Introduction
The Deluge asserts that the United States’ economic strategies during and following World War I, such as deflation and tariff increases, significantly influenced its emergence as a global economic power. However, these measures also triggered the Great Depression and World War II by fostering economic and political instability, obstructing international collaboration in economic recovery, and undermining efforts to establish collective security.
The United States’ Rise as a World Economic Power During World War I
The Deluge argues that the US became an economic power in WWI due to being the world’s top creditor and owning the most gold. After the war, the US chose deflation, creating a problem for other countries. They had to either deflate, causing unemployment, or devalue their currency against gold. Most chose the latter. Europe suffered, and there was a risk of cheap European imports flooding the US. To stop this, “In 1921 and 1923, they raised tariffs, terminating a brief experiment with freer trade undertaken after the election of 1912” (Frum 12). The US played a role in global financial flows, with Germany borrowing from the US to pay reparations.
The Path to the Great Depression and World War II
The US economic policies led to its rise as an economic power and caused the Great Depression and World War II. The US supported Britain and France in World War I, leading to increased trade and investment (Frum 4). However, the US commitment grew too big, making it unable to avoid getting involved in the war. The US became a “super-state” but failed to cooperate with other countries in stabilizing the world economy and establishing collective security (Frum 5). This conservative vision prevented the US from preventing the Great Depression and the rise of fascism, causing economic and political instability.
Conclusion
In conclusion, The Deluge argues that the US economic policies during and after World War I played a significant role in its rise as an economic power but also had negative consequences. The choice of deflation and raising tariffs created economic and political instability hindered global cooperation and ultimately contributed to the Great Depression and World War II. While the US became a dominant economic force in the aftermath of the war, its conservative vision and failure to cooperate with other countries prevented it from effectively addressing the challenges of the time.
Work Cited
Frum, David. “The Real Story of How America Became an Economic Superpower.” The Atlantic. 2014. Web.