American Policy and the Trade-Growth Struggle

During its first 500 days in office, foreign policies of Carter Administration were characterized by activism, innovation and rhetoric about best interests of humanityas well as by indecision, inconsistency, and frustration. Policies to promote world economic growth and to regulate flow of international trade were no exceptions. Good intentions may not quite have led to hell; but landscape of unresolved dilemmas and discarded policies looked like a vision of purgatory. By Administration's second summer, it was not yet clear what would emerge from ordeal, but it was evident that outcomes would not closely resemble hopes and ambitions of January 1977. This essay will discuss Carter Administration's road to purgatory in two areas-global demand management policy (growth policy) and international trade. Throughout essay, I assume that foreign and domestic policies, and politics, are closely intertwined. Within countries, a struggle takes place between groups with different interests-for instance, unionized workers in importcompeting industries versus consumers favoring cheap imports, or sometimes bankers versus industrialists. Although these differences are never finally resolved in a pluralistic society, a balance is struck by governments, who define the national interest in view of political pressures as well as their -own calculations. At this point, struggle becomes internationalized: since foreigners are usually not represented in domestic politics, preferred policies of governments are almost invariably inconsistent with one another. Each state seeks to impose unwanted costs on others rather than inflicting them on its own citizens. The key point is that politics of foreign economic policy center around question of which states will bear major costs of adjusting to change. Foreign economic relationships are highly political. Controversies about economic policies are rarely issues of technique; on contrary, real interests are at stake. Any analysis of foreign economic policy must deal with issues of motivation. To what extent should one interpret policies as motivated by desires for power, or for wealth? Are these motivations contradictory or complementary, and where do real choices lie? These issues are discussed in following section. To understand results of policy, it is also necessary to analyze constraints. What

Development economics · Economics · International trade · Political economy · Political science · Global Financial Crisis and Policies

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