The United States should use its tremendous wealth and power to shape a global economic recovery that will help advance middle-class well-being. It should reject a zero-sum mentality and recognize that a collapse in the global economy would be disastrous for all Americans.
Summary
If there ever was a truism among the U.S. foreign policy community—across parties, administrations, and ideologies—it is that the United States must be strong at home to be strong abroad. Hawks and doves and isolationists and neoconservatives alike all agree that a critical pillar of U.S. power lies in its middle class— its dynamism, its productivity, its political and economic participation, and, most importantly, its magnetic promise of progress and possibility to the rest of the world. And yet, after three decades of U.S. primacy on the world stage, America’s middle class finds itself in a precarious state. The economic challenges presented by globalization, technological change, financial imbalances, and fiscal strains have gone largely unmet. And that was before the novel coronavirus plunged the country into the worst economic crisis since the Great Depression, exposed and exacerbated deep inequities across American society, led long-simmering tensions over racial injustice to boil over, and launched a level of societal unrest that the United States has not seen since the height of the civil rights movement.
If the United States stands any chance of renewal at home, it must conceive of its role in the world differently. That too has become a point of rhetorical consensus across the political spectrum. But what will it actually take to fashion a foreign policy that supports the aspirations of a middle class in crisis? The Carnegie Endowment for International Peace established a Task Force on U.S. Foreign Policy for the Middle Class to answer that question. This report represents the conclusion of two years of work, hundreds of interviews, and three in-depth analyses of distinct state economies across America’s heartland (Colorado, Nebraska, and Ohio). It proposes to better integrate U.S. foreign policy into a national policy agenda aimed at strengthening the middle class and enhancing economic and social mobility.Five broad recommendations bear highlighting up front.
First, broaden the debate beyond trade. Manufacturing has long provided one of the best pathways to the middle class for those without a college degree, and it anchors local economies across the country, especially in the industrial Midwest. It makes sense, therefore, that so much of the debate about the revival of America’s middle class is centered around the effects of trade policy on manufacturing workers. But while millions of manufacturing jobs have been lost in the United States, other economic forces beyond global trade have also played a major role in the decline. In this sense, debates about “trade” are often a proxy for anxieties about the breakdown of a social contract—among business, government, and labor—to help communities, small businesses, and workers adjust to an interdependent global economy whose trajectory is increasingly shaped by large multinational corporations and labor-saving technologies.
Moreover, the majority of American households today sustain a middle-class standard of living through work in areas outside manufacturing, especially in the service sectors where the United States has competitive advantages. Many of these Americans generally support the trade policies of past decades that have largely served them well. In a February 2020 Gallup poll, 79 percent of Americans agreed that international trade represents an opportunity for economic growth.1 Many of these Americans are less concerned with overhauling past trade policies and are more preoccupied with how military interventions and changes in the United States’ global commitments, among other aspects of foreign policy, might affect their security and economic well-being.
Middle-class Americans are not a monolithic group. Their interests diverge. Different aspects of foreign policy impact them differently, including across gender, racial, ethnic, and geographic lines. Getting trade policy right is hugely important for American households but it is not a cure-all for the United States’ ailing middle class and represents only one element of a broader set of middle-class concerns about U.S. foreign policy.
USFP_FinalReport_final1Salman Ahmed (co-editor and project director) is a nonresident senior fellow at the Carnegie Endowment for International Peace.
Wendy Cutler is vice president of the Asia Society Policy Institute
Rozlyn Engel (co-editor) is a nonresident scholar at the Carnegie Endowment for International Peace and a professor of the practice in economics at the U.S. Naval Academy.
Daniel M. Price is co-founder and managing director at Rock Creek Global Advisors.
David Gordon is a senior adviser for the Geoeconomics, Geopolitics, and Strategy Program at the International Institute for Strategic Studies
Jennifer Harris is a senior fellow at the Hewlett Foundation.
Lieutenant General (Retired) Douglas Lute e is a distinguished chair at West Point, president of Cambridge Global Advisors, and senior fellow at Harvard’s Belfer Center.
Christopher Smart is chief global strategist at Barings and head of Barings Investment Institute.
Jake Sullivan n is a nonresident senior fellow at the Carnegie Endowment for International Peace and co-chair of National Security Action.
Ashley J. Tellis s is the Tata Chair for Strategic Affairs and a senior fellow at the Carnegie Endowment for International Peace.
Tom Wyler r is the senior vice president for global strategy at PSP Capital.
To read the full report, click here.