National Security and the Loss of Innocence
Chapter 3 (Part 3 of 4) of the book
The Discovery of First Principles, Volume 3
Edward J. Dodson
And So Went The Democracy
As Chodorov saw things, the U.S. was already well along the path of
entrenched power concentrated in the national government. Ironically,
many of those with the most to lose were lining up to cement the
process. In describing the nation's loss of liberty, Chodorov echoes
the assessment of Marriner Eccles and Harry Gunnison Brown:
Time was when Americanism shook at its foundation at the
mere suggestion of government intervention in the field of business,
except as a benefactor. But now this step is looked upon with
complacency, if not as good Americanism. An airline company actually
invites the government to take over its business when the squeeze
between fixed rates and wage demands leaves nothing in the way of a
return on capital. That seems to be the latest in Americanism. The
next step is as straight as the crow flies. Industry will
proposition government as follows: regulate us, fix prices, fix
wages, if you will, but for the sake of 100 percent Americanism
guarantee us some rate of return, or at least assure us against
losses. It is not outside the range of possibility that the
government will respond by establishing insurance of stock values,
similar to the insurance of bank deposits. This will facilitate a
transition to the British scheme of translating stocks into
government bonds. Either as guaranteed stocks or as bonds, the
support comes from taxation. Therefore the holders have a vested
interest in government and, having in mind the preservation and
perpetuation of their incomes, must skill themselves in the business
of politics. They will perforce become the controlling committee.
Thus the communistic goal of centralization will be achieved by
means of on-the-barrel Americanism.[64]
Chodorov could easily have added that the expansion of government
prerogatives into the realm of private arrangements had created new
opportunities for well-placed businesses. Liberalism broadened the
efforts of vested interests beyond mere protection from competition
into a division of spoils, where excessive charges and inferior goods
or services were proffered unchecked by market forces. One result was
that everyone was organizing -- forming institutes and foundations,
think tanks and public relations operations. The Federal government
was besieged by advocates of membership organizations representing
every conceivable business coalition, interest group or worker
organization. The problem had become sufficiently severe by 1946 that
Truman signed legislation requiring lobbyists to register with the
government and report their sources of income. This measure did little
to slow them down.
A measure of where the money and power still rested was revealed by
legislation introduced in the U.S. House of Representatives to
prohibit organized labor from calling industry-wide strikes and
rolling back other protections labor had won during the war. Truman
vetoed the measure, writing that the "bill was completely
contrary to our national policy of economic freedom" and
would make government a primary agent in "the
collective-bargaining process."[65] Not very long thereafter,
however, the Democratic Party lost control of the U.S. Congress as a
result of the 1946 elections. A Republican dominated Senate overruled
Truman's veto and the Labor-Management Relations Act of 1947 went into
effect. Organized labor, fighting its battles within a societal
structure subordinated to industrial landlordism, took a step backward
in its quest to develop monopoly power on a par with the nation's
powerful landlords and recipients of other forms of monopoly privilege
and license. Truman had not helped himself politically by his
replacement of the Roosevelt cabinet with individuals whose
credentials for national public office left something to be desired.
The Gallup organization announced in the Spring of 1946 that barely
half the country thought he was doing a reasonably good job. Americans
turned to younger men they hoped would cleanse government of machine
politics and communists at the same time. This was the election year
that brought Richard Nixon, John F. Kennedy and Joseph R. McCarthy
into public office. McCarthy managed to defeat Minnesota's long-time
Senator, Robert M. LaFollette, Jr. The new Republican majority used
its numerical strength to initiate attacks on any who had demonstrated
sympathy for ideas long accepted as well within the boundaries of the
liberal agenda. Reactionaries occupying the fringe of Republican Party
politics managed to capture key committee assignments in the Congress.
And, at the top, New York's Governor, Thomas Dewey, and Senators
Arthur Vandenberg and Robert A. Taft were set to challenge one
another, then Truman, for the Presidency in 1948.
Republicans opposed Truman's nomination of David Lilienthal to head
the Tennessee Valley Authority, declaring that he was both soft on
communism and an adherent to the gospel of centralized power. Taft
rallied conservative forces against the unions, helping to
drive labor back into Truman's camp. Truman, in the meantime, had not
been totally idle or passive to the attack on Democratic Party
supremacy. With diminished U.S. military preparedness becoming an
issue, he brought the armed forces together under James Forrestal, who
was appointed to the new cabinet post of Secretary of Defense. The
Joint Chiefs of Staff became part of a new National Security Council
(NSC); and, the Office of Strategic Services became, under the NSC,
the Central Intelligence Agency (CIA). One of the first issues they
had to face was the mounting evidence that Chiang Kai-shek's
Kuomintang nationalists were losing support among the Chinese people
and the Chinese communists were becoming more potent with each passing
day. About the best that could be hoped for in China was that a
coalition government that included the communists might prevent Soviet
capture of Manchuria as another satellite state. Dispatched by Brynes
to China, George C. Marshall did what he could to bring the Chinese
factions together. In February of 1946, the Chinese tentatively agreed
to a cease-fire and to the formation of a unified military force.
Marshall returned in March to the United States, reasonably confident
that the Soviets had been thwarted insofar as Manchuria was concerned;
no sooner had he arrived back home, however, than fighting resumed.
Nationalist victories over the next few months destroyed their
interest in compromise and coalition government.
Marshall made one last trip to China before relieving James Byrnes as
Secretary of State. Chiang Kai-shek was now determined to destroy the
communists militarily and was firmly convinced that he could do so.
Early in January of 1947, Marshall left China for good. In his
memoirs, Truman expressed a view that could only have come from
experience, and one his successors ought to have listened to with
care:
Some ... experts believed ... that America could force
unity on China -- that, in effect, we could "ram it down their
throats." ...What I hoped to achieve was to see China made into
a country in which Communism would lose its appeal to the masses
because the needs of the people and the voice of the people would
have been answered.
I knew that peace in the world would not be achieved by fighting
more wars. Most of all, I was always aware that there were two
enormous land masses that no western army of modern times had ever
been able to conquer: Russia and China. It would have been folly,
and it would be folly today, to attempt to impose our way of life on
these huge areas by force![66]
Elsewhere around the globe, Truman followed a very different line of
reasoning, one that would impose on the United States the unwelcome
obligation of assisting neo-totalitarian rulers against citizen
uprisings. When an empty treasury drove the British out of Greece and
Turkey, opening the door to Soviet intervention, Truman pressed the
U.S. Congress to approve more than $400 million to strengthen the
Greek and Turkish regimes. Many openly worried where this type of
decision-making would take the country. I.F. Stone, for example, wrote
in August: "You cannot kill an idea. You cannot make misery
more palatable by putting it under guard. You cannot build a stable
society on exploitation and corruption. When Mr. Truman understands
this as fully as Mr. Roosevelt did, American foreign policy will begin
to look like something more than a futile attempt to build bulwarks
against Soviet expansion on the quicksands of bankrupt ruling classes."[67]
Walter Lippmann, also extremely troubled by the new Truman Doctrine,
warned that such a "vague global policy, which sounds like a
tocsin of an ideological crusade, has no limits" and "cannot
be controlled."[68] What worried Lippmann more than anything
else was that with Greece and Turkey as door-openers, U.S. interests
would increasingly be placed in the hands of regimes who had little or
nothing in common with the Democracy other than a desire to
obtain U.S. financial assistance in return for a declaration of
anti-Sovietism. In Truman's mind -- and that of George Marshall, Dean
Acheson and others in the government -- the Greeks and Turks were "free
peoples ... engaged in a valiant struggle to preserve their liberties
and their independence."[69] In reality, democracy was left
out of the equation. While many of those who fought and died did so
because they suffered under existing regimes, communist victories
merely altered the nature of oppression, of who was tortured and
murdered. In his March 12 speech before the Congress, Truman had set
forth the rules under which the U.S. would fight the Cold War:
I believe that it must be the policy of the United
States to support free peoples who are resisting attempted
subjugation by armed minorities or by outside pressures.
I believe that we must assist free peoples to work out their own
destinies in their own way. ...
One way of life is based upon the will of the majority, and is
distinguished by free institutions, representative government, free
elections, guarantees of individual liberty, freedom of speech and
religion and freedom from political oppression.
The second way of life is based upon the will of a minority
forcibly imposed upon the majority. It relies upon terror and
oppression, a controlled press and radio, fixed elections, and the
suppression of personal freedoms. ...
The seeds of totalitarian regimes are nurtured by misery and want.
They spread and grow in the evil soil of poverty and strife. They
reach their full growth when the hope of a people for a better life
has died.[70]
Where, outside of the social democracies of Europe were these
threatened free peoples? With rather more insight, Max Lerner called
upon those who believed in social democracy (or democratic socialism)
to reject both communism and anti-communism. The appropriate path was
a high middle ground that embraced democratic processes and
institutions as well as a high standard of well-being for all
citizens. At this juncture, Robert M. Hutchins brought Rexford
Tugwell, Harold Innis, Stringfellow Barr and others to Chicago to take
on the challenge of framing a world constitution; out of this effort a
fledgling world federalist movement was born. Conversely, one
of the most powerful sentiments arising among people long-dominated by
external powers was the right of self-government and the claim to
sovereignty. World peace demanded that these two seemingly
contradictory thrusts be reconciled. The German political scientist
Ernst Wilhelm Meyer urged that self-determination be distinguished
from self-government, writing that "one very properly can say
that all economic necessities could be taken care of much better when
self-determination is granted while at the same time economic
sovereignty is limited, whereas political coercion, forcing people to
live under the rule of alien governments, almost necessarily would
lead to lasting political tensions and under such tensions economic
interests themselves would constantly suffer."[71] Asking
people who had no history of truly democratic, participatory
government to subordinate newly-acquired sovereignty to even the most
democratic form of federated governance was asking more than most were
willing to give.
While the world's intellectuals debated the merits of world
federalism as a check on the unbridled aggressiveness of
nation-states, the real decision-makers struggled to rationalize
relations with one another. In the United States, Walter Lippmann
challenged Dean Acheson over the false assumptions he believed were
embraced by the Truman Doctrine. Acheson, apparently blinded by his
own narrow historical perspective (and ignoring the extraordinary
burdens that subordinate, satellite states imposed on their sponsoring
state), was firmly convinced that the line against Soviet expansionism
had to be drawn in Greece and Turkey. Otherwise, all of Europe and the
Middle East were in jeopardy of falling to forcible communist
takeovers and Soviet domination. Harsher critics of the Truman
Doctrine, such as Henry Wallace, also went on the attack. "There
is no regime too reactionary for us," Wallace told a radio
audience, "provided it stands in Russia's expansionist path."[72]
What Wallace argued for was a program of real hope in the form of
economic aid -- channelled through the United Nations -- as the best
means of combating the spread of communism. To his credit, the promise
of this alternative course of action was not wholly lost on Truman.
Although committed to containment of Soviet power, he also saw as
integral to the U.S. role in global affairs the promotion of economic
cooperation and international trade unhampered by protectionism. Other
than this, however, the U.S. government had no plan similar to that of
the Soviets to train revolutionaries in the arts of guerilla warfare
or, for that matter, the building of democratic socio-political
institutions. There were no other MacArthurs around the globe able to
exercise a similar far-reaching influence over the transition of a
nation's future course.
Under MacArthur's stewardship (too short-lived as it turned out), the
introduction into Japanese society of more just socio-political
institutions and arrangements would proceed incrementally and with
patient prodding. The Marshall Plan was designed by Dean
Acheson and George Marshall as the next best approach for dealing with
sovereign governments. Reconstruction assistance was designed to
improve economic conditions and strengthen the position of democratic
forces in the Old World. Exercising restraint, the U.S. would both
pressure and entice other governments to embrace democratic
socio-political reforms. In effect, then, Truman's advisers proceeded
along multiple paths in their approach to foreign policy. Objective
principles, noble as they might be, had to be set aside when balance
of power issues required decisions tied to expediency. Ernst Wilhelm
Meyer raised another fundamental question, one that was largely
ignored in the atmosphere of Cold War hysteria:
[W]ill the settlements, if they do not rest on any
principle understandable and appealing to the conscience of the
common man, be conducive to serving the most important, most
realistic requirement of peace, namely to create peace in the
peoples' hearts? Is it indeed too late -- can it ever be too late --
for democracies to remember the seemingly forgotten, but fundamental
democratic principle of self-determination? And is one, at least in
this country, not perhaps permitted to add that, by vigorously
upholding it, American democracy especially could enhance its world
prestige, because no other principle, as indicated before, is more
intimately connected with American ideals and American history?[73]
Whatever hope individuals such as Meyer held out for the
Democracy to lead by example was undermined -- conveniently so for
those whose interests focused on open access to natural resources and
extraordinarily cheap labor -- by the Cold War. By the beginning of
1947, the number of U.S. troops stationed in Europe had fallen to
around 200,000. Soviet troops, by comparison, numbered 1,100,000
(although Khrushchev later revealed that total Soviet troop strength
was also undergoing dramatic reduction in the face of costs the
Soviets could no longer absorb). George Marshall, sworn in as U.S.
Secretary of State, worried that U.S. military strength had so
deteriorated as to make any confrontation with the Soviets extremely
dangerous. And yet, close examination of events shows that Soviet
power was hardly monolithic. Stalin's police state was hated and
broadly opposed, particularly outside Russia itself. These conditions
dictated that Stalin clamp down on the Soviet people and close off
contacts with the West to the greatest extent possible. That in itself
proved extremely difficult in practice because of the Soviet
commitment to the promotion of communist expansion on a global scale
and to the maintenance of a neo-colonial imperial system. As we now
recognize, industrial-landlordism (assisted by monopolistic privileges
extracted from foreign governments) proved far more able to absorb the
expenses of opposing communism than state socialism in opposing
social democracy. Not that there would not be considerable stresses
imposed on U.S. socio-political institutions and arrangements.
While Truman struggled to restrain inflation and maintain full
employment in the face of demobilization, Stalin committed the Soviet
peoples to rapid industrialization without regard for improvement in
personal living standards. Neither the leaders of these two giant
powers nor any other nation stopped to consider their moral
responsibility to preserve and protect the globe's ecosystems from
degradation. The earth was viewed more as something to be left behind
and discarded after exploitation of what humans needed than as our
life-support system. State socialist and totalitarian regimes behaved
with the least regard for the earth. Under Stalin and his successors,
all Marxist-Leninist objectives conflicting with industrial
development and military strength were sacrificed. Intimidation
retarded individual initiative, inventiveness and productivity. Fear
and orthodoxy prevailed in an atmosphere of mutual distrust, so much
so that even Marshal Zhukov, the Soviet Union's most successful
military strategist, was relegated to the command of a small,
provincial garrison at Odessa. Beetle Smith, the U.S. ambassador to
Russia, told Dwight Eisenhower that one of the reasons Zhukov had been
relieved was because of his friendship with Eisenhower. Under Stalin's
dictatorship, the Soviets were forced to follow a path of internal and
external policies laden with a crushing determinism. Time was against
the Stalinist crusade, however, because coercion works only so well
and for only so long as a means of motivating others to labor without
personal benefit. Even slaves frequently rise up against their masters
when death becomes preferable to enslavement. At a lesser degree of
imposed rule, centralized, bureaucratic decision-making (even under
private enterprise) thwarts the generation of cutting edge
technological or organizational breakthroughs. Individuals thrive when
they are left to freely collaborate and to create, to experiment and
to innovate.
By 1946 Stalin's unflinching adherence to collectivist agriculture
and to brutal enforcement of central planning had resulted in severe
food shortages and widespread starvation, particularly in the Ukraine.
Farmers were imprisoned or put to death for failure to obey ridiculous
state agricultural directives. Only with Khrushchev's arrival as First
Secretary of the Ukraine was a semblance of sane decision-making
reintroduced. Despite these problems, the Soviets were placed in the
difficult position of having to provide material support to the
communist regimes established in Poland, Rumania, Bulgaria, the Baltic
states and Czechoslovakia. Garrisoning troops in these countries was
already proving a hardship they could not long endure. Even Stalin
sensed there were limits to what the threat of Soviet intervention
could accomplish. He accepted the fact that he could not forcibly
bring the Finns -- an intensely nationalistic people who had already
demonstrated their willingness to sacrifice in defense of their
sovereignty -- under Soviet control. That Stalin did not want the
Soviet Union to have to fight for territorial gains was also
demonstrated by his withdrawal of Soviet troops from northern Iran. To
some extent, at least, Stalin had learned a few lessons from history.
The successful and permanent establishment of communist regimes had to
be orchestrated by indigenous leaders whose allegiance to Stalin,
first, and the Soviet Union, second, were unquestioned. Khrushchev
explains, further, that Stalin "jealously guarded foreign
policy in general and ... policy toward other Socialist countries in
particular as his own special province."[74] Arkady N.
Shevchenko, a student at the Moscow State Institute of International
Relations (MGIMO) as the decade of the 1940s was ending, adds that
anyone even on the periphery of power had to pay close attention to
the twists and turns of events. "As policy shifted at
Stalin's whim," Shevchenko recalls, "men and nations who had
been in favor became pariahs overnight; established dogma turned into
heresy. It could be disastrous to miss a lecture where the revised
truth of the day was proclaimed for us to copy down."[75] He
was learning there is no terror greater than the concentration of
police power in the hands of a paranoid and absolute despot, and no
tyranny greater than that imposed under the shroud of contrived
doctrine. Try as he might, what Stalin could not do was exercise
complete mind control over an entire nation; even more difficult was
to extend absolutism to satellite states and subjugated peoples.
Even beyond Stalin, however, many Soviet leaders accepted as a
general position that the United States and Britain had to be treated
as enemies of the Soviet state. This may account, to some extent, for
the slowness among the social democratic leaders in recognizing
Stalin's true character. Even as late as 1947, Stalin had told George
Marshall that considerable room existed for compromise -- over the
economic and political unity of Germany, the status of Austria, on
reparations and concerning other issues. To his credit, Marshall did
not fall for Stalin's deceptions and returned to the United States
convinced the Soviets had no such intentions and that the
reconstruction of German industrial capacity was essential to the
overall economic recovery of Europe as a whole. Marshall reported all
this to Truman and then to the U.S. public, calling for bipartisan
support of sustained economic assistance and military protection for
any and all nations willing to cooperate with the United States. The
brief postwar period had also taught Dwight Eisenhower that the
Soviets could not be trusted. He wrote in his diary:
I personally believe that the best thing we could now do
would be to post 5 billion to the credit of the secretary of state
and tell him to use it to support democratic movements wherever our
vital interests indicate. Money should be used to promote
possibilities of self-sustaining economies, not merely to prevent
immediate starvation.[76]
One problem with Eisenhower's proposal was that the interests of many
U.S. agrarian and industrial landlords ran directly counter to any
support for broad participatory government. Marshall's thinking was
running along an entirely different track, for he was extremely
fearful of what was involved with the kind of long-term commitments
implied by the Truman Doctrine. Marshall approached the dilemma by
directing Dean Acheson to establish a Policy Planning Staff within the
State Department to provide the type of analysis and data gathering
required to monitor the progress of whatever programs were to be
funded. The British decision to withdraw from Greece accelerated the
need for action, and George Kennan was brought in to head up the
planning operation. In his memoirs, Kennan indicates an appreciation
for the principle that empire-building rarely yields general benefit
to the aggressor over time. "I considered,"
concludes Kennan, "that the Russians and their Eastern
European associates were poorly set up to take responsibility either
for the governing of Greece or for the support of the Greek economy
[and] that all this might boomerang on them in the form of serious
economic difficulties and other problems, which the West might even
ultimately exploit to good advantage.[77] In light of this
statement, one is hard-pressed to explain Kennan's parallel concern
over what would later be described as the domino effect. In the end,
he recommended that the U.S. provide whatever assistance was necessary
to the anti-communist factions in Greece. Doing so would not only
stabilize the political situation in Greece but also relieve the Turks
from Soviet pressures and strengthen anti-communist resolve in other
parts of Europe as well. The Middle East, dominated by peoples deeply
attached to the Islamic faith, seemed much less susceptible to
subversion from within.
Kennan actually argued against any commitments broader than those
outlined above. He, too, was fearful of the open-ended obligations
suggested by the Truman Doctrine. Ironically, he attracted extensive
criticism from Walter Lippmann in 1947 after the appearance in Foreign
Affairs of an article originally delivered in memorandum form to
James Forrestal. Kennan later acknowledged in his memoirs that what he
wrote gave readers a totally wrong impression of his policy
recommendations toward the Soviets. He and Lippmann were, in reality,
in virtual agreement that attempting to counter every Soviet move with
force would expose the U.S. to the same process of self-weakening --
exacerbated by the certainty of internal strife -- as had decimated
Britain and was inevitable for the Soviets. Kennan was, however,
accurate in concluding that "the major part of the structure
of Soviet power is committed to the perfection of the dictatorship and
to the maintenance of the concept of Russia as a state of siege, with
the enemy lowering beyond the walls."[78] That was, at least,
true of Stalin. If Stalin could instill in the Soviet people a healthy
fear of the social democracies, then he could maintain order in an
environment of scarcity and oppression. This meant that true
cooperation between the Soviets and the West was an impossibility.
Rather, the U.S. needed to concentrate on removing wherever possible
the conditions under which communism acquired a following and then
await the inevitable implosion of the Soviet national security state
under the weight of its own oppressive nature. Lippmann expressed in
his own writing a more immediate concern that Britain, France and the
rest of Europe was precariously close to economic collapse and
political chaos, circumstances that offered the communists an
opportunity to recruit the naive and the disillusioned into their
midst despite the evidence of Soviet tyranny. In response to this
threat, and despite the protestations of Lippmann and Kennan,
anti-communism took on the knee-jerk characteristic destined to pull
the United States into so much later difficulty. Dean Acheson
(described by Ronald Steel as "[a] broker in power ...
fascinated by its use"[79] ) became one of the principal
architects of a new global strategy based on the assumption that an
expansion of U.S. power was inherently good and that of any other
power inherently evil. In 1972, Roger Morgan, of the Royal Institute
for International Affairs, countered that devastation of Soviet
infrastructure made them far more dependent upon reparations than U.S.
officials could have imagined. This problem might have resulted in a
rather different postwar environment had Stalin not survived the war.
The first indication of what was to come took expression in a speech
Acheson delivered in May, in which he offered his interpretation of
why communism had to be purged from Greece and the Turks given
material support. The U.S. Congress responded by approving economic
and military assistance. In the minds of U.S. leaders, German
reconstruction now became paramount to the survival of European social
democracy. The U.S. would provide the financial resources; the
European governments would have to develop a comprehensive plan and in
the process prevent their own communist factions from
undermining the program. Marshall spelled out the essential elements
of the proposal to an audience at Harvard University, and
representatives from sixteen nations met in Paris in July to begin
working out the details. From September through December, Truman
worked to gain Congressional support for the plan. By the end of
March, the bill -- named the European Recovery Act -- was passed by
the Congress and signed into law by Truman on April 3, 1948. Some $17
billion was committed over a four-year period.
Many European nations were battling inflation, high unemployment and
a huge balance of payments deficit with the United States. In 1947
alone, the value of imports exceeded exports by more than $4 billion
(70 percent of which was owed to producers in the United States).
Britain's economy in 1947 was near collapse. A winter of uncommon
severity consumed the nation's coal reserves and left both industry
and households with only hours of electricity each day. The government
ran through existing U.S. loans, then anxiously awaited U.S.
Congressional approval of the Marshall Plan. On the plus side, the
British were now freed from the financial burden of assisting the
established government in Greece and were positioning themselves to
pull out of India. Even keeping an uneasy peace between Jews and Arabs
in Palestine had become a burden Britain could no longer afford. By
late 1947 the Palestine question was in the hands of the United
Nations, which decided on partition and an end to the British mandate.
Burma withdrew from the empire, and Britain's other Asian imperial
outposts were poised to do the same. The Irish voted to leave the
empire, while the Boer-dominated Union of South Africa distanced
itself from association with Britain. Clement Atlee's Labour
government had the very difficult task of encouraging exports to earn
U.S. dollars, while imposing heavy taxes on incomes and imports to
bring the budget into balance (measures the imposition of which by the
International Monetary Fund would become standard for countries buried
by debt and dependent upon continued access to the international
credit markets).
The British were also struggling with the early stages of introducing
a welfare state. Economist Roy Harrod wrote that the government was "formally
wedded to the doctrines of socialism,"[80] and failed to give
serious consideration to the lessons of history (and political
economy) in its formation of public policy. In addition to the
establishment of a free national health system, Labour also mandated
controls over rents for housing while pouring large sums into new
construction. Yet, as the Labour historian R.H. Tawney reminded fellow
Brits in 1951, the top one per cent of the population still controlled
half of all property.[81] Tawney acknowledged the accomplishments of "steeply
graduated taxation"[82] as a remedy for past privilege.
However, in his mind, none of these measures were enough to achieve
the basis for equality, for economic freedom of the entire citizenry:
Unless it be held that it is a matter of indifference
that essential services should be conducted with an eye, not to the
general welfare, but to the profits of investors, that productive
efficiency should stagnate or run down, and that consumers should be
exploited, the case for submitting them to public control is not
open to question. Whether control should take the form of
regulation, or of their acquisition by the State and management by a
public body, is a question of expediency, to be answered differently
in different cases. ...
An intelligent policy will start from the centre, not nibble at the
outworks. The first requirement is, clearly, to master the key
positions of the economic world, whence the tune is piped to which
the nation dances. Banking, evidently, is one, for it determines the
economic weather more directly than any other; transport a second,
and power a third; while the coal industry, in England the sole
source of power, is a fourth, land and agriculture a fifth, and
armaments a sixth.[83]
Interestingly, economist Roy Harrod later speculated that under the
circumstances of the postwar era, even "a Conservative
government would have nationalized some of the industries affected."[84]
The coal industry had been nationalized since 1938. Air and rail
transport had come under public control even earlier, as had electric
and gas power. Despite stiff opposition from Conservatives, the steel
industry was turned over to a not-for-profit corporation (an act
reversed in 1951 upon the return of the Conservatives to power), and
regulation over banking tightened. Still deeply in debt, the British
persevered, their empire dissolving as they struggled to construct a
more complete social democracy but failing to attack the core of
landed privilege that continued as albatross on Britain's producers.
To many observers, the fate of Britain, the other social democracies
and much of the rest of the world now rested firmly on U.S shoulders.
Herbert Hoover's global travels in 1947 brought home the message that
starvation threatened almost everywhere in the Old World. Passage of
the European Recovery Act intervened to stem the tide of political
disorder and potential upheaval. Winston Churchill thanked the
Americans for their generosity; a great many others in Europe (the
French, in particular) equated the arriving dollars with invasion and
a new form of cultural subversion even as the French were enduring
chronic shortages and dramatic price increases for food and other
necessities. A coalition government had nationalized essential
industries (including coal, gas, electricity and banking), and under
the direction of Jean Monnet an aggressive program of modernization
was undertaken. This effort suffered because of the French
government's foolhardy attempt to hold onto its imperial possession in
Southeast Asia. The nation was also hit by massive labor strikes in
1947 and 1948. Despite these problems, Monnet saw to it that funds
received under the Marshall Plan were immediately invested in the
development of capital infrastructure.
The Italians, who voted to dissolve the monarchy and establish a
republic, adopted a new constitution in 1948. Already, a pattern of
extreme divisiveness dominated Italian politics. Matters were made
worse by U.S. pressure on prime minister Alcide De Gasperi to purge
the communists from the government. Reform of Italy's system of land
tenure and taxation was desperately needed. Unfortunately, only
socialists and communists gave lip service to land reform, and
the controlling parties stood firm on the side of the status quo.
Under these trying circumstances, the Italians moved slowly to enter a
more integrated European economic community.
Political stability and economic recovery in Belgium, the
Netherlands, Denmark and Norway advanced more quickly. The war had
caused far less damage to the physical infrastructure of these
nations, and their governments resisted the temptation to self-create
credit through by exchanging government debt for central bank notes.
As production of goods accelerated, prices moderated and the
underground economy in these countries dissolved.
In Germany, a new currency was introduced into the U.S., British and
French zones to remove from the Soviets their ability to use currency
expansion as a means of shifting purchasing power to their zone
without producing any goods or services. Stalin responded by
tightening down the iron curtain with ever greater force and by
establishing the Cominform as a rubber stamp for Soviet policies.
Berlin was sealed off, and Truman ordered the airlift relief that
continued from late June until the following May. In September of
1948, the French finally agreed to combine their zone in Germany with
that of the United States and Britain. Konrad Adenauer, the mayor of
Cologne, emerged as head of the Christian Democrats. Under Adenauer's
leadership, Germany's postwar officials met in Bonn to draft a new
constitution for the new German Federal Republic. Early in 1949,
Adenauer became chancellor. Germans in the Soviet zone of occupation
formalized the break by establishing their own republic.
In the interim, Stalin turned his back on the Greek Communists (to
whom refuge was denied by Tito in Yugoslavia), emasculated the Italian
and French party leaders and demanded of all communists an
unquestioning allegiance to Soviet leadership. Czechoslovakia's
government was purged of non-communists and brought securely under
Soviet domination.
In Yugoslavia, Tito did not wait for any similar attack on his
sovereignty and power. Soviet advisers were sent packing, their
Yugoslav allies purged and most imprisoned. Fearful that other Titos
might get similar ideas, Stalin removed from power any and all leaders
who possessed a nationalist following in the other Soviet satellite
governments. Khrushchev, in his memoirs, contradicts himself by
placing the blame for the split squarely on Tito's shoulders after
earlier condemning Stalin's aggressive thirst for total domination.
Tito's nationalist support was far too strong for Stalin to attempt a
forceful overthrow. And, in any event, sending troops at this juncture
might have united other satellites against the Soviet Union. In 1969,
Milovan Djilas, instrumental in the Yugoslav break with Stalin and
later imprisoned by Tito for his outspoken views against what Djilas
saw as the corruption of Leninist ideals, boldly condemned the
Communist parties and their leaderships:
All the demons that Communism believed it had banished
from the forthcoming as well as the real world have crept into the
soul of Communism and become part of its being. Communism, once a
popular movement ... has become transformed into national political
bureaucracies and states squabbling among themselves for prestige
and influence, for the sources of wealth and for markets -- for all
those things over which politicians and governments have always
quarreled, and always will. The Communists were compelled by their
own ideas and by the realities in their society first to wrest power
... from their opponents, and then scrabble for it among themselves.
This has been the fate of all revolutionary movements in history.
The Communists became so completely absorbed and engulfed in greed
and the lust for power that their power became absolute,
totalitarian; and in their struggle for power they showed themselves
to be ordinary mortals, as fallible as other men, ... Instead of
abolishing war ... now the great Communist powers have enslaved
smaller Communist countries, and the human race is under the threat
of a conflict between the two great Communist powers, the Soviet
Union and China, ...
The Communists are chiefly to blame for their own misfortunes. The
result of their obstinacy in pursuing an imaginary society, in the
belief that they could change human nature, is that their ideas and
they themselves have been inexorably crunched by the frenzy of the
violence they perpetrated. The human being under Communism, as in
all situations at all times in human history, has proved too
intractable and quite unfit for any ideal models, particularly those
that seek to restrict his boundaries and prescribe his destiny.[85]
Clearly, the aging revolutionaries had turned reactionary and
conservative. They found that the collectivist ideal, subjected to the
rigors of central planning, could be sustained only by intense
coercion and the purging of initiative from the human spirit. The
moral dilemma faced by those in the West centered on whether to wait
or to act. Waiting meant that millions of people would suffer ongoing
oppression and denial of their liberty. An amazingly large number of
people would be imprisoned, tortured and murdered as a reminder to
others of what resistance or dissent would bring. Acting -- directly
and forcefully -- was not an option for the West. Even the United
States was absorbed by socio-political issues of grave domestic
importance.
The end of the Second World War had not brought stability, rather
just the opposite. Still, the leaders of the social democracies faced
a difficult moral dilemma, particularly in the face of serious
challenges to their positions and institutions from those outside the
mainstream now demanding greater participation in government and some
semblance of equality of opportunity. Under these circumstances, few
leaders were willing to take their countries to war on behalf of those
imprisoned behind the iron curtain. Among U.S. leaders, Truman,
Marshall, Acheson, Kennan and others, accepted that preparedness and
united resistance to Soviet expansionism and subversion had to serve
as baseline foreign policy objectives during the years or decades
while they waited for the Soviet system to fall apart. In the
meantime, they would do what they could to convince Soviet leaders
that the U.S. was willing to accept co-existence if the Soviets would
just live with the status quo. Henry Wallace represented those who
clinged to the optimistic possibilities of a true rapprochement with
the Soviets. In May, Stalin replied to a letter from Wallace, in which
the Progressive candidate for the Presidency proposed six steps[86] to
end the Cold War. Although Stalin's response appeared to be positive,
Truman and his advisers were too far along in establishing containment
as U.S. policy to seriously consider anything Stalin might now say in
the public arena. Wallace should also have realized that as long as
Stalin remained alive and in power, the Soviets would never be
satisfied with a stalemate. Rather than waste any more time in
negotiations with Stalin, representatives from the key social
democracies met in Brussels to discuss the merits of an alliance
between the nations of the northern Atlantic region. Meanwhile, Truman
crisscrossed the United States in search of public support, hammering
away at big business and those who wanted to dismantle the New Deal.
His Republican opponent, New York Governor Thomas E. Dewey, was so
certain of victory that he barely campaigned at all until September.
Wallace's extensive leftist and communist support eroded any real
chance of his becoming the next President and his campaign faded into
oblivion.
Anti-communist fervor was now reaching into the hearts of average
Americans. Government officials were encouraged -- almost directed by
popular consensus -- to initiate a campaign against communists and the
Communist Party. Truman had already established a system of loyalty
review boards to investigate charges against Federal employees thought
to be communists or communist sympathizers. Anyone with communism in
their backgrounds was to be purged or prohibited from government
service. Was this an over-reaction? Perhaps. Certainly, the lives of
some people were turned upside down with little or no just cause. Yet,
given the heat of the times, the checks and balances inherent in the
socio-political structure of the United States held firm. Emotions
were reaching a fever pitch but, all in all, due process prevailed.
Another element in the drama that continued to unfold was the
willingness of so many communists and communist sympathized to
repudiate their earlier adherence to this very alien philosophy. Kim
Philby and other European communists were Marxists first, communists
second. Few communists in the United States studied Marx or Lenin or
Trotsky; they were tied emotionally to the promise of communism and
became extremely disillusioned by the totalitarian behavior of Stalin
and the Soviet state. Now, the Soviets were also attempting to dictate
strategy to communists in the United States, employing U.S. citizens
in espionage and treasonous acts. Communism had proven to be nothing
more than another form of state socialism, orchestrated by an
elaborate propaganda machine opportunistically used by those
determined to seize power and rule by ruthlessness. Many communists
living in social democratic societies were slowly coming to this
conclusion, too late in some cases to save themselves from the
consequences of the paranoia they helped to create.
By 1948, roughly a thousand persons had been discharged from
employment in the U.S. government on the grounds of suspected
disloyalty. Only a very few were actually brought to trial for
treasonous acts. However, in July the leading members of the U.S.
Communist Party were all indicted for treason. Others were expelled
from the nation's labor unions in a determined effort by mainstream
labor leaders to purge Labor of anti-U.S. elements. Communists in the
United States failed to understand, observes Richard Walton, "that
American workers are very different from the European proletariat;
they are more likely to be latent capitalists than socialists."[87]
Marxist ideas failed to take hold in the United States because of an
almost blind acceptance of the rhetoric (if not the reality) of
individualism as the key to preservation of the Democracy.
There might no longer be a nearly universal ownership of landed
property, but the reasons -- virtually everyone outside leftist
intellectual circles agreed -- were corruption and monopoly privilege.
These were the ills that had to be purged. A certain amount of power
in the hands of government was necessary to accomplish these societal
objectives. The right degree of power was the least amount required to
do the job.
Americans in the postwar years had regained their optimism and were
slow to again question the structure of their socio-political system.
Wealth had long been extremely concentrated in the Old World, where
Marxism and other brands of utopian socialism competed for the
revolutionary zeal of the intelligentsia and the downtrodden. As the
people of the U.S. came to hate and fear Stalinism, to discover that
U.S. communists increasingly served as Soviet agents engaged in
treason and subversion, any obligation to be fair toward communists
diminished in response to what seemed a far greater danger. A large
number of communists went into hiding; thousands of others were forced
out of the Party by a paranoid leadership fearful of being turned on
by disgruntled members who had become communists because of an
idealistic if misguided commitment to the defense of human rights.
Stalinism had shed all pretensions to innocence and revealed an
unrelenting lust for power. Only by condemnation of Soviet tyranny
could communists resurrect themselves as idealistic adherents to the
collectivist form of societal organization. They should have listened,
for instance, to I.F. Stone, whose faith in an incremental adoption of
socialism by democratic means remained strong. The challenge to the
world's nations in 1947 was, Stone realized, to devote considerable
wealth to the role of reconstruction and the development of societal
infrastructure. Peace would prevail only when the world's peoples once
again had the means to engage in trade and commerce. There was, of
course, a cost to be endured; the question for nations was how that
cost was to be paid:
Capital is amassed by suffering, either other people's
or one's own. One takes part of the fruit of one's own labor or of
someone else's in order to build improvements -- factories,
machines, ships, roads -- that will ultimately raise the standard of
living. Someone must give up something today in order to have more
tomorrow: that is the logic of capital accumulation. Whether under
capitalism or socialism, there is no painless way to create capital.
[Another] method for creating capital is to take it out of one's
own hide. That is what Bolshevik Russia has been engaged in doing
for a generation. The Russians under Communism have been building up
their own capital, not by borrowing but by suffering, the suffering
of Russia's own people. The Five Year Plans are giant demonstrations
of how capital can be built up, without foreign loans for foreign
exploitation, under a system harsh, ruthless, and single-minded
enough to underfeed and underclothe a whole generation for the sake
of the future.[88]
A case could be, and has been, made that there was no other choice
available to the Soviet leadership -- even after Stalin beneficently
died. Their citizenry still included a large minority of illiterate
peasants who wanted nothing more from government than to be given land
and then left alone. Private initiative was forcibly subordinated to
production for the collective good; and, where resisted, achieved by
force. Moreover, all vestiges of the ancient aristocracy were
ruthlessly purged. Long-term survival against the Germans, British and
Americans demanded rapid industrialization and total planning. There
was, one might rationalize, no time for the incremental processes
associated with democracy. Democracy had to wait for a time when the
Soviet Union could stand secure from external threats. Beyond Soviet
borders, fewer and fewer former sympathizers continued to accept such
rationalizations. Sidney Hook, Arthur Schlesinger, Jr., Dwight
Macdonald and Bertram Wolfe joined with other anti-Stalinist
intellectuals to form the American Intellectuals for Freedom in an
effort to engage Soviet bloc intellectuals in debate. Yet,
intellectuals East and West were largely without power to influence
the actions of leaders in their respective societies. Few were truly
activist by nature; fewer still were willing to jeopardize what they
defended as intellectual objectivity by direct involvement in
politics. Irving Howe, George Orwell and C. Wright Mills contributed
to Macdonald's journal, Politics, which attacked the
governments of the U.S. and Soviet Union as having gone far beyond the
legitimate bounds of just power. Former communists collaborated on a
book of essays[89] published in 1949 that explained the magnetic lure
of Stalinism to those wholly outside the reality of life under the
grip of Soviet power. William O'Neill, in an analysis of the
attachment of U.S. intellectuals to communism, adds a penetrating
insight when he says that those who came to communism during the
Depression "were very different from the first generation of
intellectuals [Max Eastman, John Reed and Lincoln Steffens, to name a
few] who ... were drawn to Communism not out of blind faith but
because as secular persons in a rational age they believed it to be
scientific, the next step forward in mankind's progress toward an
intelligent social order."[90] They were, sadly, quite
misguided by their instincts. Reason and an objective analysis of
experience failed them. Human nature, and particularly the lust for
power by persons wholly indoctrinated into a value system grounded in
moral relativism, worked against the possibility of a communitarian
society emerging out of the ashes of minority rule. Cooperation
results from the nurturing of the moral sense and is the exception
rather than the rule when individual initiative is subdued by
hierarchy -- in all its forms. This is true as well even where
participation in government is broad and democracy well-established.
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