- The Empire Trap: The Rise and Fall of U.S. Intervention to Protect American Property Overseas, 1893–2013 by Noel Maurer
In The Empire Trap: The Rise and Fall of U.S. Intervention to Protect American Property Overseas, 1893–2013, Noel Maurer attempts to “make concrete what was previously vague” (22) in the history of U.S. foreign policy. Specifically, Maurer explores the pattern of U.S. government intervention to protect the overseas investments of American businesses when they were threatened, typically through acts of expropriation, by foreign governments. Maurer calls this pattern the empire trap, “in which one American administration’s promise to intervene on behalf of U.S. investors makes it harder for future administrations to refrain from such intervention” (8). The empire trap played out across two American empires. The first empire began with the Spanish–American War and Theodore Roosevelt’s 1904 declaration of the “Roosevelt Corollary” to the Monroe Doctrine and lasted through the early 1930s. This period was marked by the insertion of U.S. agents into foreign governments (primarily in Latin America) to oversee the collection and disbursement of local customs revenues to ensure the stability of government finance and the prompt and responsible payment of government debts. The second empire, which largely overlapped with the Cold War, witnessed the U.S. government use covert action and economic sanctions (primarily in the form of restrictions on foreign aid) to ensure the fair treatment of U.S. investors. Government intervention has ultimately been supplanted by international arbitration and other legal processes aimed at depoliticizing investments disputes.
The Empire Trap, as Maurer succinctly explains at the outset, advances “four basic findings.” First, “American government intervention on behalf of U.S. foreign investors was astoundingly successful at extracting compensation through the 1980s.” Even when the United States could not prevent or reverse acts of expropriation, in the vast majority of cases investors were provided fair compensation by expropriating governments as a result of U.S. intervention. Second, “American domestic interests trumped strategic concerns again and [End Page 577] again,” as successive presidential administrations, regardless of their ideological predilections, repeatedly pursued acts of intervention on behalf of investors whether those interventions advanced larger strategic interests or not. Third, “the United States proved unable to impose institutional reform in Latin America and West Africa even while American agents were in place, let alone afterward.” In all but one case, the fiscal receiverships and dollar diplomacy of the first empire failed to increase the collection of customs revenues, let alone produce long-term stability. Fourth, “the technology that the U.S. government used to protect American property rights overseas changed radically over time - and ultimately, in a case of unintended consequences, gave U.S. investors a set of tools that they could employ against foreign governments without explicitly calling on the power of the American executive to protect them” (2–3).
Maurer brings an impressive amount of data to the table in support of his four findings, providing a multitude of detailed examples spanning more than a century of global history to demonstrate the extent to which the U.S. government provided protection to American overseas investments. The government did much more to protect investments in natural resources (including oil) than it did in public utilities and other areas of economic activity, but the degree of intervention was significant and has generally been overlooked as a coherent and consistent feature of foreign policy. One of the great strengths of The Empire Trap is the depiction of the emergence of legal and arbitral processes to resolve investment disputes in the latter part of the twentieth century. By exploring the development of these new tools of resolution in the context of the old method of government intervention, Maurer provides tremendous insight into the complexities and difficulties of creating a depoliticized system that could actually be successful.
At the end of the introduction, Maurer asserts the contributions that The Empire...