There is no better way to describe the international monetary system today than through the statement made in 1971 by U.S. Treasury Secretary, John Connally. He said to his counterparts during a Rome G-10 meeting in November 1971, shortly after the Nixon administration ended the dollar’s convertibility into gold and shifted the international monetary system into a global floating exchange rate regime that, “The dollar is our currency, but your problem.” This remains the U.S. policy towards the international community even today. On several occasions both the past and present chairpersons of the Fed, Ben Bernanke and Janet Yellen, have indicated it still is the U.S. policy as it concerns the dollar.
To most Americans of the classes which consider themselves significant the war [World War I] brought a sense of the sanctity of the State which, if they had had time to think about it, would have seemed a sudden and surprising alteration in their habits of thought. In times of peace, we usually ignore the State in favour of partisan political controversies, or personal struggles for office, or the pursuit of party policies. It is the Government rather than the State with which the politically minded are concerned. The State is reduced to a shadowy emblem which comes to consciousness only on occasions of patriotic holiday.
A PEOPLE’S HISTORY OF THE UNITED STATES by Howard Zinn
“War is the health of the state,” the radical writer Randolph Bourne said, in the midst of the First World War. Indeed, as the nations of Europe went to war in 1914, the governments flourished, patriotism bloomed, class struggle was stilled, and young men died in frightful numbers on the battlefields-often for a hundred yards of land, a line of trenches.
“War is the health of the State.”
The famous seven words appeared in an unfinished manuscript written by the progressive essayist Randolph Silliman Bourne (1886-1918) during World War I. In a collection of Bourne’s essays entitled War and the Intellectuals (1964), editor Carl Resek explained the phrase’s meaning. Resek wrote, “In its proper place it [the saying] meant that mindless power thrived on war because war corrupted a nation’s moral fabric and especially corrupted its intellectuals.” The seven words contain a complexity of meaning that is often overlooked by those who use it.
America has been at war for over a decade now and hostilities are not abating. Quite the opposite. American troops and clout have spread across the Arab world and the Middle East, leaving casualties heaped and enemies gathering. If economic emergencies usher in conflict, then more war is coming. The complexity of Bourne’s insights needs to be explored in order to deprive the state of as much health as possible.
The State, Government, and Society
In times of peace, Bourne believed the majority of people pursued their own interests according to their own values. They worked and cooperated with each other, married and raised children without paying much attention to the state. Instead, they dealt with the government. Bourne defined government as
a framework of the administration of laws, and the carrying out of the public force. Government is the idea of the State put into practical operation in the hands of definite, concrete, fallible men.