Foreign Policy. The American Economy: A Historical Encyclopedia

Since the founding of the United States, American foreign
policy has vacillated between isolationism, or the reluctance
to become involved in global politics, and moralism, which
dictates that foreign policy be justified on ethical principals.
The uniqueness of this approach to foreign policy derives
from the peculiar experiences and circumstances of the
United States itself: its geographic isolation from the centers
of world conflict during the nineteenth century, its tendency
toward pacifism in international affairs, and the uniqueness
of the American experiment.
When the founders broke constitutional ties with England, they were convinced of the need to develop a foreign
policy distinct from that of the European powers—a position
characterized by Thomas Jefferson’s admonition against entangling alliances. This retreat from European politics can be
seen as a retreat from the power politics of the time, for political conflict was centered in Europe. This period of American foreign policy can be described as the realistic period, an
era in which when the United States understood that neutrality in international politics was necessitated by the national interest of the country.
The next period of foreign policy was guided by an approach that involved thinking in terms of moral principles
yet acting in terms of power; it is known as the ideological period. In an era when the European powers struggled for colonial possessions through imperialistic ventures and wars of
conquest in Africa and Asia, American foreign policy was influenced by the writings of Jefferson and John Quincy
Adams, who described political interests in moral terms. The
Monroe Doctrine and Manifest Destiny are the best examples
of political interests couched in moral terminology. The ideological period ended during the latter half of the nineteenth
century as the United States sought to become a great power,
and it is best exhibited by the U.S. annexation of the Philippines following the cessation of the Spanish-American War
in 1898.
America entered a new phase of foreign policy, known as
the utopian period, when moral principles no longer justified
the country’s national interest and foreign policy was divorced from political reality and dictated in terms of moral
principles. This phase is best characterized by the political
thought of Woodrow Wilson, who opposed the pursuit of
America’s national interest—maintaining the balance of
power in Europe—on moral grounds. Yet when President
Wilson led the United States into war with Germany, he pursued the right policy—again, maintaining the balance of
power in Europe—for the wrong reason. Wilson could only
respond to the national interests of the Allies in terms of his
own moral principles. At the Treaties of Paris and Versailles,
the president had to agree to a series of compromises that, in
effect, meant a capitulation of those very principles.
The isolation of the interwar period was interrupted by
America’s entrance into World War II, primarily on moral
grounds. The Axis powers were characterized as evil; thus, the
goal of U.S. involvement in World War II could be viewed as
the destruction of evil.
Following the end of World War II, America’s isolation
from global politics ended, necessitated by a series of events
that culminated with the onset of the cold war with the Soviet Union. A globalist course of foreign policy, motivated by
domestic values, was set in motion. America’s foreign policy
was to be based on the principles of maintaining the balance
of power with the Soviet Union and assuming global responsibility. Threatening statements against Western-style capitalism by Soviet leader Joseph Stalin would be the guiding force
of American foreign policy throughout the cold war era. Put
another way, America’s global involvement would be based
on opposition to the Soviet Union.
With the breakdown of the cold war consensus, as exemplified by America’s defeat in Vietnam, succeeding administrations attempted to introduce a new foreign policy to replace the outdated containment strategy. The administration
of President Richard Nixon sought to reintroduce power politics to American foreign policy, whereas Jimmy Carter’s tried
to introduce a global politics approach. Ronald Reagan and
his administration restored a foreign policy from an earlier
era, and the Soviet Union and the threat of international
communism became the centerpiece of American foreign
policy until the collapse of the USSR in 1991. Following the
Soviets’ fall, the process of formulating American foreign

policy objectives focused on economics. Changing technology, a growing population, and economic development necessitated the emphasis on economic needs.
In the post–World War II period, the foreign policy of the
United States became directly entwined with foreign aid. In
1947 President Harry S Truman announced the Truman
Doctrine, which provided funds for anticommunist forces in
Greece and Turkey. The success of the Truman Doctrine resulted in the implementation of the Marshall Plan in late
1947, which provided $12 billion for the rebuilding of Western Europe (the plan had originally also been offered to the
Soviet Union, which refused to participate). During the 1950s
and 1960s the United States continued to divert foreign aid to
areas on the verge of falling to communism, and it increased
military expenditures in regions such as Korea and Vietnam.
Funding went to the Afghanistan freedom fighters after the
Soviets invaded that country in 1979, and aid was provided to
the Contras in Nicaragua in an effort to topple the
communist-backed Sandinista government. The United
States also earmarked over $23 billion for the Strategic Defense Initiative (Star Wars) project that ultimately resulted in
a series of U.S.-Soviet treaties to limit missiles. After the cold
war ended with the fall of the Soviet Union in 1991, foreign
policy expenditures took on a different function.
Since the terrorist attacks of September 11, 2001, the
United States has augmented its financial support of countries in Southeast Asia with large Muslim populations. Increases in assistance to nations such as India, Pakistan, and
the Philippines rose between 17 percent and 250 percent.
Pakistan received $200 million in 2002, and India received an
increase of $25 million during the same period.
In 2002 the United States continued to provide foreign assistance to a number of countries and international organizations around the world, totaling $15.4 trillion. Israel received $720 million, Egypt $655 million, Jordan $150 million,
East Timor $25 million, Mongolia $12 million, and the Sudan
$10 million. Israel and Egypt also received $2,040,000 and
$1,300,000 in military expenditures, respectively. In addition,
the United States also spent $615 million in Eastern Europe
and $795.5 million in the former Soviet Union. Another
$318.5 million went for antiterrorism programs. Most of the
balance of the foreign assistance budget focused on a variety
of international programs, such as the Peace Corps, the
Export-Import Bank, the Trade and Development Agency,
HIV and AIDS research, refugee services, technology research, and efforts to end international slavery.
The U.S. economic involvement in foreign policy continues to promote the peace and stability of a number of regions
around the world. It also promotes American interests and
attempts to address the needs of peoples in distress. As in the
past, political, cultural, and social considerations determine
the amount and availability of U.S. funds provided to countries around the world.
—Keith A. Leitich
References
Bloomfield, Lincoln P. In Search of American Foreign Policy.
New York: Oxford University Press, 1974.
Crabb, Cecil V., Jr.
Policymakers and Critics: Conflicting
Theories of American Foreign Policy.
New York: Praeger,
1976.
Dallek, Robert.
The American Style of Foreign Policy: Cultural
Politics and Foreign Affairs.
New York: Alfred A. Knopf,
1983.
Gilpin, Robert.
War and Change in World Politics. New York:
Cambridge University Press, 1981.
Holsti, Ole R., and James S. Rosenau.
American Leadership
in World Affairs.
Boston: Allen and Unwin, 1984.
Legg, Keith R.
Politics and the International System: An
Introduction.
New York: Harper and Row, 1971.
Leopold, Richard W.
The Growth of American Foreign Policy.
New York: Alfred A. Knopf, 1962.
Morganthau, Hans.
In Defense of the National Interest. New
York: Alfred A. Knopf, 1952.
Perkins, Dexter.
The American Approach to Foreign Policy.
Cambridge, MA: Harvard University Press, 1962.
Quester, George.
American Foreign Policy: The Lost
Consensus.
New York: Praeger, 1982.

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