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A. "Open Door Imperialism" Through the 1930s.
Open Door imperialism consisted of using U.S. political power to guarantee access to foreign markets and resources on terms
favorable to American corporate interests, without relying on direct political rule. Its central goal was to obtain for U.S.
merchandise, in each national market, treatment equal to that afforded any other industrial nation. Most importantly, this
entailed active engagement by the U.S. government in breaking down the imperial powers' existing spheres of economic influence
or preference. The result, in most cases, was to treat as hostile to U.S. security interests any large-scale attempt at autarky,
or any other policy whose effect was to withdraw a major area from the disposal of U.S. corporations. When the power attempting
such policies was an equal, like the British Empire, the U.S. reaction was merely one of measured coolness. When it was perceived
as an inferior, like Japan, the U.S. resorted to more forceful measures, as events of the late 1930s indicate. And whatever
the degree of equality between advanced nations in their access to Third World markets, it was clear that Third World nations
were still to be subordinated to the industrialized West in a collective sense. Indeed, one think that Kautsky had the Open
Door in mind in formulating his theory of "ultra-imperialism," in which the developed capitalist nations cooperated to exploit
the Third World collectively.15
This Open Door system was the direct ancestor of today's neoliberal system, which is falsely called "free trade" in the
apologetics of court intellectuals. It depended on active management of the world economy by dominant states, and continuing
intervention to police the international economic order and enforce sanctions against states which did not cooperate. Woodrow
Wilson, in a 1907 lecture at Columbia University, said:
Since trade ignores national boundaries and the manufacturer insists on having the world as a market, the flag of his nation
must follow him, and the doors of the nations which are closed must be battered down.... Concessions obtained by financiers
must be safeguarded by ministers of state, even if the sovereignty of unwilling nations be outraged in the process. Colonies
must be obtained or planted, in order that no useful corner of the world may be overlooked or left unused. Peace itself becomes
a matter of conference and international combinations.16
Wilson warned during the 1912 election that "Our industries have expanded to such a point that they will burst their
jackets if they cannot find a free [i.e., guaranteed by the state] outlet to the markets of the world."17
In a 1914 address to the National Foreign Trade Convention, Secretary of Commerce Redfield followed very nearly the same
theme:
...we have learned the lesson now, that our factories are so large that their output at full time is greater than
America's market can continuously absorb. We know now that if we will run full time all the time, we must do it by
reason of the orders we take from lands beyond the sea. To do less than that means homes in America in which the husbands
are without work; to do that means factories that are shut down part of the time.18
Under the Open Door system, the state and its loans were to play a central role in the export of capital. The primary purpose
of foreign loans, historically, has been to finance the infrastructure which is a prerequisite for the establishment of enterprises
in foreign countries. As Edward E. Pratt, chief of the Bureau of Foreign and Domestic Commerce, said in 1914:
...we can never hope to realize the really big prizes in foreign trade until we are prepared to loan capital to foreign
nations and to foreign enterprise. The big prizes... are the public and private developments of large proportions, ...the
building of railroads, the construction of public-service plants, the improvement of harbors and docks, ...and many others
which demand capital in large amounts.... It is commonly said that trade follows the flag. It is much more truly said that
trade follows the investment or the loan.19
It was, however, beyond the resources of individual firms or venture capitalists, or of the decentralized banking system,
to raise the sums necessary for these tasks. One purpose of creating a central banking system (the Federal Reserve Act, 1914)
was to make possible the large-scale mobilization of investment capital for overseas ventures. Under the New Deal, the mobilization
began to take the form of direct state loans.20 The state's financial policies, besides promoting the accumulation
of capital for foreign investment, also underwrite foreign consumption of U.S. produce. As John Foster Dulles said in 1928,
"We must finance our exports by loaning foreigners the where-with-all to pay for them...."21 These two functions
were perfected in the Bretton Woods system after WWII.
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