Yay or Nay with Foreign Relations?

Sydney Swayzer

            As people, we are always trying outdo each other, whether it’s sports, school, work, or even home, either as individuals or groups and societies. The world’s nations obviously do compete with each other in arms and GDP, but they also benefit from each other through trade, alliances in wars, and lending money and bonds. But what incentives persuade governments to increase or decrease relations with other nations? Governments make foreign relations regarding the types of government the nation has, how their own economy is holding up, and how this relationship could affect those with other countries.

            On a global scale, competition with other countries can be healthy as long as it doesn’t get out of hand. After WWII, tensions between the United States and the Soviet Union started to rise since the US was capitalist while the USSR was communist “During the Cold War, the United States and the USSR engaged in a tug-of-war over power and influence in the world [and the] conflict often centered on the development of atomic weapons” [1]. Instead of trying to win the Cold War, President Nixon wanted to manage it since things had gotten so out of control by improving relations with China and the Soviet Union, both being the most powerful communist nations. China and the USSR were also starting to have their own problems with each other, so Nixon decided to work with China to force the Soviet Union to work with the US. This resulted in tensions relaxing and creating a balance of cooperation and peace among the world’s most powerful nations; thus, trade resumed with the US, China, and the USSR.

            Not only do countries improve others to improve their own, but they also need to do it. The Great Depression was caused by a number of factors: declines in consumer demand, financial panics, and misguided government policies. It also caught governments off-guard because of it following demobilization from WWI and huge inflation from the 1920s. [3] America’s industrial production dropped over 45 percent while the GDP dropped 30 percent making it the worst country affected by the Great Depression. This downturn in the United States was spread by the network of exchange rates linking other nations’ economies with the America’s. [4] Charles Wheelan, author of Naked Economics, comments how the status of one economy can affect the statuses of those all over the globe: “In business as in sports, your competitor’s misfortune is your gain. At the global level, the opposite is true. If other powerful economies fall into recession, they stop buying our goods and services-and vice versa.” [5] After WWI, American banks loaned Europe for industrial expansion, but as investments were stopping, Europe’s credit infrastructure collapsed. [6] To protect their own economies, governments enact tariffs which tax imports and exports of goods. This led to international trade dropping 30 percent, deteriorating ties between the world’s nations.

            George Santayana, philosopher, essayist, poet and novelist, said, “Those who cannot remember the past are condemned to repeat it,” and a lesson can be learned from the Cold War and the Great Depression. [7] A certain level of cooperation, relations, and economic growth between nations is needed to ensure that the world’s economies keep growing and ultimately avoid collapses leaving nations, societies, and economies in ruins.


Notes

[1]   Hart, Diane, and Bert Bower. History Alive!: Pursuing American Ideals. (Palo Alto, CA: Teachers’ Curriculum Institute, 2008), 501.

[2]   “Nixon and the Cold War.” Nixon and the Cold War. Accessed June 22, 2016. http://tdl.org/txlor-dspace/bitstream/handle/2249.3/193/12_nix_cld_wr.htm.

[3]   Pells, Richard H. “Great Depression.” Encyclopedia Britannica Online. August 18, 2014. Accessed June 22, 2016. http://www.britannica.com/event/Great-Depression.

[4]   “The Great Depression in Global Perspective.” Digital History. Accessed June 22, 2016. http://www.digitalhistory.uh.edu/disp_textbook.cfm?smtID=2.

[5]   Wheelan, Charles J. Naked Economics: Undressing the Dismal Science. (New York: W. W. Norton & Company, 2010), 205.

[6]   “The Great Depression.” The Great Depression. Accessed June 22, 2016. http://history-world.org/great_depression.htm.

[7]   “George Santayana.” Wikiquote. Accessed June 22, 2016. https://en.wikiquote.org/wiki/George_Santayana.

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