Nixon Shock Research Articles

On the Political Nature of “Market domination” in the energy sector (the 2008 Crisis)

This is the second article in the series. The first was devoted to the recombination of the world monetary model (Bretton Woods) 1971–1973. The trigger point for the recombination was the Nixon Shock (rejection of the gold fixing of the dollar). There was a replacement of the world equivalent of value (gold for oil), which remained “unnoticed” (not noticed) for a long time. 2008 cashed out the replacement. 1971 and 2008 cannot be considered independently of each other. This is not about cyclic failures (they are linear), but about the basic (cause of failures) flaw in the model. The reason is not a situational shortage of resources for growth, but the discriminatory nature of law as such, international law (regulations for disposing of growth effects based on parity of forces) in particular. 1971 and 2008 — déjà vu matrix, where the trigger (a factor that exacerbates a chronic disease) is a unilateral undermining (Nixon Shock and QE) of the regulations that determine the functioning of the world economy (devaluation of the norm). On both occasions the US played va banque . In 1971, the flaw was legalized, a new (G7) international format or “oil consumer cartel” arose. In 2008, it was proposed to institutionalize the flaw, to recognize it as an integral part of the overall model of growth. The proposal did not suit developing countries (primarily Russia and China). The crisis, which began as a financial breakdown, turned into a deep political confrontation.

On the Political Nature of “Market Dominance” in the Energy Sector (1973 Crisis)

The article attempts to analyze the oil crisis of 1973 from the perspective of changes in the world financial system’s functioning. The author takes as the starting point of the crisis not the “oil embargo” of the Arab countries in response to the Yom Kippur War, but Richard Nixon’s decree of 1971 on the rejection of the gold fixing the dollar (Nixon Shock). The result was a transformation of the mechanisms and principles of the Bretton Woods system. According to the author, the economy and the socio-political model of the Western countries, subsequently (after the collapse of the socialist camp) of the whole world, underwent a transformation. The article’s relevance is due to the fundamental similarity of the parameters and characteristics of the world economy’s current crisis with the crisis of 1973, which gives the author reason to consider the current crisis a relapse. The author proves that the current global crisis is caused by the shortcomings and costs of the socio-economic model formed in 1973 On the agenda are the same questions and problems that were not answered 50 years ago.

Ending Bretton Woods: evidence from the Nixon tapes†

AbstractRichard Nixon's August 1971 announcement of a set of policies known collectively as the New Economic Policy (NEP), or the ‘Nixon shock’, effectively terminated the Bretton Woods system (BWS) of fixed exchange rates that had governed the international monetary system since 1944. While there are many accounts of Nixon's decision to end the BWS, the secret Nixon White House tapes provide unique insights into the decision‐making process and Nixon's struggle with this decision. Using the tapes as evidence, we find that Nixon resisted ending the BWS for political reasons and did not fully understand the NEP's strategy, particularly the fact that the domestic policies were designed to provide cover for the international policies. The tapes also clarify that the decision to adopt the NEP was made prior to the Camp David Summit of 13–15 August 1971 in response to general speculative pressure. While the US reacted to pressure on the dollar, Nixon and Treasury Secretary John Connally attempted to appear to be driving decisions for the domestic electorate. The temporary float of exchange rates as part of the NEP inevitably became permanent as a result of Nixon's choice of advisors and his preferences for open capital flows and stimulative monetary policy.

The Economic Strategies of U.S. Nonproliferation Policy during the Nixon-Ford Years

Abstract Much of international relations scholarship attributes the United States’ commitment to prevent the global spread of nuclear weapons as the outcome of US national security interests. Yet, US nonproliferation policy comprises a compelling set of economic goals and strategies, beyond economic sanctions. Without incorporating economic factors and actors, and their convergence with the Cold War US national security state, the understanding of US nonproliferation policy remains incomplete. The 1970s challenged US postwar economic preeminence through the “Nixon shock,” the end of dollar convertibility to gold of the Bretton Woods system, and the 1973 oil price shock. Concurrently, the United States’ market share in terms of global nuclear reactor sales declined while those of West European suppliers like France and West Germany increased. This essay argues that US nonproliferation efforts, which in the Nixon-Ford era took the form of the Nuclear Suppliers Group (NSG) after India's 1974 nuclear explosion, were guided as much by security concerns about proliferation as by Washington's aim to reclaim its market share to protect US nuclear industry against West European competition.

The “Nixon China Shock” in the Mirror of Japanese Domestic Politics

The “Nixon China Shock” (the July 15, 1971 statement by the U.S. President R. Nixon about the recent trip of his National Security Advisor H. Kissinger to the PRC and about the President’s upcoming visit there) became one of the pivotal points in the history of Japanese foreign policy and contributed to Tokyo becoming more independent from Washington in its diplomatic course. Using the case of Japan’s reaction to this event, the article explores the characteristic features of the foreign policy making process in post-war Japan and demonstrates the considerable influence of these features on the character of Japanese foreign policy of the so-called “1955 System” period (the prolonged and continuous dominance of the conservative Liberal Democratic Party in 1955-93). The paper shows the decentralization of the foreign policy making process, expressed in the limited ability of the Prime Minister to determine foreign policy, the presence of considerable internal contradictions in the MoFA of Japan, the factionalism of the ruling party, and the high degree of dependency of the government’s policy course on the public opinion. It proves that these factors were one of the reasons for Japan’s political leadership avoiding decisive actions to normalize relations with the PRC before the “Nixon shock”, cautious that it might damage its relations with the U.S. and unable to discern the signs of upcoming U.S.-Chinese détente, and after this event, vice versa, making every effort to normalize its relations with Beijing as soon as possible, reaching this goal even before their American partners did. Given the historical importance of the “1955 System” for contemporary Japanese politics, the article’s conclusions are significant for the understanding of the logic of Japan’s domestic politics and foreign policy of the entire post-war period.Author declares the absence of conflict of interests.

США – Япония: От «шоков Никсона» к «битью Японии» при Рейгане (1974–1989)

США – Япония: От «шоков Никсона» к «битью Японии» при Рейгане (1974–1989)

‘Nixon shocks’ and their implications for the Japanese diplomacy

‘Nixon shocks’ and their implications for the Japanese diplomacy

The China Problem in Postwar Japan: Japanese National Identity and Sino-Japanese Relations by Robert Hoppens

Reviewed by: The China Problem in Postwar Japan: Japanese National Identity and Sino-Japanese Relations by Robert Hoppens Karl Gustafsson The China Problem in Postwar Japan: Japanese National Identity and Sino-Japanese Relations. By Robert Hoppens. London: Bloomsbury, 2015. 312pages. Hardcover £85.00; softcover £28.99. Robert Hoppens’s The China Problem in Postwar Japan presents a detailed account of Sino-Japanese relations in the 1970s. The book is divided into four main parts, the first of which examines the period between 1945 and 1970. The remaining parts focus on three key developments in the 1970s—the normalization of relations and the so-called Nixon shock that preceded it; the bilateral peace treaty negotiations in the mid-1970s and the controversy over whether or not to include an antihegemony clause; and, finally, the conclusion of the 1978 peace treaty and subsequent economic cooperation. A key argument of the book is that the Japanese debate on policy toward the People’s Republic of China (PRC) was influenced by a discursive struggle to define Japanese identity and Japan’s place in the world. Different political actors interpreted Japan’s relations with China and argued for particular policies toward the PRC based on their preferred understandings of Japanese identity. They also sought to use Sino-Japanese relations to support the conceptions of identity that they promoted. Hoppens makes this argument in relation to the common understanding that post-war Japan lacked a national identity or national consciousness. He forcefully and convincingly demonstrates that this perceived lack of national identity actually formed a shared basis on which struggles over identity took place. Conservatives and rightists as well as progressives and leftists all agreed that “Japanese lacked a normal, healthy, or truly independent national identity” (p. 2). What they disagreed on was exactly what a “normal” and “healthy” identity looked like and what it should be “independent” from. Leftists wanted to construct a national identity independent from the United States and from the conservative Japanese state. According to their vision, the state would serve the Japanese people rather than the other way around. They viewed Japan’s past wars and imperialist project as having been rooted in blind loyalty to the state; they drew inspiration from and regarded as legitimate the nationalism of the anti-imperialist liberation movements elsewhere in Asia, including China. Conservatives, by contrast, objected to the separation of the people and the state promoted by leftists and considered defeat in the war and the subsequent Occupation to have brought on an abnormal lack of identification with the state. They embraced a national identity in which the state and its symbols were central. In the 1970s, the book claims, Sino-Japanese relations were a key battleground in this struggle to define Japanese national identity. By Hoppens’s account, Japan’s relations with China in general and with the PRC’s policies in particular initially lent support to leftist narratives but then changed during the decade in ways that seemed more and more to validate conservative identity constructions. [End Page 142] Before Nixon’s surprise visit to China in 1971 and Japan’s subsequent normalization of relations with the PRC, Japanese leftist narratives presented the absence of official relations with and recognition of the PRC as indicating a lack of independence, suggesting as it did that Japanese foreign policy was determined by the Cold War strategic concerns of the United States. For leftists, China exemplified the struggle for Asian national independence, and they consequently promoted a national identity based on resistance against the Japanese state and its close ally the United States. Arguing for recognition of and close relations with the PRC was a key part of this resistance. Yet after Nixon’s visit, Sino-Japanese diplomatic normalization, and Chinese policies seeking cooperation with the United States as well as the conservative Japanese government, it became increasingly difficult for leftists to make the situation fit into their preferred narratives. Leftists were, as a consequence, alienated from the PRC. Instead, conservative narratives found strength in the Chinese government’s behavior, which, especially as economic cooperation between Japan and China deepened, included explicitly stating the need for China to learn from Japan. Such developments served to...

Jordan Sand. Tokyo Vernacular: Common Spaces, Local Histories, Found Objects.

In Tokyo Vernacular: Common Spaces, Local Histories, Found Objects, Jordan Sand considers how, in the late twentieth century, neighborhood activists, architects, artists, and others promoted urban preservation projects and claimed rights to common spaces, thus fostering new modes of political engagement in Japan's postindustrial society. The micropublics they created, however, existed in ambivalent relation to both the capitalist forces that captured ever growing shares of urban life and the metropolitan authorities who sought to remake Tokyo in conjunction with the demands of the market. Noting Tokyo's lack of monumental structures and history of repeated destruction through natural and man-made disasters, Sand reflects on the meanings of urban preservation in a city with ostensibly little to preserve (p. 1). He presents these movements as reactions to the failure of a set of ideas of postwar nationhood in which the monumental public plaza (hiroba) served as the locus of unified action by sovereign citizens. This form of mobilization reached its apex in the 1960 demonstrations against renewal of the United States-Japan Security Treaty; but by the end of the decade, state agencies actively denied citizens the right to the plaza, seeking instead to ensure that urban space was amenable to capitalist development. The forcible expulsion in 1969 of anti-Vietnam War demonstrators from Shinjuku Station's West Exit Underground Plaza (which was renamed a pedestrian concourse) constitutes the symbolic starting point for Sand's study. Not only rapid economic growth but also Japan's increasing participation in the global tourism industry stimulated transformations in the urban landscape and the property regime shaping it. The “dematerialization of wealth” (p. 12) that followed the 1971 “Nixon shock” and accelerated in the 1980s gave even greater impetus to the waves of destruction and speculative construction that turned Tokyo into the global city of the present, a city with little in the way of a “secure foundation in any notion of tradition” (p. 5).

A Study on Investment Pattern Investors of Jewellery at Pattukkottai Town

Gold has been used throughout history as money andhas been a relative standard for currency equivalents specific to economic regions or countries, until recent times. Many European countries implemented goldstandards inthe latter part of the 19th century until these were temporarily suspended in the financial crises involving World War I After WorldWar II, the BrettonWoods system pegged the United States dollar to gold at a rateof US$35 per troy ounce. The system existed until the 1971 Nixon Shock, when the US unilaterally suspended thedirect convertibility of the United States dollar to gold and made the transition to a fiat currency system. The last currency to be divorced from gold was the Swiss Franc in2000. Since 1919 the most common benchmark for the price of gold has been the London gold fixing, a twice-dailytelephone meeting of representatives from five bullion-tradingfirms of the London bullion market. Furthermore, gold is traded continuously throughout the world based on the intraday spot price, derived from over-the-counter gold-tradingmarkets around the world (code XAU). The following tablesets forth the gold price versus various assets and key statistics on the basis of data taken with the frequency of five years. Gold isthe most popular as an investment. Investorsgenerally buy gold as a hedge or harbor against economic, political, or social fiat currency crises (including investmentmarket declines, burgeoning national debt, currency failure, inflation, war and social unrest). The gold market is subject to speculation as are other markets, especially through the useof futures contracts and derivatives. Gold price has shown a long term correlation with the price of crude oil. This suggestsa reason why gold is sold off during economic weakness.

The Nixon shock after forty years: the import surcharge revisited

AbstractOn 15 August 1971, President Richard Nixon closed the gold window and imposed a 10% surcharge on all dutiable imports in an effort to force other countries to revalue their currencies against the dollar. The import surcharge was lifted four months later after the Smithsonian agreement led to new exchange rate parities. This paper examines the political, economic, and legal issues surrounding this use of trade sanctions to achieve exchange rate adjustments.

The Fed as the Engine of Worldwide Inflation

The United States is a sovereign country that has the right to follow its own monetary policy. By an accident of history, since 1945 it is also the center of the world dollar standard—which remains surprisingly robust to the present day. So the choice of monetary policy by the U.S. Federal Reserve can strongly affect its neighbors for better or for worse. Beginning with the Nixon shock in 1971, American policy makers have frequently ignored foreign complaints. But by ignoring feedback effects from the rest of the world, the Fed has made both the world and American economies less stable.

Beggar-thy-neighbor interest rate policies

The United States is a sovereign country that has the right to follow its own monetary policy. By an accident of history, since 1945 it is also the center of the world dollar standard—which remains surprisingly robust to the present day. So the choice of monetary policy by the U.S. Federal Reserve can strongly affect its neighbors for better or for worse. Beginning with the Nixon shock in 1971, American policy makers have frequently ignored foreign complaints. But by ignoring feedback effects from the rest of the world, the Fed has made both the world and American economies less stable. The most recent example is the Fed’s policy of setting short-term interest rates close zero to since mid 2008, and then compounding this effect in late 2010 by “quantitative easing” designed to drive down long rates as well. At the November G-20 meeting in Seoul, foreign officials complained vociferously of hot money inflows from the United States creating inflationary pressure. Ironically, the Fed’s zero interest rate policy also impedes bank lending within the United States itself while seriously weakening other American financial institutions—such as insurance companies and pension funds.

Nixon in the world: American foreign relations, 1969-1977

Introduction: The Adventurous Journey of Nixon in the World Parameters 1. An Elusive Grand Design 2. Nixon as Statesman: The Failed Campaign 3. Henry Kissinger and American Grand Strategy in the 1970s 4. Salesmanship and Substance: The Influence of Domestic Policy and Watergate OPENINGS 5. Nixon, Kissinger, and the Opening to China 6. Nuclear Nixon: Ironies, Puzzles, and the Triumph of Realpolitik 7. The Frailties of Grand Strategies: A Comparison of Detente and Ostpolitik 8. The United States and the Making of the Helsinki Final Act CLOSINGS 9. Waging War on All Fronts: Nixon, Kissinger, and the Vietnam War, 1969-1972 10. The End of the Vietnam War, 1973-1976 FLASHPOINTS, HOTSPOTS, AND ALLIES 11. The Weight of Conquest: Henry Kissinger and the Arab-Israeli Conflict 12. The Danger of Geopolitical Fantasies: Nixon, Kissinger, and the South Asia Crisis of 1971 13. History from Below: The United States and Latin America in the Nixon Years 14. Nixon Shocks Japan, Inc 15. Thanks for the Fish: Nixon, Kissinger, and Canada

The Creation of the .Shock Myth.: Japan's Reactions to American Rapprochement with China, 1971–1972

President Richard M. Nixon's July 1971 announcement of his visit to China is remembered in Japan as a policy that “shocked” the Japanese and almost universally cited as the “Nixon Shock”. To be accurate, there were actually two “shocking” announcements that summer. The second came in August 1971, just one month later, when the dollar was devalued after the U.S. currency was taken off the gold standard. Since plural and single nouns are indistinct in the Japanese language, both these events are discussed under the same term, “Nixon Shock”.

EUの構築とヨーロッパ・アイデンティティの創造

The objective of my article is to discuss the following hypothesis that the construction of the EU is a political movement having the continuity with a process of nation-state building, analyzing the Statement of Paris in 1972 (Paris Summit) and the Declaration on European Identity in 1973 (Copenhagen Summit).For this objective, I give attention to the phrase of “the foundation of an ever closer union among the peoples of Europe” in the preamble to the Treaty of Roma. I primarily regard the European integration as the movement of integration of the peoples. Nationalism is a movement for nationstate building and has created its own national identity as a significant symbol for national integration in general. The European integration movement has also tried to create its own identity, a European Identity. It was also the time when the movement decided to progress from an economic community to a political union.In the Paris Summit in 1972, the European Union was first manifested as a political aim in the official document of EC. But, this starting point toward EU hasn't been substantially observed because the 1970s has been evaluated as a “stagnant period” or “dark age” (S. Hoffman). However, this absence of perspective for the integration movement of the 1970s caused the lack of analyses not only on the declaration on European Identity in 1973, but also on the fact that the Community and member states had forged European Identity as a symbol for European Union. At that time, the Community and the member-states faced the substantial changes in international society. For example the Nixon shock, the Oil crisis, the Cold War and the Detente, and the advance of globalisation. That is to say, they shared the common threats but on the other hand, they had internal problems and transformations; the failure of the Snake, the necessity of institutional reform, and “the convergence of value consciousness (R. Inglehart)” among the peoples.The Paris and Copenhagen Summits were held in the period of dynamic changes. And in these Summits, the keypersons, such as Tindemans and even Pompidou, had imaged the EU through the analogy with a nationstate. In addition, Member states added the limitation of “a common European civilization” to European Identity in Copehnhagen. Namely, in the process of construction of EU, one can observe the method that establishes the legitimacy of governance by making its own political identity. The 1970s, especially its first half, was never “dark age” of the European integration. The movement of the European integration in the 1970s as a whole had largely taken an important step forward the EU in the Maastricht Summit.

Currency Asymmetry, Global Imbalance, and Rethinking Again of International Currency System

The US dollar has been volatile and falling again and again in recent decades as well as recent years, and for many observers, it is going to be broken sooner or later. The central importance of the dollar is due to the fact that it is not just a currency for the US. Over half of all dollar bills in circulation are held outside of the US borders, and almost half of the US Treasury bonds are held as reserves by foreign central banks. The US dollar is supposed to be the anchor that stabilizes the currency market. Instead, today it is a major source of instability. In the back ground, the US fiscal deficits have been running high again under Bush administration, once up to almost 3% of US GDP. And current account deficit is set to about 7% in 2005 and more volatility is widely expected. The situation is very challenging for the central banks of Japan, China, Korea, Taiwan and Singapore which collectively hold about US$2.8 trillion worth of US Treasury bonds as part of their reserves. The moment that they reduce their purchases, the value of the dollar slips. Yet, the more they buy, the more they are exposed to a potential free fall of the US dollar. China has been blamed, not only by US congressmen who are understandably not very familiar with either the complicated currency issues or the domestic politics in any other country, but also many economists or business strategists. It was said that it was all because RMB did not reevaluate, as the source of this global and currency instability. How much revaluation of RMB would remove the US deficits of $700 billions, or at least the US-China trade deficits $200 billions (including Hong Kong)? 500% or 1000%? Of cause no body asked for that kind of magnitude now. Normally smart people say 30-50%, with the unsaid intention to blame-then-suggest again another 30-50% after some initial moves, then the third, the fourth. This seems not really new phenomena at all. It has been all so familiar before and since the Nixon shock in early 70s', and in 80s' when there was the Plaza Accord. The convenient targets to blame were the gold standard, the Dutch Mark, the Japanese Yen. Now it is turn for Chinese reminbi. So the question is what are the real causes of the imbalance and currency instability? In this short paper, we first take a look at what is really going on with the Chinese economy and trade balance, and then try to identify sources of the current imbalance , and then, as a concluding remark, think again the possibilities to reform the currency system.

U.S.-Japan Relations in a Changing World (review)

Reviewed by: U.S.-Japan Relations in a Changing World Henry R. Nau (bio) U.S.-Japan Relations in a Changing World. Edited by Steven K. Vogel. Brookings Institution, Washington, 2002. x, 286 pages. $46.95, cloth; $18.95, paper. What drives U.S.-Japan relations and therefore affects this relationship most in the future? That is the question addressed in this volume celebrating the fiftieth anniversary of the San Francisco Peace Treaty and the U.S.-Japan Security Treaty. Overall, the volume concludes that the San Francisco system forged in 1951 "remains intact, yet it is gradually losing its grip over the relationship" (p.2). Steven Vogel, the volume's editor and contributor, argues that this system, based on an unequal alliance, will be less stable and more contentious in the future than in the past. The greater turbulence may not decrease cooperation because the utility of military power is declining, economic issues are becoming less contentious, and bilateral relations are increasingly embedded in multilateral institutions. But it will increase tensions as Japanese foreign policy becomes more independent, the diplomatic agenda expands beyond trade, and more domestic actors participate in policymaking on both sides. To reach these conclusions, the volume examines a variety of factors driving the U.S.-Japan relationship. Each chapter looks at specific independent variables from different levels of analysis. Three chapters focus on relative military and economic power from the systemic level. Three others highlight domestic variables, including ideas (policy paradigms), interests, and governmental institutions. Two more stress international interactions through trade and financial linkages. One appeal of the volume is its eclectic embrace of alternative theoretical perspectives. The three groups of chapters develop respectively realist (interests), constructivist (ideas), and liberal (institutions) accounts of U.S.-Japan relations. The volume's conclusions tilt toward constructivist and liberal interpretations. Although realist factors, namely the basic power imbalance, are unlikely to change, nationalist (constructivist) [End Page 183] and institutional (liberal) forces will move the U.S.-Japan relationship toward greater tension. Michael Green sets this tone in the first chapter titled "Balance of Power." After 50years, the basic asymmetries in the strategic relationship, he argues, remain intact. The imbalance has been adjusted five times as Japanese relative power grew (1960 revision of the Security Treaty, 1969 Satō-Nixon response to the Nixon shocks, 1978 Defense Guidelines, 1990-91 Persian Gulf War, and 1997 Revision of the Defense Guidelines). But throughout these externally induced crises, neither party wanted to jeopardize the fundamental trade-off in the relationship. Japan remained willing to sacrifice some autonomy in return for U.S. defense commitments, and America accepted less burden-sharing in order to maintain a strong position and freedom of action in Asia. The only structural power shifts that could undermine the strategic relationship, Green argues, are an implosion of the Japanese economy (which would shift U.S. attention to China), a U.S.-China confrontation over Taiwan that did not end well for America, and an American economic decline and retreat from Asia. Green concludes that none of these shifts is likely. William Grimes in his chapter on "Economic Performance" agrees that a U.S. economic decline relative to Japan, although unlikely, would erode the U.S.-Japan relationship. The relationship works best, he argues, when Japanese economic growth does not exceed U.S. growth. The most serious economic tensions occurred in the late 1980s and early 1990s when Japan was perceived to be surpassing the United States. This perception of a Japanese juggernaut persisted into the 1990s even though it eventually proved wrong. The United States rebounded solidly in the 1980s due to a dramatic deregulation and restructuring of the microeconomy from manufacturing to services (a part of the story Grimes misses by focusing primarily on macroeconomic and exchange rate issues). Meanwhile, Japan rushed headlong into a structural stone wall, as catch-up manufacturing industries absorbed more and more capital at the expense of new service and information sectors. Grimes doubts that Japan, with its aging population, massive national debt, and continuing banking problems, can challenge the United States again in the future. Laurie Freeman's chapter on the "Media" also highlights the influence of structural power shifts on...

From Special Relationship to Third Option: Canada, the U.S., and the Nixon Shock

The articulation of the so-called Nixon Shock of August 15, 1971, more formally called the New Economic Program (NEP), was an epochal event in the history of Canada-United States relations, that stimulated Ottawa consider new world in which the U.S. did not bulk so large. (1) The Canadian assumption that the United States would always accord their country consideration when calculating the American interest as, for example, it had when it had exempted Canada from the Interest Equalization Tax in 1963, was shaken on that day. (2) Much their surprise, Canadians found themselves no different in American eyes than Western Europeans and the Japanese. The special relationship (3) that had existed between the two North Americans at least since the Second World War, was officially over as the various elements of the NEP took effect, among them the temporary ten percent import surcharge, the Domestic International Sales Corporation (DISC), which encouraged export activity by allowing tax deferral within the DISC while it was more or less exclusively engaged in export sales activity, ten percent tax credit for investment in American-produced machinery, and job development tax credit. was an article of faith in Ottawa in the dog days of summer 1971 that these measures would hinder Canadian sales the U.S. causing widespread economic dislocation. The NEP was made necessary by the declining position of the United States in the global economy, or so its author, Secretary of the Treasury John Connally, believed. He was determined to head off what the Administration believe[d] be the most important non-military threat U.S. national security: economic competition from Japan and Western Europe. (4) This had been made worse by the United States' involvement in debilitating war in Vietnam that sapped the moral fiber of the country and took its gold pay for bombing runs in the North and troops in the South. As well, American technology seemed be second-rate when compared with that of Japan, as did U.S. business organization and practice. In short, on various levels decision-makers were forced confront the reality that their nation seemed be less powerful and less essential global prosperity than it had been in the past. also made Americans more defensive and less willing adopt policy of noblesse oblige when considering requests by smaller petitioners like Canada. reflected a certain self-doubt, ... rather pervasive pessimism. (5) And the fact that the U.S. current account balance struggled maintain itself in the black through most of the 1960s, and went from small surplus in 1970 deficit of US$3 billion in 1971, did not help at all, especially as Canada seemed be doing quite well, at least in terms of its trade surplus with the U.S.; that had increased from CDN$750 million in 1970 CDN$1.1 billion the following year. (6) The NEP was draconian and as the Canadian political scientist, Peter Dobell, has pointed out, It [was] no exaggeration suggest that the effect in Canada of these short-term measures and of the negotiations that followed their introduction produced national catharsis. (7) They were also, as one critic later characterized them, the equivalent putting gun the head of the rest of the world. (8) The program vaulted the U.S. back into the center of Canadian calculations from whence it had strayed following the publication of Canadian Prime Minister Pierre Trudeau's vision of foreign policy contained in Foreign Policy for Canadians which had minimized comment on the United States. This article investigates the effects of Nixon's 1971 announcement on Canada, providing lens onto relations between the North Americans as Ottawa sought cope with its changed circumstances. Why was the U.S. performing so poorly, relatively, in economic terms by the later 1960s? The assistant the president for international economic affairs, Peter Peterson, had some ideas as well as some thoughts on how address them. …

Kennedy, China, and the Tragedy of No Chance

The articles under review all contribute to the growing literature on American China policy during the 1950s and 1960s. The authors illu minate understudied aspects, notably the fascinating food relief de bate. Furthermore, directly or indirectly, they explore the most fundamental pertinent questions: How was American China policy made during the 1950s and 1960s? How responsive were key deci sion-makers to both second-echelon and nongovernmental advice? What lay behind the perpetuation of Sino-American conflict—and can one trace the seeds of the Nixon shock to earlier decades? Did the