From Dick Nixon to Joe Biden: Fifty years of global economic triumph and disappointment.

• Author: Zoellick, Robert B.

Library bookshelves bend under the weight of tomes about Richard Nixon's foreign policy. Jeffrey Garten's splendid new book Three Days at Camp David narrates the rarely researched companion story of Nixon's major international economic initiative. In doing so, Garten encourages historians to consider the intriguing parallels between Nixon's security and economic transformations.

Nixon was a war president from day one. His fate was to direct a retreat, a most dangerous maneuver. This withdrawal was more than tactical; Nixon believed that his strategic challenge was to reorder the international politics of power because of the relative decline of U.S. economic might.

The president aimed to regain advantage through agile world leadership. In foreign policy, Nixon aspired to redraw the map of power as a new multipolarity. In doing so, the president wanted to avoid a slide back to American isolationism. Nixon's plan for a new international economy seemed less deliberate. Nevertheless, Garten's tale shows that Nixon attempted to rebalance global economic responsibilities and avoid the protectionism of the past.

Nixon's new foreign policy sought better relations with Moscow in order to prevent nuclear war and restrain Soviet expansionism. His entente with China treated Beijing as an instrumentality, not as a partner, in a triangular relationship that would deter catastrophic war among big powers. Nixon signaled to allies that they would have to earn Washington's support; Europe and Japan could no longer take America's market and dollar for granted. Nixon hoped these maneuvers would lead the American public to view him as a man of peace and prosperity.

Nixon's inaugural address called for a shift from years of confrontation to an era of negotiation. Scholars have recognized how Nixon translated that summons into foreign policy, but most have overlooked the implications for the president's international economic platform.

Nixon's strategies reflected his reading of history. The president believed that nations which lost the ability to pursue great ideas ceased to be great. Nixon's audacity would give history a nudge. The president also believed that democratic leaders needed bold moves to electrify the public and sustain support. Garten's account reveals these precepts of Nixon's thinking in economics, just as daring moves typified Nixon's security strategies.

In foreign policy, then-U.S. National Security Adviser Henry Kissinger's trademark preferences for maneuver, ambiguity, and nuance complemented Nixon's approach. Kissinger viewed himself as a strategic negotiator who continually pursued stability, not perfection, amidst perpetual change. The president had no such counterpart on his economic team. U.S. Treasury Secretary John Connally was a blunt disrupter and dealmaker. However, Office of Management and Budget Director George Shultz recognized the need for adaptive equilibria, which he believed could be achieved through freer markets.

Ironically, Nixon's and Kissinger's foreign policy strategy overlooked an American capacity that Shultz appreciated: The U.S. aptitude for innovation, especially through technology and in the private sector. Even as Nixon was trying to refashion world politics and economics to suit his expectations of America's decline, the United States landed a man on the moon (1969), began a transformation of the Bretton Woods monetary and exchange rate order (1971), opened a door to a new relationship with China (1971-1972), and began technological revolutions, especially in information.

Ronald Reagan, whose view of America's potential differed markedly from Nixon's, would launch the next stage of transfiguration in global systems based on the American capacity for revival.

ADAPTING THE INTERNATIONAL ECONOMY

Garten's book also prompts readers to consider why--and how--U.S. leaders forced the adaptation of the international economic regime that Washington had created after World War II. Nixon's bold stroke in August 1971 was the first, but not the only, American venture over the past seventy-five years to reshape the rules, expectations, norms, and even the institutional architecture of the international economic order. As the leaders of the global market economy, U.S. officials have struggled continually to pursue the right mix of national--but also systemic--interests.

Garten's account reveals the interconnections among exchange rates, monetary and fiscal policies, capital flows, trade, and domestic plans and politics. These elements reappear in later cases--up to today.

The experience of 1971 offered lessons for astute successors. Shultz's preference for flexible exchange rates eventually became the new policy norm; the adaptability of markets enabled the international system to adjust to both shocks and longer-term shifts, although often with pains. The U.S. private sector demonstrated an impressive resilience, especially through technological innovation. Nixon's experience also shows that...