America must rise from wars again

THE story of how World War I transformed the United States into the world's leading economic power is a saga of a nation reluctantly entering the war, and seizing every opportunity to dictate the shape of world economic order. There is one conspicuous similarity between then and now. The sun was setting on British imperial power, as the US was becoming the new imperial hegemon in 1914. Now, in 2014, US global influence is being challenged by rising powers China and India, and Europe that is reinventing itself.

The Great War (1914-1918) led to New York replacing London as the global financial capital. It laid the platform for Washington to aggressively pursue global economic ambition through diplomatic and military interventions abroad. In contrast to the US economy benefiting from that war, US wars in Vietnam and Iraq caused huge losses that brought the US to the brink of economic collapse, as these wars were accompanied by ill-advised domestic economic policies that caused nationwide devastation.

World War I cost the US government more than US$30 billion, two-thirds raised from loans that future generations would repay, and a third contributed through taxes. The Great War provided an opportunity for the US to emerge from its shell of diplomatic neutrality, which president Woodrow Wilson cited to keep the country out of the war until 1917. Thereafter, the US intervened abroad at will, even though Mr Wilson created a myth of pursuing a moral agenda.