TWO POST-WAR SETTLEMENTS
World War II produced two postwar settlements. One was a reaction to deteriorating relations with the Soviet Union, and it culminated in the containment order.” It was a settlement based on the balance of power, nuclear deterrence, and political and ideological competition. The other settlement was a reaction to the economic rivalry and political turmoil of the 1930s and the resulting world war, and it culminated in a wide range of new institutions and relations among the Western industrial democracies and Japan. This settlement was built around economic openness, political reciprocity, and multilateral management of an American-led liberal political order.15
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The two settlements had distinct political visions and intellectual rationales,and at key moments the American president gave voice to each. On12 March 1947, President Truman gave his celebrated speech before Congressannouncing aid to Greece and Turkey, and wrapped it in a new Americancommitment to support the cause of freedom around the world. TheTruman Doctrine speech was a founding moment of the containmentorder ; it rallied the American people to a new great struggle, this oneagainst the perils of world domination by Soviet communism. A fateful hour had arrived, Truman told the American people. The people of theworld must choose between two alternate ways of life.” If the UnitedStates failed in its leadership, Truman declared, we may endanger the peace of the world. 16It is forgotten, however, that six days before this historic declaration,Truman gave an equally sweeping speech at Baylor University. On thisoccasion, Truman spoke of the lessons the world must learn from the disasters of the 1930s. As each battle of the economic war of the thirties wasfought, the inevitable tragic result became more and more apparent. Fromthe tariff policy of Hawley and Smoot, the world went on to Ottawa andthe system of imperial preferences, from Ottawa to the kind of elaborateand detailed restrictions adopted by Nazi Germany.” Truman reaffirmed American commitment to economic peace,” which would involve tariffreductions and rules and institutions of trade and investment. In the settlement of economic differences, the interests of all will be considered, anda fair and just solution will be found.” Conflicts would be captured anddomesticated in an iron cage of multilateral rules, standards, safeguards,and dispute resolution procedures. According to Truman, this is the way of a civilized community.
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The containment order is well known in the popular imagination. Itis celebrated in our historical accounts of the early years after World WarII, when American officials struggled to make sense of Soviet militarypower and geopolitical intentions. In these early years, a few wise men fashioned a coherent and reasoned response to the global challenge of Soviet communism.18 The doctrine of containment that emerged was the coreconcept that gave clarity and purpose to several decades of American foreignpolicy.19 In the decades that followed, sprawlingbureaucratic and militaryorganizations were built on the containment orientation. The bipolardivision of the world, nuclear weapons of growing size and sophistication,the ongoing clash of two expansive ideologies all these circumstancesgave life to and reinforced the centrality of the containment order.”
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By comparison, the ideas and policies of the Western order were morediffuse and wide-ranging. It was less obvious that the intra-Western agenda was a grand strategy designed to advance American security interests. Asa result, during the Cold War it was inevitable that this agenda would beseen as secondary, a preoccupation of economists and American business.
The policies and institutions that supported free trade and economic opennessamong the advanced industrial societies were quintessentially the stuff of low politics.” But this is a historical misconception. TheWestern settlementwas built on varied and sophisticated ideas about American securityinterests, the causes of war and depression, and the proper and desirablefoundations of postwar political order. Indeed, although the containment order overshadowed it, the ideas behind order among theWestern industrialcountries were more deeply rooted in the American experience and athoroughgoing understanding of history, economics, and the sources ofpolitical order.
The most basic conviction behind American thinking about postwarorder in theWest was that the closed autarkic regions that had contributedto world depression and split the world into competing blocs before thewar must be broken up and replaced by an open and nondiscriminatory