Sectoral conflict 67 Sectors with major overseas investment interests would be expected to have a different foreign economic and political outlook than sectors with little or no international production or sales.Internationally oriented banks and corporations would be generally favorable to freer trade,the former to allow debtors to earn foreign exchange and the latter both because intra-firm trade was important to them and because they tended to fear retaliation. Internationally oriented sectors could also be expected to support an exten- sion of American diplomatic commitments abroad,both specifically to safe- guard their investments and more generally to provide an international environment conducive to foreign economic growth.Those sectors that sold but did not invest abroad would be sympathetic to American attempts to stabilize foreign markets,but might oppose international initiatives that rein- forced competing producers overseas.Economic sectors with few foreign assets or sales could be anticipated to support protectionist policies in their industries,because they were not importing from overseas subsidiaries, tended to be less competitive,and had few worries about retaliation.Such sectors would be unsupportive of major American international involvement that might strengthen real or potential competitors of U.S.industry. Two broad blocs on foreign economic policy did indeed emerge after World War I,and their preferences were more or less as might have been predicted.One group of economic interests was"internationalist'':it sup- ported American entry into the League of Nations,U.S.financing of Euro- pean reconstruction,commercial liberalization,and international monetary and financial cooperation.The other cluster of economic interests was the "isolationists":it opposed the League and American financing of Europe, called for renewed trade protection,and was indifferent or hostile to global financial and monetary accords.8 The two sets of policy preferences were competing rather than complementary,and although there were some actors in a middle ground,the extreme unevenness of American overseas economic expansion meant that preferences tended to harden in their opposition. The central dilemma of U.S.foreign economic policy for fifteen years after World War I was the great economic strength of two opposing sets of economic and political actors,neither of which was powerful enough to vanquish the other.Among the consequences of interest to the analyst of international relations is that the state did not undertake to impose a foreign policy derived from America's international position upon recalcitrant do- mestic actors;instead,the central state apparatus found itself torn between Political Economy of the Smoot-Hawley Tariff,"Discussion Paper No.1244,Harvard Institute for Economic Research,May 1986. 8.Opposition to the League was indeed led by a prominent nationalist Massachusetts senator whose adamant insistence on protecting manufactured goods while allowing the free import of inputs was ably captured by"'Mr.Dooley,who noted that"Hinnery Cabin Lodge pleaded f'r freedom f'r th'skins iv cows"in ways that"wud melt th'heart iv th'coldest mannyfacthrer iv button shoes."Cited in John A.Garraty,Henry Cabot Lodge (New York:Knopf,1953),p.268; the book contains ample,and somewhat weightier,evidence of Lodge's economic nationalism.Sectoral conflict 67 Sectors with major overseas investment interests would be expected to have a different foreign economic and political outlook than sectors with little or no international production or sales. Internationally oriented banks and corporations would be generally favorable to freer trade, the former to allow debtors to earn foreign exchange and the latter both because intra-firm trade was important to them and because they tended to fear retaliation. Internationally oriented sectors could also be expected to support an exten￾sion of American diplomatic commitments abroad, both specifically to safe￾guard their investments and more generally to provide an international environment conducive to foreign economic growth. Those sectors that sold but did not invest abroad would be sympathetic to American attempts to stabilize foreign markets, but might oppose international initiatives that rein￾forced competing producers overseas. Economic sectors with few foreign assets or sales could be anticipated to support protectionist policies in their industries, because they were not importing from overseas subsidiaries, tended to be less competitive, and had few worries about retaliation. Such sectors would be unsupportive of major American international involvement that might strengthen real or potential competitors of U.S. industry. Two broad blocs on foreign economic policy did indeed emerge after World War I, and their preferences were more or less as might have been predicted. One group of economic interests was "internationalist": it sup￾ported American entry into the League of Nations, U.S. financing of Euro￾pean reconstruction, commercial liberalization, and international monetary and financial cooperation. The other cluster of economic interests was the "isolationists": it opposed the League and American financing of Europe, called for renewed trade protection, and was indifferent or hostile to global financial and monetary accords.' The two sets of policy preferences were competing rather than complementary, and although there were some actors in a middle ground, the extreme unevenness of American overseas economic expansion meant that preferences tended to harden in their opposition. The central dilemma of U.S. foreign economic policy for fifteen years after World War I was the great economic strength of two opposing sets of economic and political actors, neither of which was powerful enough to vanquish the other. Among the consequences of interest to the analyst of international relations is that the state did not undertake to impose a foreign policy derived from America's international position upon recalcitrant do￾mestic actors; instead, the central state apparatus found itself torn between Political Economy of the Smoot-Hawley Tariff," Discussion Paper No. 1244, Harvard Institute for Economic Research, May 1986. 8. Opposition to the League was indeed led by a prominent nationalist Massachusetts senator whose adamant insistence on protecting manufactured goods while allowing the free import of inputs was ably captured by "Mr. Dooley," who noted that "Hinnery Cabin Lodge pleaded f'r freedom f'r th' skins iv cows" in ways that "wud melt th' heart iv th' coldest mannyfacthrer iv button shoes." Cited in John A. Garraty, Henry Cabot Lodge (New York: Knopf, 1953), p. 268; the book contains ample, and somewhat weightier, evidence of Lodge's economic nationalism