THE EXTRAORDINARY GLOBAL recessions of the past decade have seriously weakened the international economic structure established by the Truman administration. Slow growth and rising unemployment have left Western governments at odds over economic policy and susceptible to internal protectionist pressures. The U.S. economy, which until the 1970s was almost immune to external developments, is increasingly vulnerable to volatile world commodity prices and to fluctuations in international interest and exchange rates. Foreign competition has badly hurt U.S. manufacturing. The global interdependence eagerly anticipated by American leaders in 1945 is nearly realized, but more and more Americans are now asking if the costs exceed the benefits.
Americans are not alone in questioning the value of the multilateralist system. Faced with financial collapse, many developing countries are clamoring for major reforms of the world trading system, notably the indexing of commodity prices to stabilize exporters' incomes. As the champion of the free market system, the United States is the principal target of Third World criticism.
American policies have also come under sharp attack from our closest allies. At one time, West European critics commonly charged that the open economic system was a Trojan horse for the invasion of their markets by American corporations. During the 1970s, the Japanese replaced the Americans as the main competitive threat, and European penetration of U.S. domestic markets proceeded at a brisk pace. Now it is more fashionable to complain about American protectionism and high interest rates. With some justice, the NATO allies also contend that Washington's effort to impose harsh controls on East-West trade has unnecessarily exacerbated Cold War tensions and strained the alliance.