"The United States and Globalization"

Bruce E. Moon, Lehigh University, USA

Chapter 28 (Part Four: Responses to Globalization)

Richard Stubbs and Geoffrey R.D. Underhill, eds.

. Political Economy and the Changing Global Order

(Oxford University Press, 1998)

Introduction

Most nations can only react to globalization, but the United States, as the system's dominant economic and political actor, is also able to affect the speed and character of the globalization process itself. By promoting the institutions that integrated national economies after World War II, it appears that the U.S. acted as predicted by hegemonic stability theory (HST).⁽¹⁾ As American dominance faded, the global system drifted away from the coherence of its original Bretton Woods design to the present chaotic patchwork of inadequate governance, a pattern that also lends credence to HST explanations centered on the relative decline of the hegemonic power. However, America's distinctive foreign policy tradition and peculiar political, economic, and social structure offer a better explanation for the character of the globalization that has emerged.

America's idiosyncratic vision and reluctant hegemony

At the end of World War II, the United States exhibited the two most important characteristics required of a candidate to champion global liberalism.⁽²⁾ First, it possessed the dominance that affords a hegemon both the greatest incentive and the greatest capacity to advance globalization. As the most productive economy, it was the most likely to benefit from open goods markets and as the largest source of both supply and demand for capital it was the most likely to exploit open capital markets. Its power was used to persuade or coopt a majority of nations, compel most of the remainder, and isolate the few dissenters. Second, the liberalism of the American domestic economy demonstrated that "its social purpose and domestic distribution of power was favorably disposed toward a liberal international order".⁽³⁾ However, America's dominance is accompanied by a profound isolationism and its liberalism is colored by its unique circumstances. The effects of these eccentricities were discernible in the Bretton Woods design but eventually became dominant in both American policy and the global regime it sponsored.

Hegemonic, but Isolationist

No account of American foreign policy can ignore the monumental shadow cast by the deep historical isolationism of the United States. From its colonial period onward, America has displayed hostility to foreign pressures and an abiding antipathy toward multilateral policies and supra-national institutions.⁽⁴⁾ This isolationism has been overcome only occasionally by extraordinary exigencies, most notably the combination of military, political, and economic challenges to the immediate postwar order in Europe. Even then, its commitment to a global institutional order has been reluctant and sporadic, not at all the attitude expected of a hegemon by HST.

This profound disinterest in foreign affairs has been sustained by a frequently ignored economic reality: the American economy has been and remains relatively unaffected by developments elsewhere in the global economy. The historic insulation of the American economy from the global one stems from the size and physical remoteness of the U.S. market, which relies less on trade than virtually any other in the world.⁽⁵⁾ For most nations, of course, a small foreign sector would imply proportionately small external influence, but the overwhelming size of the U.S. market means that even a modest percentage of American GNP constitutes a sizable share of global economic activity. In the early 1950s, for example, American exports constituted more than a third of industrial country exports, yet less than 5 percent of U.S. GNP.

This odd pattern of dominance has crosscutting implications for the ability of the U.S. to embrace its theoretical role of global hegemon. It had the power to shape the international system's fundamental structure, but little need to do so in order to protect either the national economy or the interests of sub-national groups. This autonomy allowed the U.S. to be inattentive to systemic issues and left the system vulnerable to the reemergence of America's natural isolationism whenever external pressures abated. However, when the U.S. was engaged with questions of system design, it could easily afford to indulge the interests of others -- as expected of a hegemon -- because that seldom required much sacrifice of its own modest stake.

Liberal, but myopic

Minimal external reliance also affected the character of American liberalism. With such a small import-competing sector, protectionist pressures were modest, even though theory identifies groups that normally oppose free trade. The Stolper-Samuelson theorem predicts that trade would harm unskilled labor, but that group is notoriously poorly represented by structures of American political power. Unlike the European working class, which has been championed economically by a strong trade union movement and defended politically by resultant social democratic parties, unskilled labor in the U.S. has been divided by ethnic identification, language, and region, leaving it politically impotent and economically vulnerable. Heckscher-Ohlin trade theory implies that inefficient sectors of the economy will suffer losses, but the general dominance of American industry in the immediate postwar era made these niches of comparative advantage for foreigners hard to find, and, given high transportation costs, difficult to exploit.

As American supremacy has eroded since the 1970s, greater vulnerabilities have produced dislocations in scattered industries, most prominently in textiles, steel, and autos. But no ideological current exists to frame these as the inevitable consequences of globalization, and no organized opposition demands that accommodation be made. Instead, these inroads have been interpreted as reflections of "cheating" by other nations (especially Japan), triggering a response in the foreign policy arena rather than an acknowledgment of the trade-offs endemic to an open economy. In short, U.S. foreign economic policy has a built-in liberal inclination because its unusually small foreign sector is made up of elements which are either economically invulnerable to foreign competition or politically powerless to resist it.

As a result, American liberalism, largely unchecked by contrary domestic forces, has become theoretically rigid and ideologically extreme. From Cordell Hull's influential plea for free trade as the key to international peace in the 1940s to American commentary on Russia in the 1990s, U.S. rhetoric has associated free markets with material prosperity, stability, justice, democracy, human rights, international peace and more. As James Fallows puts it:

The Anglo-American system of politics and economics, like any system, rests on certain principles and beliefs. But rather than acting as if these are the best principles, or the ones their societies prefer, Britons and Americans often act as if these were the only possible principles and no one, except in error, could choose any others. Political economics becomes an essentially religious question, subject to the standard drawback of any religion -- the failure to understand why people outside the faith might act as they do.⁽⁶⁾

Herein lies a contradiction. Though a passionate proselytizer, the United States maintains a more shallow commitment to liberalism than nations whose small market size makes trade openness inevitable or those for whom it represents a conscious acceptance of its mixed welfare implications. Nor is it as stable as in those nations where it has evolved as a strategic compromise among powerful political actors. As a result, American systemic designs are not as attentive to the complex side-effects of globalization as would be expected from a hegemon more deeply affected by the system it created.

Bretton Woods

Fifty years ago, the combination of American hegemonic credentials and fortuitous circumstances were sufficient to fashion a system to meet the delicate balance between national and systemic needs. At the system's core lie the multilateral trade negotiations of the GATT/ITO, designed to rekindle economic growth by restoring trade to levels reached before the catastrophic decline of two-thirds during the Great Depression. However, the key to the success of Bretton Woods -- and the sharpest contrast with the current system -- was the recognition that liberalization also brought problems and constraints that not only undermined its benefits but threatened the capacity of individual nations to embrace it.

The Bretton Woods design acknowledged the sacrifices required of nations in order to liberalize and contained various provisions for easing those burdens. GATT allowed nations to demand access to foreign markets for its exports as compensation for the dislocations caused by imports, thus providing political cover for shaky governments to withstand protectionist pressures and creating domestic constituencies to balance them. The negotiation process enabled nations to liberalize trade at a pace compatible with resolving the domestic political and economic problems it created and GATT itself contained a number of escape clauses that recognized the inherent tension between liberalization and other domestic economic goals. The IMF not only prescribed stable exchange rates but also offered resources to member states to facilitate their cooperation in maintaining them: its lending facilities provided an alternative to exchange rate devaluation and protectionism for nations feeling balance of payments pressures. Finally, the World Bank offered longer-term funding to rebuild war-torn economies that otherwise could not survive international competition, most notably from the United States. American unilateral and bilateral policy toward Europe, especially the Marshall Plan and the temporary tolerance of European protectionism, greatly augmented these arrangements, perhaps dwarfing them in effect.

The system as a whole was coherent and realistic, allowing nations to move toward free capital and goods markets at their own pace. They fashioned arrangements that were consonant with their own priorities and circumstances but generally reflected "the compromise of embedded liberalism"⁽⁷⁾. The challenge "to devise a form of multilateralism compatible with the requirements of domestic stability"⁽⁸⁾ was not seen as a lofty aspiration, but rather as an absolutely essential requirement to achieve any kind of workable system at all. Without the flexibility it provided, nations would neither have agreed to the obligations implicit in acceptance of Bretton Woods initially nor would they have been capable of meeting them subsequently. At stake was the very political legitimacy of the state itself, which must not only achieve economic prosperity but also maintain enough control over the domestic political economy that its claim to being responsive to the citizenry is seen as plausible.

Still, Bretton Woods, whose sparse institutional component contained no permanent trade organization, a monetary authority with sharply limited enforcement capacity, and an underfinanced development bank, represented as minimal a core as could be squared with the label of "system." If the profound threats of the 1940s made some institutional structure absolutely imperative, the American influence was responsible for its minimalist character. Proposals for an IMF and World Bank with a broader charge and expanded powers fell victim to American antipathy toward intrusive supranational institutions that would challenge U.S. policy autonomy. During heated negotiations over the charter for the International Trade Organization, the U.S. blocked provisions that would give the organization greater authority over domestic economic policies and a larger role in adjudicating trade policy disputes, yet permit nations greater freedom to adopt protectionist measures. Even so, the American Congress refused ratification, the result of a coalition of free trade purists who thought the agreement too illiberal and isolationists who thought it too internationalist. Thus, the tariff reduction negotiations of the skeletal GATT, intended as an interim measure until the ITO could commence operations, became the only instrument for regulating global trade. The result was globalization with relatively little active involvement by either the U.S. or an international institution. Subsequently, the system was to drift further from the compromises necessary for its founding and closer to the American vision of proper (that is, minimal) economic management.

Changes in American policy

To the extent that the modestly internationalist position of the U.S. in Bretton Woods could be reconciled with the role expectations of a hegemon, American policy changes since then make clear that it was a temporary aberration from traditional practice. Motivated since the 1970s by its rising vulnerability to trade competitors and its changing pattern of comparative advantage, American policy has become increasingly narrowly self-interested. The U.S. has become less attentive to matters of global system structure, instead pursuing its goals through aggressive unilateralism and regionalism. Even when actively engaged, its multilateral agenda is now less likely to champion initiatives justified by global welfare considerations, particularly if they appear to require sacrifice of more immediate national goals or ideological purity. Most telling is the American emphasis upon liberalization of capital markets -- where the U.S. comparative advantage remains dominant -- even though the theoretical case is much stronger for free trade in goods markets and evidence continues to accumulate that excessive capital flows have become injurious to global welfare. The American neglect of systemic concerns has accelerated in recent years because its global leadership had always been sustained by the cold war image that international architecture was required to maintain its national security. The end of the Cold War allowed the U.S. to return to its historic propensity to seek a naive combination of economic benefits but political disengagement best exemplified by George Washington in his Farewell Address: "The great rule of conduct for us in regard to foreign nations is, in extending our commercial relations to have with them [the nations of Europe] as little political connection as possible."

Aggressive unilateralism

As the U.S. stake in the global economy has grown -- trade levels as a percentage of GDP have nearly tripled since the immediate post-war period, for example -- both threats and opportunities have increased. American attempts to minimize the former while maximizing the latter have required a dual strategy. U.S. efforts to promote opportunities for American exporters and foreign investors remain concentrated in its multilateral drive for a global system free of barriers, while its unilateral and bilateral policies have increasingly erected such barriers to protect American firms that compete with imports. The U.S. justifies its unilateral actions as consistent with its systemic philosophy because they are designed to compensate for the unfair trade practices of others, but other nations have criticized this pattern as hypocritical, especially because the U.S. has resisted the creation of more binding trade dispute resolution mechanisms.

While American tariff rates for most favored nations have remained low, non-tariff barriers (NTBs) targeted against particular nations have risen. They have taken several forms, some fully in accord with GATT rules and even consistent with liberal principles. Section 201 of the Trade Reform Act of 1974 implemented GATT's article 19 escape clause, permitting nations to suspend tariff reductions for industries suffering from sudden increases in imports, regardless of cause. This escape clause has not been frequently used, no doubt because it undermines the American case for systemic liberalism. The U.S. has felt more free to employ Section 301 (and its extension in the 1988 Trade Act dubbed "Super 301") because it is designed to target particular countries found to be engaging in "unjustifiable, unreasonable or discriminatory" trading practices. It authorizes countervailing duties to offset dumping by foreign manufacturers or subsidies by foreign governments. As such, these actions can be squared with the idea of "fair trade" even if their consistency with "free trade" is more dubious.

Competitors object to such an approach for many reasons. They contend that these actions are often invoked for purely protectionist purposes, including the desire to deter sharp competition for the American market by threatening successful competitors with the rigors of the U.S. legal process and potential retaliation. They resent the extension of American domestic principles to the international arena through extra-territoriality and ideological hegemony, especially because "the Anglo-American view has taken on a moral tone.... If a country disagrees with the Anglo-American axioms, it doesn't just disagree -- it is a cheater."⁽⁹⁾ Further, it has become common for the U.S. to threaten use of such "fair trade" actions in order to require competitors to "voluntarily" reduce exports through voluntary export restraints (VERs), the most prominent of which was the 1980s agreement that restricted the import of Japanese autos. Moreover, it is not easy to predict when these actions will be invoked.⁽¹⁰⁾ This has led some to conclude that "the greatest potential for the erosion of multilateralism lies in the ability of the powerful to heavy-ride rather than in the small and weak to free-ride."⁽¹¹⁾ By playing on the ambiguity of "free trade" and "fair trade", these policies have enabled the U.S. to champion free trade and deny its disruptive impact, yet simultaneously protect its most vulnerable industries.

The rise of regionalism

A second dimension of U.S. trade policy can be seen in a similarly ambivalent light. For the past decade, the United States has displayed a tolerance -- perhaps even a preference -- for regional trade systems. The clearest example is the Canada-United States Free Trade Area, which quickly evolved into the North America Free Trade Agreement (NAFTA). Many liberal critics saw this as a rejection of multilateralism and a dangerous step toward regional trade blocs eventually bound to compete along mercantilist lines. Adding to these worries was American encouragement of various Pacific Rim initiatives and continuing pressure by the Clinton Administration to extend NAFTA throughout the Western Hemisphere as the Free Trade Area of the Americas (FTAA).⁽¹²⁾

In contrast, the U.S. contends that NAFTA and FTAA represent an affirmation of its hegemonic role of cajoling and bullying others to support multilateral liberalism -- because NAFTA was a bargaining ploy to counter regionalism in Europe and thus re-energize the then-languishing Uruguay Round of GATT talks. NAFTA may have had that effect, but it also demonstrated that the U.S. is far more satisfied with regional schemes than the mythical hegemon of HST.

In fact, these regional agreements create liberalization structured along the lines favored by the American vision but blocked at the global level by competing European perspectives. NAFTA, which lacks not only a secretariat but even an identifiable physical location, embodies the American ideal of a regime without institutions.⁽¹³⁾ It also contrasts dramatically with the rich tapestry woven of the EU's multiple agencies, which are meant to mitigate the effects of liberalization and thus facilitate its extension and deepening. The U.S. remains intolerant of extra-national constraints, especially if they challenge America's vision of liberalization without side effects.

The multilateral agenda

As U.S. dominance has eroded, America's willingness to ignore its own interests in fashioning global policies has faded with it. The U.S. continues to promote liberalism, but mostly in those areas in which American economic interests are directly involved. Only agriculture became a real priority among producer-consumer talks in the Uruguay Round, in part because the U.S. has become more reliant on financial flows than trade competitiveness. Thus, even while trade barriers of major interest to less developed nations remain unresolved, U.S. energies in GATT/WTO have been directed to auxiliary issues such as trade-related investment measures (TRIMs), the protection of intellectual property rights, and trade in services.

With its advantages in financial services intact, the U.S. has been especially active in promoting capital liberalization. One proposal would amend the IMF's charter to make the liberalization of capital movements one of the purposes of the Fund and extend its jurisdiction to supervise restrictions on capital flows. Another was the abortive effort to enact a Multilateral Agreement on Investment (MAI), the centerpiece of which was the quintessential American position that foreign investors should be guaranteed national treatment -- that is, virtually all national restrictions on foreign direct investment should be prohibited. At least in the short term, such liberalization would no doubt benefit MNCs, whose political influence, already strong in the U.S. because of its unusual pattern of class relations, has grown further in recent years. Without an institutional locus for working class solidarity -- American labor prefers the moniker of middle class -- the interests of multinational capital have seldom been explicitly challenged. Initiatives favorable to capital have also been aided by the breathtaking speed of further class transformation in American society, driven by the decline of manufacturing, the rise of the white-collar service sector and high technology, and, especially, the widespread distribution of equity issues through 401-K and mutual funds. The capitalist class has expanded -- more than a third of American households now own stock -- while the decline in manufacturing has shrunk the mobilizable working class.

The American vision

Even in the face of increasing evidence of its flaws, the U.S. remains committed to a global system in line with its unique ideological vision -- liberalism supported by a very sparse institutional structure to mitigate the adverse consequences of the globalization it produces. The dilemma, faced squarely at Bretton Woods but neglected since, is put most plainly by a leading proponent of globalization: "the most serious challenge for the world economy in the years ahead lies in making globalization compatible with domestic social and political stability -- or to put it even more directly, in ensuring that international economic integration does not contribute to domestic social disintegration."⁽¹⁴⁾ The threat arises from the significant distributional consequences that attend massive trade and capital flows. Immediate dislocations ⁽¹⁵⁾ create tensions and contribute strongly to the politically and socially divisive income inequality that has been well documented in recent years. Furthermore, globalization engenders conflict over domestic norms and the social institutions that embody them, including the potential for a "race to the bottom" in labor standards and the environment.

None of these problems need undermine the case for global liberalization, however, because most admit of governmental amelioration. Indeed, that is precisely the direction taken by "the compromise of embedded liberalism" in the Bretton Woods era: "societies were asked to embrace the change and dislocation attending international liberalization. In turn, liberalization and its effects were cushioned by the newly acquired domestic economic and social policy roles of governments".⁽¹⁶⁾ Over the longer term, however, the unencumbered capital mobility of contemporary globalization affords an exit option to capital owners that gives them unprecedented bargaining leverage over nation-bound actors. Workers face declines in wages, benefits, and working conditions and suffer the costs of increasing insecurity. Meanwhile, the difficulty of taxing footloose capital severely undermines the capacity of governments to provide social insurance or, indeed, to raise the revenues required to address any of the problems exacerbated by globalization. Further, regulation to advance environmental or other social goals becomes increasingly infeasible.

When the ability of national governments to cope with such problems has been sharply reduced, one option is to augment national capacities with international ones. Another is to free governments to balance these pressures as they see fit and even to facilitate their choice. GATT's escape clause could be reinvigorated and antidumping mechanisms more explicitly monitored, for example. If the IMF and World Bank were to encourage social insurance instead of demanding austerity, government pull-backs from the intolerably harsh discipline of the so-called Washington Consensus could be avoided. The role of these international financial institutions in dictating policy is widely seen as undemocratic, especially since the privatization urged as part of the Washington Consensus moves power from elected and accountable public officials to unelected, unaccountable, foreign actors. Instead, the contemporary system has bound nations even more tightly to liberal orthodoxy and contributed further to the crisis of political legitimacy unleashed when governments are unable to insulate their citizens from the effects of global markets. It is significant that the last attempt to so submerge alternative values to market discipline occurred earlier in this century in the context of much less democratic polities.

The Asian currency crisis demonstrates what may be the most significant weakness of the current system's devotion to capital mobility -- the monetary pressures that arise from the Mundell-Fleming constraint that a nation cannot simultaneously achieve the three goals of capital mobility, exchange rate stability, and monetary policy autonomy. Fidelity to the first of these is enforced by both World Bank/IMF policy and the power of capital markets themselves to demand the freedom to engage in capital flight as a condition for not exercising that right. States forced to choose between the remaining two goals must hope that domestic economic and political needs do not require the exercise of real autonomy and that exchange rate volatility does not escalate beyond the tolerable. When the foreign exchange reserves of even the largest and most powerful economies are inadequate to appreciably move the exchange rate through direct intervention, and where the absence of a central institution to perform that role leaves domestic economies to adjust very painfully to rapid movements of capital, an attentive hegemon might consider weakening the forces of global finance. The U.S., however, cannot empathize with the complex effects of exchange rate movements on other nations because its own small foreign sector transmits so few impacts on price levels or output. Furthermore, capital controls threaten the interests of the MNC, one of the few powerful American actors that relies heavily on the global economy.

Prominent alternatives exist. Provision could be made to exchange information to restrict tax-strategies available to MNCs. The Tobin Tax proposed by economist James Tobin would tax foreign exchange transactions, both to raise funds to support international efforts and to reduce the appeal of the destabilizing short-term capital flows that have been implicated in economic crises in East Asia and Latin America. The capital controls that have been used successfully in otherwise liberal economies like Chile could be countenanced. The EU with its Social Charter and a host of other policies and procedures enacted in recognition that such pressures represent possible impediments to future liberalization demonstrate again that greater regulation can go hand in hand with greater liberalization of trade. The funding available for crisis management could be enhanced.

Instead, the U.S. has retreated from even its tepid style of leadership. While the global financial system appeared poised on the brink of collapse in the fall of 1998, disappointment with the IMF's management of the Asian crisis led the isolationist American Congress to seek the demise of the IMF rather than to alter either its policies or the liberal system as a whole.⁽¹⁷⁾ They refused to fund an extension of the IMF and also refused to make good on more than $1 billion in back dues owed to the UN. Worse yet for the image of a benign hegemon, they have offered to meet financial obligations to the UN only in return for acquiring veto power with respect to the reproductive health agendas of all UN constituents (e.g. barring any mention of abortion). As Diana Tussie notes, "The United States has often interpreted a rule-based order to mean the extension of American rules and procedures to the rest of the world."⁽¹⁸⁾

It is arguable whether the unresponsive of American policy toward the costs implicit in accelerating globalization results more from design or neglect. Two sets of explanations -- one centered on isolationism and the other on a striking narrowness of strategic vision -- converge. Certainly, the American image of a successful international economic system is decidedly less regulated and institutionalized than others. In line with standard liberal theory, it seeks only to decrease national governmental control of cross-border transactions, confident that the resulting flows will increase prosperity. When problems arise (as in Mexico, Southeast Asia, and Russia), it is content with ad hoc responses that maintain hegemonic autonomy rather than advancing global institutional authority.

It is also true that the U.S. is poorly positioned to design ways of resolving or coping with costs of globalization it does not feel. The U.S. has little experience with ameliorating trade-induced dislocations, unlike Europe, where generous welfare provisions have long complimented protectionism to afford security to the working class and regionalism has eased the pressures on the national state. Indeed, the division of authority between levels of government makes it difficult for the U.S. to integrate trade policy, which is enacted by the Federal government, and welfare and education policy, which are largely functions of state and local government. On the finance side, the U.S. is even less familiar with the challenges of coping with volatile and uncomfortable capital flows that have lately plagued developing countries.

Contemporary globalization: a patchwork of inadequate governance

A regime committed to this neo-liberal brand of globalization has severe limitations, most notably that it is less stable than one built to withstand the predictable economic and political forces that emerge within any under-regulated system. This involves not only such "economic" forces as destabilizing capital flows but "political" forces that have not been accommodated in system creation (like dissenting nations and sub-national interests.) Instead of exploring alternatives, the U.S. has hoped to silence dissenters by portraying globalism as natural, inevitable, and irreversible. To the contrary, the 1920s demonstrate that when globalization is seen as a source of problems by citizens not convinced of its benefits, it can be reversed with breathtaking speed. Or, as Rodrik notes, "social disintegration is not a spectator sport -- those on the sidelines also get splashed with mud from the field."⁽¹⁹⁾

In short, the explanation for recent evolution of the system lies in the peculiar character of American hegemony. Only an ideological hegemon would fail to see the need for more aggressive action and only an isolationist one would fail to act on it. As a result, it appears that the gravest threat to the globalization goal lies not in diminished American hegemony, but rather in continuing implementation of America's peculiar vision of its hegemonic role.

Suggested Readings

Block, Fred L. The Origins of International Economic Disorder. Berkeley: University of California Press, 1977.

Blumenthal, Sidney. "The Return of the Repressed: Anti-Internationalism and the American Right," World Policy Journal, 12 (1995), pp. 1-13.

Cline, William R. Trade and Income Distribution. Washington: Institute for International Economics, 1997.

Crabb, Cecil. Policy-Makers and Critics. New York: Praeger Publishers, 1976.

Goldstein, Judith. "Ideas, Institutions, and American Trade Policy," International Organization 42, 1 (1988): pp. 179-217

Helleiner, Gerald. "Transnational Enterprises and the New Political Economy of U.S. Trade Policy," Oxford Economic Papers 29, 1 (1977).

Kindleberger, Charles. The World in Depression 1929-39. Berkeley: University of California Press, 1973.

Kennedy, Paul. "The (Relative) Decline of America," Atlantic Monthly, August 1987: pp. 29-38.

Pauly, Louis. Who Elected the Bankers? Surveillance and Control in the World Economy. Ithaca: Cornell University Press, 1997.

Polanyi, Karl. The Great Transformation. New York: Reinhart, 1944.

Rogowski, Ronald. "Political Cleavages and Changing Exposure to Trade," American Political Science Review 81, 4 (1987), pp. 1121-1137.

1. Robert Gilpin, The Political Economy of International Relations (Princeton, New Jersey: Princeton University Press, 1987), pp. 72-92.

2. John Ruggie, "International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order," International Organization 36: 382.

3. Ruggie, p. 382. For the generally unregulated character of "Anglo-Saxon" capitalism, see James Fallows, "How the World Works," The Atlantic Monthly, December 1993, pp. 61-87.

4. Evidence that the United States eschewed global leadership for half a century after its economic dominance entitled it to such a role includes the refusal to join the League of Nations and to cooperate at the World Economic Conference in London in 1933. The persistence of this attitude was demonstrated in the 1970s when President Nixon unilaterally dissolved the fixed-rate monetary order that threatened American policy autonomy.

5. Exports account for slightly over 10% of U.S. GNP, roughly a third of the European average. The U.S. has relied on foreign capital to balance perpetual trade deficits but it has not been forced to alter policy to attract it.

6. "How the World Works", p. 65. His inclusion of Britain is clearly misplaced, except during the Thatcher period.

7. For an elaboration of this noteworthy phrase, see Ruggie, "International Regimes"

8. Ruggie, p. 399.

9. Fallows, p. 35.

10. Indeed, Canadian enthusiasm for CUSTA owed much to its binational trade dispute resolution panels, which could block arbitrary American actions.

11. Diana Tussie, "Multilateralism Revisited in a Globalizing World Economy," Mershon International Studies Review 42 (1998), p. 190.

12. Congressional opposition, motivated by nationalist and protectionist sentiment, blocked the latter by refusing to grant "fast track" authority to negotiate agreements exempt from legislative amendment.

13. Without a class-based system of political representation, the best organized American opposition to such agreements has come from progressive organizations like environmental groups. They have joined with elements of the right to emphasize the potential threats to national autonomy represented by the WTO and NAFTA's binational dispute resolution panels rather than distributional consequences.

14. Dani Rodrik, "Has Globalization Gone Too Far?" (Washington: Institute for International Economics, 1997), p. 2.

15. For example, "under typical parameters, lowering of a trade restriction will result in $5 or more of income being shuffled among different groups for every $1 of net gain." Rodrik, p. 30.

16. John Ruggie, "At Home Abroad, Abroad at Home: International Liberalization and Domestic Stability in the New World Economy," Millennium: Journal of International Studies 24, 3: 508.

17. Designing a more humane globalization requires a combination of attributes not to be found in Congress where internationalists are almost exclusively liberal whereas opponents of the market are both protectionist and isolationist.

18. Tussie, p. 189.

19. Rodrik, p. 7.