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Exporting Capitalism: Private Enterprise and U.S. Foreign Policy by Ethan B. Kapstein

2024; The MIT Press; Volume: 26; Issue: 1 Linguagem: Inglês

10.1162/jcws_r_01203

1531-3298

Robert Pee,

Elite Sociology and Global Capitalism

Economic statecraft has returned as a key feature of the international system at a time when the burgeoning competition between the United States and the People's Republic of China (PRC) encompasses investment flows, foreign aid policies, and the projection of rival models of development. Ethan B. Kapstein's Exporting Capitalism is a timely examination of U.S. attempts to mobilize private business and investment to support U.S. national security objectives from 1945 onward, a policy he dubs "Private Sector Development" (PSD) to distinguish it from Official Development Aid (ODA) programs funded and implemented by the U.S. government.The book's main intervention—although it is more implicitly than explicitly argued—is to reject approaches, often found in older currents of scholarship, such as the Wisconsin School and corporatism, that conceptualize U.S. capitalists as the main source of U.S. efforts to export capitalism. By contrast, Kapstein argues that it was the U.S. government, rather than private business, that drove this policy imperative. The policy was championed by officials who believed that economic development overseas could be promoted most effectively through development of the private sector and that such development would produce stronger governments more capable of resisting Soviet inroads, more friendly to the United States, and more stable internally because of the pacifying effects of economic growth.In seven chronological chapters and one concluding chapter, Kapstein traces U.S. attempts to export capitalist structures. He begins by examining U.S. attempts to bolster anti-Communist governments in East Asia, such as Taiwan and South Korea, through PSD at the beginning of the Cold War. He then traces the development and deployment of this approach in areas that became successively strategically significant to the United States, such as Latin America, Eastern Europe and the former Soviet Union, and Iraq and Afghanistan in the 2000s. The book concludes with an analysis of the current competition between the United States and the PRC to promote their interests and development models globally, pitting China's statist Belt and Road Initiative against the U.S. Development Finance Corporation's attempts to prevent Chinese inroads by mobilizing and empowering private U.S. capital.Kapstein's work demonstrates that much of U.S. development policy during the Cold War was designed to encourage greater amounts of foreign direct investment (FDI) from the U.S. private sector by implementing changes in local regulatory and legal frameworks that would improve the "investment climate" for these states and so make them more attractive to U.S. investors. U.S. policymakers often paired these types of aid with a requirement for recipient states to demonstrate a commitment to change through "self-help." However, this reliance on smaller amounts of ODA to spur FDI, and the placing of responsibility on recipients to enact change, was often motivated by budgetary constraints on U.S. government aid programs and domestic political obstacles. These factors limited the U.S. government's ability to implement development without the partnership of U.S. businesses and investors.Kapstein's perspective is that of a critical insider seeking to identify the issues that can inhibit the successful implementation of PSD. These points are then translated into easily digestible lessons for contemporary U.S. policymakers and are often explicitly articulated at the end of chapters. Kapstein is often astute in analyzing the interactions between U.S. policymakers and local governments, the differing forms of leverage possessed by each group, and how they together shaped the implementation of PSD. He also casts doubt on some of the assumptions underlying the impulse to foster capitalism as a tool of foreign policy. For example, his analysis of PSD in Iraq and Afghanistan in the 2000s convincingly casts doubt on the idea that greater investment can lead to economic growth and internal peace within fragile states riven by tension between ethnic and religious groups. His assessment of the outcomes of PSD in Eastern Europe and the former Soviet Union is balanced and nuanced, stressing the differing trajectories of the states within the area. He discusses how the growth of inequality resulting from market transitions may have contributed to democratic backsliding in countries such as Hungary and Poland. He maintains that the success or failure of PSD in these contexts was determined by local contexts and actors as well as U.S. policy, while acknowledging flaws in U.S. approaches, such as the failure to adapt tactics and programs to local contexts.This pragmatic and technocratic approach is suited to the story Kapstein wishes to tell, but it means that he does not often step away from analysis of PSD implementation to engage in wider critical analysis of more of this approach's underlying assumptions and the factors that have shaped it. He is content to state that the impetus for PSD arose from the "broader ideational and ideological context" of U.S. politics and culture (pp. 11–12). Further analysis of the reasons for the prominence of an ideological framework that supported the export of capitalism in U.S. foreign policy, the manner through which it was transmitted, and the interests it served would have provided greater theoretical grounding.In addition, Kapstein's narrative tends to project a largely fixed U.S. approach to PSD, with changes occurring at the implementation level or being determined by local contexts. He leaves unexplored the impact on PSD of shifts in the U.S. economy and in U.S. economic policies, such as the shift from the "New Deal Order" of the 1940s–1970s, which blended the state and the private sector in domestic economy and foreign aid policy, toward the "Neoliberal Order" of the 1980s–2016, based far more on the private sector internally and externally. Although Kapstein does include a brief discussion of Ronald Reagan's shift toward the "magic of the marketplace" and his aid policy toward Central America (pp. 106–114), deeper analysis of this 1980s shift has implications for his analysis of PSD in Eastern Europe, Iraq, and Afghanistan. In addition, Kapstein's portrayal of the U.S. private sector's relations with the U.S. government would benefit from further analysis. He depicts the government as the mobilizer of a private sector that was generally unconvinced of the benefits of making large investments in developing countries. However, this approach tends to treat the U.S. business community as a monolith instead of considering the objectives and perspectives of differing economic sectors and the influence they wielded. Consideration of these issues would have permitted greater scrutiny of the assumptions behind the PSD approach, the relations between the U.S. actors who shaped it, and how these shaped its impact on the ground, rather than taking PSD as a natural and implicitly desirable facet of U.S. foreign policy and focusing on the lessons of implementation.Exporting Capitalism is a wide-ranging and well-supported examination of an underresearched area of U.S. foreign policy. It will be a useful resource for academics and postgraduate students examining the links between development policy, international trade and investment, and U.S. national security imperatives. Further work should build on Kapstein's book to shed light on other dimensions of PSD, such as its ideological framework, its domestic motors, and its connection to shifts in the U.S. economy. Kapstein's triumph lies in presenting U.S. efforts to export capitalism since 1945 as an area of current historical enquiry, and his work will be a valuable foundation for further studies of this topic.