How Debt Bankrupted the British Empire, and Why America Is Walking the Same Path

38 pointsposted 14 days ago
by thisislife2
(nitishastra.substack.com)

21 Comments

indigoabstract

14 days ago

The article goes over my head by building too many arguments to sustain its case.

For me it's much simpler to articulate:

Human relationships are build on trust and mutual respect. Once that is gone, the relationship goes out the window as well and it's not coming back.

Counter intuitively, relationships between countries seem to function mostly the same way, instead of being based strictly on interest and practicality as one might expect.

Once trust is strained until it breaks, it's not going to be the same from then on.

mikelitoris

14 days ago

“The British Empire’s descent from unchallenged global hegemon in 1939[…]” lol what? British empire was a meager shadow of itself after WW1. Indians’ take on British empire is always wild.

libraryofbabel

14 days ago

In fact it peaked in size in 1920. But you’re broadly correct about the sense of decline post-WWI and the sense that America would be the dominant 20th-century power.

melesian

14 days ago

The UK itself lost one third of its land area in 1921, following yet another insurrection in Ireland (always a coerced part of the UK subject to genocidal rule and expropriation).

The last straw for the Irish was summary executions of the insurrectionists and the ravages of the Black and Tans -- like ICE but with arsonists and criminals, but without masks. The US will be fortunate if the parallels remain only financial.

sjajshha

14 days ago

I found John Glubb’s analysis of the problem much better than the author’s: https://people.uncw.edu/kozloffm/glubb.pdf

Much more impressive he wrote this 50 years ago, but he might as well have been alive today. History certainly rhymes.

mrlonglong

14 days ago

A glaring omission is the Chinese civilisation. It's lasted thousands of years.

prewett

14 days ago

The individual dynasties, however, lasted about 250 years each, like the others listed. China also got taken over by the Mongols in the mid-1200s, (retaken by Han Chinese a century later), and then by the Manchurians in the mid-1600s. Chinese civilization, not just the government, got taken over by European rationalism/modernism in 1940s with the Communist Revolution. (It's ironic that the Chinese government talks complains about "Western influences", when their whole governmental ideology is based on European ideas.)

mrlonglong

10 days ago

Confucianism lasted a lot longer though.

drumhead

14 days ago

The US will be able to keep issuing as much debt as they like as long as the Dollar is the global reserve currency. Its when that stops being the case they'll be in trouble with hyperinflation being the most likely outcome.

jfengel

14 days ago

The US will keep issuing debt as long as people are willing to buy its debt at a reasonably low price. Which people keep doing.

For a long time that was because people were justifiably convinced that the US would honor those debts, which it could do because it kept producing even more stuff every year, and would never even think about threatening to default. Here in 2026 I cannot imagine why they are continuing to, except inertia.

hshdhdhj4444

14 days ago

> in 2026 I cannot imagine why they are continuing to, except inertia.

Because there is no where else for that debt to go. No one else wants to take on so much debt.

Meanwhile there are a bunch of asset managers who are paying the mortgage on their beach home in the Caribbean with the bonuses they earn by investing in US debt. If the US defaults on that debt 10 tears from now that means they still earned 9 years of million dollar salaries, and anyways they won’t be blamed for something the entire industry suffered from at that point.

If they do the prudent thing and ask for a higher price they will end up investing fewer dollars which reduces their 2% commission on invested capital, money that might go to their international equity golfing buddy instead.

Entities where the money is managed by the investor itself (for example, foreign national governments) do indeed appear to be cutting back.

drumhead

14 days ago

Because everyone has a lot of dollars and they need to earn a return, so its either the Eurodollar market or US debt. US debt is safer. But its true to say that people are more and more reluctant to buy longer dated bonds and are turning to shorter and shorter maturities which is another problem for the US government.

Jensson

14 days ago

British pounds were the global reserve currency, then when they took too much debt it stopped and it was very bad for them.

People will stop using your currency as a reserve currency if you abuse it too much.

m0llusk

14 days ago

The American economy today is far larger and more diverse than Rome or the British Empire ever were which makes such comparisons difficult at best. One of the good things about fiat currencies is that you can manipulate or replace them as needed.

indubioprorubik

14 days ago

Eh, no, the debt is not a problem, as long as the world is willing to pay the tax for the police and ordering institutions. The ruling empire is a defacto service provider- and the world taking and hoarding the dollar is basically allowing for the printing of endless debt, as long as the empire does its job. If it ceases to perform its job, the tax paid by buying and keeping currency reserves becomes worthless - and the debt realizes.

Thus can be concluded, the moment a empire acts only in self interest, abandoning all its services to the global public, the debt it holds becomes real.

user

14 days ago

[deleted]

kledru

13 days ago

Second Rome = Constantinople.

but interesting to see this flagged...