ULI358U-AMERICAN FOREIGN POLICY
Chapter 5: U.S. Global Policies During the Cold War
The Struggle for Post-War Supremacy
In 1944 at an idyllic New Hampshire resort, Britain and America established with the Bretton Woods conference three major goals: 1) make funds available for postwar reconstruction and development; 2) to control the currency chaos that follows wars by making funds contingent upon sound monetary practices; 3) reduce or eliminate trade barriers. From Bretton Woods came the World Bank and the IMF. The president of the World Bank has traditionally been American, the managing director for the IMF, European.
There was no immediate agreement on free trade. Preferential agreements between Britain and its commonwealth was the main obstacle. However, future rounds produced the General Agreement on Trade and Tariffs (GATT) in 1947 and finally the World Trade Organization (WTO) in 1995. While Britain and America shared a common vision of peace, negotiations at Bretton Woods also made clear that Britain was now a junior partner.
The Americans likewise needed to be adaptable in their response. Blustering would be taken as weakness, disunity with glee and any naïve hope that the “Russians have changed” or can be dealt with honestly, Soviet leadership would quickly exploit. Instead, Kennan advocated containment, “by the adroit and vigilant application of counter-force at a series of constantly shifting geographical and political points.” Ultimately, this was a test. America should have confidence in its way of life and letting it serve as an example was the best way to topple a rotted Soviet society. However, the United States should not be afraid of exploiting and exposing Soviet weakness, as they were surely doing to the West.
American Containment in Practice
When applied, the containment theory warped easily in the face of competing realities. It is true that many countries like Japan and South Korea thrived because of American intervention. They became compelling counterpoints to the narratives the Soviet bloc offered in a way Kennan’s X Article imagines. However, the desire to retain European allies while opposing their continued imperialism was a harsh reality that intruded on the theory. Moreover, the most fervent anti-communist leaders were also some of the least democratic. And visa-versa. These complications distorted what was originally such a noble vision.
Arthur Vandenberg, the Republican chair of the Senate Foreign Relations Committee and a former isolationist, advised Truman that Republicans would support him, but to get the support of the public, he needed to “scare the hell out of the American people” (Goldman, 1961: 59). This, the Truman Doctrine did. The speech implied that America was the unrivalled leader of the free world and with it came an obligation to support any government threatened by communism.
The Truman administration believed that communism spreads on economic misery; democracy, on a successful and prosperous foundation of capitalism.
The United States was so well supplied, it needed little from Europe. Faced with the very real fear that the communists would capitalize on Western European impoverishment to further their gains, Truman scrapped any last vestiges of the Morgenthau Plan and requested $17 billion in funds (with $12 billion ultimately allocated and spent, or 100 billion in today’s dollars). This came to be known as the Marshall Plan. Most funds went to the economic engines of Europe: Britain, France and West Germany. The Marshall Plan was a living demonstration of the economic might and success of the capitalist model. By 1950, Western Europe exceeded its pre-war production by 25 percent. The German question strained relations with the Soviets to their breaking point. Having suffered two attacks at the hands of Germany, Stalin demanded compensation through reparations, which would also serve to keep Germany weak. However, Truman believed that Europe could only recover if Germany recovered. The West refused Russia’s demands for German reparations from their current industrial production. This, together with the question of a common currency and parliamentary elections delineated the borders between East and West Germany ever more.
While America cast the Cold War as a struggle between democratic free nations and totalitarian communism, in reality, the choice was less clear. As in the case of Vietnam, democratic elections might lead to a communist government, which then may come under the sway of the Soviet Union, who could manipulate the levers of power towards permanent rule. On the other side, the leader who supports private property or American interests may also have authoritarian tendencies. Jean Kirkpatrick, President Ronald Reagan’s ambassador to the UN, argued there was a fundamental difference between authoritarian government (dictator on the right), and totalitarian (dictator on the left) -- authoritarian governments can eventually reform into democracies, totalitarian dictators cannot (the Kirkpatrick Doctrine). Moreover, authoritarian dictators have greater respect for private property and market forces (Kirkpatrick, 1983). America placed a greater importance on private property than free elections. Nowhere are these principles more clearly demonstrated than America’s policies towards Latin America.
It is important for the student of history to remember that when atomic weapons first appeared, they were considered another weapon in the arsenal, albeit very powerful. The destruction of entire cities did not make the weapon novel, as Americans had fire-bombed 67 Japanese cities in the last months of World War II. The March 10, 1945 firebombing of Tokyo killed 105,000 civilians – more than either Hiroshima or Nagasaki. Curtis LeMay, head of strategic bombings over Japan, once quipped that if America had lost the war, his office would have been
tried as war criminals (The Fog of War, 2003). Neither Truman or Eisenhower took the nuclear option off the table, and they made it known to the Soviets, Chinese and North Koreans. In fact, as part of Eisenhower’s New Look, he saw nuclear weapons as offering a “bigger bang for the buck” than conventional military, thereby easing expenditures.
McNamara’s second lesson was Rationality Will Not Save Us. Only at a 1992 meeting with Castro did McNamara learn the Soviets already had 162 warheads on the island. Shocked, McNamara had three questions for Castro: 1) Did you know the missiles were on the island? 2) If you did, would you have recommended their use? 3) If they were used, what would have happened to Cuba? Castro responded that yes, he knew they were there; and, not only would he have recommended their use, he did! As for Cuba, it would have been totally destroyed. Castro was rational. Khrushchev was rational. Kennedy and McNamara were rational. But McNamara said, “we lucked out.” As a result of the Cuban Missile Crisis, the Soviets and Americans came to the conclusion that nuclear war meant Mutually Assured Destruction (MAD); that is, nuclear weapons were no longer an option for warfare when both sides have the capacity to destroy the other in a counterstrike (The Fog of War, 2003).
The Middle East: Regional and Global Instability
The questions of Zionism (Jewish resettlement in Palestine) forced an intractable problem on first the Ottoman Empire, then the British, to which there were no good solutions. The UN partition in 1948 of Palestine into a Palestinian and Jewish state did not resolve the issue, but it did fundamentally change its character. Britain’s contradictory positions over the years underscores the difficulty of the issue. In the closing months of the First World War, Palestinian territory fell from the Ottoman hands to a British mandate. In 1917, the British government issued the Balfour Declaration, guaranteeing a national home for the Jewish people in Palestine. Following the 1936-37 Arab revolt, the British government acknowledge that the local Palestinian population should have been consulted.
The overthrow of the Egypt’s monarch in 1952 by a military officer, Gamal Abdel Nasser represented to the United States the unleashing of a force beyond their control: Nasserism. This was the first successful national movement and it represented a third way, neither monarchical nor communist. Nasser reveled in this independent role. He purchased weapons from the Soviets. He recognized the Peoples Republic of China. Eisenhower complained how Nasser played “East against West by blackmailing both.” When Eisenhower cut aid to Egypt’s Aswan High Dam in 1956, Nasser nationalized the Suez Canal. Britain conspired with France and Israel to take it back by military force. The Israelis invaded the Sinai Peninsula. Eisenhower was furious that he was not consulted and that this action would further inflame
nationalist sentiment. He, along with the Soviet Union, joined in the UN’s condemnation of the attack on Egypt and the operation withered. Nasser immediately became a hero to the Arab world--a strike at imperialism and Zionism.
Oil-supplying nations came together a decade earlier and formed OPEC (Organization of the Petroleum Exporting Countries) to combat what they felt were the artificially low prices set by the major Western petroleum companies, the so-called Seven Sisters. In the aftermath of Yom Kippur, OPEC targeted an oil embargo at countries who supported Israel in the war. Prices quadrupled in the final months of 1973. The Nixon Administration made it known that the embargo was harming American efforts in Vietnam, that no great power would be held hostage so it would secure the oil fields by force if necessary. Eventually, the Saudi king relented. However, the embargo had huge economic ramifications. The United States’ consumption of oil had skyrocketed over the years while their domestic production in Texas and Oklahoma already peaked. The cost of oil impacted the cost of everything, and the world moved towards a global recession as petrodollars shifted from the West to the Middle East (Yergin, 1991). While the economic fallout from the Arab-Israeli Wars continued through the 1970s, eventually Egypt and Israel came to a peace agreement, the Camp David Accords—brokered by President Jimmy Carter. In return for the Sinai Peninsula, Egypt agreed to recognize Israel’s right to exist, normalize relations and open the Suez Canal to Israeli shipping. While the Israeli’s prevailed in the Yom Kippur War, all parties realized the need for lasting peace.
After Vietnam
By 1972, the Nixon Doctrine tempered such high expectations with the need for compromise and negotiations, as well as relying on other countries to share the burden. America was to support, not replace, local fighters. However, Nixon and Kissinger’s triangulations reeked of amoral, self-interested maneuvering. Watergate cemented the image of an administration without a moral compass. In 1975, President Gerald Ford secured from the Soviet Union an agreement to respect human rights in return for official recognition of Eastern European and Soviet boundaries. The Helsinki Accords, in fact turned out to be a surprisingly effective cudgel that later presidents could use against the Soviet government. When Carter came to power, he promised to make the United States the moral beacon that it had once been, but also to continue the policy of détente. Carter suspended military aid to Chile, El Salvador, Nicaragua and Uganda for human-rights abuses. He returned the Panama Canal and maintained good relations with the USSR. However, a more aggressive Soviet posture, culminating with the invasion of Afghanistan, forced Carter’s hand. Already by 1978, Carter announced that while he wanted to “increase our collaboration with the Soviet Union…. [they] can choose either confrontation or cooperation. The United
States is adequately prepared to meet either choice (Carter, 1978: 1050-57).” By 1980, America boycotted the Moscow Olympics, embargoed grain and ended the SALT II negotiations.
Many hallmarks of President Ronald Reagan, which seemingly stands in stark contrast to Carter, actually began under Carter. Reagan the moral crusader against the Godless communists. Reagan’s military buildup. Reagan’s bleeding the Soviet Union by supplying arms to mujahedeen (Afghani 122 U.S. Global Policies During the Cold War Islamic fundamentalists). All begin with Carter, but Reagan would go further. The true contrast lies with Nixon. If the Nixon Doctrine sought to maintain the status quo with relaxed tensions, Reagan saw the Soviets as liars and cheats, something to be consigned to the ash heap of history.
Economic downturns had a major impact on American foreign policy during the 1970s, and so too for the Soviets during the 1980s. The oil crisis of 1973 contributed to the stagflationof the 1970s, which was particularly acute in the United States. Meanwhile, rising oil prices and increased energy production gave the Soviet Union a new lease on life.
Stagflation – Usually economic production stagnates, or an economy growing too rapidly leads to inflation. The 1970s experienced these two phenomena together.