In State of the Union: Nation Essays 1958-2005, Gore Vidal writes: On September 16, 1985, when the Commerce Department announced that the United States had become a debtor nation, the American Empire died. The empire was seventy-one years old and had been in ill health since 1968. Like most modern empires, ours rested not so much on military prowess as on economic power.

After the French Revolution, the world money power shifted from Paris to London. For three generations, the British maintained an old-fashioned colonial empire, as well as a modern empire based on London’s primacy in the money markets. Then, in 1914, New York replaced London as the world’s financial capital. Before 1914, the United States had been a developing country, dependent on outside investment. But with the shift of the money power from Old World to New, what had been a debtor nation became a creditor nation and central motor to the world’s economy. All in all, the English were well pleased to have us take their place. They were too few in number for so big a task. As early as the turn of the century, they were eager for us not only to help them out financially but to continue, in their behalf, the destiny of the Anglo-Saxon race: to bear with courage the white man’s burden, as Rudyard Kipling not so tactfully put it. Were we not—English and Americans—all Anglo-Saxons, united by common blood, laws, language? Well, not, we were not. But our differences were not so apparent then. In any case, we took on the job. We would supervise and civilize the lesser breeds. We would make money.

By the end of World War II, we were the most powerful and least damaged of the great nations. We also had most of the money. America’s hegemony lasted exactly five years. Then the cold and hot wars began. Our masters would have us believe that all our problems are the fault of the Evil Empire of the East, with its Satanic and atheistic religion, ever ready to destroy us in the night. This nonsense began at a time when we had atomic weapons and the Russians did not. They had lost 20 million of their people in the war, and 8 million of them before the war, thanks to their neoconservative Mongolian political system. Most important, there was never any chance, then or now, of the money power (all that matters) shifting from New York to Moscow. What was—and is—the reason for the big scare? Well, World War II made prosperous the United States, which had been undergoing a depression for a dozen years; and made very rich those magnates and their managers who govern the republic, with many a wink, in the people’s name. In order to maintain a general prosperity (and enormous wealth for the few) they decided that we would become the world’s policeman, perennial shield against the Mongol hordes. We shall have an arms race, said one of the high priests, John Foster Dulles, and we shall win it because the Russians will go broke first. We were then put on a permanent wartime economy, which is why a third or so of the government’s revenues is constantly being siphoned off to pay for what is euphemistically called defense. [Continue reading…]