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stake. Military spending is part of a larger set of foreign policies that produces broader
economic winners and losers. Because these economic interests are less widely
recognized that those that come directly from the income effects of military spending,
they require some explanation.
As the dominant power in the postwar world, the United States has sought to
shape the rules governing the international system. This international order has produced
domestic as well as international winners and losers. Since 1945, American policy
makers have sought to establish and maintain a world order open for American trade and
investment. Although the United States was not as unambiguously supportive of free
trade as Britain was during its period of 19th century predominance, American policy
makers nevertheless worked to develop international institutions that promoted increased
international trade and more liberal foreign investment. The architects of postwar
American foreign policy believed that a relatively liberal world order would insure the
security of the nation as well its prosperity (e.g, Block 1980; Fordham 1998b).
The construction of the postwar order entailed the use of military as well as
economic power. The United States made commitments to the security of key developed
trading partners and investment sites in Western Europe and East Asia. It also sought to
contain or eliminate challengers to the world order, including not only the Soviet Union
and China, but also less powerful states, such as Cuba, that sought to offer alternative
models of economic and political development. Since the terrorist attacks of September
11, 2001, the role of military power in American efforts to shape and enforce the rules of
behavior in the international system has become especially clear. As a number of
Convention