Pennings, A.J. (2026, Jan 28) Reviewing the New Deal’s Global Economy Framework and Its Current Challenges. apennings.com https://apennings.com/how-it-came-to-rule-the-world/reviewing-the-new-deals-global-economy-framework-and-its-current-challenges/

Introduction

Before we lose January, I wanted to remind people of the preferred meaning of Jan 6 (Of course we will remember the attack on the capitol). In his 1941 State of the Union address on January 6th, FDR articulated the “Four Freedoms.” The first three (Speech, Worship, Fear) were standard democratic ideals, but the fourth was revolutionary for the US. “The fourth is freedom from want… which, translated into world terms, means economic understandings which will secure to every nation a healthy peacetime life for its inhabitants.”

From Four Freedoms to the United Nations and the End of Empires

FDR implicitly stated that globalizing the New Deal had become a US national security interest. While the “Four Freedoms” (Speech, Worship, Want, and Fear) were initially presented to Congress to justify aiding the Allies, they became the moral/political framework of the Atlantic Charter, a joint declaration that set the conditions for the US entering the war. Seven months later, FDR met Churchill secretly off the coast of Newfoundland in August 1941 to sign the Charter. Churchill wanted a military alliance, while FDR wanted to ensure the war wasn’t just about preserving old empires, but about creating a new global system. FDR wanted to end the colonial system and ensure a global trade regime based on maritime protections for all commercial shipping. FDR had the leverage and made the Atlantic Charter a prerequisite to the US entering the war.

The “Four Freedoms” served as the primary American draft for what became the Atlantic Charter. The translation happened across several of the Charter’s eight points.[1] The most direct “translations” appear at the middle and end of the Charter, referring to Points 5 and 6 (Freedom from Want). These points called for “fullest collaboration between all nations in the economic field” and a peace that “will afford assurance that all the men in all the lands may live out their lives in freedom from fear and want.” Point 8 (Freedom from Fear) mirrored FDR’s fourth freedom by calling for the “abandonment of the use of force” and the disarmament of aggressor nations. While Freedom of Speech and Religion were not explicitly named in the Charter’s final text (partially to avoid friction with the Soviet Union, a potential ally in WWII), they were encapsulated in Point 3, which asserted “the right of all peoples to choose the form of government under which they will live.”

The Atlantic Charter played a crucial role in shaping the ideological and institutional landscape that led to the decline of the British, French, and Dutch colonial empires. Its principles inspired movements for independence, including in India and Indonesia, ultimately contributing to the end of colonial rule in many countries. It also directly led to the rise of the United Nations, after the “Declaration by the United Nations” was signed in January, 1942 by the United States, the United Kingdom, the Union of Soviet Socialist Republics, China, Australia, Belgium, Canada, Costa Rica, Cuba, Czechoslovakia, Dominican Republic, El Salvador, Greece, Guatemala, Haiti, Honduras, India, Luxembourg, Netherlands, New Zealand, Nicaragua, Norway, Panama, Poland, South Africa, and Yugoslavia. This Declaration was a pivotal point in world affairs.

The Atlantic Charter essentially “globalized” the Four Freedoms. By January 1, 1942, 26 nations signed the “Declaration by United Nations,” which explicitly cited the Atlantic Charter as its foundational document. This Declaration marks the beginning of the “United Nations.” Its first activity was “Bretton Woods, the United Nations Monetary and Financial Conference, held in July 1944 at the Mount Washington Hotel in Bretton Woods, New Hampshire, that brought together delegates from 44 nations to establish a new post-war global economy (See Below). Immediately after, it kicked off the Dumbarton Oaks Conference in August–October 1944. Following the Yalta meeting among the Allied leaders, the Big Four (US, UK, USSR, China) drafted the “blueprint” structure of the UN, which included a Security Council and a General Assembly. FDR died on April 12, 1945, just before the UN was finalized at the San Francisco Conference in June 1945.

Was the New Deal Socialism? Building the US-led Global Economic Order

Except for Social Security, the term “socialism” was rarely used during the New Deal. It’s a small word considering the task ahead for the US and the global system. FDR’s plans even preceded Keynesian economics. However, he did “contain” finance, which he saw as an unruly system that led to the Great Crash of 1929 and its global instability. Part of that “containment” was a tax system with rates north of 90 percent for top earners.

To prevent a third World War, the Allies decided that the global economy needed an “engine” to manage exchange rates and rebuild shattered nations. In July 1944, delegates from 44 nations met at the Mount Washington Hotel in Bretton Woods, New Hampshire. Their goal was to design a system that codified the Atlantic Charter’s promise of “economic advancement and social security,” FDR’s Freedom from Want.

Bretton Woods gave rise to two institutional pillars. One was the International Monetary Fund (IMF), which was designed to ensure exchange rate stability and prevent the “beggar-thy-neighbor” currency devaluations that crippled trade in the 1930s. The other was the International Bank for Reconstruction and Development, the “World Bank,” as it came to be called, was initially focused on the “Reconstruction” of war-torn Europe, but later expanded resources for the “Development” of what is now loosely called the “Global South.”

The mechanics of Bretton Woods focused on fixed exchange rates and the strict connection between the US dollar and Gold. The system was built on a Gold Exchange Standard, with USD pegged to Gold at $35 per ounce (oz). Each country defined its currency’s value in terms of dollars (e.g., the British Pound was initially set at $4.03) and committed to maintaining it. This peg provided the stability necessary for international trade to flourish, directly addressing the “Freedom from Want” by enabling predictable global markets.

The result was that the USD became the world’s major liquidity currency (initially hampered by Gold), the United Nations was created (but always hampered by the Security Council vetoes), and the US Navy became the ocean’s police, allowing countries like China to forgo their own protective navies and reducing the cost of their goods for countries worldwide. This system is currently under review.

It was a 15-year endeavor rebuild the US economy and to shape a new global system, expanding the New Deal into a world system with the Atlantic Charter, Bretton Woods, and the UN. The Marshall Plan pumped $18 billion into Europe to help it “reconstruct.”

But tensions increased between the US and the USSR, helping facilitate the Cold War. When the US dropped the atomic bombs on Hiroshima and Nagasaki, it wasn’t just to end the war with Japan; it was a signal to Stalin. The US held a nuclear monopoly, which Stalin viewed as an attempt to bully the USSR into concessions in Eastern Europe. The National Security Act of 1947 created the Central Intelligence Agency and a security apparatus in the US government that unified the military branches under the National Security Council. Once the USSR detonated their own atomic bomb in 1949 (much sooner than US intelligence predicted), the race shifted to the Hydrogen Bomb (thermonuclear), so much for FDR’s freedom from fear. This was a leap in destructive power from kilotons to megatons.

When the West introduced a new currency (the Deutsche Mark) in 1948 to stabilize the economy, Stalin viewed it as an act of economic warfare and blocked all land routes to West Berlin. This forced the Berlin Airlift, the first major “hot” confrontation of the Cold War. The Western allies wanted to rebuild the German economy to stabilize Europe. Stalin wanted to strip Germany of industrial assets, as it did in China’s Manchuria as reparations to rebuild the Soviet Union.

In 1950, NSC-68 (National Security Council Report 68) became the definitive blueprint for the Cold War, effectively turning the “Four Freedoms” into a military-industrial mandate. Produced by Paul Nitze and the Policy Planning Staff, this document shifted the U.S. strategy from “patient containment” to “active rollback” and massive rearmament. It was a challenge to the New Deal-led containment of Communism, and aimed to liberate nations already under Communist control, such as North Korea when General Douglas MacArthur moved forces past the 38th parallel to eliminate the North Korean army, triggering a massive Chinese intervention and a retreat to a containment stalemate.

Reviewing the US-led “Rules-Based” World Order

The New Deal as a global “Allies” solution morphed in the 1970s when we reached the limits of the dollar-gold standard (Triffin Dilemma). and USD trade went electronic with Reuters Monitor.[1] US debt expanded to provide the new “gold” backing for the global currency with US Treasuries. Financial containment was ended, and taxes were reduced. Computer networks replaced the telex, and spreadsheet logic dominated the new political economy with the Bloomberg Box, Excel, and China’s Wind, digitizing and privatizing wealth.

Pan-capitalism broke out in the 1990s with the end of the USSR and the “Atari Democrat’s” World Trade Organization’s “new rules” framework that opened the world to IP networks through privatization, liberalization of services through GATS, and reducing tariffs on all sorts of electronic and digital devices. The WTO maded China and the other Asian Tigers very rich while privatized telecoms (like NZ Telecom) opened up the world to free video/voice calls, global services like software, and social media networks like FB.

But just as the gold in Fort Knox had its limits, the US public grew nervous about the federal debt. Both Democrat and Republican politicians used the US debt to instill fear in the US public. The US consumer’s trade deficit kept countries like China prosperous (As Ken Cao pointed out, the US is (China’s “Iron Rice Bowl”), and the USD global liquidity system functioning, but not without dollar shortages cropping up, as in 2008, and the persistent strong dollar we see today.

BRICS emerged as a “Second World” attempt to challenge the US-led world order by trying to seduce the Global South with the Belt and Road Initiative and calls for “de-dollarization.” But the failed SMO in Eastern Europe, and the breakdown of the Chinese economy, and India’s capture of Russia’s shadow fleet oil tankers have crumbled the BRICS initiative.

It did challenge Walter Wriston’s “information standard” and turned investment and reserve hold to gold. China’s CIP has made inroads into the world’s payment systems traditionally dominated by SWIFT.[2] Fintech innovations, including AI, represent a major challenge to USD dominance as we move into an era of blockchain and tokenization.

The Trump solution has been a chaotic mixture of “America First” tariffs, ending foreign aid, USD-backed stablecoins (2027), and military escalation. Resentment is building worldwide, but global money is still flowing back along the “Milk Road” into the USD.

And to Usher’s point, the US liberal/progressive movement does not have a major focus on the political economy, either domestically or globally. Even Obama used the “deficit” card as if the US economy ran on “household” economics that are limited by income and credit card debt. But debt expanded rapidly with COVID-19 reigniting concerns about the deficits.

That is why I think FDR’s vision for the Great Depression, the transformation of US industrialization, and decolonization and global economic enablement are useful data points to consider going forward for both the US and the global order.

Summary

In his 1941 State of the Union address on January 6th, FDR articulated the “Four Freedoms.” The first three (Speech, Worship, Fear) were standard democratic ideals, but the fourth was revolutionary for the US. “The fourth is freedom from want… which, translated into world terms, means economic understandings which will secure to every nation a healthy peacetime life for its inhabitants.”

Later that year, after the attack on Pearl Harbor and Hitler declared war on the US, these ideas became central Allied war aims, underpinning the Atlantic Charter (that ended the British Empire) and the UN Universal Declaration of Human Rights. It was the pivotal point in world affairs. FDR implicitly stated that globalizing the New Deal had become a US national security interest.

The result was that the USD became the world’s major liquidity currency (initially hampered by gold), the United Nations was created (always hampered by the Security Council vetoes), and the US Navy became the ocean’s police, allowing countries like China to forgo their own protective navies and reducing the cost of their goods for countries worldwide. This system is currently under review.

Except for Social Security, the term “socialism” wasn’t used much in the New Deal. It’s a small word considering the task ahead for the US and global system. FDR’s plans even preceded Keynesian economics. However, he did “contain” finance, which he saw as an unruly system that led to the Great Crash of 1929 and its global unstability. Part of that “containment” was a tax system with rates north of 90 percent for top earners.

It was a 15-year endeavor rebuild the US economy and to shape a new global system, expanding the New Deal into a world system with the Atlantic Charter, Bretton Woods, the Marshall Plan, and the UN, all of which were resisted by the USSR, helping facilitate the Cold War.

The New Deal as a global “Allies” solution morphed in the 1970s when we reached the limits of the dollar-gold standard (Triffin Dilemma). and USD trade went electronic with Reuters Monitor. US debt expanded to provide the new “gold” backing for the global currency with US Treasuries as “pristine collateral.” Financial containment was ended, and taxes were reduced. Computer networks replaced the telex, and spreadsheet logic dominated the new political economy with the Bloomberg Box, Microsoft’s Excel, and China’s Wind, digitizing and privatizing wealth.

Pan-capitalism broke out in the 1990s with the end of the USSR and the “Atari Democrat’s” World Trade Organization’s “new rules” framework. The WTO opened the world to IP networks and digital devices, making China and the other Asian Tigers very rich. Privatized telecoms (like NZ Telecom) then opened up the world to free video/voice calls, web advertising, global social media networks like FB, and AI web data collection.

But just as the gold in Fort Knox had its limits, the US public grew nervous about the expanding federal debt. Luckily, the US consumer’s trade deficit kept China and the world economy moving. USD global liquidity system continued function, but not without dollar shortages cropping up, as in 2008, and the persistent strong dollar we see today. USD is strenghtened by the “Milkshake Theory” that drives surpluses around the world to the USD.

BRICS is a “Second World” attempt to challenge the US-led world order by seducing the Global South with the Belt and Road Initiative and calls for “de-dollarization.” But the failed SMO in Eastern Europe, and the decline of the Chinese economy, and the Indian Coast Guard boarding the dark fleet’s oil tankers have crumbled the BRICS’ momentum.

The Trump solution has been a chaotic mixture of “America First” tariffs, ending foreign aid, USD-backed stablecoins (2027), and military escalation. Resentment is building worldwide, but global money is still flowing back along the “Milk Road” into the USD.

The US liberal/progressive movement does not currently have a major focus on the political economy, either domestically or globally. Even Obama used the “deficit” card as if the US economy ran on “household” economics that are limited by income and credit card debt. But debt expanded rapidly with COVID-19 reigniting concerns about the deficits.

That is why I think FDR’s vision for the Great Depression, the transformation of US industrialization, and decolonization and global economic enablement are useful data points to consider going forward for both the US and the global order. “Socialism” is an insufficient concept to enact a successful democratic political economy.

Conclusion

This blog post argues for reclaiming January 6th as the anniversary of FDR’s “Four Freedoms” speech (1941) rather than the date of the Capitol attack. The post traces the arc from FDR’s “Global New Deal” to the modern digital financial order.

It posits that FDR’s inclusion of “Freedom from Want” was a revolutionary pivot that transformed the US New Deal into a global security strategy. FDR realized that US national security depended on global economic stability. This philosophy underpinned the Atlantic Charter (decolonization), the UN (political forum), and the Bretton Woods system.

The US Navy became the “global police,” lowering trade costs for the world, while the US dollar provided liquidity. Crucially, FDR “contained” finance with high taxes and regulations to prevent the instability of the 1929 crash.

The shift from Gold to Spreadsheets (1970s–1990s) describes the collapse of the FDR order due to the Triffin Dilemma (the limits of the gold standard). In the 1970s, the US shifted from backing the dollar with gold to backing it with US Debt (Treasuries). Financial containment ended. The “telex” was replaced by computer networks (Reuters, Bloomberg, Excel). This digitized and privatized wealth, leading to “Spreadsheet Capitalism.”

In the 1990s, “Atari Democrats” and the WTO opened the world to IP networks, enriching the Asian Tigers and China. The post argues we are now reaching the limits of this debt-based system. The BRICS attempt to “de-dollarize” and curry favor in the South via the Belt and Road Initiative. But BRICS challenges are crumbling due to the failure of Russia’s military operation (SMO) and China’s economic breakdown. Global capital is still flowing back to the USD via the “Milk Road.”

The “Trump Solution” is a chaotic mix of tariffs, stablecoins, and military escalation. Meanwhile, modern liberals fail to understand political economy, joining the Republicans in treating the US budget like “household economics” rather than a tool for industrial transformation.

Notes

[1] The eight points of the Atlantic Charter are 1. No territorial gains were to be sought by the United States or the United Kingdom. 2. Territorial adjustments must be in accord with the wishes of the peoples concerned. 3. All peoples have a right to self-determination. 4. Trade barriers were to be lowered. 5. There was to be global economic cooperation and advancement of social welfare. 6. Freedom from want and fear; 7. Freedom of the seas; 8. Disarmament of aggressor nations, postwar common disarmament.

A classic source on Bretton Woods and the Triffin Dilemma was Moffit, M. (1983) The World’s Money. NY: Simon & Schuster, Inc.
[2] Wriston’s interpretation of the Information Standard The Twilight of Sovereignty: How the Information Revolution Is Transforming Our World was organized around a rhetoric of assurance, not a critical analysis. He argued the power of multinational corporations, nation-state dictatorships, and any aggregation of power antithetical to democratic prospects will fall to the sovereign power of the information standard.

© ALL RIGHTS RESERVED

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Anthony J. Pennings, PhD is a professor at the Department of Technology and Society, State University of New York, Korea and a Research Professor for Stony Brook University. He teaches AI and broadband policy. From 2002-2012 he taught digital economics and comparative political economy at New York University. He also taught in the Digital Media MBA at St. Edwards University in Austin, Texas, where he lives when not in Korea.

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Category: democratic political economies, digital geography, enabling frameworks, enterprise systems, financial news, financial technology, geopolitical risk, global communications, global e-commerce, how IT came to rule the world, spreadsheet logic, sustainable development
Tags: FDR > Four Freedoms > New Deal

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