Economic Interest in US Foreign Policy?
In a couple of days I have to give a small presentation on the impact of US Economic Interest on US Foreign Policy. It is a rather broad question, isn’t it? How to answer it in 10 minutes? Maybe showing this video?
The seminar and the lectures in US Foreign Policy did not really give me an academic framework for this specific policy analysis. In general though, Dr. Halper’s perspective as a Washington-insider was interesting, especially when we discussed Sino-American-Relations. And Dr. Thompson is a great historian with enthusiasm for Wilson – the seminar on Wilsonianism was one of the best debates in Cambridge.
But somehow I struggle to put the complicated and complex American policy making into simple concepts, such as Wilsonianism, Liberalism, Realism, Isolationism, Internationalism and relate them to the Economic Interests. When I read Frank Ninkovich’s Wilsonian Century, I wondered whether it is really possible to put the different objectives of American Foreign Policy into these terms.
Take for instance the claim that the United States foreign policy before the 1900 was isolationist, afterwards realist or internationalist. The United States has intervened in other countries since its foundation in the 18th century.
In almost all these conflicts policy-makers had to think about the economic and security consequences as well as about opinion at home. They had to motivate the citizens to go to war by appealing to higher ideals, but often enough financial and trade related motives came into play as well.
Was the foreign policy mostly dominated by economic concerns? In support of this theory, one could say that despite its rhetoric appealing to higher ideals, the US has supported dictatorships and authoritarian regimes around the world if it suited its economic or security interests.
The Comic Book Addicted to War uses an entertaining way to make the claim that the United States have employed military threats to receive economic concessions from other countries or and that they have intervened in countries when revolutions threatened to endanger American business interests.
The comic book features some interesting quotes by American Policy Makers and Army Representatives:
When any territory outside the present territorial limits of the United States becomes necessary for our defense or essential for our commercial development, we ought to lose no time in acquiring it.
I spent thirty-three years and four months in active service in the country’s most agile military force, the Marines. I served in all ranks from second Lieutenant to Major General. And during that period I spent most of my time being a high-class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism.
[...]
Thus I helped make Mexico, and especially Tampico, safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenue in. I helped in the raping of half-a-dozen Central American republics for the benefit of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers and Co. in 1909-1912. I brought light to the Dominican Republic for the sugar interests in 1916. I helped make Honduras “right” for American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went its way unmolested.
Major General Smedley Darlington Butler
These quotes suggest that foreign policy is dominated by business interests. But not all foreign policy decisions are dominated by economic considerations. During the Cold War, American Foreign Policy was dominated by containment objectives towards the Soviet Union than business prospects.
One could argue of course that the military itself has been a striving business in the US whose interest it was to maintain a permanent state of confrontation to justify its expenditure. The United States spend more on the military than the rest of the world combined.
But if you compare the military spending of the United States to the American Economy, it is still rather small (only about 3.7 percent). While it is true that the military has an important standing in determining US Foreign Policy, I really wonder how much power the military industry in Washington has?
How about the importance of Economic Foreign Policy in the general Foreign Policy in the US. Jerel Rosati in his book “The Politics of United States Foreign Policy” has argued that many presidents were more concerned with diplomacy and security than with the economic foreign policy which was handled by a variety of agencies and departments in the American administration.
Do Economic Interests play a role in Elections? Election campaigns in the US are expensive and maybe politicians have a strong incentive to tailor politics to the needs of the corporate sponsors?
Yet election campaigns can also be financed through other means. The previous Obama campaigns were almost totally financed by individidual contributions.
Politicians in the US have to address the median voter because of a winner-takes-it-all system that permeates most primary elections and as well the presidential elections. This voting system allows some minorities to dominate regional elections which might be crucial to win the overall-elections. Also the majority voting also makes the congress less representative in terms of minority opinions. But it also limits the powers of single interest to be influential in elections.
Business interests do play a role in Washington – through providing expertise, lobbying, networking in the day-to-day policy process. However, it is unclear whether these business interests have always stronger role than other interests from NGOs or Activists Groups.
In Germany, individual politicians need the support of a political party. The major political parties need the support from business organisations and labor unions as well, so they are much more resceptible to economic arguments than in other countries. In the USA, Presidents in office can not count on the loyalty of their party, they need to win individual votes in Congress when conducting foreign policy. This process of finding a compromise opens the possiblity to have regional interests connected to larger policy initiatives, but it is not certain that this would allow business interests to dominate the foreign policy agenda.
All of this points to the finding that economic interests do play a role but maybe not a prominent one. Can we then say that US foreign policy are much more dominated by higher ideals like the struggle for democracy? I don’t think so. Historians and Policy Analysts should not confuse that the public statements of politicians and the actual policy can be quite different from each other. I think no one seriously doubts that often enough the US Foreign Policy has been in contradiction to democratic values and liberal objectives.
The key to understand the Economic Interest in US Foreign Policy is the character of the issue at hands. When the problem is a Zero-Sum-Problem where gains of the US means losses to other states (like the access to oil reserves), then economic interests and security interests align and interventions on behalf of these interests are clouded by referring to higher values.
When the US faces a problem where coordination between countries yields a higher output (a typical coordination-game in Game Theory Lingo), then the US Foreign Policy deviates from a strict security-based or economic-based foreign policy. The two World Wars can be cited as examples for that. In these instances, personal values of leaders have an impact on shaping the foreign policy of the United States.
