Edward Hallet Carr observed that "the science of economics presupposes a given political order, and cannot be profitably studied in isolation from politics."1 Throughout history, the larger configurations of world politics and state interests have in large measure determined the framework of the international economy. Succeeding imperial and hegemonic powers have sought to organize and maintain the international economy in terms of their economic and security interests.
From this perspective, the contemporary international economy was the creation of the world's dominant economic and military power, the United States. At the end of the Second World War, there were efforts to create a universal and liberal system of trade and monetary relations. After 1947, however, the world economy began to revive on the foundations of the triangular relationship of the three major centers of noncommunist industrial power: the United States, Western Europe, and Japan. Under the umbrella of American nuclear protection and connected with the United States through military alliances, Japan and Western Europe were encouraged to grow and prosper. In order to rebuild these industrial economies adjacent to the Sino-Soviet bloc, the United States encouraged Japanese growth, led by exports, into the American market and, through the European Economic Community's (EEC) common external tariff and agricultural policy, also encouraged discrimination against American exports.2
Today, the triangular relationship of the noncommunist industrial powers upon which the world economy has rested is in disarray. The signs of decay were visible as early as the middle 1960s, when President John F. Kennedy's grand design failed to stem the coalescence of an inward-looking European economic bloc and to
Robert Gilpin is a professor of politics and international affairs at Princeton University in Princeton, New Jersey.