The AFL-CIO, the U.S. Balance of Payments, and the End of the Post–World War II Liberal Order, 1965–1973

Abstract

This article analyzes the AFL-CIO’s international economic policy activism in the late 1960s and early 1970s within the context of the collapse of Bretton Woods monetary system. It shows that AFL-CIO economists developed a far-reaching critique of multinational corporations that encompassed not only concerns about import competition and capital flight but also charges that multinational firms contributed to the United States’ balance of payments woes. Fighting charges that union wages drove inflation, labor leaders maintained that private capital outflows and intracompany transactions exacerbated U.S. payments deficits. They therefore advocated for capital controls and import restrictions as alternatives to fiscal and monetary restraint. Their efforts to preserve the expansionary policies underpinning postwar liberalism, however, ultimately failed. By calling attention to the AFL-CIO’s failed activism in international monetary politics, the article offers a new vantage point for understanding organized labor’s declining influence in the last third of the twentieth century.