Читать книгу Financial Cold War. A View of Sino-US Relations from the Financial Markets онлайн

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‘Free market’ ideology had been a major factor in America's victory in the Cold War and, by the fall of the Soviet Union (USSR), US financial markets, with the dollar at their core, had long since attained global leadership. The whole world had become dependent on an American-dominated financial system.

The victory of free market capitalism over communism was so convincing that political parties of the left had to become more centrist – if not outright right-wing – in order to win power. The epochal phrase ‘It's the economy, stupid’ was coined by campaign strategist James Carville during Bill Clinton's successful 1992 presidential campaign and summed up the prevailing mood in the US. Across the Atlantic, in 1995 Tony Blair's Labour Party in Great Britain abandoned Clause IV of the party's constitution, which had previously committed Labour to ‘common ownership of the means of production’. This was seen as a decisive step on the path towards Blair's election victory in 1997.

A significant outgrowth of this free market ideology were the monetarist economic policies advocated by Milton Friedman and economists of the Chicago school. Their popularisation was, in many ways, a reaction against the dominance of redistributive Keynesian economics that had prevailed since the end of World War II (WW2) but which had failed to meet economic challenges faced in the 1970s. The influence of monetarist economics was to have a profound impact on government and central bank policies around the world. The increased role for central banks in managing the money supply within economies de-emphasised fiscal policy and governments’ role in economic management.