid-90s til recently.

The outburst of left wing and cultural radicalism in the late 60s, the Vietnam war, heavier US involvement in central America, the decline in corporate profits in the 70s, the development of computing technology and information automation, all of these are connected with the fundamental saturation and then decline in the growth capacity of US imperial economic power...

When limits to growth are hit, the response is usually some kind of crisis -- because capitalism requires continuous growth. War either colonial or against other colonial powers, social turbulence, etc. etc.

Dropping the gold standard was just one of the panic-moves performed by US capital interests to try to salvage things. And honestly, it likely had little to no effect.

After the mid-90s there was a reprieve from this for a bit, as the collapse of the USSR and the opening of China to western industrial interests opened up new economic horizons. Which now seem to be closing off.

replies(1): >>29athr+Ik