The New Deal
and Liberal Hegemony
The most fundamental and enduring conflict in U.S. foreign policy in the twentieth century is between internationalists and nationalists. Internationalists, including political and business elites driven by ideology and economic interests, have supported global institutions committed to lowering trade barriers and facilitating international trade and investment through multilateral lending arrangements. Nationalists, also driven by ideology and economic interests, have supported high tariff barriers and opposed U.S. involvement in global institutions. Internationalists have included business firms with the most extensive ties to foreign markets through exports and foreign direct investments. In contrast, nationalist business interests have been tied to the U.S. domestic market and historically dependent on tariffs or other forms of trade protection to secure a profitable niche in the U.S. market. 1
Although these labels are useful starting points for students of foreign policy making, they need to be modified to account for the historical patterns of business involvement in the dominant foreign policy coalitions of the twentieth century. Business internationalists are themselves divided on foreign policy issues based on the regional (or global) location of their investments and the competitiveness of their firms in the international marketplace. Historically, the most globally competitive and capital-intensive business internationalists have been the leading champions of what some have called “liberal internationalism.” 2 As an important historical economic and ideological force in U.S. foreign policy, liberal internationalists posit a relationship between domestic economic prosperity and access to foreign markets. 3 In addition, they have been the most ardent supporters of free trade, bilateral foreign assistance, and multilateral institutions of all U.S. foreign policy interest groups.