Vietnam and Great Society spending cost America its trade surplus and killed Bretton Woods

Evidence

As long as America was the major surplus nation, Bretton Woods was safe as houses. And that’s why, by the late 1960s, the Bretton Woods system was dead in the water. The reason? Three developments which caused America to lose its trade surplus and become a chronically deficit economy. The first was the escalating Vietnam War which forced the US government to spend billions in South East Asia on supplies and services for its military. The second was President Lyndon Johnson’s attempt to make amends for the ill effects of conscription on working-class America, its black communities in particular. His valiant but expensive Great Society programme substantially reduced poverty but, at once, sucked lots of imported goods from Japan and Europe into the United States. — Yanis Varoufakis, Technofeudalism, 172

Categorization

• XREF: Establishes the causal chain (surplus-loss → Nixon Shock → financial deregulation) that Varoufakis needs before introducing cloud capital and platform rent. — connects to: US financial-military hegemony structured the postwar Fordist world economy — David Harvey, The Condition of Postmodernity: An…, 825; The Nixon Shock deliberately demolished Bretton Woods — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 214; The US imposed the dollar at Bretton Woods, killing Keynes’s clearing union — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 1016 (+12 more)

Broader Connections

• US financial-military hegemony structured the postwar Fordist world economy #expands (0.80) — David Harvey, The Condition of Postmodernity, 825
• Post-Bretton Woods globalization is the unstable Global Minotaur phase of capitalism #expands (0.80) — Yanis Varoufakis, Technofeudalism, 216
• Financialization won by subordinating collective interests to speculative private capital after Bretton Woods #expands (0.80)
• The dollar’s role in commodity pricing kept it dominant after Bretton Woods collapsed. #qualifies (0.80) — Yanis Varoufakis, Technofeudalism, 196
• The Bretton Woods consensus prioritized domestic full employment over capital mobility #qualifies (0.80) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 416
• The Nixon Shock deliberately demolished Bretton Woods #complicates (0.75) — Yanis Varoufakis, Technofeudalism, 214
• The US imposed the dollar at Bretton Woods, killing Keynes’s clearing union #expands (0.75) — Yanis Varoufakis, Technofeudalism, 1016
• Bretton Woods institutionalized the monetary nationalism Hayek had attacked since the 1930s #complicates (0.75) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 424
• States chose power export over sacrifice of national wealth #corroborates (0.75)
• Growing financial power systematically dismantled Bretton Woods-era regulatory controls. #expands (0.75) — Max Haiven, Cultures of Financialization, 150
• Troop salaries spent abroad leak economic benefit out of the US economy #expands (0.72) — David Vine, Base Nation_ How U.S. Military Bases…, 652
• Postwar American consumption was politically constructed #expands (0.72) — Shoshana Zuboff, The Age of Surveillance Capitalism, 1721
• Capital-account liberalization creates surplus-deficit imbalances and boom-bust cycles #expands (0.72) — Natascha van der Zwan, Making Sense of Financialization, 34
• Neoliberals were ready accomplices in Bretton Woods’ collapse #corroborates (0.72) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 412
• American concessions to Asian states were read as weakness and exploited #complicates (0.70) — Samuel P. Huntington, The Clash of Civilizations and the…, 610