The New International Economic Order (NIEO) was a failure as a political program. Its proposals called for a sweeping transformation of the global economy, but most of them never came close to being implemented. In fact, during the following decades, the world economy evolved not toward the NIEO vision of multilateral oversight and income redistribution but in the opposite direction, toward a more purely marketbased approach that has variously been called globalization, neoliberalism, market fundamentalism, or the “Washington Consensus.” Why, then, study the NIEO? Scholars today might be forgiven for dismissing the NIEO as nothing more than empty rhetoric on the part of its advocates, or as the product of their naiveté and misunderstanding of basic economic laws and the realities of power in world politics.

This essay argues that the NIEO is remarkable precisely because it was so different from the path actually taken by the global economy after the 1970s. The NIEO seems hopelessly unrealistic to many observers looking back today, and yet it was taken quite seriously at the time. Even its most important critics, including U.S. policymakers like Henry Kissinger, did not dismiss the NIEO out of hand. They recognized the wide appeal of the NIEO, and they feared that if the United States placed itself in open opposition, it would find itself isolated and without allies at the UN. Rather than rejecting the NIEO outright, Kissinger and other U.S. officials expressed sympathy with its general aspirations and sought to find some common ground with the NIEO’s advocates, while also working to divide the Third World coalition and to block the NIEO’s most threatening provisions. The fact that the leaders of both developed and developing nations seriously debated a proposal so at odds with the laws of the market as they are generally understood today indicates just how new the consensus around those economic laws really is, and just how much has changed in the last four decades.