Money and Power: America and Europe in the 20th Century

Money makes the world go around: Kathleen Burk looks at how the Yankee dollar transferred influence from the Old World to the New.

The international power of the United States in the twentieth century has been grounded in its economic strength. In 1900, even before the US had much of an army, it was perceived as a power and a future great power. By 1920 it was the supreme financial power in the world, having displaced Great Britain during the First World War. By 1945 it was virtually the only financial power, most others having been devastated by the Second World War. By 1985 it had lost its position as supreme financial power, with Japan succeeding to the crown. It had been a short but action-packed reign.

The economic power of the US, as of any country, can be difficult to pin down. Power to do what? After all, economic power is not necessarily transferable to other realms. Power exercised by whom? Does the term 'financial power' refer to private money controlled by bankers and private investors, or public money controlled by governments? Indeed, does 'financial power' exist if abundant private money cannot be directed according to government policy? Certainly these are important questions when considering American relations with Europe, because economic relations, economic aid and economic rivalry have been dominant themes.

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