In 1919, the U.S. was forced to abandon much of the global decision-making consensus it sought as other powers balked. In 1945, the catastrophe partly caused by 1919’s reparations against Germany led the Allies, then including the Soviet Union, to craft a consensus-based, global financial order resting on a neutral reserve asset — gold — that all believed would ensure the balance of power stayed balanced. After 1971, the U.S. abandoned the gold standard and gained increasing clout as the dollar replaced gold as the world’s go-to reserve currency. The result was a long-lasting, if often uneasy, financial order empowering the increasingly globalized, financialized system that has come to advantage the U.S. at the growing cost of wealth inequality.
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