In the first half of the 20th century, and more actively in the post–World War II period, the United States government used economic aid programs to advance its foreign policy interests. US policymakers generally believed that support for economic development in poorer countries would help create global stability, which would limit military threats and strengthen the global capitalist system. Aid was offered on a country-by-country basis to guide political development; its implementation reflected views about how humanity had advanced in richer countries and how it could and should similarly advance in poorer regions. Humanitarianism did play a role in driving US aid spending, but it was consistently secondary to political considerations. Overall, while funding varied over time, amounts spent were always substantial. Between 1946 and 2015, the United States offered almost $757 billion in economic assistance to countries around the world—$1.6 trillion in inflation-adjusted 2015 dollars. Assessing the impact of this spending is difficult; there has long been disagreement among scholars and politicians about how much economic growth, if any, resulted from aid spending and similar disputes about its utility in advancing US interests. Nevertheless, for most political leaders, even without solid evidence of successes, aid often seemed to be the best option for constructively engaging poorer countries and trying to create the kind of world in which the United States could be secure and prosperous.
Jeffrey F. Taffet
Foreign economic policy involves the mediation and management of economic flows across borders. Over two and a half centuries, the context for U.S. foreign economic policy has transformed. Once a fledgling republic on the periphery of the world economy, the United States has become the world’s largest economy, the arbiter of international economic order, and a predominant influence on the global economy. Throughout this transformation, the making of foreign economic policy has entailed delicate tradeoffs between diverse interests—political and material, foreign and domestic, sectional and sectoral, and so on. Ideas and beliefs have also shaped U.S. foreign economic policy—from Enlightenment-era convictions about the pacifying effects of international commerce to late 20th-century convictions about the efficacy of free markets.
Economic nationalism tended to dominate U.S. foreign trade policy throughout the long 19th century, from the end of the American Revolution to the beginning of World War I, owing to a pervasive American sense of economic and geopolitical insecurity and American fear of hostile powers, especially the British but also the French and Spanish and even the Barbary States. Following the U.S. Civil War, leading U.S. protectionist politicians sought to curtail European trade policies and to create a U.S.-dominated customs union in the Western Hemisphere. American proponents of trade liberalization increasingly found themselves outnumbered in the halls of Congress, as the “American System” of economic nationalism grew in popularity alongside the perceived need for foreign markets. Protectionist advocates in the United States viewed the American System as a panacea that not only promised to provide the federal government with revenue but also to artificially insulate American infant industries from undue foreign-market competition through high protective tariffs and subsidies, and to retaliate against real and perceived threats to U.S. trade. Throughout this period, the United States itself underwent a great struggle over foreign trade policy. By the late 19th century, the era’s boom-and-bust global economic system led to a growing perception that the United States needed more access to foreign markets as an outlet for the country’s surplus goods and capital. But whether the United States would obtain foreign market access through free trade or through protectionism led to a great debate over the proper course of U.S. foreign trade policy. By the time that the United States acquired a colonial empire from the Spanish in 1898, this same debate over U.S. foreign trade policy had effectively merged into debates over the course of U.S. imperial expansion. The country’s more expansionist-minded economic nationalists came out on top. The overwhelming 1896 victory of William McKinley—the Republican party’s “Napoleon of Protection”—marked the beginning of substantial expansion of U.S. foreign trade through a mixture of protectionism and imperialism in the years leading up to World War I.
B. Alex Beasley
American cities have been transnational in nature since the first urban spaces emerged during the colonial period. Yet the specific shape of the relationship between American cities and the rest of the world has changed dramatically in the intervening years. In the mid-20th century, the increasing integration of the global economy within the American economy began to reshape US cities. In the Northeast and Midwest, the once robust manufacturing centers and factories that had sustained their residents—and their tax bases—left, first for the South and West, and then for cities and towns outside the United States, as capital grew more mobile and businesses sought lower wages and tax incentives elsewhere. That same global capital, combined with federal subsidies, created boomtowns in the once-rural South and West. Nationwide, city boosters began to pursue alternatives to heavy industry, once understood to be the undisputed guarantor of a healthy urban economy. Increasingly, US cities organized themselves around the service economy, both in high-end, white-collar sectors like finance, consulting, and education, and in low-end pink-collar and no-collar sectors like food service, hospitality, and health care. A new legal infrastructure related to immigration made US cities more racially, ethnically, and linguistically diverse than ever before. At the same time, some US cities were agents of economic globalization themselves. Dubbed “global cities” by celebrants and critics of the new economy alike, these cities achieved power and prestige in the late 20th century not only because they had survived the ruptures of globalization but because they helped to determine its shape. By the end of the 20th century, cities that are not routinely listed among the “global city” elite jockeyed to claim “world-class” status, investing in high-end art, entertainment, technology, education, and health care amenities to attract and retain the high-income white-collar workers understood to be the last hope for cities hollowed out by deindustrialization and global competition. Today, the extreme differences between “global cities” and the rest of US cities, and the extreme socioeconomic stratification seen in cities of all stripes, is a key concern of urbanists.
American workers have often been characterized by the press, scholars, and policy-makers as apathetic and ill-informed about foreign policy issues. To highlight this point, scholars have frequently used an anecdote about a blue-collar worker who responded to an interviewer’s questions regarding international issues in the 1940s by exclaiming “Foreign Affairs! That’s for people who don’t have to work for a living.” Yet missing from many such appraisals is a consideration of the long history of efforts by both informal groups of workers and labor unions to articulate and defend the perceived international interests of American workers. During the early years of the American Republic, groups of workers used crowd actions, boycotts, and protests to make their views on important foreign policy issues known. In the late 19th century, emerging national labor unions experimented with interest group lobbying as well as forms of collective action championed by the international labor movement to promote working-class foreign policy interests. Many 20th- and 21st-century US labor groups shared in common a belief that government leaders failed to adequately understand the international concerns and perspectives of workers. Yet such groups often pursued different types of foreign policy influence. Some dominant labor organizations, such as the American Federation of Labor (AFL) and Congress of Industrial Organizations (CIO), participated in federal bureaucracies, advisory councils, and diplomatic missions and programs designed to encourage collaboration among business, state, and labor leaders in formulating and promoting US foreign policy. Yet other labor groups, as well as dissidents within the AFL and CIO, argued that these power-sharing arrangements compromised labor’s independence and led some trade union leaders to support policies that actually hurt both American and foreign workers. Particularly important in fueling internal opposition to AFL-CIO foreign policies were immigrant workers and those with specific ethno-racial concerns. Some dissenting groups and activists participated in traditional forms of interest group lobbying in order to promote an independent international agenda for labor; others committed themselves to the foreign policy programs of socialist, labor, or communist parties. Still others, such as the Industrial Workers of the World, advocated strike and international economic actions by workers to influence US foreign policy or to oppose US business activities abroad.
After World War II, the United States backed multinational private oil companies known as the “Seven Sisters”—five American companies (including Standard Oil of New Jersey and Texaco), one British (British Petroleum), and one Anglo-Dutch (Shell)—in their efforts to control Middle East oil and feed rising demand for oil products in the West. In 1960 oil-producing states in Latin America and the Middle East formed the Organization of the Petroleum Exporting Countries (OPEC) to protest what they regarded as the inequitable dominance of the private oil companies. Between 1969 and 1973 changing geopolitical and economic conditions shifted the balance of power from the Seven Sisters to OPEC. Following the first “oil shock” of 1973–1974, OPEC assumed control over the production and price of oil, ending the rule of the companies and humbling the United States, which suddenly found itself dependent upon OPEC for its energy security. Yet this dependence was complicated by a close relationship between the United States and major oil producers such as Saudi Arabia, which continued to adopt pro-US strategic positions even as they squeezed out the companies. Following the Iranian Revolution (1978–1979), the Iran–Iraq War (1980–1988), and the First Iraq War (1990–1991), the antagonism that colored US relations with OPEC evolved into a more comfortable, if wary, recognition of the new normal, where OPEC supplied the United States with crude oil while acknowledging the United States’ role in maintaining the security of the international energy system.