| Summary: | In response to the emerging cold war, why did the United States stress industrial expansion in Western Europe but focus on primary production alongside policing operations in the non-western world? Examining US postwar occupation in Germany and Korea from a world-systems perspective, this article argues that a given countrys standing in the capitalist economy generally shapes American foreign policy toward that particular country in the early cold war years. A paladin of system-wide prosperity and peace, the United States sought to restore the international division of labor after World War II. Reactions varied across the system, however, because of distinct socio-economic developments. The presence of capital-intensive export-dependent industry afforded western Germany flexible labor-management relations. Politics was overall stable there, and America dispensed with heavy-handed intervention. In southern Korea, labor-exploitive tenancy farming rendered interclass compromise virtually impossible. As intransigent peasants threatened the market economy, the United States used force to keep the ally in the system.
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