Using archival materials dating from the early 1940s before most conventional analyses of the cold war begin, this article reappraises current views on Anglo-American cooperation in the Middle East. It proposes that antagonism between American ‘new deal internationalism’ and British ‘guided development’ created a dysfunctional rather than a ‘special’ relationship. Two different versions of western overseas capitalism were competing for primacy, with the ‘free world’ central to American projections being predicated on opening up rather than sustaining Britain's political and economic ascendancy in the region. Although the British were left with prime military responsibilities after 1947, these implied no civil-sector prerogatives; instead, American policy advanced new core–periphery development principles which assumed unrestricted access to indigenous client-allies. In subsequent crises, this determined American disassociation from Britain's Middle Eastern interests in all but progressively reduced form, notwithstanding spasmodic doubts during future moments of cold war strategic ‘overstretch’ elsewhere in the world.