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Hoon Lee, Toby J. Rider, “Evaluating the Effects of Trade on Militarized Behavior in the Context of Territorial Threat,” Foreign Policy Analysis, Vol. 14, Issue 1, January 2018, https://academic.oup.com/fpa/article-abstract/14/1/44/2625527?redirectedFrom=fulltext

Empirical Results

This does not necessarily mean that the US is in systemic decline, but it encompasses a trend that appears to be negative and perhaps alarming. Although the US still possesses incomparable military prowess and its economy remains the world’s largest, the once seemingly indomitable chasm that separated America from anyone else is narrowing. Thus, , and the inevitable result will be a world that is less peaceful, liberal and prosperous, burdened by a dearth of effective conflict regulation.

Over the past two decades, no other state has had the ability to seriously challenge the US military. Under these circumstances, motivated by both opportunity and fear, many actors have bandwagoned with US hegemony and accepted a subordinate role. Canada, most of Western Europe, India, Japan, South Korea, Australia, Singapore and the Philippines have all joined the US, creating a status quo that has tended to mute great power conflicts.

For the United States, as I argue here, the maintenance of its leading role matters greatly. The alternative would not only be a more disorderly and dangerous world in which its own economic and national security would be adversely affected, hut also regional conflicts and the spread of nuclear weapons would be more likely. In addition, allies and those sharing common values, especially liberal democracy and the market economy, would increasingly be at risk. Ultimately, America’s ability to avoid serious decline and the significant international retrenchment that would be a result of severely reduced resources becomes a matter of policy and political will. There is nothing inevitable about decline, and both past experience and national attributes matter greatly. Flexibility, adaptability, and the capacity for course correction provide the United States with a resilience that has proved invaluable in the past and is likely to do so in the future.  

IS RETREAT from global hegemony in America’s national interest? No idea has percolated more widely over the past decade—and none is more bogus. The United States is not headed for the skids and there is no reason it should be. The truth is that America can and should seek to remain the world’s top dog. The idea of American hegemony is as old as Benjamin Franklin, but has its practical roots in World War II. The United States emerged from that war as the dominant economic, political and technological power. The only major combatant to avoid serious damage to its infrastructure, its housing stock or its demographic profile, the United States ended the war with the greatest naval order of battle ever seen in the history of the world. It became the postwar home of the United Nations, the International Monetary Fund and the World Bank. And, of course, the United States had the bomb. America was, in every sense of the word, a hegemon. “Hegemony” is a word used by social scientists to describe leadership within a system of competing states. The Greek historian Thucydides used the term to characterize the position of Athens in the Greek world in the middle of the fifth century BC. Athens had the greatest fleet in the Mediterranean; it was the home of Socrates and Plato, Sophocles and Aeschylus; it crowned its central Acropolis with the solid-marble temple to Athena known to history as the Parthenon. Athens had a powerful rival in Sparta, but no one doubted that Athens was the hegemon of the time until Sparta defeated it in a bitter twenty-seven-year war. America’s only global rival in the twentieth century was the Soviet Union. The Soviet Union never produced more than about half of America’s total national output. Its nominal allies in Eastern Europe were in fact restive occupied countries, as were many of its constituent republics. Its client states overseas were at best partners of convenience, and at worst expensive drains on its limited resources. The Soviet Union had the power to resist American hegemony, but not to displace it. It had the bomb and an impressive space program, but little else. When the Soviet Union finally disintegrated in 1991, American hegemony was complete. The United States sat at the top of the international system, facing no serious rivals for global leadership. This “unipolar moment” lasted a mere decade. September 11, 2001, signaled the emergence of a new kind of threat to global stability, and the ensuing rise of China and reemergence of Russia put paid to the era of unchallenged American leadership. Now, America’s internal politics have deadlocked and the U.S. government shrinks from playing the role of global policeman. In the second decade of the twenty-first century, American hegemony is widely perceived to be in terminal decline. Or so the story goes. In fact, reports of the passing of U.S. hegemony are greatly exaggerated wars in Iraq and Afghanistan were relatively minor affairs considered in long-term perspective. The strategic challenge posed by China has also been exaggerated. Together with its inner circle of unshakable English-speaking allies, the United States possesses near-total control of the world’s seas, skies, airwaves and cyberspace, while American universities, think tanks and journals dominate the world of ideas. Put aside all the alarmist punditry. American hegemony is now as firm as or firmer than it has ever been, and will remain so for a long time to come. THE MASSIVE federal deficit, negative credit-agency reports, repeated debt-ceiling crises and the 2013 government shutdown all created the impression that the U.S. government is bankrupt, or close to it. The U.S. economy imports half a trillion dollars a year more than it exports. Among the American population, poverty rates are high and ordinary workers’ wages have been stagnant (in real terms) for decades. Washington seems to be paralyzed by perpetual gridlock. On top of all this, strategic exhaustion after two costly wars in Afghanistan and Iraq has substantially degraded U.S. military capabilities. Then, at the very moment the military needed to regroup, rebuild and rearm, its budget was hit by sequestration. If economic power forms the long-term foundation for political and military power, it would seem that America is in terminal decline. But policy analysts tend to have short memories. Cycles of hegemony run in centuries, not decades (or seasons). When the United Kingdom finally defeated Napoleon at Waterloo in 1815, its national resources were completely exhausted. Britain’s public-debt-to-GDP ratio was over 250 percent, and early nineteenth-century governments lacked access to the full range of fiscal and financial tools that are available today. Yet the British Century was only just beginning. The Pax Britannica and the elevation of Queen Victoria to become empress of India were just around the corner. This is not to argue that the U.S. government should ramp up taxes and spending, but it does illustrate the fact that it has enormous potential fiscal resources available to it, should it choose to use them. Deficits come and go. America’s fiscal capacity in 2015 is stupendously greater than Great Britain’s was in 1815. Financially, there is every reason to think that America’s century lies in the future, not in the past. The same is true of the supposed exhaustion of the U.S. military. On the one hand, thirteen years of continuous warfare have reduced the readiness of many U.S. combat units, particularly in the army. On the other hand, U.S. troops are now far more experienced in actual combat than the forces of any other major military in the world. In any future conflict, the advantage given by this experience would likely outweigh any decline in effectiveness due to deferred maintenance and training. Constant deployment may place an unpleasant and unfair burden on U.S. service personnel and their families, but it does not necessarily diminish the capability of the U.S. military. On the contrary, it may enhance it. America’s limited wars in Afghanistan and Iraq were hardly the final throes of a passing hegemon. They are more akin to Britain’s bloody but relatively inconsequential conflicts in Afghanistan and Crimea in the middle of the nineteenth century. Brutal wars like these repeatedly punctured, but never burst, British hegemony. In fact, Britain engaged in costly and sometimes disastrous conflicts throughout the century-long Pax Britannica. British hegemony did not come to an end until the country faced Germany head-on in World War I. Even then, Britain ultimately prevailed (with American help). Its empire reached its maximum extent not before World War I but immediately after, in 1922. 

This does not necessarily mean that the US is in systemic decline, but it encompasses a trend that appears to be negative and perhaps alarming. Although the US still possesses incomparable military prowess and its economy remains the world’s largest, the once seemingly indomitable chasm that separated America from anyone else is narrowing. Thus, the global distribution of power is shifting, and the inevitable result will be a world that is less peaceful, liberal and prosperous, burdened by a dearth of effective conflict regulation. Over the past two decades, no other state has had the ability to seriously challenge the US military. Under these circumstances, motivated by both opportunity and fear, many actors have bandwagoned with US hegemony and accepted a subordinate role. Canada, most of Western Europe, India, Japan, South Korea, Australia, Singapore and the Philippines have all joined the US, creating a status quo that has tended to mute great power conflicts. However, as the hegemony that drew these powers together withers, so will the pulling power behind the US alliance. The result will be an international order where power is more diffuse, American interests and influence can be more readily challenged, and conflicts or wars may be harder to avoid. As history attests, power decline and redistribution result in military confrontation. For example, in the late 19th century America’s emergence as a regional power saw it launch its first overseas war of conquest towards Spain. By the turn of the 20th century, accompanying the increase in US power and waning of British power, the American Navy had begun to challenge the notion that Britain ‘rules the waves.’ Such a notion would eventually see the US attain the status of sole guardians of the Western Hemisphere’s security to become the order-creating Leviathan shaping the international system with democracy and rule of law. Defining this US-centred system are three key characteristics: enforcement of property rights, constraints on the actions of powerful individuals and groups and some degree of equal opportunities for broad segments of society. As a result of such political stability, free markets, liberal trade and flexible financial mechanisms have appeared. And, with this, many countries have sought opportunities to enter this system, proliferating stable and cooperative relations. However, what will happen to these advances as America’s influence declines? Given that America’s authority, although sullied at times, has benefited people across much of Latin America, Central and Eastern Europe, the Balkans, as well as parts of Africa and, quite extensively, Asia, the answer to this question could affect global society in a profoundly detrimental way. Public imagination and academia have anticipated that a post-hegemonic world would return to the problems of the 1930s: regional blocs, trade conflicts and strategic rivalry. Furthermore, multilateral institutions such as the IMF, the World Bank or the WTO might give way to regional organisations. For example, Europe and East Asia would each step forward to fill the vacuum left by Washington’s withering leadership to pursue their own visions of regional political and economic orders. Free markets would become more politicised — and, well, less free — and major powers would compete for supremacy. Additionally, such power plays have historically possessed a zero-sum element. In the late 1960s and 1970s, US economic power declined relative to the rise of the Japanese and Western European economies, with the US dollar also becoming less attractive. And, as American power eroded, so did international regimes (such as the Bretton Woods System in 1973). A world without American hegemony is one where great power wars re-emerge, the liberal international system is supplanted by an authoritarian one, and trade protectionism devolves into restrictive, anti-globalisation barriers. This, at least, is one possibility we can forecast in a future that will inevitably be devoid of unrivalled US primacy. 

This might herald the emergence of a new system, no longer dominated by one power but multipolar, and certainly very different from the one established after World War II. For, as Princeton’s John Ikenberry has noted a few years ago, “there is no liberal internationalism without American and western hegemony — and that age is ending.” With the decline of the United States and the parallel rise of China, countries have the option to “seek alternative patrons rather than remain dependent on Western largess and support.”

The end result might very well be a bifurcated world order, on the heels of a period of instability and turmoil, or what Ian Bremmer and Nouriel Roubini have called a “G-Zero” world, one without clear leadership and global cooperation. Bifurcation means the coexistence of competing systems that follow fundamentally different rules. This can already be observed in the realm of economic governance.

American leadership need not mean involvement in endless wars. Past history gives us examples. The Marshall Plan allowed worn-torn allied governments to provide their people with political stability and economic development. NATO was an effort to build Western European unity, end the quarrels that had produced two world wars, and deter Soviet aggression. The United Nations, disappointing in many ways, was a vehicle for broad international efforts against disease, illiteracy and regional wars. The International Monetary Fund, World Bank and the General Agreement on Trade and Tariffs were designed to facilitate international trade, prevent currency wars and assist in economic development. These initiatives prevented another great power war, achieved a large degree of European reconciliation, and eased the transition for post-colonial countries in Africa and Asia. None would have happened without strong and persistent American leadership. The U.S. negotiated a series of defense treaties with more than 35 nations, designed to deter aggression, that also eased their burden of self-defense and allowed them to place more resources into the reconstruction of their economies. In the Middle East, the Arab States and Israel saw the U.S. as an honest broker, assisting in the negotiation of peace treaties between Israel and Egypt and Israel and Jordan. During the Obama administration there has been a steady American retreat from world leadership. NATO is far less effective. Allies such as Israel, Poland, Saudi Arabia, Pakistan, Egypt, the Baltic States and Iraq are no longer confident of American support. Hence, China, Russia and Iran are asserting hegemonic claims. The world is now torn by devolution and fractionalization. The forces of global and regional cooperation are in disrepair. The United Nations stands helpless against Russian aggression, civil war in Syria and Libya and atrocities by the Islamic State across the Middle East and North Africa; the European Union is facing possible revolts and threats of secession by the United Kingdom and Greece and waning allegiance in much of Europe; and NATO offers Ukraine no more than its good wishes as Russian President Vladimir Putin’s military swallows the country bit by bit. Our allies are far from steadfast. Their governments are weaker, and vivid world leaders are hard to find among them. Putin, the insane leaders of the Islamic State and the Iranian mullahs have put fear in the hearts of our allies. Why are these second- and third-rate powers able to intimidate their neighbors far more effectively than did the far more powerful Soviet Union? Our democratic allies in Europe, lacking a clear sense of direction, are ruled by unstable coalitions. Even Germany, perhaps the strongest of our European allies, refuses to confront Putin in his efforts to destabilize Ukraine. When the Obama administration made concession after concession to the Iranians over its nuclear program, our negotiating partners in Europe lost any interest in taking serious steps to keep Iran out of the nuclear club. In the Middle East tribalism and religious fanaticism have left Iraq, Syria, Libya and Yemen virtually ungovernable. Iraq, left to its won devices by Obama’s withdrawal after American troops sacrificed so much to establish a nascent democracy, is now falling apart. In Egypt, a military regime is trying to forcibly contain the boiling pot that is the Muslim Brotherhood. Saudi Arabia and the Persian Gulf States, feeling abandoned by Obama’s rush to a nuclear agreement with Iran, are sensing the quicksand beneath their feet. Warlordism and radical Islam plague the economically depressed countries of sub-Saharan Africa. A combination of devolution and chaos becomes normal state of affairs absent a strong centripetal leadership. In the last half of the 20th century, America provided that force with persuasion, assistance, assurance and trust. As the Obama administration allows the U.S. to slip into the shadows world politics, the danger of war increases. 

Before I discuss the Statements of Enforcement Policy, some staff advisory opinions relating to the Statements, and proposed antitrust exemptions and loosening of antitrust standards under the proposed Medicare legislation, let me describe briefly some basic antitrust principles as they apply to health care. Antitrust law is based on the premise that competition generally benefits consumers by producing the best mix of quality, goods and services at the lowest prices. In assessing possible restraints on competition, the Commission examines the market from the point of view of the consumer. The Commission seeks to determine whether the actions in question will promote or hinder consumers' interest in being able to choose among a variety of quality and price options according to their own needs.

The FTC enforces the antitrust laws to ensure that competitive forces will be allowed to stimulate the development of health care delivery systems desired by consumers. Through sound antitrust enforcement, the FTC has eliminated anticompetitive restraints and thus has helped market forces create an environment in which innovative forms of health care delivery could emerge to compete on their merits.

The federal antitrust laws prohibit three categories of conduct that undermines competition:

agreements by two or more businesses not to compete, or to limit competition;

But overall, she says, the picture is worrying. The already high rates of biodiversity loss from habitat destruction, chemical pollution and invasive species will accelerate in the coming 30 years as a result of climate change and growing human populations. By 2050, Africa is expected to lose 50% of its birds and mammals, and Asian fisheries to completely collapse. The loss of plants and sea life will reduce the Earth’s ability to absorb carbon, creating a vicious cycle.

“The numbers are staggering,” says the former Romanian environment minister. “I hope we aren’t the first species to document our own extinction.”

In a Wildlife and Countryside Link survey from March, 2020,62 estimated losses due to COVID-19 for 23 responding organisations were already greater than US$100 million, not inclusive of future losses from decreased grant opportunities. Reduced funding for conservation has been substantial in many locations,63 impeding effective global biodiversity conservation, including achieving UN Aichi biodiversity targets, and issues such as deforestation, wildlife poaching, and greenhouse gas emissions.64 The $343 billion global wildlife tourism industry65 has been substantially affected by the COVID-19 pandemic66 with income shock affecting households throughout a range of countries and regions with high biodiversity,66 and wildlife-related tourism activity entirely vanishing in some locations.63 For example, in Kenya, tourism to Tsavo National Park generates a mainstream revenue for the Kenya Wildlife Service, whose operations are crucial to wildlife protection, protected area establishment, and anti-poaching enforcement.67 Tsavo Trust reported a 50% reduction in their capacity to operate in March, 2020,67 which could substantially disrupt conservation work for years to come. Such disruptions can lead to increased illegal resource extraction and wildlife poaching that feeds into the illegal trade, both as a result of diminished capacity to patrol protected areas, and severe reductions in income that wildlife tourism provides to millions worldwide.57 Although data on the effects is still being collected for some of these cases, there have already been increased instances of poaching and illegal resource harvesting, although, these trends might not be universal.57

Lockdown effects Lockdowns and restrictions to human movement have had diverse effects, with consequences for biodiversity and ecosystems. On the one hand, they have reduced tourism pressure in many areas, but on the other hand, they have simultaneously disrupted important environmental conservation programmes.68 For example, the Australian Antarctic Division experienced COVID-19-related project delays, reduced capacity to train and deploy expedition teams,69 and scaled back their 2020–21 summer expedition, potentially undermining the realisation of research goals.70 These changes came as Antarctica's 2019–20 summer temperatures were substantially above average,71 concluding the Earth's hottest decade ever recorded.72, 73 This disruption and similar other interferences could compromise the accuracy and continuity of climate research that is required to both guide and measure progress on reducing greenhouse emissions, and impede mitigation of climate change's effects on disease emergence.47 Although economic shutdowns initially led to some significant reductions in air pollution and CO2 emissions around the world,74, 75 emissions declined less than expected by climate researchers and rose substantially again as 2020 progressed.76 A continued surge of activity aimed at economic recovery as social lockdowns and economic shutdowns are relaxed could probably negate the benefits of a short pause in human activity unless managed correctly.

The recent SARS-CoV-2 pandemic, which is causing COVID-19 disease, has taught us unexpected lessons about the dangers of human suffering through highly contagious and lethal diseases. As the COVID-19 pandemic is now being partially controlled by various isolation measures, therapeutics, and vaccines, it became clear that our current lifestyle and societal functions may not be sustainable in the long term. We now have to start thinking and planning on how to face the next dangerous pandemic, not just overcoming the one that is upon us now. Is there any evidence that even worse pandemics could strike us in the near future and threaten the existence of the human race? The answer is unequivocally yes. It is not necessary to get infected by viruses found in bats, pangolins, and other exotic animals that live in remote forests to be in danger. Creditable scientific evidence indicates that the human gut microbiota harbor billions of viruses that are capable of affecting the function of vital human organs such as the immune system, lung, brain, liver, kidney, or heart. It is remotely possible that the development of pathogenic variants in the gut can lead to contagious viruses, which can cause pandemics, leading to the destruction of vital organs, causing death or various debilitating diseases such as blindness, respiratory, liver, heart, and kidney failures. These diseases could result in the complete shutdown of our civilization and probably the gradual extinction of the human race. This essay will comment on a few independent pieces of scientific facts, and then combine this information to come up with some (but certainly not all) hypothetical scenarios that could cause human race misery, even extinction, in the hope that these hypothetical scenarios will trigger preventative measures that could reverse or delay the projected adverse outcomes.

Not everyone on Wall Street believes political gridlock will be a positive for the U.S. stock market.

Stocks rallied ahead of the midterm elections on hopes for a change in political leadership. Tuesday's elections allowed those hopes to become reality as Republicans took control of the House of Representatives, creating the sort of gridlock investors have longed for.

While these short-lived pain points can be estimated, the long-term consequences of such extreme political grandstanding may have the bigger impact. As American politics becomes more polarized, it gets harder for our government to pass necessary bi-partisan legislation that deals with real issues facing the economy.

Instead, the business community is increasingly stuck having to navigate uncertain policy environments. One political party takes power and shoves through their pet priorities, until the other side takes power and rolls those policies back.

Meanwhile, in order for Gridlock Good to play out, you need…gridlock.

We still have the Georgia Senate run-off on January 5; that result will decide that body's balance of power. PredictIt, the event futures market, gives Democrats a 26% probability of taking a majority in that chamber. If they pull it off, that is the “Blue Wave,” whereby Democrats control the White House, Senate and House of Representatives.

When “everyone” on Wall Street is expecting “Gridlock Good,” brace for downside.

Exhibit 1 shows every notable S&P 500 decline since we launched the WisdomTree U.S. LargeCap Dividend Fund (DLN). While it sometimes did not beat the S&P 500, DLN outperformed the S&P 500 Value Index in all 17 instances in which the S&P 500 declined 5% or more since we launched the Fund in 2006.

Divided governments are generally thought to be good for the stock market, with neither Democrats nor Republicans receiving a broad mandate from voters that would lead to extreme policy changes.

It was certainly good for stocks last week. The S&P 500 rose 7.3%, its best weekly gain since April, ahead of Democrat Joe Biden taking the White House and Democrats and Republicans potentially splitting control of Congress.

In addition to advancing the theoretical literature on diversionary war, this paper tests these hypotheses with far better data than previously available. The new data for this paper consists of over 30,000 US diplomatic events between 1945 and 2006 drawn from a new corpus of all New York Times articles on foreign affairs over this period. Events are classified into 20 specific types (such as praise, threaten, or coerce) and four aggregate categories (material cooperation, verbal cooperation, verbal conflict, and material conflict). Verbal actions are those that occur in speech only (such as appeals or rejections) while material actions are those that involve physical action (such as the provision of aid or the exhibition of force posture). This represents the most detailed and comprehensive event dataset for this period. Its granularity allows for a better examination of domestic coalitional effects, and for an examination of diversionary cheap talk for the first time. Though other datasets like Militarized Interstate Disputes 3.0 under the Correlates of War project11 have greater historical range, they are censored in the sense that they only contain major events. While other day-level international relations event datasets exist, most notably King and Lowe (2003), they lack historical breadth, with most extending back only into the 1990s. Therefore, this new dataset is an advance in terms of detail and range. Modeling choices include fixed effects regression and Bayesian vector autoregression. I find strong empirical support for the theories outlined above. For Democratic administrations, a one percentage point increase in unemployment is associated with 12.85% more verbal conflicts per month than the baseline average (significant at the 1% level), but no more material conflicts. Unified government is associated with over 25% more verbal and material conflicts per month than divided government for both Democratic and Republican administrations (significant at the 1% level). Throughout, the estimates presented in this paper are conservative: I operationalize conflict as events the United States participated in, but if the sample is restricted to international events the United States initiated, the point estimates are larger and the statistical significance greater. This paper examines only the US case due to the wealth of data available on events, economic conditions, and public opinion ratings. However, future studies might broaden the analysis to OECD countries more generally. The broadest inference—that elected leaders verbally divert abroad to satisfy their core domestic constituency through rally around the flag effects, while avoiding paying the costs of war—should have theoretical traction in all democratic party systems. In the remainder of this paper, Section 2 reviews the literature, Section 3 advances a theory of diversionary behavior, Section 4 introduces the data, Section 5 presents the empirical analysis, and Section 6 concludes 2 Existing Literature Testing the diversionary aggression hypothesis has become somewhat of a cottage industry in political science. A recent review concludes that though the internal logic of diversionary war is “compelling and theoretically well supported,” the empirical evidence is “decidedly mixed.”12 Several studies have found empirical support for diversionary aggression in US foreign policy.13 A commonly cited example is President Reagan’s 1983 invasion of Grenada following the incident in Lebanon in which 200 Marines were killed. Other incidents that have raised scholarly interest are President Clinton’s strikes in Serbia, Sudan, and Afghanistan in 1998 and 1999 concurrent with his impeachment scandal.14 Other studies have found support for diversionary aggression in non-US and cross-national contexts.

This does not mean that global economic governance will continue to function effectively going forward. It is worth remembering that there were genuine efforts to provide global public goods in 1929 as well, but they eventually fizzled out. The failure of the major economies to assist Austria after the CreditAnstalt bank failed in 1931 led to a cascade of bank failures across Europe and the United States. The collapse of the 1933 London conference guaranteed an ongoing absence of policy coordination for the next several years.

The start of the Great Depression was bad. International policy coordination failures made it worse. Such a scenario could play out again. There is no shortage of latent or ongoing crises that could lead to a serious breakdown in global economic governance. The IMF’s reluctance to take more critical actions to address the eurozone crisis have already prompted one angry resignation letter from an IMF staffer. The summer 2012 drought in the midwestern United States could trigger another spike in food prices. The heated protectionist rhetoric of the 2012 presidential campaign in the United States, or the nationalist rhetoric accompanying China’s 2012 leadership transition, could spark a Sino-American trade war. If global economic growth continues to be mediocre, the surprising effectiveness of global economic governance could peter out. Incipient signs of backsliding in the WTO and G-20 might mushroom into a true “GZero” world.

The second question is handled similarly. Drezner acknowledges that the policies hastily enacted to combat the crisis were anything but optimal. By that measure, our governing institutions might be expected to deserve a failing grade. But that, he asserts, is an “absurd standard to apply. ... The question is not whether global governance has been flawless but whether it has been good enough” (p. 15). In effect, therefore, any minimal amount of achievement should be regarded a success. On this view, a grade of D is as good as an A. They all “work.”

In fact, a realistic grade would be closer to D than A. Yes, as Drezner demonstrates, powerful interests went to work to maintain the openness of the trading system. Yes, the United States turned out to have the power to exercise a degree of leadership. And yes, there was no serious challenge to prevailing neoliberal norms. But on balance, protectionist measures did proliferate, mainly in the form of “behind-the-border” nontariff barriers. Many governments, most notably the authorities in Berlin, stubbornly resisted American calls for greater stimulus. And some less market-friendly ideas did begin to gain legitimacy, such as a newfound respect for capital controls. If the system “worked,” it did so barely enough to pass. It seems almost unseemly to boast about what is at best a gentleman’s C.