President Trump seems intent on destroying the greatest alliances in history. In just the past few weeks, he has attacked French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau in Twitter tantrums, fled the Group of Seven meeting in disgust to fly to the side of North Korean dictator Kim Jong Un, and reportedly called the European Union “worse than China” when it comes to trade violations. From his enclosure in Singapore, while enjoying the hospitality of the genteel autocrats who run that city-state, Trump said our NATO allies “rip us off.” U.S. allies were aghast. “In a matter of seconds, you can destroy trust with 280 Twitter characters,” German Foreign Minister Heiko Mass said.
Perhaps Trump was mainly trying to show toughness before his historic summit with Kim, as his top economic adviser, Larry Kudlow, suggested. But plainly what we are witnessing here is “America First” with a vengeance — Trump giving voice to his visceral unilateralism and long-simmering mistrust of the global economic system that his predecessors in the White House, both Democratic and Republican, had the largest hand in creating over the past 70-odd years. The global institutions and alliances that Trump thinks only “tie us up and bring America down” — as he put it in his biggest foreign policy speech as a candidate in 2016 — were designed to do just the opposite: to ensure a peaceful world dominated by the United States and to build a global economy that would enrich and protect Americans. And they succeeded beyond their creators’ wildest dreams. Presidents from FDR to Ronald Reagan and beyond didn’t nurture the United Nations, NATO, the G-7, trade alliances, the World Trade Organization and other bodies only out of some misguided sense of noblesse oblige. They did it to serve U.S. interests.
“Trump might think about this order in his own terms, as real estate: The American order embodies an investment, made over seven decades, that generated incredible returns,” says Princeton scholar John Ikenberry, one of the international system’s foremost defenders and author of the forthcoming “Bending the Arc of History,” an account of 200 years of internationalism. “It has generated more wealth and physical security for more people than any other regional or global order in the ancient or modern world — full stop. Even America’s troops and bases in Europe and Asia have been a net gain — in the narrow sense, as their forward presence is subsidized by the host country (the troops would cost more to station at home), and in the larger sense of buying American influence in these regions.”
These institutions have sustained a global market for American businesses over the (mostly) peaceful past seven decades and the two greatest economic booms in U.S. history: the postwar “golden period” that endured through the 1960s, and the “Great Moderation” from the 1980s to the mid-2000s . We may now be in the middle of the third such expansion. Moreover, this global economic and alliance system continues to deliver amazing — if often unheralded — dividends.
Compare two stock market implosions, one before and one after the creation of this international system. After Black Tuesday in 1929, a global depression led to fascism, Nazism and the worst war in history, leaving 60 million dead. Most historians agree that this chain of events was aided by American isolationism and a lack of international cooperation, especially in the failure of the League of Nations and the passage of the protectionist Smoot-Hawley Tariff in 1930. In response, Franklin Roosevelt and others sought to remake the world in America’s image, with democracy promotion, open markets and workable global institutions: “We will not accept a world, like the postwar world of the 1920s, in which the seeds of Hitlerism can again be planted and allowed to grow,” Roosevelt said in 1941. He and his successor, Harry Truman, helped create the United Nations — with America assured a dominant role and a veto on the Security Council — and the Bretton Woods Agreement to impose a global system of regulated open markets. Later on, NATO and the G-7 were added to strengthen cooperation in the face of the Soviet threat.
The crash of 2008 turned out so differently in large part because those bodies — and a stable international system — existed, permitting coordinated action by the U.S. Federal Reserve and Treasury (which also get much of the credit). During the Great Recession, trade dropped precipitously but did not break down. China and other major U.S. debt holders continued to invest in America. There was no significant surge of protectionism or virulent nationalism (at least until recently). No Americans died in a world war.
A decade later, the payoff in stability continues, and the major nations, as contentious as they sometimes are, continue to be bound by the iron laws of the U.S.-orchestrated globalized economy. No nation can prosper outside it, and even countries with dramatically different political and social systems, like America and China, must act according to a common set of norms on trade. What Washington created 70 years ago has evolved into a kind of self-enforcing club, and countries that aren’t part of it, like Iran and North Korea, are desperate to join — which no doubt is one reason Kim made his way to Singapore. On other key issues, too, like transnational terrorism and climate change, no alternative exists but multilateral global cooperation.
Global institutions like the United Nations, NATO and the World Trade Organization have also served U.S. interests in a larger and more subtle way. By providing multilateral cover to U.S.-orchestrated moves (for example, U.N. Security Council sanctions against Iran and North Korea), these organizations have taken the raw edge off American hegemony and made it more palatable to the other major powers — at least until now. Throughout history, the rise of dominant or hegemonic powers has inspired alliance-building against them and usually war. This has not happened to America yet, despite its often controversial role as the lone superpower in the quarter-century since the Cold War.
True, the system and its institutions have sometimes faltered. Globalization has fostered greater income inequality within the United States, as Harvard economist Dani Rodrik argues in his new book, “Straight Talk on Trade.” Trump is exploiting popular mistrust of these institutions among many Americans who feel cheated by the globalized economy. And they’re not entirely wrong: Some countries like Canada maintain high tariffs on certain protected products (as does America), and over the past half-century both political parties oversold the benefits of major international trade agreements, from NAFTA to the Trans-Pacific Partnership (TPP), and dramatically underestimated the hazards, especially worsening inequality and social upheaval. Trump also has a point about those NATO “free riders” (as even Barack Obama called them); according to a 2016 NATO report, only five of the alliance’s 28 members are meeting its goal of spending 2 percent of their gross domestic product on defense, and the United States tops them at more than 3 percent of GDP.
All this argues for fixes — but hardly for junking the whole system. Trump and his supporters deride the global order as an alien thing imposed on America, but it was literally made in America and built by American patriots. The International Monetary Fund and the World Bank were born in New Hampshire in 1944. The same year, the United Nations came to life at the Georgetown estate of Dumbarton Oaks; its charter was signed in San Francisco and its headquarters installed in New York. NATO was officially formed in Washington in 1949. Because the Soviet Union is gone, Trump calls NATO’s mission outdated, but he tends to ignore the role the alliance has played in supporting the U.S. war against the Taliban in Afghanistan over the past decade and a half. Among the countries that have suffered the deaths of hundreds of soldiers there: Britain, Canada, France, Germany and Italy, which also happen to make up most of the G-7.
All in all, it’s been, as our president might say, a terrific deal for America.