How to Win a Great-Power Competition: Alliances, Aid, and Diplomacy in the Last Struggle for Global Influence

The United States is confronted with a condition in the world which is at direct variance with the assumptions upon which [our foreign] policies were predicated,” wrote a State Department official. “Instead of unity among the great powers . . . there is complete disunity.” The secretary of state concluded that the Russians were “doing everything possible to achieve a complete breakdown.” The president called for unilateral action to counter U.S. adversaries. “If we falter in our leadership,” he told Congress, “[we will] surely endanger the welfare of this nation.”

These precise words were spoken in 1947, by Russia specialist Chip Bohlen, Secretary of State George C. Marshall, and President Harry S. Truman. But they are being echoed today by a new U.S. administration, heralding another era of great-power competition in which adversaries jostle for global influence. “After being dismissed as a phenomenon of an earlier century,” the Trump administration’s National Security Strategy proclaimed, “great power competition returned.” The strategies of Truman and Trump, however, could not be more different.

Seventy-one years ago, in the wake of World War II, the onset of a dangerous new great-power competition led American policymakers to accept the need for intervention abroad to protect U.S. security and prosperity. The centerpiece of their strategy was to create strong, independent, democratic allies in western Europe and Asia capable of resisting authoritarian threats and temptations. The United States could thereby protect its own economic and security interests without having to rely on its military.

That vision was sustained through the Cold War and after, over successive administrations, Democratic and Republican—until the present one. The Trump administration is now at war with itself over the meaning of the president’s “America first” slogan and its consistency with this vision, and the outcome will determine whether the postwar liberal order survives or whether a new Hobbesian struggle takes its place—a struggle in which the United States would merely be first among equally self-interested brutes. The tragic irony is that just as the administration declares the start of a new age of great-power competition, it threatens to discard and disavow the tools that helped the United States win the last such struggle.


In the space of a few short years after World War II, the United States created the major institutions that still define the world order today—an order that has long served the United States’ interest in peace and prosperity. The United Nations, the International Monetary Fund, the World Bank, the North Atlantic Treaty Organization, and the predecessors to the World Trade Organization and the European Union were all launched between 1945 and 1949.

But President Donald Trump thinks these institutions are threats to U.S. sovereignty. The WTO is “a disaster … We’re going to renegotiate or we’re going to pull out.” Its regional parallel, the North American Free Trade Agreement (NAFTA), is “the worst trade deal ever.” As for NATO and the EU, both offshoots of the Marshall Plan, Trump has made clear that he sees them as, at best, anachronisms, and at worst historic mistakes. The EU, he claims, “was formed, partially, to beat the United States on trade. … I don’t really care whether it’s separate or together.” His reasoning is that he can, he thinks, reduce trade deficits—which have historically been associated with higher U.S. growth—by renegotiating trade deals bilaterally with smaller partners.

Those in the administration who have pressed to preserve the existing international order, such as Secretary of Defense James Mattis and Director of the National Economic Council Gary Cohn, have been labelled “internationalists” by friend and foe alike. Yet the order’s founders—men such as Marshall, his successor as secretary of state, Dean Acheson, and Under Secretary of State for Economic Affairs Will Clayton—were hard-nosed realists. Marshall himself was the great military mastermind of World War II. These men were hardly sacrificing America’s treasure and sovereignty to abet foreign interests; they were engaged in an ambitious mission to found an American-led order based on the moral primacy of democratic government and free economic exchange.


The Marshall Plan was the Truman administration’s strategy to complete the withdrawal of three million troops from Europe after World War II without allowing any European power to dominate the Eurasian landmass. At the heart of the plan was the creation of a western European confederation, underwritten by massive U.S. financial aid.The intervention was the first and most critical element of State Department Policy Planning Director George Kennan’s new grand strategy of “containing” the Soviet Union by buttressing democratic capitalism west of the Iron Curtain. Without such aid, Italy and France in particular would have faced growing Communist-backed labor violence and political upheaval. “The greatest danger to the security of the United States,” warned the new Central Intelligence Agency in 1947, “is the possibility of economic collapse in western Europe and the consequent accession to power of communist elements.”In order to protect the United States’ vital interest in continued access to the world’s most important industrial markets, and to prevent Soviet control of vital sea lanes that could threaten U.S. security, Washington made the creation of strong independent allies its primary foreign policy objective. The alternative strategy of sending millions of troops back to Europe would have been vastly more costly, both economically and politically. Truman thought it common sense to “spend twenty or thirty billion dollars” over four years “to keep the peace” rather than spend multiples of that annually fighting another war. In the end, the aid bill was only $13.2 billion ($135 billion today). It was money well spent.

The most consequential element of the Marshall Plan was not the money, however, but European integration. Contrary to Trump’s rendering of history, the blueprint for European economic union emerged from the State Department (specifically Will Clayton), and not from Europeans looking to take advantage of the United States on trade. The reason for promoting integration was twofold: to ensure that aid was not wasted by duplicating economic activities (such as steel production) across countries and to make West Germany self-sustaining as quickly as possible by boosting trade with its neighbors.

The plan was wildly successful. It resulted not merely in a golden age of economic growth for the United States and its beneficiaries but also the creation of enduring transatlantic cooperation. “The recovery of Western Europe is a twenty-five to fifty-year proposition,” Republican Senator Henry Cabot Lodge, Jr., wrote presciently in 1948, and “the aid which we extend now and in the next three or four years will in the long future result in our having strong friends abroad.” By 1989, 40 years after NATO’s founding and Acheson’s insistence that Washington must have allies, and not neutral transactional counterparts, the United States’ alliances were still intact and Moscow’s were in tatters.


Secretary Mattis would have been right at home in an administration with Secretary Marshall or Acheson. Mattis has consistently contradicted Trump’s calls to slash the diplomatic budget. “If you don’t fund the State Department fully,” he once warned, “then I need to buy more ammunition.” In this judgment, he could not have been more perfectly aligned with the founders of the international order seven decades ago. President Truman’s Army Secretary, Kenneth Royall, told Congress he would need an additional 160,000 troops and a $2.25 billion boost to the military budget ($26 billion in today’s money)—a 20 percent increase—if it failed to approve Marshall aid for Europe.

The White House’s new “America first” National Security Strategy is an uncomfortable blend of the view held by Marshall, Acheson, and Truman and the vision that President Trump campaigned on. It contains, on the one hand, multiple references to the importance of alliances and celebrates the successes of twentieth-century diplomacy—including the creation of the Marshall Plan and NATO. It states, on the other hand, that “putting America first is the duty of [its] government and the foundation for U.S. leadership” and laments how others have “exploited the international institutions we helped to build.” While the document is short on specifics, it reflects schizophrenia in the executive branch that cries out for treatment.

The prevailing global order was built on the understanding that having allies—as opposed to colonies or tributaries—necessarily meant ongoing compromise with other sovereign wills. The United States must now decide whether such compromise is worthwhile to preserve that order or whether it should instead just slug it out with China and Russia for the fugacious affections of other nations and blocs. Choosing wisely today means understanding how and why it chose as it did in the first place.

— Benn Steil is director of international economics at the Council on Foreign Relations and author of The Marshall Plan: Dawn of the Cold War.

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