28 MAY-JUNE 2026 | THE FOREIGN SERVICE JOURNAL SPEAKING OUT Alan Larson is a retired Foreign Service officer with the rank of Career Ambassador who served as under secretary for economic affairs, assistant secretary for economic and business affairs, and ambassador to the OECD. After retiring from the State Department, he advised businesses on their most complicated and consequential international challenges. T he collapse of the Americanled international economic system is at hand. Or at least so say many renowned experts. If the experts’ analyses are correct, and they may well be, State Department professionals should remember that their predecessors played leading roles in creating the most successful global economic system in history. The architects of the new one will need unique capabilities: deep experience and expertise in dealing with China, a sophisticated understanding of the theory and practice of international economic policy, and the diplomatic skills to negotiate workable arrangements with other countries whose traditions and interests are not identical to our own. State Department officers cannot accomplish this task alone. They will need to work closely as members of a team led by the president, Secretary of State, and other senior advisers. At the same time, no administration will be able to accomplish this task without the active involvement of State Department officers and their distinctive capabilities. How It Was Done in the 1940s Recall the construction of the last international economic system. In the early 1940s, Secretary of State Cordell Hull pressed the Roosevelt administration to prioritize postwar economic arrangements. Hull especially sought to avoid the protectionist economic policies by which one country would try to make itself richer by making other countries poorer. Such protectionist policies had led to the Great Depression and World War II. Hull and Under Secretary of State Sumner Welles convinced President Roosevelt to include open trade principles in the Atlantic Charter, in which FDR and Winston Churchill set out a shared vision for the postwar world. Then Assistant Secretary for Economic Affairs Dean Acheson pressed Britain to commit to an open, multilateral trade regime as part of the Lend-Lease Act and negotiated the establishment of the World Bank. Future Under Secretary for Economics Will Clayton drew on business acumen and diplomatic skill to parry an unsound proposal of Britain’s John Maynard Keynes. Acheson and Clayton were the administration’s most credible witnesses before Congress on the Marshall Plan. Clayton also was the principal U.S. negotiator for the General Agreement on Tariffs and Trade, the predecessor to the World Trade Organization. At a crucial moment in the negotiations, Clayton convinced President Harry Truman to veto a protectionist tariff on wool that would have undercut America’s credibility in advocating for a new international system based on more open markets. Joseph Stalin was determined to disrupt an economic recovery in Europe. Foreign Service Officer (FSO) George Kennan’s “long telegram” explained to Washington why the Soviets’ pervasive paranoia and insecurities would impel them to undermine political stability and economic recovery in Europe. Henry Kissinger, not one given to cheap praise, judged that no FSO ever shaped debate over the U.S. role in the world to such an extent as Kennan. Acheson, Clayton, and Kennan played crucial roles in developing the Marshall Plan and assisted Truman to make the case for it before Congress and the American people. America’s Leading Role In 1991, during my stint as U.S. ambassador to the Organization for Economic Cooperation and Development (OECD), a retiring European ambassador shared an experience he had had nearly 40 years earlier in the very same room. Back then, Averell Harriman, at the time the chief U.S. representative to Europe, had described to European diplomats, including my colleague, what the United States was prepared to do if Europeans would band together and develop a recovery plan based on reform and trade. For the first time in years, hope surged among the European diplomats. Secretary of State George Marshall had made the case that “the economy of Germany must be rebuilt,” a sharp contrast to U.S. policy after World War I. Diplomats Required: Shaping the New International Economic System BY ALAN LARSON
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