THE REAL 'LIBERAL' AGENDA
Progressive values shaped the postwar international economic system that has procured the benefits of globalization and trade. Will U.S. policymakers remember?
Article by Inu Manak, Author
May 30, 2024
CFR
In fact, modern views on trade and globalization are a stark departure from core progressive values; mainly, that domestic and international prosperity are strongly linked, that trade institutions support the rule of law, and that globalization is an important tool for improving conditions for the world’s poorest. In an essay for the Cato Institute’s Defending Globalization project, we explore the contemporary discourse surrounding U.S. leadership in international trade and emphasize how progressive values informed and shaped the system that exists today. Importantly, the U.S. experience with the Great Depression and recognition of the costs of nationalism following World War II spurred a new approach rooted in the notions of shared prosperity, fairness, and creating opportunities for all to benefit.
In a 1934 speech requesting additional trade authority from Congress, President Franklin Delano Roosevelt expressed concern over the startling decline of world trade, which not only “meant idle hands, still machines, ships tied to their docks, despairing farm households, and hungry industrial families,” but in turn, “has made infinitely more difficult the planning for economic readjustment in which the Government is now engaged.” Roosevelt well understood the need for a vibrant international economy to help the United States prosper at home. He acknowledged that the United States should “sustain activities vital to national defense,” but that “equally clear is the fact that a full and permanent domestic recovery depends in part upon a revived and strengthened international trade and that American exports cannot be permanently increased without a corresponding increase in imports.”
While the United States faces a different economic situation today, the COVID-19 pandemic, geopolitical rivalry, and supply chain vulnerabilities have precipitated a change of heart on globalization. Despite ample evidence that globalization has served as an important driver of economic growth and poverty reduction worldwide, expanding global economic opportunity has not been a top priority for U.S. policymakers seeking to address these modern challenges. Instead, growing economic nationalism has obscured the merits of globalization and common-sense reforms that could help the Bretton Woods institutions keep up with a rapidly evolving world. Perhaps most importantly, in the rush to remake the world trading system yet again, many have lost sight of the core American principles that helped lift billions out of poverty, making the world richer and more equal in the process. Refocusing on the reality of our global links—that we rise and fall together, that a system that shields the weak from the most powerful is in all of our interests, and that economic openness provides a fair shot for anyone that wants to participate in the global economy—will go a long way in helping U.S. economic leadership get back on track.
Read the full essay, “The Progressive Case for Globalization.”
Bettmann / Contributor, Getty Images
In recent years, a growing bipartisan consensus against trade and globalization has put U.S. foreign economic policy into a tailspin and raised concerns over a retreat of U.S. leadership among our allies. The last two administrations have openly questioned the benefits of globalization and called for a rethink of the Washington Consensus. Through escalating trade wars, industrial policy, and hamstringing the World Trade Organization, and with it, the rules-based economic order, the United States has walked away from the very system it helped create. These actions are not only mistakes, but they go against the long-held progressive beliefs that undergirded U.S. efforts to remake the world trading system in the aftermath of World War II.
In recent years, a growing bipartisan consensus against trade and globalization has put U.S. foreign economic policy into a tailspin and raised concerns over a retreat of U.S. leadership among our allies. The last two administrations have openly questioned the benefits of globalization and called for a rethink of the Washington Consensus. Through escalating trade wars, industrial policy, and hamstringing the World Trade Organization, and with it, the rules-based economic order, the United States has walked away from the very system it helped create. These actions are not only mistakes, but they go against the long-held progressive beliefs that undergirded U.S. efforts to remake the world trading system in the aftermath of World War II.
In fact, modern views on trade and globalization are a stark departure from core progressive values; mainly, that domestic and international prosperity are strongly linked, that trade institutions support the rule of law, and that globalization is an important tool for improving conditions for the world’s poorest. In an essay for the Cato Institute’s Defending Globalization project, we explore the contemporary discourse surrounding U.S. leadership in international trade and emphasize how progressive values informed and shaped the system that exists today. Importantly, the U.S. experience with the Great Depression and recognition of the costs of nationalism following World War II spurred a new approach rooted in the notions of shared prosperity, fairness, and creating opportunities for all to benefit.
In a 1934 speech requesting additional trade authority from Congress, President Franklin Delano Roosevelt expressed concern over the startling decline of world trade, which not only “meant idle hands, still machines, ships tied to their docks, despairing farm households, and hungry industrial families,” but in turn, “has made infinitely more difficult the planning for economic readjustment in which the Government is now engaged.” Roosevelt well understood the need for a vibrant international economy to help the United States prosper at home. He acknowledged that the United States should “sustain activities vital to national defense,” but that “equally clear is the fact that a full and permanent domestic recovery depends in part upon a revived and strengthened international trade and that American exports cannot be permanently increased without a corresponding increase in imports.”
While the United States faces a different economic situation today, the COVID-19 pandemic, geopolitical rivalry, and supply chain vulnerabilities have precipitated a change of heart on globalization. Despite ample evidence that globalization has served as an important driver of economic growth and poverty reduction worldwide, expanding global economic opportunity has not been a top priority for U.S. policymakers seeking to address these modern challenges. Instead, growing economic nationalism has obscured the merits of globalization and common-sense reforms that could help the Bretton Woods institutions keep up with a rapidly evolving world. Perhaps most importantly, in the rush to remake the world trading system yet again, many have lost sight of the core American principles that helped lift billions out of poverty, making the world richer and more equal in the process. Refocusing on the reality of our global links—that we rise and fall together, that a system that shields the weak from the most powerful is in all of our interests, and that economic openness provides a fair shot for anyone that wants to participate in the global economy—will go a long way in helping U.S. economic leadership get back on track.
Read the full essay, “The Progressive Case for Globalization.”
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