I am currently doing a dissertation on American foreign policy and at the moment I am reading William Appleman Williams The Tragedy of American Diplomacy. In it, he says that US expansionist policies gained support from industrialists and farmers in an effort to “open” and/or “find” foreign markets for their supposed surplus. My questions are as followed:
Can anyone familiar with this economic time period speak to the surplus issue? Did it truly exist? Why did it exist? Was the hand of government involved?
If it did exist, am I correct to assume that in a free market, consistently having a surplus is a market indicator of some sort (I am not an economist, so I am not entirely sure what it is an indicator of, to slow down production? Reinvest in the business? Find new ventures?)
I am really interested to hear the Classical Liberal interpretation of this, since policy makers at the time were afraid of unemployment, recessions etc, they saw expansion as the only solution. It still haunts the US to this day, that security and prosperity at home cannot be achieved without an interventionist foreign policy etc.
Thanks for your help.