As income and asset inequality in the US exceeds levels in feudal Europe nearly one thousand years ago, a few question this progeny of capitalism and democracy. The current problems are well documented and do not need to be repeated here.

Yet this time, in a world first, revolution has been avoided by some innovative economic engineering. The key criteria for revolutions have not changed, an empty stomach and an inquiring mind. The US resident poor are fed to obesity and spend their non-working hours sitting in front of TVs and PCs. Fifty five million individuals struggling on less than $8 an hour, and a state sponsored debt burden, acquiesce in a stupor of sugary fats and sugary facts. But the American miracle over the past half century has been the creation of a huge subclass of US non-resident poor. Over 200 million workers serving the US economy offshore earning 25c per hour.

This non-resident solution to a slave workforce was successfully implemented in the past by both the Roman and British Empires. However the earlier system required a blend of direct sovereign control and protectorates to enforce trade and excise terms, with significant military costs, normally funded by debt. It also required that only the Roman or British mints could make silver or gold coinage accepted across the nations. Under Roman ‘protection’ territories could only mint bronze coins, ensuring the silver denarius were always preferred in trade. The British imposed the gold sterling and minted the silver Indian rupee throughout its territories in the 19th century.

The US model is slightly different, and far more innovative. A US sponsored WTO/IMF breakdown of trade and foreign investment barriers allows the US to own work forces and assets overseas without sovereign invasion. This, combined with a US dollar fiat reserve currency, disconnected from any silver or gold standard, allows the US to effectively print coins for trade and debt, without the Roman or British need to mint gold or silver coins or maintain bullion reserves. The final piece in the strategy is enforcing the US dollar as the currency for all major bilateral transactions outside the US. As a result of these three initiatives not only are 69% of all sovereign currency reserves in US dollars, but 75% of all US dollar transactions occur outside the USA with no US party involved.

Being a reserve fiat currency has allowed the US to be the first nation in history to maintain indefinitely a massive trade deficit without currency depreciation or purchasing gold. US treasury bonds have also been the natural place for other nations to store their reserve currency, suppressing US borrowing interest rates. In an extraordinary act of irony, the costs of policing the system, with US military might, is financed by other nations through their purchase of US treasury bonds rather than annual levies and reparations favoured by the Romans and British. US companies are able to employ directly or indirectly millions of people in slave like conditions, immune from the regulations of their country, and without any US military troops on the ground. These three factors have allowed them to keep a slave labour force offshore for 4 decades with no need to ‘pay’ the consequences through overseas borrowing, currencies depreciation, or gold reserve allocations.

All other countries have to go to public markets to borrow US dollars for bilateral trade, which they can never pay back. The IMF and WTO, based in Washington, then enforce trade agreements in return for reopening the debt markets to them.

This is an elegant system of Empire and also immaculately repackaged as ‘The American Dream’ or ‘Globalisation’ or ‘Free Markets’.