Global Inequality and American Foreign Policy in the 1970s
Cornell University Press, 2022
Nearly a half century ago, decolonized nations around the world united behind a United Nations Declaration for the Establishment of a New International Economic Order (NIEO). The 1974 declaration asserted the right of developing nations to make their own sovereign economic policies, advancing an ambitious set of proposals to address global inequality. These included such measures as granting developing countries preferential treatment under international trade rules, the reform of the international monetary system to emphasize development needs, and technology transfer from the wealthy industrialized North.
Looking back, of course, we know that what happened was nearly the exact opposite of the NIEO. The debt crisis that erupted soon thereafter rapidly diminished developing nations’ bargaining power. The UN was sidelined as a site for policy dialogue between North and South, replaced by the International Monetary Fund (IMF) — which, unlike the UN, was controlled by the North and dominated by the United States. Rather than more financing for development, there were years of IMF austerity. Rather than economic self-determination, there was policy conditionality aimed at removing government interference in markets and creating a friendly investment climate. And rather than making special accommodations for developing countries, international trade rules were standardized to institutionalize the advantage of wealthy countries.
Yet American policy elites in the 1970s could foresee none of this, and they experienced the NIEO as a significant challenge. A new book by historian Michael Franczak, Global Inequality and American Foreign Policy in the 1970s, traces how the American policy establishment responded to the NIEO challenge, drawing on research from seven different archives as well as multiple interviews with key informants. This compelling and original story is told as a multilayered narrative made up of loosely related subplots and featuring a compelling cast of characters.
The leading character is Henry Kissinger, the secretive and powerful secretary of state who dominated the foreign policy landscape of the 1970s. Kissinger is perhaps most remembered for his promotion of détente with China, as well as for his apparent indifference to human rights — as evidenced by his support for the secret bombings in Cambodia and his involvement in the CIA-backed toppling of Salvador Allende, the democratically elected president of Chile. Behind Kissinger’s achievements and atrocities was his realist worldview, which inspired a pragmatic (if sometimes brutal) approach to foreign policy.
Kissinger’s Cold War realism had its blind spots. While negotiating America’s exit from the decades-old war in Vietnam, he and President Richard Nixon ramped up military actions to extract concessions from the North Vietnamese. Ostensibly aimed at achieving a “peace with honor” that left the United States’ hegemonic reputation intact, this strategy was a dismal and bloody failure. Yet according to Franczak, Kissinger subsequently experienced a major change in perspective. After decades of viewing the Third World through the lens of great power politics, Kissinger became convinced that global inequality was an issue that merited attention in its own right.
Kissinger’s approach to the “global negotiations” was characteristically pragmatic, and it was relatively successful. It involved a two-pronged initiative of concessions and bilateral arrangements to pacify and divide the South, as well as an alliance with the Europeans to block the proposal’s more radical elements. European governments were more open to the NIEO than many American policymakers were.