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Unipolar Economic Rule is Dead: Long Live the Economic Multipolar World

By Matthew Clark

Authors note; Generally I do not like to use abbreviation's and acronyms. I am influenced in this matter by George Orwell who stated, accurately in my opinion, that abbreviations and acronyms shrink thought. In this article I do use the G7 and BRICS acronym for convenience. It is a practice I shall try not to repeat.

In 1944 the Western Allied governments, anticipating victory in World War Two, sent representatives to Bretton Wood, New Hampshire, United States, to set up a post war economic order for the Western World. This conference was lead by the United States, supported strongly by the United Kingdom, with 42 other nations participating in an attempt to bring prosperity, and order, to a fractured world.

Much of the conferences results involve great detail, as is wont to happen when hundreds of civil servants get together, but it is possible to give a general overview of the outcome of this Bretton Woods get together.

The United States dollar would be the reserve currency of the member states, while in turn the American dollar would be pegged to Gold at $35 an ounce. A world bank would be set up to assist nations in need of credit for their economy, and an International Monetary Fund to manage the international implications of the agreement on global currencies. There was also a development bank formed as well as motions to negotiate future agreements in other economic spheres, principally Trade and Tariffs.

It is important at this point to note that Bretton Woods was a very substantial move to centralize the economies of its member countries. This ran counter to the traditional culture of most of these nations which had recognized a high degree of individual liberty in their jurisdiction(s). Due to the turmoil of the Second World War this contradiction went largely unnoticed by the general public. As well the centralization trends of Bretton Woods were a fraction of the totalitarianism of the victorious Eastern powers, led by the Communist Soviet Union. In relative terms Bretton Woods member states had much more individual liberty than the Communist countries. Fundamentally however the western nations were becoming more collectivistic.

Despite facing systemic challenges, such as the 1971 decoupling of the United States Dollar from Gold, which in effect turned every country in the world cash into a fiat currency, the American United Kingdom brainchild did rather well. Spreading throughout the non communist international order, its member states generally experienced prosperity, complimented by an entrepreneurial business class, and a dynamic citizenry. When comparing this group to the communist bloc there was no doubt who had the better system. Communist countries had stagnant business practices, mind numbing regulations, and inhabitants made dull through servitude.

Yet all was not wine and roses within the Bretton Wood aligned nations. Post 1971 governments within the United States fold started to accumulate large debts, allowed by an international fiat currency system to live well beyond their means. Over time the personnel finances of the general public transformed from a custom of large savers, into ominously large debtors. Society in most of these countries transformed from one of production to that of consumption. Most people in Bretton Woods countries , along with their governments, were living substantial well beyond their means.

In 1991 the communist world, with the exception of Red China, disintegrated. Burdened with centrally planned economies, the Bolshevik powers became dysfunctional. Aside from Romania, who had a Christmas season revolution, the communist bloc was erased by the volition of those in power, or on its cusp. Realizing they could no longer rule over a disenchanted citizenry, the rulers surrendered. This was deduced, probably correctly, as a condemnation of the socialist system. Unfortunately in the West, or western aligned nations, amongst political leaders and general public alike, many saw the Communist failure as a justification of the Bretton Woods style system, despite its centralizing tendencies.

By the early nineteen nineties Western governments had acquired unsustainable public debt. Canada in particular was a case in point. Led by Minister of Finance Paul Martin and Prime Minister Jean Chretien, the federal government decided to get their financial house in order. Tellingly though, they did do so not by cutting their departments down to a manageable size. Rather they cut expenditures by switching services to the provincial administrations. Federal debt was reduced at the cost of increasing provincial government insolvency.

With public, and private, finances improperly addressed, the international economy had increasingly stifled by 2008. All growth depended on debt financing. Savings at any level seemed irrelevant. Furthermore the richer nations of the world , referred to as the developed economies, led the globe in even greater centralization.

Back in 1975 the most prosperous (at that time) countries in the globe, formed an organization referred to as the G7. It was a byproduct of the Bretton Woods established order, a further attempt to control the economic agenda of the planet. This new organization consisted of the United States, United Kingdom, Japan, France, Italy, Germany, and, as a favour to the Americans, their northern neighbour Canada. In 1994 the organization briefly became the G8 with the admittance of Russia as a new member. Russia was eventually expelled from the group in 2014 because her leaders refused to play according to the other member states politics. Her lawmakers strong streak of independence unsettled the political leaders of the other G7 constituents.

By the year 2021 the Group of Seven had expanded economically to encompass a total of 33 trillion, 930 billion United States Dollars. (World Bank figures) An impressive total, yet all predicated on public debt. Every one of its members administrations has a Gross Domestic Product to debt ratio greater than 100%. As well the private debt of the general public in these jurisdictions is staggering. In 2019 for instance, the average Canada had 167,000 Canadian dollars of debt for every 100,000 Canadian dollars of assets. In essence the average Canadian household is in a financial condition of living on borrowed time. Although Canada is the most extreme case within the seven member group, they are not atypical. Inhabitants of all the G7 jurisdictions are in financial decline.

Incredibly the G7 nations, despite these flaws, have seen fit to apply economic sanctions against the people, and governments, of any nation they deem politically unworthy. People in such countries as Iran, Venezuela, Russia, North Korea, have been curtailed from fully participating in international trade. This has been applied with such severity that the average person in Venezuela in the 20 teens lost 25 pounds, with the animals in the Caracas zoo being hunted, and consumed by starving citizens, driven to famishment by internationally applied sanctions. (source Zerohedge)

No political leader worth their salt would allow such aggression against his comrades without a reaction to counterbalance the assault. Predicably in 2009 in Yekaterinburg, Russia, representatives of the governments of Brazil, Russia, India, China, and South Africa, met and formed the BRICS aligned nations. Although it stated a goal, no doubt genuine, of increasing trade and prosperity among its member states, in practice it is also a challenge to the G7. The G7 which has ruled the global economy in a unipolar fashion since the fall of Soviet style communism, now had a credible challenger.

According to World bank figures, by 2021 the BRICS economies accounted for a Gross Domestic Product, in United States Dollars, of 24 Trillion, 303 Billion, 570 million. Furthermore despite censure by the G7 lawmakers, especially after the February 24, 2022 start of the Special Military Action by Russian armed forces against Ukraine, the administrations of Iran and Argentina have applied to join the BRICS. Egypt, Turkey, and Saudi Arabian governments are in talks with BRICS representatives to apply for membership. This if it occurred, would mean a further 2 Trillion, 363 billion, 100 million United States Dollars wealth to the organization. (World Bank figures)

What will be the result of these developments is strictly guesswork at this juncture. Nevertheless one fact is obvious. The condition of Unipolar Economic Rule occurring since 1991 is dead. If this death leads to the benefit of a less centralized international financial, trade, and economic order, than Long Live The Multipolar Economic World!

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