The Monroe Doctrine: From 1823 to the Trump Era – An Economic Analysis of American Hegemonic Politics

Hegemony goal: Leading influence without formal rule – Other states remain formally independent but orient themselves towards the hegemon

A hegemon governs through influence, not direct rule.

In 1823, US President James Monroe proclaimed a doctrine that officially promised the protection of the young Latin American republics from the old European monarchies. But behind the noble rhetoric of "independence" and the formula "America for the Americans" lay, from the very beginning, a clear, hard-nosed calculation: securing their own economic dominance.

What was once conceived as a defensive bulwark against the Holy Alliance in Europe has, over two centuries, transformed into an offensive instrument of geopolitical power projection. From the territorial expansion of the 19th century through the "dollar diplomacy" and CIA interventions of the Cold War to the protectionist "America First" policies of the Trump era, the Monroe Doctrine has consistently served the same purpose: legitimizing access to raw materials, control of strategic trade routes, and political dominance over the Western Hemisphere.

This in-depth analysis looks behind the diplomatic scenes and deconstructs the myth of America as a "protector." It reveals how economic constraints dictate Washington's foreign policy, why the US now fears Chinese competition in Latin America, and why the long-term costs of this hegemony will burden not only the Global South but also the US itself. Discover how a 200-year-old principle still shapes the world order today—and why it may be doomed to failure in a multipolar world.

Origins and historical development: The birth of an imperial principle

The Monroe Doctrine was formulated on December 2, 1823, when US President James Monroe delivered his annual State of the Union address to Congress. In this historic speech, he laid out the principles of a foreign policy that would shape American continental policy for the next two centuries. However, the doctrine was not developed by Monroe himself, but was largely conceived by John Quincy Adams, then Secretary of State. Adams recognized early on that the United States needed a geopolitical position that would both keep European powers out of the Western Hemisphere and legitimize its own expansionist policies.

The historical context of its emergence was complex. After the victory over Napoleon, the major European powers had formed the Holy Alliance, a coalition of the victorious absolutist monarchies led by Austria, Prussia, and Russia. This alliance aimed to suppress liberal and revolutionary movements in Europe and restore the monarchical order. Washington was deeply concerned that these powers might also intervene in Latin America, where the wars of independence against Spain had just ended successfully. The newly formed republican states in South and Central America were seen as potential targets for a restoration of the monarchical order through European intervention.

The doctrine itself was summarized in several central principles. First, the United States declared that it would consider any further colonization of the American continent by European powers as unwelcome interference. Second, the United States promised not to interfere in the internal affairs of Europe or to attack existing European colonies in the Americas. Third, the United States asserted that the Western Hemisphere constituted a separate sphere, free from European influence. While the phrase "America for the Americans" was coined later, it succinctly captured the essence of the doctrine.

The economic motives behind this geopolitical positioning were manifold. Firstly, the US sought new trade opportunities with the newly independent Latin American states. Trade with the former Spanish colonies had been relatively small before their independence, accounting for less than two percent of total American trade. Nevertheless, American businesspeople and politicians hoped this would change after independence. Secondly, territorial expansion and securing access to raw materials played a crucial role. The US was expanding westward and needed clear borders and spheres of influence to compete with other major powers such as Russia and Great Britain. The northwestern regions of America were considered an important source of furs, fishing rights, and a trade route to Asia.

The doctrine remained largely ineffective in the first decades after its proclamation. The United States lacked the military power to enforce its claims. When the British invaded the Falkland Islands in 1833, the United States was powerless to intervene. It was not until 1845, under President James Polk, that the doctrine was actively used to advance US expansionist goals. Polk invoked the Monroe Doctrine to justify the annexation of Texas and Oregon and to counter perceived British ambitions in California, which at the time was still part of Mexico. The ensuing Mexican-American War resulted in significant US territorial expansion, including territories such as New Mexico, California, Utah, Nevada, Arizona, and parts of Wyoming.

Economic motives and geopolitical constraints: The invisible hand behind the doctrine

The economic foundations of the Monroe Doctrine were more complex than official rhetoric suggested. While the doctrine was presented as a defense of republican principles and Latin America's independence from European influence, the underlying interests were largely economic. The United States saw itself as an emerging economic power that needed to protect and expand its sphere of influence in order to compete in the long term with established European colonial powers.

A key aspect was the search for new markets. Industrialization in the northern states was progressing rapidly, and the American economy needed both raw materials and markets for its products. Latin America seemed ideally suited for this. The region offered rich resources such as cobber, silver, tin, coffee, sugar, and later, oil. However, American companies and investors found themselves competing with British, French, and German interests, which already maintained established economic relationships. The Monroe Doctrine served as a political instrument to shift this competition in favor of American companies.

Spheres of influence in the west and southwest of the North American continent were another economic driver. The United States systematically expanded westward, and control of strategic ports, trade routes, and sources of raw materials was crucial. The negotiations for the Transcontinental Treaty between John Quincy Adams and the Spanish envoy Luis de Onís in 1819 not only established the border between the US and Spanish America but also implicitly defined spheres of influence. The US thus secured access to the Pacific Ocean and laid the foundation for its later role as a Pacific power.

Britain's role in the creation of the doctrine was ambivalent. In August 1823, Great Britain offered the United States a joint declaration to prevent European powers from interfering in Latin America. The British had their own economic interests in the region and wanted to protect access to Latin American markets. However, John Quincy Adams rejected a British-American alliance and advocated for a unilateral American declaration. This decision was strategically astute, as it allowed the United States to claim leadership in the Western Hemisphere without being dependent on the British.

Economic interests became increasingly dominant throughout the 19th century. The United States transformed from a defensive to an expansionist power. The original formulation of the doctrine, which still aimed at repelling European interventions, was gradually broadened. In 1848 and 1870, the principle of non-transfer was added, prohibiting the transfer of colonial territories to other powers. This expansion served to protect American economic interests and prevented European powers from selling or transferring their colonies to other European nations, which would have weakened the US position.

The economic crises of the late 19th century contributed to the intensification of the doctrine. The Panic of 1893 and the subsequent economic recession led to a search for solutions through expansion. The United States sought new markets for its surplus production and investment opportunities for its capital. Latin America presented itself as a viable option, but the European powers already held strong economic positions in the region. The Monroe Doctrine was now used to justify a more active, aggressive policy.

Practical application in the 19th and 20th centuries: From theory to military reality

The practical application of the Monroe Doctrine evolved during the 19th century from a purely rhetorical position to an active instrument of US foreign policy. The first decades after 1823 were characterized by a certain impotence on the part of the United States. The American navy was too weak to enforce its own claims, and European powers largely ignored the doctrine. The British occupation of the Falkland Islands in 1833 vividly demonstrated that without military strength, the doctrine was merely a paper tiger.

It was only under President James Polk in 1845 that the Monroe Doctrine was first actively used for expansionist purposes. Polk used the Monroe Doctrine to justify the annexation of Texas and Oregon. He argued that the United States had the right to extend its sphere of influence to its natural borders and to repel European interference. The Mexican-American War, which resulted from this policy, was a direct consequence of this new interpretation of the doctrine. The United States not only conquered Texas but also New Mexico, California, and other territories that later became the states of Utah, Nevada, Arizona, and parts of Wyoming.

The second half of the 19th century brought further applications. In 1895, the United States used the doctrine to pressure Great Britain in a border dispute between Venezuela and British Guiana. Invoking the Monroe Doctrine, the American government forced London to negotiate, asserting that the US was the hegemon of the continent and would not tolerate interference in its sphere of influence. This was a turning point, as Great Britain, as the most powerful world power, yielded and recognized the American position.

The most significant development came in 1904 with the Roosevelt Corollary. President Theodore Roosevelt declared that the United States would not stand idly by if South American states exhibited chronic disorder and mismanagement. To avoid giving foreign powers a pretext for interference, the United States was compelled to assume the role of international policeman. This declaration transformed the Monroe Doctrine from a defensive to an offensive doctrine. The United States now claimed the right to unilaterally intervene in the internal affairs of its southern neighbors.

The practical consequences were far-reaching. The United States repeatedly intervened in the Caribbean and Central America. American troops were stationed in Cuba, Nicaragua, Haiti, and the Dominican Republic, where they installed puppet governments and controlled the economic policies of these countries. The Dominican Republic was placed under direct American financial control in 1905 after several European states intervened with warships to collect debts. The Monroe Doctrine served as justification for these interventions, which often lasted for decades and severely restricted the sovereignty of the affected states.

World War I marked another turning point in the application of the Monroe Doctrine. President Woodrow Wilson used the doctrine to position the United States as the moral leader in the Western Hemisphere. The Fourteen Points, which Wilson presented in 1918, implicitly contained the Monroe Doctrine as the foundation for a new world order. The United States no longer intervened only in Latin America but claimed a global leadership role. The doctrine became part of a larger vision in which the United States acted as the guarantor of democracy and free trade.

The interwar period saw an increased application of the doctrine in the Caribbean and Central America. The United States intervened in Nicaragua, Haiti, and the Dominican Republic to prevent political instability and the threat of European interference. However, these interventions primarily served to protect American economic interests, particularly those of the United Fruit Company and other American corporations that controlled vast tracts of land and infrastructure in the region. The doctrine became a pretext for a policy often referred to as dollar diplomacy, in which economic interests and political control went hand in hand.

World War II and the Cold War transformed the Monroe Doctrine once again. The Soviet Union was now perceived as the greatest threat to the Western Hemisphere. The doctrine served as justification for a comprehensive security architecture in Latin America. The founding of the Organization of American States (OAS) in 1948 was an attempt to unite the region under American leadership and prevent communist influence. The US supported military regimes in Latin America as long as they were anti-communist and protected American interests.

The Cuban Missile Crisis of 1962 was the culmination of this policy. When the Soviet Union deployed nuclear missiles to Cuba, the United States invoked the Monroe Doctrine to legitimize its blockade and the threat of military force. President John F. Kennedy argued that the deployment of Soviet nuclear missiles in the Western Hemisphere constituted an unacceptable threat and that, as the continent's leading power, the United States had the right and the duty to prevent it. The crisis ended with the withdrawal of the Soviet missiles, but the doctrine was now firmly entrenched in the United States' anti-communist security policy.

The 1970s and 1980s brought further interventions. In Chile, the US supported the 1973 military coup against the democratically elected president Salvador Allende because his socialist policies were considered a threat to American economic interests. In Nicaragua, the US fought against the Sandinista government, and in El Salvador, it supported the government against leftist rebels. This doctrine served as justification for these interventions, which often resulted in massive human rights violations and undermined democracy in the region.

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Modern interpretations and the Trump era: a return to unilateral protectionism

The modern interpretation of the Monroe Doctrine under President Donald Trump marks a return to a unilateral and protectionist understanding of American foreign policy. Trump explicitly revived the doctrine and used it as a framework for his policies toward Latin America and the world. In several speeches, he emphasized that the US would assert its interests in the Western Hemisphere and would not tolerate interference from other powers, particularly China. This rhetoric is not merely a historical reference but part of a comprehensive strategy that is redefining the global role of the US.

The economic aspects of the modern Monroe Doctrine are clear. Trump has repeatedly pointed out that China has gained too much influence in Latin America and that the US must reverse this. China's investments in infrastructure, mining, and agriculture in the region are perceived as a threat to American economic interests. The US accuses China of making Latin American countries dependent through debt-trap diplomacy and unfair trade practices. The doctrine serves as justification for trade restrictions, tariffs, and political pressure on Latin American governments that maintain close ties with China.

A central element of its modern application is migration policy. Trump linked the Monroe Doctrine to the issue of illegal immigration from Latin America. He argued that the US had the right to compel Central American governments to stop migration and that, if necessary, the US could intervene militarily or impose massive economic sanctions. This policy leads to a new form of dependency, in which Latin American countries are forced to prioritize American migration interests over their own economic and social needs.

Relations with Europe have also changed. The Trump administration devalued the transatlantic alliance and emphasized that the US would pursue its own interests, independent of European allies. This stance is consistent with the Monroe Doctrine, which originally aimed to keep Europe separate from America. Trump repeatedly accused Europe of not contributing enough to its own defense and questioned NATO. This policy leads to a redefinition of the Western Hemisphere, in which Europe is excluded and the US emerges as an isolated hegemon.

The trade policy of the Trump era reflects the Monroe Doctrine. The US has favored bilateral trade agreements and withdrawn from multilateral agreements such as the Trans-Pacific Partnership (TPP). The doctrine serves as justification for protectionist measures intended to safeguard American industries and secure access to Latin American markets. The US negotiates from a position of strength and threatens economic consequences if its demands are not met.

Economic analysis and systemic critique: The hidden costs of hegemony

An economic analysis of the Monroe Doctrine shows that the long-term costs of American hegemony in Latin America outweigh the short-term benefits. The doctrine has led to a structure in which Latin American economies are dependent on the US and have been unable to pursue independent industrial development. The US has treated the region as a source of raw materials and a market for American products, but the development of local industries has been systematically hindered.

The trade structure reveals significant imbalances. The US exports high-value manufactured goods such as machinery, electronics, and services to the region, while importing raw materials and agricultural products. This trade relationship is asymmetrical and results in persistent balance of payments imbalances favoring the US. Latin American countries are forced to peg their currencies to the dollar or take on dollar-denominated debt, thus binding them to American monetary policy.

Investment flows are also one-sided. American companies invest in extractive industries, agriculture, and services, but less in the development of local technology or infrastructure. Profits largely flow back to the US, while the environmental costs and social consequences remain in the host countries. This structure leads to the peripheralization of Latin American economies, which are unable to rise to the level of developed industrial nations.

The debt crisis of the 1980s is a direct result of this structure. Latin American countries had taken on massive dollar-denominated debt to finance their development. When the US Federal Reserve drastically raised interest rates in 1979, this debt became unpayable. The US used the crisis to further open up the region and implement structural adjustment programs that gave American companies access to privatizable state-owned enterprises. The Monroe Doctrine served as justification for this intervention in the economic policies of sovereign states.

The social costs are enormous. American support for military regimes in Latin America has cost thousands of lives and set back democratic development for decades. The economic inequalities exacerbated by American hegemony lead to widespread poverty, migration, and social tensions. The US profits from cheap labor and raw materials, while the people of Latin America suffer the consequences.

The modern application of the doctrine under Trump exacerbates these problems. The focus on migration and trade deficits ignores the structural causes of economic problems in Latin America. Threats of economic sanctions and military intervention create uncertainty and discourage long-term investment. The demand for isolationism leads to a deterioration of trade conditions for the region and increases economic dependence.

The doctrine has also damaged the American economy itself. The focus on military and political control has led to a neglect of economic development in the region. Instead of creating stable, prosperous trading partners, the US has fostered instability and poverty, resulting in migration and security problems. The long-term costs of border security, military operations, and development aid far outweigh the short-term gains from access to raw materials.

The future of hegemony in a multipolar world

The Monroe Doctrine has shaped American foreign policy for two centuries and continues to serve as justification for unilateral action and military interventions. From its inception, the doctrine has been an instrument of economic and geopolitical control, operating under the guise of defending freedom and independence. Historical development shows that the United States has invoked the doctrine most strongly whenever its economic interests appeared threatened.

The modern challenges are complex. China's role in Latin America represents a new form of competition, one that is economic and less military. China is investing in infrastructure and offering loans without political strings attached. This strategy is more successful than the American mix of political pressure and military threats. The US must recognize that the Monroe Doctrine, in its historical form, no longer works. Latin American countries are sovereign states seeking multiple partnerships and no longer wishing to be subject to American control.

The economic logic of the doctrine is also outdated. In a globalized world, bilateral trade relations are less important than regional cooperation and integration. The US benefits more from stable, prosperous neighbors than from dependent, unstable satellite states. A new strategy must be based on mutual benefit, respect for sovereignty, and genuine economic development. The current rhetoric of the Trump era, which relies on threats and isolationism, is counterproductive and ultimately harms American interests.

Transatlantic relations are another important factor. The original Monroe Doctrine aimed to keep Europe separate from America. The modern version threatens to divide Europe and the US, weakening both. In a world with rising powers like China and Russia, a strong transatlantic alliance is more important than ever. A return to unilateral policies weakens the Western position overall and leads to a multipolar world in which the US is no longer the dominant power.

The future of American hegemony depends on its ability to adapt. The Monroe Doctrine, as a unilateral instrument of control, is obsolete. A new vision of American leadership in the Western Hemisphere must be based on partnership, economic integration, and shared values. The challenges of the 21st century, such as climate change, migration, and global economic crises, require cooperative solutions, not unilateral threats.

The historical record of the Monroe Doctrine is mixed. While it propelled the US to continental superpower status and prevented European colonial powers from exerting influence in Latin America, the cost to the region was immense. The doctrine has led to an asymmetry in which the US reaps the benefits of trade and investment, while Latin America is left with instability, underdevelopment, and dependency. The modern version under Trump threatens to exacerbate these inequalities by relying on threats and coercion rather than development and cooperation.

The economic logic of the doctrine is no longer tenable in a globalized world. In the long run, the US benefits more from prosperous, stable neighbors than from dependent, impoverished satellite states. A new strategy would have to promote investment in infrastructure, education, and technology in Latin America, instead of solely focusing on access to raw materials. It would have to pursue fair trade agreements that strengthen both sides, rather than cementing asymmetrical relationships. It would have to address migration at its root cause by creating economic opportunities, rather than tightening borders and forcing governments to deter people.

The geopolitical landscape has fundamentally changed. China is present in Latin America, not through military threats, but through investment and trade. The US's European allies are dissatisfied with American unilateralism and are seeking their own paths. Russia is exploiting divisions in the West to strengthen its position. In this multipolar world, the Monroe Doctrine, in its historical form, cannot survive. The US must decide whether it wants to remain an isolated hegemon or assume a leading role in a cooperative system of the Western Hemisphere.

The transatlantic alliance is a central pillar of Western stability. The Monroe Doctrine, originally intended to divide Europe from America, must now be reversed. The US and Europe share common interests in promoting democracy, human rights, and economic development in Latin America. A joint strategy that combines American market power with European values ​​and development aid would be more successful than unilateral American actions. The current policies of the Trump administration, which view Europe as a competitor rather than a partner, weaken the Western position overall.

The future of American leadership in the Western Hemisphere depends on a willingness to move beyond the Monroe Doctrine. A new doctrine would have to be based on mutual respect, sovereignty, and shared interests. It would have to acknowledge the mistakes of the past and develop a vision for a shared future. The challenges of the 21st century require not imperial pretensions, but astute diplomacy, economic prudence, and genuine partnership. The Monroe Doctrine has served its purpose, but its time is over. It is time for a new era of American-Latin American relations based on equality and shared prosperity.

Konrad Wolfenstein

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