The Rise of the American System - Liberal Leviathan: The Origins, Crisis, and Transformation of the American World Order - page 119

geopolitical lessons learned from the 1930s stood behind this conviction. It was the closure of
the world economy—protectionism and the formation of hostile regional spheres—that led to
the breakdown of order and great-power war. “The next peace,” Vice President Henry Wal-
lace said in 1941, “must take into account economics; otherwise, it will serve as the seedbed
for aggression.” 12
During the 1930s, the United States saw its geopolitical operating space shrink as the other
great powers began to construct closed and competing regional blocs. Germany pursued a
series of bilateral trade agreements with Eastern European countries in order to consolidate
an economic and political sphere of influence in the region. Japan pursued an even more overt
campaign to create a Greater East Asian Co-Prosperity Sphere. In a less obvious or aggress-
ive way, Britain also was pursuing a strategy of discriminatory economic cooperation with
its Commonwealth partners—a nonterritorial economic bloc built around the imperial pref-
erence system. By the end of the 1930s, the world was effectively carved up into relatively
insular economic blocs—antagonistic groupings that American officials understood to be at
least partly responsible for the upset of war. 13
President Truman embraced this same view—at least initially. In an address at Baylor
University in March 1947, he laid out his vision of “economic peace” and appealed for sup-
port for his policies of lower trade barriers and a postwar trade organization. In his view, the
1930s demonstrated the indivisibility of economics and politics—of trade and statecraft. “As
each battle of the economic war of the thirties was fought, the inevitable tragic result became
more and more apparent. From the tariff policy of Hawley and Smoot, the world went on
to Ottawa and the system of imperial preferences, from Ottawa to the kind of elaborate and
detailed restrictions adopted by Nazi Germany. Nations strangled normal trade and discrim-
inated against their neighbors, all around the world.” And so an open trading system was one
of the “cornerstones of our plans for peace.” 14
The historian Robert A. Pollard describes this general conviction about the reconstruction
of an open world economy as a “postwar consensus” within American policymaking circles.
American policy makers “agreed that Washington should take the leadership in creating
postwar international institutions that would stabilize currencies, ease financial crisis, and
promote world commerce, as well as a new collective security organization that would
deter aggression. A proper functioning system of world trade would foster interdependence
among nations, they reasoned, thereby raising the price of aggression.” 15 An open world eco-
nomy—managed with cooperative institutional arrangements—would give countries equal
opportunities for trade and investment. Peaceful economic competition, nondiscriminatory
access to resources, and the efficiency gains from open markets would create an international
environment that served America's long-term and extended interests.
Open markets would provide the essential foundation for a wider multilateral system or-
ganized around the rule of law. This deep conviction about how to organize the global system