This article is adapted from a research paper submitted to the SAIS Review of International Affairs
Secretary of State George Marshall made history during his 1947 Harvard commencement speech by announcing his namesake plan for Europe’s postwar reconstruction. Central to this effort was the U.S. ambition to create a rules-based order based on multilateral frameworks.
The Marshall Plan was the U.S.’s foundational big bet —a high-magnitude, low-frequency action designed to shape world order. It proved to be a resounding success and helped establish today’s international order.
Despite this initial success, each subsequent American big bet has yielded diminishing returns. Today, the rules-based order fades as America loses its will to defend it.
There are two reasons for these diminishing returns. The first is structural opportunity, or what is available to be won. The postwar vacuum that made large returns available has been filled, leaving only lower-margin actions. The second is Institutional grounding, or how much the bet aligns with the order. Over time, the United States has become more likely to bypass rules that once legitimized its leadership. These reasons are self-reinforcing. Diminishing structural opportunities encourage institutional abandonment, and abandonment further diminishes structural opportunities.
Three cases illustrate these dynamics: the Marshall Plan, the 2003 invasion of Iraq, and the response to Russia’s invasion of Ukraine.
Case One: The Marshall Plan
As Western Europe lay in ruins in the years after World War II, communist parties began to gain ground in places like France and Italy. The structural opportunity for a big bet like the Marshall Plan was immense. Instead of focusing solely on construction funding, the Truman administration also designed the Marshall Plan to encourage multilateral action among Europeans. Inspired by the American experience of federalism and economic integration, planners sought to create an integrated Europe capable of containing historical rivalries, especially between France and Germany, while generating sufficient stability to withstand Soviet pressure.
The returns exceeded expectations. The Marshall Plan increased Europe’s aggregate gross national product by 32 percent, with agricultural output rising 11 percent and industrial output 40 percent. Beyond the economic recovery, the institutional effects proved equally durable–perhaps more so. The OEEC established patterns of cooperation that culminated in the European Coal and Steel Community, predecessor to today’s European Union. The United States had bet on an integrated Western Europe, and integration delivered returns that far exceeded the initial investment. This is what positive returns look like: not merely achieving objectives but altering the structural conditions for subsequent action.
Case Two: Iraq
The September 11 attacks created an environment in which restraint felt inadequate. The structural opportunity appeared to be one in which the rules-based order faced no state-based threat, but rather deviants with devastating weaponry. The Bush Administration asserted that “The gravest danger our Nation faces lies at the crossroads of radicalism and technology.”
Intelligence assessments, since discredited, claimed that Iraq possessed weapons of mass destruction. Fixated on this threat, the administration began treating its rules-based order as an obstacle. It preferred preemptive strikes against rogue states even without evidence of an imminent attack. Washington proceeded to invade Iraq in 2003, without UN Security Council authorization.
While the Marshall Plan generated legitimacy, Iraq squandered it. The returns were negative and compounding. Military victory yielded political chaos, then regional destabilization, then ISIS. 4,616 US troops and contractors were killed, along with an estimated 210,993 Iraqi civilians. Beyond the battlefield, the war corroded belief in the order it claimed to defend. China, observing American eagerness for regime change in authoritarian states, increased its military budget fivefold. Russia expert analyst Fyodor Lukyanov observed that Iraq taught Vladimir Putin that “strong nations do not have to contemplate international law.”
Case Three: Response to Russian Aggression
Russia’s 2022 invasion of Ukraine was a crucial opportunity for the US to defend its hegemony by way of the big bet. The Biden administration acted immediately, consolidating NATO allies and coordinating with the European Union to arm Ukrainian forces while unleashing a stifling sanctions package against Moscow.
This initial response embodied the Marshall template—multilateral coordination, burden-sharing, and consolidated power on a consensus of rules adherence. Germany announced a historic €100 billion defense commitment. Finland and Sweden abandoned decades of neutrality to join NATO. An invasion designed to fracture the Western alliance instead consolidated it.
But what took years to build was dismantled in months. The Trump administration paused security assistance, initiated bilateral negotiations with Putin, and declared NATO membership for Ukraine “unrealistic”—all outside multilateral frameworks. At the 2025 Munich Security Conference, Vice President Vance challenged allies directly while European leaders warned of transatlantic “decoupling.”
The result? Allied hedging accelerated. European movements toward security autonomy emerged not as a rejection of the American alliance but as insurance against its inconsistency. Ukraine demonstrates the fragility of institutional grounding: the United States is only self-bound if it chooses to be bound.
What This Means
These cases trace a clear arc, where diminishing structural opportunities combined with eroding institutional grounding produce declining returns. The Marshall Plan built order out of a vacuum. Iraq created chaos where stability existed. Ukraine began as a coordinated defense and devolved into unilateral improvisation.
The mechanism is self-reinforcing. As returns diminish, the temptation to bypass institutions grows. Each bypass erodes legitimacy, reduces allied cooperation, and further constrains opportunity. The United States isn’t merely a victim of changing conditions—it actively delegitimizes the order it built.
Three constraints are compounding now: fiscal strain limiting sustained commitment, political polarization preventing cross-administration continuity, and allied distrust making cooperation difficult. Allies don’t doubt American capability—they doubt American willingness to collaborate.
The liberal international order as constructed under American hegemony isn’t returning. But the choice between managed multipolarity and catastrophic competition remains. Unconstrained multipolarity produces systemic war; the Concert of Europe’s collapse produced the First World War, after all.
The Path Forward
The question is no longer whether American hegemony can be preserved but whether the transition can be managed without catastrophe. For the United States, this means smaller bets, maximally grounded–selective engagement, coordinated multilaterally. Washington must recognize institutional constraints as infrastructure through which influence becomes durable, or else retrench from these forums as perceived obstacles.
For allies, the task is preserving institutional architecture even without consistent American leadership. European strategic autonomy and NATO burden-sharing represent insurance that is essential against American inconsistency. Measured leadership would not view this as abandonment.
The Marshall Plan template remains the most effective instrument of durable influence. Abandoning it only squanders American power–rather than unleashing it as so proclaimed by rash unilateralism. The United States retains the capacity to place big bets. What it lacks is the institutional credibility to ensure positive returns. That credibility can be rebuilt, but only through demonstrated commitment to multilateral frameworks. The choice remains ours.