The demand for, and the corresponding debate over, economic development of poor areas took recognizable shape during the 1940s. Most foreign policy histories of the 1940s and the Cold War era plunge into the decade's crises and great power conflicts.( 1) obsession with the "horizontal dimension of rivalry among the most powerful states" (e.g., the American- Soviet confrontation) obscures the vertical dimension of power--that is, "the domination and subordination of metropole over hinterland, centre over periphery, in a world political economy."( 2) Also lost in the morass of big power politics is an understanding of the "reciprocal and dynamic interaction" of polity and economy.( 3) A political economy perspective avoids these pitfalls and thus illuminates U.S.-Third World relations and the issue of economic development during the 1940s.
Taking a political economy approach to American foreign relations involves examining events on several planes and dimensions simultaneously. American policies toward the Third World derived from the internal needs of a capitalist and corporatist nation. Those policies also represented the demands and responsibilities of a hegemonic power in a capitalist world-economy. The following sections examine separately the internal and external determinants of American foreign relations. In practice these levels of analysis intersect and overlap.
A political economy perspective recognizes a reciprocal relationship between socioeconomic structures and political superstructures. An economic structure is a mode of production. It consists of a set of productive forces or means of production--for example, raw materials, tools, technology, skills, energy, and so forth. It also entails the ways people relate to one another in producing, distributing, and exchanging goods. These social relations of production describe who owns and/or controls the means of production, the division of labor, and the network of exchange relations. Social relations of production define class structure and class struggle