Barack Hussein Obama announced details of his new national export initiative yesterday. By pursuing his goal it is likely that the US will reverse one of the primary conditions contributing to global stability since the end of the Second World War.
Is a coincidence that when the dominant global power did not use state power to seek foreign markets, the degree of competition and ultimately violence among players on the international stage was markedly lower than in previous periods? If not a coincidence, then the full weight of the American nation behind a strategy of maximizing exports could have massive unintended consequences.
The world was a fairly mercantile place before World War II. Empires established colonies not merely to get access to raw materials, but to gain captive markets. When commercial interests clashed, skirmishes were common, and often erupted into full-blown war. Imperial Japan is a good example. The U.S. attempt to block Japan from appropriating the Dutch East Indies oil production and domineering over China was the proximate cause for Japan’s attack on Pearl Harbor. Of course economic interactions can still ignite conflict, but they have not done so on a global scale since WWII. Why?
“In the past, most U.S. companies focused almost solely on the robust domestic market for their goods.”
One of the leading reasons the world has been so stable is because the traditional merchant powers have had a deep market to sell into: the United States. Part of the peace accords and reconstruction of Japan included granting it full access to the U.S. market as well as full American protection of Japanese trade lines. Part of the peace accords and reconstruction of Germany included a similar arrangement. These arrangements proved so successful in containing Japanese and German imperial ambitions, revitalizing and enriching their economies, and giving them a powerful incentive to be part of the U.S. alliance structure that the pattern was repeated throughout Western Europe, in Taiwan and Korea, and to a lesser degree in Indonesia and elsewhere.
By granting these states privileged access to the American market — and not necessarily demanding American access to their markets in return — the United States created conditions extremely favorable for its allies’ economic development and prosperity. “All” it asked for in return was the right to determine military strategy, ultimately creating a global alliance network that served American interests. The United States traded some market share to turn adversaries into allies, both reducing the number of foes and intimidating the remainder by the sheer size of the U.S. alliance structure. As a result, some of the world’s most aggressive mercantile powers became placid. They no longer had to go to war for access to resources or markets.
This entire arrangement, however, rested on the basis that the United States generally did not use the full force of its state power in pursuit of its singular economic ends. The United States was content to buy others’ goods and run trade deficits to command the loyalty of its allies in security matters. The question with the Obama administration’s export strategy is whether it marks a change from this mode. To increase exports, one has to increase penetration into foreign economies, and a number of countries’ economies and social systems only work the way they do because they have taken shape with minimal outside pressure — i.e., minimal competition from the United States. This is not to say that many countries do not already perceive the U.S. presence as overbearing, but rather that the United States simply has not spent much energy in competing for foreign market share over the past half century. If it suddenly exerts itself in opening up the doors of trade around the world — and doubling U.S. exports would mean finding buyers for an additional $1.5 trillion dollars worth of goods — it will disrupt a lot of places.
And Barack Hussein Obama doesn't care.