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Think global, act local with a new twist

This discussing the panic of 1837 caught my eye:

Americans forget that outside of a unique period after World War II, the United States has not been an economic hegemon. What changes when we’re not on top?

When you’re not the hegemon, domestic politics is more difficult. Often, it’s the politics of constraint—that is, explaining to voters what can’t be done, because of the demands of the global marketplace. This is a difficult, unpleasant kind of politics. Indeed, it might not even be right to call it “domestic” politics at all. In a very open economy, the line between domestic and foreign policy breaks down. As I show in the book, many local issues suddenly acquire international significance. When there were riots in Philadelphia in 1844, for example, there was real concern in London—because holders of Pennsylvania bonds wondered whether the government had enough control of the population to collect the taxes needed to make its loan payments. About one third of American states were already in default to foreign lenders.


More detail on the Philadelphia 1844 riots here, here, and here. Interesting, they seem to have sparked both the Know Nothing Party and the Catholic School system.

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letsgetitdone's picture
Submitted by letsgetitdone on

in gold, or a foreign currency or was it owed in a sovereign fiat currency?