The Empire Trap: The Rise and Fall of U.S. Intervention to Protect American Property Overseas, 1893-2013 - Hardcover

Maurer, Noel

Hardcover

ISBN 10: 0691155828 ISBN 13: 9780691155821

Verlag: Princeton University Press, 2013

Inhaltsangabe

How the United States became an imperial power by bowing to pressure to defend its citizens' overseas investments

Throughout the twentieth century, the U.S. government willingly deployed power, hard and soft, to protect American investments all around the globe. Why did the United States get into the business of defending its citizens' property rights abroad? The Empire Trap looks at how modern U.S. involvement in the empire business began, how American foreign policy became increasingly tied to the sway of private financial interests, and how postwar administrations finally extricated the United States from economic interventionism, even though the government had the will and power to continue.

Noel Maurer examines the ways that American investors initially influenced their government to intercede to protect investments in locations such as Central America and the Caribbean. Costs were small—at least at the outset—but with each incremental step, American policy became increasingly entangled with the goals of those they were backing, making disengagement more difficult. Maurer discusses how, all the way through the 1970s, the United States not only failed to resist pressure to defend American investments, but also remained unsuccessful at altering internal institutions of other countries in order to make property rights secure in the absence of active American involvement. Foreign nations expropriated American investments, but in almost every case the U.S. government's employment of economic sanctions or covert action obtained market value or more in compensation—despite the growing strategic risks. The advent of institutions focusing on international arbitration finally gave the executive branch a credible political excuse not to act. Maurer cautions that these institutions are now under strain and that a collapse might open the empire trap once more.

With shrewd and timely analysis, this book considers American patterns of foreign intervention and the nation's changing role as an imperial power.

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Über die Autorin bzw. den Autor

Noel Maurer is associate professor of business administration at Harvard Business School. He is the author of The Power and the Money and coauthor of The Politics of Property Rights, Mexico since 1980, and The Big Ditch (Princeton).

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"How did the United States come to have an 'informal empire' in the late nineteenth century, and how did it get out of the empire business at the end of the twentieth? How and why did threats and gunboats get replaced by courts and international tribunals in order to protect American property rights in less developed countries--and do these new tools work as well as the old ones? Read this carefully researched and cleverly argued book, and learn the answers."--Stephen Haber, Stanford University

"Noel Maurer's wonderful book explores a long-standing question: as European powers built world empires in the nineteenth century, why did the United States--the leading global economy--not follow suit?The Empire Trap provides readers with the definitive answer."--James Robinson, coauthor ofWhy Nations Fail: The Origins of Power, Prosperity, and Poverty

"Challenging previous assumptions about the complex relationship between business and U.S. foreign policy,The Empire Trap describes government efforts to escape business pressure and use foreign policy to promote more significant national interests. There is no better way to judge the security offered by the current international arbitration regime than to understand where it comes from. This book should be read by economic and diplomatic historians, and by business people concerned with protecting their investments in risky countries."--Louis T. Wells, Herbert F. Johnson Professor of International Management Emeritus, Harvard Business School

"Bringing together an impressive array of cases, this excellent and entertaining book presents an explanation for the pattern of U.S. intervention in foreign countries on behalf of American business interests over roughly a century. Maurer has accomplished something truly remarkable by providing a cohesive explanation across so many regions and over such a length of time. Valuable to many fields, this book will be a springboard for much future scholarship."--Richard Sicotte, University of Vermont

"Through a mix of international history and analysis, this book delves into the idea that U.S. administrations historically found themselves compelled to use military and other coercive force overseas on behalf of American private interests threatened with or suffering expropriation, usually by revolutionary governments. An ambitious work."--Eric Rauchway, author ofBlessed Among Nations: How the World Made America

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"How did the United States come to have an 'informal empire' in the late nineteenth century, and how did it get out of the empire business at the end of the twentieth? How and why did threats and gunboats get replaced by courts and international tribunals in order to protect American property rights in less developed countries--and do these new tools work as well as the old ones? Read this carefully researched and cleverly argued book, and learn the answers."--Stephen Haber, Stanford University

"Noel Maurer's wonderful book explores a long-standing question: as European powers built world empires in the nineteenth century, why did the United States--the leading global economy--not follow suit?The Empire Trap provides readers with the definitive answer."--James Robinson, coauthor ofWhy Nations Fail: The Origins of Power, Prosperity, and Poverty

"Challenging previous assumptions about the complex relationship between business and U.S. foreign policy,The Empire Trap describes government efforts to escape business pressure and use foreign policy to promote more significant national interests. There is no better way to judge the security offered by the current international arbitration regime than to understand where it comes from. This book should be read by economic and diplomatic historians, and by business people concerned with protecting their investments in risky countries."--Louis T. Wells, Herbert F. Johnson Professor of International Management Emeritus, Harvard Business School

"Bringing together an impressive array of cases, this excellent and entertaining book presents an explanation for the pattern of U.S. intervention in foreign countries on behalf of American business interests over roughly a century. Maurer has accomplished something truly remarkable by providing a cohesive explanation across so many regions and over such a length of time. Valuable to many fields, this book will be a springboard for much future scholarship."--Richard Sicotte, University of Vermont

"Through a mix of international history and analysis, this book delves into the idea that U.S. administrations historically found themselves compelled to use military and other coercive force overseas on behalf of American private interests threatened with or suffering expropriation, usually by revolutionary governments. An ambitious work."--Eric Rauchway, author ofBlessed Among Nations: How the World Made America

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THE EMPIRE TRAP

THE RISE AND FALL OF U.S. INTERVENTION TO PROTECT AMERICAN PROPERTY OVERSEAS, 1893–2013

By Noel Maurer

PRINCETON UNIVERSITY PRESS

Copyright © 2013 Princeton University Press
All rights reserved.

ISBN: 978-0-691-15582-1

Contents

Acknowledgments............................................................
vii
One Introduction..........................................................
1
Two Avoiding the Trap.....................................................
25
Three Setting the Trap....................................................
58
Four The Trap Closes......................................................
89
BOX 1. THE MEXICAN EXCEPTION...............................................
137
Five Banana Republicanism.................................................
148
Six Escaping by Accident..................................................
188
Seven Falling Back In.....................................................
245
Eight The Empire Trap and the Cold War....................................
313
BOX 2. ETHIOPIA AND NICARAGUA..............................................
347
Nine The Success of the Empire Trap.......................................
350
Ten Escaping by Design?...................................................
387
Eleven The Empire Trap in the Twenty-first Century........................
433
Notes......................................................................
453
Index......................................................................
537

CHAPTER 1

Introduction

An extraordinary act in the history of the civilizednations, without precedent, without possible justification,a barbarous act because it is an attack on themost rudimentary principles of international law, anignoble act because it is the fruit of an immoral andcowardly collusion of force and betrayal.—Cipriano Castro, 1902

This is the great threat, the biggest threat that theplanet faces today. The Yankee empire.—Hugo Chávez, 2010

In 1900, Venezuelan president Cipriano Castro seized propertiesbelonging to the American asphalt trust. Venezuelantroops forcibly ousted the trust's employees and occupied its facilitieson the shores of Lake Bermúdez, one of the largest naturaltar pits in the world. The McKinley administration protested,and the Navy Department ordered three warships to the scene,but the United States did not intervene. Dissatisfied with theofficial response, the asphalt trust immediately set out arminga rebellion to overthrow Castro's government. American corporatesupport for the rebels led Castro to seize British-flaggedvessels carrying weapons for Castro's opponents. That in turnprovoked a confrontation between Castro and the United Kingdom,which caused the German government to get involvedon the British side. The Anglo-German alliance shelled La Güaira,sank two Venezuelan vessels, blockaded several ports, andthreatened invasion. The U.S. government was dragged backinto the dispute, where it brokered a state-to-state settlementat the International Tribunal at the Hague. The imbroglio wasconfused, politicized, and violent. But it was not unique. Fromthe confrontation between the Hawaiian sugar planters andQueen Liliuokalani in 1893 to the "dollar diplomacy" of the1920s, the U.S. government found itself drawn again and againinto disputes between American investors and foreign governmentsover their property rights.

In 2007, Venezuelan president Hugo Chávez seized propertiesbelonging to the American oil giants ExxonMobil andConocoPhillips. When asked, a State Department official stated,"The government of Venezuela, like any other government, hasthe right to make these kinds of decisions to change ownershiprules. The standard has always been that we want to see themmeet their international commitments in terms of providing fairand just compensation." The oil giants then sued Venezuela'sstate-owned oil company at the International Chamber of Commerce(ICC) and the Venezuelan government at the InternationalCentre for Settlement of Investment Disputes (ICSID). The U.S.government was not involved in the suits. The ICC decided thatVenezuela owed ExxonMobil $907.6 million in compensation.Chávez blustered, but paid. The dispute was legalistic and relativelyorderly. But it was not unique. By 2007, it was perfectlynormal for American companies to sue foreign governments ininternational tribunals over violations of their perceived propertyrights—and, at least sometimes, to win and to collect.

The Empire Trap is about the shift from politicized confrontationslike the imbroglio of 1900 to legalized disputes like themore orderly affair of 2007. It advances four basic findings. First,American government intervention on behalf of U.S. foreigninvestors was astoundingly successful at extracting compensationthrough the 1980s. Second, American domestic intereststrumped strategic concerns again and again, for small economicgains relative to the U.S. economy and the potential strategiclosses. Third, the United States proved unable to impose institutionalreform in Latin America and West Africa even whileAmerican agents were in place, let alone afterward. Finally, thetechnology that the U.S. government used to protect Americanproperty rights overseas changed radically over time—and ultimately,in a case of unintended consequences, gave U.S. investorsa set of tools that they could employ against foreign governmentswithout explicitly calling on the power of the Americanexecutive to protect them.

The first finding—that the U.S. government intervened oftenand intervened successfully on behalf of American overseasdirect investors from the 1890s through the 1980s—is particularlytrue for natural resources. State Department reportsprovide data on every investment dispute brought to its attentionbetween 1900 and 1987. For investors in oil and hardrocknatural resources, the number of cases in which countriesunequivocally managed to avoid paying full compensation—definedas the market value of foregone future income—wasalmost entirely limited to countries openly allied to the SovietUnion. In only six non-Soviet cases (out of 130) did investorsunambiguously receive less than the value of their investment asa going concern: Venezuela in 1900, Bolivia in 1952 and 1969,Ecuador in 1972, Kuwait in 1975, and Iran in 1979. In otherwords, once you look at the data, one of the major stylized factsabout the foreign expropriation of American assets disappears:investors in natural resources rarely suffered economic damagefrom expropriation. And this was because the U.S. governmentactively defended the owners and their interests, almost regardlessof the strategic situation or ideological preferences.

The implication is that domestic interests trumped strategicimperatives, over and over again—which is the second findingof this book. This result is surprising considering the relativeunimportance of foreign direct investment (FDI) to the Americaneconomy. FDI was never a significant part of total Americaninvestment, and the returns from FDI were never a significantpart of national income....

Details zur Ausgabe

• Verlag: Princeton University Press
• Erscheinungsdatum: 2013
• Sprache: Englisch
• ISBN 10: 0691155828
• ISBN 13: 9780691155821
• Einband: Gebundene Ausgabe
• Anzahl der Seiten: 558
• Kontakt zum Hersteller: Princeton University Press; https://press.princeton.edu/books; ; 7th Floor, New South Building; PRINCETON; NJ; 8544; USA
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