1 00:00:00,000 --> 00:00:02,770 [BLANK_AUDIO] Hi. Welcome back.

Last time we talked about zero hour, the sense of starting from scratch. Let's look at that from another angle. Suppose you're a leader who is trying to build a new country. How would you imagine the future of that new country? Think about the scope for imagination that a new leader would have. You've got them all over the place, because you've got countries that are completely defeated. They have to figure out how to rebuild, recover. You have ideologies that have been completely discredited. Naziism is down, for example. Fascism is discredited. What takes its place? You've got millions of people who've been displaced from their homes trying to figure out new starts: where they're going to live, what kind of new countries they'll call themselves. The Jews of Europe, for example, many of them are migrating to Palestine, a territory under the control of a British government mandate. You've got dreams that have been deferred for a long time. For example, in Great Britain itself, for years and years they've been undergoing rationing of one kind or another. When they elect a Labour government in the elections of 1945, for many Englishmen it was as if their dreams had been deferred, it was time to try to build that new land that they'd been hoping for through the years of Depression and war. I'd like you to think too, about the situation of a particular kind of leader, especially in the colonies of decaying empires. I call them here, lonely pilgrims. Think about the pilgrims, though, if you study American history, pilgrims who land in the New World and are trying to imagine a new

place. Think about the leaders in a place like colonial Burma, for example. They're trying to imagine a new place that they're going to build, and I think of them as lonely, because they don't have large organizations, ready-made political parties, big institutions that they just kind of step into. There is a sense of organizational loneliness, there are just a handful of these people in different clusters trying to imagine new countries. Who are these people? Let me give you some illustrations. In China, you could look at a man like Mao Zedong. He'd been leading the Chinese Communist Party, literally in the wilderness during the 1930s and much of World War II. As the war ends, his Chinese Communists have also been fighting the Japanese. The Nationalist government has been badly bludgeoned by the war with the Japanese, too. He's seeing a lot of different opportunities. Here's Mao during the 1930s. A little different from the iconic photographs of him perhaps you've been used to seeing. Here's another image of Mao in the 1930s, notice everybody is in these standardized drab uniforms. If you went to India, you'd find men like this, on the left is Jawaharlal Nehru. Nehru's simple clothes, like the way Gandhi is dressed, both belie the fact that these men have been trained at the elite level of the British public school and university system. They were able to function very capably in both worlds. East and West. Or take this man, a new rising figure calling for the Dutch East Indies to become a new country called Indonesia. This is a Time magazine cover depicting him. I like these Time magazine covers a lot for the purpose of this course. Because, see, what Time was trying to do with these covers, it tries to capture, in a single

graphic image, a whole story that it wants to represent to tens of millions of Americans. And they get the best graphic artists available in the country to help them put together an image that tells that story. They do a really good job with it, but it's also of historical interest because it's kind of capturing the way these people in New York are trying to explain these events to other Americans. So it also gives you a little bit of a sense of the belief systems of American editors in midtown Manhattan in, say, in this case, the end of 1946. You notice the caption here, Indonesia's quote unquote President Soekarno. A roar for freedom, a reach for power. It's kind of an ambivalent picture. Do you sympathize with this man, or are you frightened by him? As they look out at these countries they're imagining, they've got all kinds of decisions like, what are the contours of this country? What are its borders? How do we define these new nations? Take the problem of someone like Soekarno in the country he imagines, Indonesia. He's building on a Dutch colony, the Dutch East Indies. Here's a map of the Dutch East Indies. The capital of the Dutch East Indies is this city here, Batavia, which we now know as Jakarta. You see the scale of miles up here. This is a huge area being covered. New Guinea, Java, Sumatra, Borneo, these are very different places. Lots of different ethnic identities, different tribes, the Moluccans here, the Dayaks here. Different religious beliefs. For instance, Islam very strong on the island of Java. What should be the borders of a new country called Indonesia? Should it be one country? Should it be several countries? Should its borders include all of Borneo? What about this part of Borneo up here? Should its borders cross the Straits of Malacca, and so on. And then if you think about these lonely

pilgrims, think about their ladders for success. Maybe you're in your job if you think about your ladder as, I go to university or maybe I go to graduate school or I get some professional training. Or I'm in a business and I'm moving up the hierarchy in my company. For these young leaders, their ladders of success are complex because they're living in hierarchies mainly established by colonial powers. So they're often climbing ladders that have been designed by the colonial power they're trying to overthrow. So there's this ambivalence is, I'm climbing a ladder that ends up leading to Paris, or to London, but actually I'm trying to raise my level in a different kind of community that I'm trying to create. What are the kind of models these young leaders might look to? They're looking around the world. How do you design this country? Well, you kind of, what's a successful country? Which one do I want to model myself after? Do I want to model it after one of the democracies? Is that appealing? Is it too hard? How about the communists? They seem to have some good models for how to take countries with lots and lots of poor people and make them pretty strong and independent pretty quickly. And the communists always talked about being against imperialism. What about if you're against communism, but you think democracy is unappealing, too hard? But you don't like the communists? Say for example, the position of many Muslims, who thought about politics. Muslim politicians, many of them are pretty deeply religious. The doctrines of communism scorn religion. Marx talked about it as the opiate of the masses. So if you're a Muslim, anti-communist, but you're not as interested in democracy, what kind of political ideology or model do you look to?

If you look, for example, to Turkey, Turkey had ostentatiously pointed itself toward secularism, limiting the role of Islam. Difficult choices. Some ideologues in the Muslim world, for example, are looking at blends of fascism, socialism, but that's Arab and secular, a pan-Arab ideology, a pan-Arab kind of empire. Or maybe there are other models to look at. Again, we come back to this issue of ideologies. We've talked about ideologies in some past presentations. These families of ideas, systematic beliefs organizing the way you think about the world. Beliefs that tell you who you are, what's your principle identity: national, class, race, ethnic. It gives you a whole narrative, and my groupies, people I'm a part of, we're on a journey that's going from here to here to here. The ideology supplies you with that ready-made narrative, a way to interpret key events of the recent past that everybody knows about. It gives you the words to use, vocabularies that other people will also understand and recognize. And it gives you programs, policy programs, things to do, how to build your country, recipes. Back in 1900, we showed you this menu of the families of political beliefs. Political parties is a simplified way of talking about it. And around 1900, you've seen this slide before, with the Revolutionary Socialists, National Tradition parties, monarchists kind of on the fringes. The centrists: Democratic Socialists, many of them Marxist, Liberals, top-down modernizers, the National Conservatives, often very pro empire. But from the 1900 to the 1920s, we saw the way the revolutionaries morphed into a Fascist movement and a Communist movement, which now share comparable influence with the old movements that were more in the center.

And then how that evolved in the 1920s, in the crisis years of the 1930s. The extremists: Communism much stronger, Fascism stronger, but also this interesting fusion in the center that creates the Social Democrats. Now let's talk about what happens in the postwar period, in the 1930s to the postwar. Fascism is profoundly discredited by World War II. Its leading examples were Italy and Germany, both in ruins. Japan was clearly flirting with Fascism, if not a wholly Fascist ideology, also in ruins. So its influence as a political ideology doesn't seem to extend far beyond Francos Spain. The National Conservatives, the top-down modernizers, they then pick up some of that loss, become a robust ideology again. Liberals, believers in small government, the ideals of liberalism maybe strengthened by the war, but liberalism as a way of organizing political action somehow seems more and more quaint to people of the late 1940s and 1950s. Communists, if anything, are even stronger. The Soviet Union having shown its strength in the Second World War. Democratic Socialists there as a faction, but not noticeably strengthened. But Social Democracy very strong indeed. In a way, the United States and its system seeming to be a paragon for it. Then for the people who are trying to imagine new countries, you take these families of ideas, and you try to adapt them to your local situation, trying to pick up opportunities that life is creating for you. One ideology I want to come back to, dwell some more on, is this business of social democracy. I've alluded to it before very briefly, but it's worth a closer look, because obviously a really important set of political ideas after World War Two. So let's just kind of break down what are the elements of social democracy?

What makes it distinctive? My own view, influenced by the take of a number of scholars, including Jeffrey Frieden, is to look at a few key elements. Just a few. One, the belief in countercyclical macroeconomics. The notion that I can influence supply and demand with governmental action. Now there are monetary versions of this and fiscal versions of this. But that I can spend money or change the value of money in order to influence the performance of my economy. It's a strong role in government management of the economy. If it's going down, push it up. If it's overheating going up too fast, slow it down, cool it off. Of course the great figure identified with countercyclical macroeconomics is this man, the British economist John Maynard Keynes, whose writings were so influential during the 1930s, but even more so beyond. Keynes himself is not a doctrinaire ideologue, either in his personal or professional life. But he was an immensely practical man who believed that doctrinaire liberals weren't giving enough room for the possibilities of government action. The second key element of Social Democracy: use social insurance to provide people with more personal security in their lives. Health insurance, old age insurance, unemployment insurance. That the government ought to play the role in managing risk for a lot of people. That if you do this, you'll ameliorate class warfare, cushion the effects of the new industrial societies that are coming with modern life. And another distinctive feature of Social Democracy is this sense of government in partnership with labor. In a way you see big corporations, big unions, the government supports them both because it wants the big corporations to help organize and manage economic life. It wants big unions so that

the workers are powerful enough to offset the power of big corporations. And that means you need big government as the umpire in this understanding of society. That sense of the part, the new partnership between government and labor is picked up a little bit in this photograph. The man on the left is the American president, Harry Truman. The man on the right is an especially interesting leader of these new big labor unions. He's Walter Reuther. He's the president of the United Auto Workers, one of the most powerful and progressive among the new unions that are playing such a dominant role, offsetting the power of the big three auto manufacturers: Ford, Chrysler, General Motors. Led by the American government, with some support from the British government, there's also a distinctive vision emerging for the global economy and how to rebuild that. Last time I stressed how important that was to the Americans, because they wanted to avoid a renewal of the Great Depression, revive world trade. How do you do that? Well, first you've got to create a new kind of standardized money. If, if money 1.0 was the old gold standard, money 2.0, rebooted after World War II, is this: it's a gold dollar standard. And what makes that different? Instead of relying on a finite amount of the yellow metal, you have a finite amount of yellow metal linked to a whole lot of paper, called dollars. You can have a certain amount of gold, but you can also have a lot of dollars. As long as the exchange rate between gold and dollars was itself relatively stable, dollars also became a hard currency on which people could set exchange rates. So this required very strong control of the money supply by the United States government as the anchor for this new system of world currency in the American economic orbit. That Bretton Woods conference that helped settle the future

of the international financial system, was held in New Hampshire, Bretton Woods, New Hampshire. It was dominated by these two men. The British representative on the right, that's Keynes, again. The man on the left is the American treasury official, Harry Dexter White. Recent documents have shown that White was very sympathetic to the Soviet government during the 1940s, and in contact with Soviet intelligence agents. In a way to understand White, you understand a man who actually was sympathetic to the big government, managed economy approach of the Soviet government and thought a managed economy approach was going to be very important to the United States in the post war period. So in a way, the Bretton Woods system is not about wide open, unregulated capitalism. The Bretton Woods system is about very managed economies with big governments creating a very carefully controlled international financial system. In that system, the United States government supported a revival of free trade, the breaking down of trade walls, the breaking down of imperial barriers. But with that, the United States was going to carefully regulate the free movement of money, because part of their financial system was one that required firm government control of the movement of currency, of capital across borders. In other words, this is not like the financial system we have in the world today. And a third key pillar of the world economy was to create international institutions to supply some money, to supply some assistance to hardship cases. So there is something created called an International Bank for Reconstruction and Development, for the governments to fund a bank that can then invest in capital goods in countries trying to rebuild. This is what today we call the World Bank. Combined with a humanitarian relief organization run by the United Nations, the UN Relief and Rehabilitation Administration,

which did enormous good, perhaps saving hundreds of thousands of lives in the aftermath of World War II, distributing assistance to people in need. You can see in this picture, this is taken in Belgium, in 1946. You see the nun handing out food to the hungry children, many of them barefoot. You see that box there right next to her: UNRRA. That's the source of the food that's helping to keep these children alive. So if you step back, you see the characteristic views of Social Democrats, both for organizing their own countries and for trying to rebuild an international system that has an element of cooperation in it and carefully managed cooperation for economic growth. Next time, we'll talk about how that vision of international cooperation runs up against the creation of two different worlds.