Foreign economic policy: a study of the use of economic means to promote foreign-policy objectives since 1918, with special reference to Australia

Laissez-faire, having superseded mercantilism, has itself given way, under pressure of government economic intervention and political instability, to a new economic policy of power, The League of Nations failed either to deal with economic likely to provoke war, or to use economic sanctions effectively. The United Nations attacked welfare problem much more capably but failed to grapple with the rapidly developing problem of economic policies. At the national level, the inter-war period was the critical period of change. The United Kingdom and United States substantially maintained laissez-faire policies of welfare although the political and economic basis of laissez-faire was being undermined. France, ineffectively, Germany, intensively and aggressively, and Russia, in defensive isolation, all applied mercantilist policies of some kind. Since 1945, mercantilist policies have become virtually universal, involving both careful attention to national defence potential and the use of economic alliances and economic sanctions. Australia had no consistent foreign economic policy between the wars and, immediately after 1945, adopted a foreign economic policy aimed at universal welfare. However, anxieties about East Asia and general political uncertainty changed the nation her foreign economic policy to give more precise attention [to] individual power position. An Australian foreign policy is now well-established both in principle and practice, contains elements of both economic alliance and economic sanctions, is directed especially to South-East Asia, and is likely to have an impact on every part of Australian economic policy, both domestic and international.