The US is shutting a door to the world

Subscribe to enjoy similar stories. Archimedes pledged to move the world, if only he had a lever long enough and a place to stand. The challenge for businesses, investors, and households is that there is no place to put our feet.

That which we thought solid is melting. The dominant characteristic of the post–World War II period has been the evolving, freer, cross-border movement of goods, services, and capital. Those trends needed time to take root.

As the revisionist power early in the 20th century, the U.S. embraced the spirit of Pax Britannia and dubbed it the “Open Door." John Hay, the 1898-1905 U.S. Secretary of State, articulated the idea.

The Open Door was an alternative to the carving up of China by European imperialist powers and Japan through political concessions such as Hong Kong or Shanghai’s Bund District. The implications were larger than China. Rather than the traditional fixed spheres of influence, Hay, in effect, proposed variable shares.

The variability would depend on economic prowess, not political concessions. The U.S. elites weren’t convinced.

The eventual U.S. rejection of the League of Nations and reluctance to replace the United Kingdom in international finance signaled that the Open Door wasn’t ready for prime time. It took the global spasms of World War II for the U.S.

elite to recognize that U.S. peace and prosperity required it to shape the postwar order. In effect, the U.S.

globalized the Open Door. Washington was instrumental in constructing a multilateral system anchored by institutions such as the International Monetary Fund, the World Bank, and the General Agreements on Tariffs and Trade, which was later succeeded by the World Trade Organization. This liberal international order