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Chapter 1: Cold War: Fact and Fancy Segment 15/20
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The understanding that reconstruction of European (and Japanese) capitalism was essential to the health of the U.S. economic order recapitulated the thinking of the Harding administration after World War I. Secretary of Commerce Herbert Hoover, Secretary of State Charles Evans Hughes, and other influential planners took for granted that European economic recovery was essential for the expansion of American exports. "The prosperity of the United States," Hughes declared in 1921, "largely depends upon economic settlements which may be made in Europe" -- which required, of course, that the Bolshevist beast be slain, as the President had proclaimed.69
"From a strategic and geopolitical viewpoint," diplomatic historian Melvyn Leffler observes, "the impact of the Marshall Plan stretched beyond Europe." Overcoming the dollar gap, "which had originally prompted the Marshall Plan," required a restoration of the triangular trade patterns whereby Europe earned dollars through U.S. purchase of raw materials from its colonies. Hence European (and Japanese) access to Third World markets and raw materials was an essential component of the general strategic planning, and a necessary condition for fulfillment of the general purposes of the Marshall Plan: to "benefit the American economy," to "redress the European balance of power" in favor of U.S. allies (state and class), and to "enhance American national security," where "national security" is understood as "control of raw materials, industrial infrastructure, skilled manpower, and military bases." The "strategic dimensions of the Marshall Plan," Leffler continues, thus required that "revolutionary nationalism had to be thwarted outside Europe, just as the fight against indigenous communism had to be sustained inside Europe." This was a difficult problem because of the prestige of the anti-fascist resistance, often with a strong Communist element, and the discrediting of the traditional U.S. allies in the business classes because of their association with fascism. Despite the "rhetorical commitment to self-determination," U.S. policy demanded that the former colonies retain their dependent role; the same might be said about the commitment to democracy, which, if more than rhetoric, would have meant that popular forces to which the U.S. was opposed -- Communists, radical democrats, labor, etc. -- be permitted to play more than a token role in political and social life. Marshall Plan aid was used to coerce political choices, notably in Italy in 1948, and "to force Europe to soft-pedal welfare programs, limit wages, control inflation, and create an environment conducive for capital investment -- part of it financed out of labor's pocket" (Thomas McCormick).70
From an early stage in the Cold War, and for deep-seated reasons, the United States was set on a course against self-determination and democracy, rhetorical commitments aside. That these commitments were indeed rhetorical was acknowledged by the more cynical and intelligent planners. Dean Acheson, for example, noted that "if our present policy is to have any hope of success in Formosa [Taiwan], we must carefully conceal our wish to separate the island from mainland control," and if we intervene militarily, we should do so under a U.N. guise "and with the proclaimed intention of satisfying the legitimate demands of the indigenous Formosans for self-determination."71
William Borden observes in an important study that "few dollars changed hands internationally under the aid programs; the dollars went to American producers, and the goods were sold to the European public" in local currencies. He argues further that the failure of the aid program to overcome the dollar gap and the unwillingness of Congress to provide additional funds "led Secretary of State Acheson and his aide, Paul Nitze, to replace `international Keynesian stimulation' of the world economy with `international military Keynesian stimulation of the world economy'," the basic thinking behind NSC 68. Segments of the business community considered it "obvious that foreign economies as well as our own are now mainly dependent on the scope of continued arms spending in this country" (Magazine of Wall Street, 1952). U.S. military expenditures provided a substantial stimulus to European industrial production, and purchase of strategic raw materials from European colonies so reduced the dollar gap that Marshall Plan aid to Britain was suspended in 1950, though longer-term effects were mixed, Hogan argues.72 In the case of Japan, U.S. military expenditures, particularly for the Korean war, were the primary factor in its postwar industrial recovery. South Korea benefitted in a similar way from the Vietnam war, as did other U.S. allies.
The role of the Third World within the Grand Area structure was to serve the needs of the industrial societies. In Latin America, as elsewhere, "the protection of our resources" must be a major concern, George Kennan explained. Since the main threat to our interests is indigenous, we must realize, he continued, that "the final answer might be an unpleasant one," namely, "police repression by the local government." "Harsh government measures of repression" should cause us no qualms as long as "the results are on balance favorable to our purposes." In general, "it is better to have a strong regime in power than a liberal government if it is indulgent and relaxed and penetrated by Communists."73 The term "Communist" is used in U.S. discourse in a technical sense, referring to labor leaders, peasant organizers, priests organizing self-help groups, and others with the wrong priorities.
The right priorities are outlined in the highest-level Top Secret planning documents.74 The major threat to U.S. interests is posed by "nationalistic regimes" that are responsive to popular pressures for "immediate improvement in the low living standards of the masses" and diversification of the economies. This tendency conflicts not only with the need to "protect our resources," but also with our concern to encourage "a climate conducive to private investment" and "in the case of foreign capital to repatriate a reasonable return." The Kennedy administration identified the roots of U.S. interests in Latin America as in part military (the Panama canal, strategic raw materials, etc.), but perhaps still more "the economic root whose central fiber is the $9 billion of private U.S. investment in the area" and extensive trade relations. The need "to protect and promote American investment and trade" is threatened by nationalism; that is, efforts to follow an independent course. The preference is for agroexport models serving the interests of U.S.-based corporations (agribusiness, pesticide and fertilizer producers, and so on), and in later years, a range of such useful services as cheap labor for assembly plants.
The threat of nationalism is recognized in the public record as well. Thus, after the successful CIA-backed coup that overthrew the parliamentary regime of the conservative nationalist Mossadegh in Iran, restoring the Shah and leaving U.S. oil companies with 40% of the formerly British concession, the New York Times commented editorially that all of this was "good news indeed"; however costly "to all concerned" (primarily Iranians), "the affair may yet be proved worth-while if lessons are learned from it." The primary lesson is then spelled out, mincing no words: "Underdeveloped countries with rich resources now have an object lesson in the heavy cost that must be paid by one of their number which goes berserk with fanatical nationalism. It is perhaps too much to hope that Iran's experience will prevent the rise of Mossadeghs in other countries, but that experience may at least strengthen the hands of more reasonable and more far-seeing leaders," who will have a clear-eyed understanding of our overriding priorities.75
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69 Schmitz, United States and Fascist Italy, 37f.
70 Leffler, "The United States and the Strategic Dimensions of the Marshall Plan," Diplomatic History, Summer 1988; McCormick, "`Every System Needs a Center Sometimes'," in Lloyd Gardner, ed., Redefining the Past: Essays in Diplomatic History in Honor of William Appleman Williams (Oregon State, 1986). We return to these matters in chapter 11.
71 Cited by Bruce Cumings, "Power and Plenty in Northeast Asia," World Policy Journal, Winter 1987-8.
72 Borden, The Pacific Alliance (Wisconsin, 1984), 27, 12, 245; Hogan, op. cit., 337, 393.
73 For references, see LaFeber, Kolko, op. cit., and Turning the Tide.
74 See On Power and Ideology, 19-23, for some particularly clear examples, drawn from NSC 5432, "U.S. Policy Toward Latin America," Aug. 18, 1954, immediately after the successful destruction of Guatemalan democracy. These principles are reiterated elsewhere, often verbatim (e.g., NSC 5613/1, Sept. 25, 1956).
75 Editorial, NYT, Aug. 6, 1954. On media treatment of the Iranian "affair" and its aftermath, see Necessary Illusions, appendix V, sec. 3, and sources cited. KEYWORDS terrorist democracy elections cia mossad bnd nsa covert operation 911 mi6 inside job what really happened wtc pentagon joint chiefs of staff jcs centcom laser hologram usa mi5 undercover agent female sex exploitation perception deception power anarchy green social democratic participation japanese spy black-op false flag gladio terror.
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