Customer Reviews

A World Safe for Capitalism

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"A World Safe for Capitalism" is an excellent case study of Dollar Diplomacy. The story begins in the 1890s when a U.S. company floated bonds in Europe to raise money for the Dominican Republic. Little of the money was invested in productive assets in the DR. Instead, it was used to cover the government's operating expenses and to pay the exorbitant fees of the company itself. This strategy obviously wasn't sustainable, but money flowed in anyway, thanks to a surplus of idle capital in Europe and investors' confidence that repayment was guaranteed by the company's lien on DR customs revenues. Eventually, the artificial structure came crashing down.

The State Department and U.S. Navy were quick to lean on the Dominicans to pay their debts. Before long, however, it became clear that draining money from the DR was also unsustainable. For one thing, it left the government too broke to maintain order. Even worse, enforcement of private U.S. claims, by preferring U.S. over European creditors, raised the prospect of European intervention. In 1905, the U.S. government changed course. It shunted aside the U.S. company, took control of DR customs revenues itself, and rescheduled the country's debt, essentially putting the DR into receivership. The Roosevelt Corollary to the Monroe Doctrine was born!

"A World Safe for Capitalism" is well-written. It is alive to the nuances of international diplomacy and finance, rejecting simplistic models of U.S. foreign policy. It's a really good book. I took off one star only because of gaps in the narrative that betray the book's origin as a PhD dissertation. In particular, the focus is on the U.S. actors, with only a pro forma treatment of the European bond holders and the Dominican government, even though they played huge roles in the story. This sort of omission is understandable and commonplace in a dissertation, but it isn't appropriate in a book issued by a major university press.