Refinding the Path Toward Utopia: An Intake from "Slouching Towards Utopia?: An Economic History of the Long Twentieth Century 1870-2016"

The Cold War: An Outtake from "Slouching Towards Utopia?: An Economic History of the Long Twentieth Century 1870-2016"

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Post-WWII Political Economy: Stabilization

Challengers

But what about the other factors that had fatally disrupted the pre-WWI global order? Imperialism, nationalism, militarism, fascism, and a really existing version of socialism preached and practiced by Stalin and his heirs that was, in many of its modes, hard to distinguish from the barbarism that Rosa Luxemburg feared that World War I had revealed as socialism’s only alternative? Fascism had been buried in the rubble of Berlin in 1945: thereafter its attractions had been limited to those plutocrats, authoritarians, colonels, and landlords trying to run unstable con games to try to stave off popular and global civil society demands for things like land reform and a less-unequal distribution of wealth as underpinnings for political democracy and the mixed economy.

Or so we had thought.

Really existing socialism became more unattractive the more closely outsiders were able to scrutinize it—and it ran into the buzzsaw of nationalism as it became more and more clear that, in Europe at least, it involved absorption into the latest incarnation of Russian Empire. Imperialism was on the way out: the United States had not become global hegemony in order to preserve British and French colonial bureaucratic masters. And the kind of militarism that sent millions of young men to die at the front while civilians died under bombing was in bad odor.

It, was, largely, as if the world—or the world outside of really existing socialism, hidden behind the iron and bamboo curtains—had awoken from a third-of-a-century bad dream.

 

Not Utopia

The new post-World War II world was not utopia. It stood for the first time under the shadow of nuclear war, and the MAD strategies nuclear weapons strategists embraced—“MAD” both as an acronym for “mutual assured destruction” and “insane”. And the world was not free from other snakes in the garden. For example, the same letter in which President Dwight Eisenhower admonishes his brother Edgar for imagining that his administration could or should roll back the New Deal and upset the social-democratic mixed-economy Keynesian order, Eisenhower boasted about how under his administration the CIA had led the coup that had entrenched Mohammed Reza Pahlavi as shah and dictator in Iran and so kept the Middle East oil states from going commie—as the Truman administration would have allowed it to do, and so largely removed the greatest “threat that has in recent years overhung the free world”.

It is true that British Prime Minister Clement Attlee and American President Harry S Truman had nixed CIA, MI6, and Anglo-Iranian Oil Company demands for a coup. But British Prime Minister Winston Churchill and American President Dwight Eisenhower’s judgments that Iranian Prime Minister Mohammed Mosadegh’s oil nationalizations and political tugs-of-war with shah and parliament were not normal politics but the prelude to a communist takeover as had happened in 1948 in Czechoslovakia—that judgment is at the very least highly contestable.

 

But Progress!

But like the similar period before 1910, economic growth enough was fast enough and equitably distributed enough that few thought revolution or a radical restructuring of institutions was in order; wealth and status were respected enough that the right wing sought to slow down rather than stop the pace of historical change; and forms of society that left-wingers saw as unfreedom were being eroded at a pace fast enough that people could see society as once more on the road to utopia. And in the Thirty Glorious Years after World War II, it all happened faster than it had before 1910: there were three decades of inventions and innovations that had not been implemented outside the United States and that formed a great backlog, and there was an example of how to forge the future: the America that had played its share in winning World War II not with blood but with mass production, and that did not come with mass executions of high cadres and government officials and continent-spanning networks of concentration camps.

There were other factors as well. To some degree the creation of the social-democratic mixed economy came about because and no one in Europe wanted a repeat of interwar experience. To some degree it came about because the governments in power were Christian democratic and social democratic rather than socialist. They believed that the “mixed economies” they were building should have a strong pro-market orientation. For such governments, as noted above, Marshall Plan and other aid gave them room to maneuver—without such aid, they would have soon faced a harsh choice between contraction to balance their international payments and severe controls on imports.

But there was one other fact about post-World War II that cemented the social-democratic mixed-economy Keynesian order that drove a generation of the fastest economic growth and the greatest advance in human prosperity and liberty the world had hitherto seen: it was the Cold War.

 

Before the Cold War

There was not supposed to be a Cold War.

Marxist theory—at least that branch of Marxist theory that became the cultic revealed religion guiding at least the official pronouncements of the governments ruling from behind Stalin and Mao’s Iron and Bamboo Curtains—was very clear on what was to come. Capitalism, in Lenin’s view, needed imperialism. Imperialism produced militarization with its enormous demand for weapons and colonies that offered captive markets. These were essential to preserve near-full employment, and so stave off the catastrophic economic crises—like the Great Depression—that would otherwise produce communist revolution. But imperalism also produced war. Thus capitalism was staving off revolution from economic catastrophe by courting revolution through political-military catastrophe.

As Lenin’s successors saw it, the capitalist-imperialist powers had successfully delayed revolution from the late 1890s though imperialism and militarism, but had then fallen into the catastrophe of World War I. And that brought Lenin to power in Russia, and the creation of the first really existing socialist country—or, rather, union of countries: the U.S.S.R. was a “union” of “republics” that were “socialist” and also “soviet”—that is, power was held by workers’ councils. In theory. Practice is always complicated. But that was as far as the revolution managed to march in the aftermath of World War I.

As Lenin’s successors saw it, the capitalists had then after World War I concluded that parliamentary democracy and representative institutions were no longer compatible with their continued rule, hence they swung their support behind fascists: Mussolini in Italy, Hitler in Germany, Franco in Spain, Petain in France, Tojo in Japan. But this did not remove the need for imperialism and militarism, but rather sharpened it. The second great imperialist war, World War II, had been worse than the first. That had led to the really existing socialist world’s expansion to the Elbe and the Adriatic—although not before Hitler’s legions had nearly destroyed the Soviet Union.

As Lenin’s successors saw it, after the post-WWII consolidation, they had five tasks:

Build up militarily to defend the territories of really existing socialism, because the fascist-militarist-capitalists might well try once again to destroy world socialism militarily—there were American generals who had wanted to start World War III the day after World War II had ended, there was at least one ex-president who thought that the U.S. had fought on the wrong side in World War II, and the U.S. had advanced scientific weapons of unbearable power.

Extend the really existing socialist order to the new territories.

Build up economically to create truly human societies, both to realize the promise of socialism and to demonstrate to peoples in the capitalist world how good life could be.\

Stand ready to assist socialist movements in capitalist countries when they decided they were strong enough to attempt a revolution.

Lie low.

If they accomplished those tasks, then the logic of imperialist-militarist-capitalism would start to work again. The capitalist powers would clash again, in another catastrophic world war. And provided the really existing socialist block could keep its head down and survive, in the aftermath it would expand again. That was the Soviet Union’s strategy: defend, rebuild, and wait, for history was on their side. Waging a cold war was not the strategy.

 

The Korean War

Stalin, however, had exhibited a taste for snatching up territory when he thought it could be taken cheaply—starting with the suppression of the Mensheviks in Georgia at the end of the Russian Civil War. After World War II, however, Stalin curbed his appetite. He did not impose a communist government on Finland, but let it remain democratic as long as it was disarmed and joined no potentially anti-Soviet alliances—and as long as its government was riddled with Soviet agents. He cut off support to the communist party in Greece—largely. He counseled Mao to join a coalition with Chiang Kai-shek (the Cantonese romanization of Jiang Jieshi) and wait.

But in 1948 Stalin could not resist snatching up Czechoslovakia in a coupe d’etat. And Mao ignored Stalin, defeated Chiang Kai-shek, and chased him and his Guomindang to Taiwan. A Cold War had begun. But U.S. plans to wage it seriously—boosting defense spending to 10% of national income and deploying U.S. armies as tripwires and more-than-tripwires all across the globe—remained planners’ fantasies, until the Korean War.

And no doubt Stalin heard whispers that he was being overly cautious, and had lost his nerve as a result of the shocks of World War II.

In 1950 the strongman Kim Il Sung, whom Stalin had installed in North Korea at the end of World War II when the Russians occupied the north off the country above and the Americans occupied the south below the 38th parallel, begged him for tanks and support to take over the south. There were then no U.S. garrisons in the south. The U.S. had declined to send troops to support Chiang Kai-shek—it had sent weapons, but had stopped when it realized that the most effective way to arm Mao’s People’s Liberation Army was to ship weapons of the Guomindang. Moreover, the U.S. was for decolonization—the British out of India, the Dutch out of Indonesia. While the U.S. was happy to provide logistical support to the French war against the communist Vietminh in southeast Asia, it wanted the French to promise independence rather than further colonial rule as the endpoint. U.S. strategic thinking was that in Asia it should use air and sea rather than land power as its weapons.

In June 1950 Stalin let slip the dog of war that was Kim Il Sung and his Soviet-trained and supplied army. The Korean War began, as the U.S. surprised Kim Jong Il, Stalin, Mao, and itself by rallying the United Nations to send an army, largely provided by the United States but formally a force of the United Nations as an organization, to defend the order that had been established in the American zone of occupation that was to become South Korea—and perhaps create a single unified Korean nation as well.

Fighting raged all across the Korean peninsula, from near the Yalu River in the north to the port of Pusan in the south. South Koreans and North Koreans fought on land; Americans fought on land, in the sea, and in the air; Chinese fought on land; Russians fought in the air (with 350 planes shot down). In three years, somewhere between one and two million Korean civilians died, 5% to 10% of the population; perhaps 400000 South Koreans were abducted from their homes and taken to North Korea; and the military dead and missing were, roughly: 500000 Chinese, 300000 North Koreans, 150000 South Koreans, 50000 Americans, 1000 British, 1000 Turkish, 500 Canadian, 400 Australian, 300 Russian, 250 French, 200 Greek, 150 Columbian, 130 Thai, 120 Ethiopian, 120 Dutch, 100 Belgian, 90 Filipino, 30 South African, 30 New Zealand, 3 Norwegian, 2 Luxembourgese, and 1 Indian soldier. The U.S. Air Force dropped half a million tons of bombs during the war—that is 40 pounds of bomb for every North Korean then alive.

The United States did not use its nuclear weapons—it was a war, but it was a limited war. U.S. theater of operations commander Douglas MacArthur asked for their use at the end of 1950 when Chinese People’s Liberation Army attacks forced the United Nations’ army to retreat from near the Yalu River back to south of Seoul. The Pentagon and U.S. President Harry Truman refused. Starting in March 1951, with the battlefront stabilized near the 38th parallel that had divided North and South Korea before the war, the Pentagon and Truman began to seek a ceasefire and a return to the status quo ante bellum—to the state of things before the war—leaving neither victor nor vanquished.

Yet the war dragged on for two more years. And the casualties mounted: military comm https://www.britannica.com/event/Korean-War/North-to-the-Yalu anders on both sides thought that leverage at the peace table was to be gained by attritting their adversary’s forces and depriving them of jumping-off points in case the war was widened. Key, in the minds of United Nations commanders Matthew Ridgway and James van Fleet, was the “Iron Triangle” about 12 miles on each side, near the 38th parallel, running from Pyonggang in the north to Kimhwa in the east to Chorwon in the west.

The ultimate sticking point in the negotiations, however, was the status of prisoners of war. The Chinese and North Koreans wanted all prisoners of war returned to their countries of origin. The United Nations and the South Koreans wanted to keep prisoners of war who wished not to return from being forced to do so. On March 5, 1953, Soviet Dictator Josef Stalin died of a stroke. Stalin’s heirs decided that the Korean War was pointless and should end. Mao’s negotiators accepted the United Nations’s prisoner-of-war position. 10000 of 15000 Chinese prisoners of war decided not to return to China 5000 or 70000 North Korean prisoners of war decided not to return to North Korea. 327 South Korean prisoners of war decided to stay in North Korea, as did 21 Americans and 1 Briton. 18 of the 22 eventually returned to the western bloc. However 8000 missing from the United Nations forces (and 80000 missing from the South Korean forces) remained unaccounted for. Most of them surely died in battle, but…

And so the current state of things—with North Korea under the autocratic rule of the current Kim dynasty which has presided over the worst famine of the post-World War II period, and with South Korea independent and now a rich industrial power and a democracy—began.

 

Consequences: The U.S. Government Spends to Fight the Cold War

In the aftermath of the Korean War, the United States saw itself as having a new role.

To start with, western Germany looked analogous to Korea—a country divided by what had originally been intended to he a military occupation boundary but had become permanent. That it could not be snatched up cheaply was not wholly reassuring, because Stalin had also exhibited a certain degree of bad judgment: in addition to allowing Kim Il Sung to launch the Korean War, there was the unsuccessful attack on Finland in 1939, and there was mother of all miscalculations, the belief that the way to deal with Hitler was to become his ally and then watch Nazi Germany and the western democracies exhaust themselves in trench warfare. Perhaps Stalin’s successors would exhibit a similar appetite for conquest on the cheap, and a similar weak grasp of geopolitical realities.

As a result of the Korean War, by the middle of the 1950s there was a full U.S. army—corps, divisions, airwings, and the standard enormous logistical tail—sitting in West Germany waiting for Stalin’s successors to attempt in Germany what Stalin, Mao, and Kim Il Sung had attempted in Korea: the reunification by force of a country that had been divided in the armistice that ended World War II. Stalin’s successors were largely unknown: the only solid thing about them was that they had flourished under Stalin and shot a couple of their own number in the power struggle that followed Stalin’s death. 

By the mid-1950s the U.S. was spending on the Cold War a huge scale. What had before June 1950 been the fantasies of national security staffers and planners became reality. They pushed U.S. national security spending up to 10% of national income after the Korean War had come to an end provided a strong floor to demand and employment in the United States as well.

A good deal of this spending was for the U.S. to project its Cold War military power far beyond its borders. U.S. bases and troops found themselves permanently deployed on every continent save Antarctica. Roughly three-quarters of a percent of U.S. national product in the mid 1950s was “net military transactions”—expenditures abroad by the U.S. army which generated no dollar inflow. In Europe, the increase in net U.S. military transactions did much to offset the winding-down of the Marshall Plan: the forces of the Supreme Allied Commander, Europe, of the North Atlantic Treaty Organization thus provided one more secure source of demand for European production during Europe’s booms in the 1950s and 1960s.

 

Waging the Cold War

Peaceful Coexistence

Nuclear forces that U.S. planners regarded as perhaps inadequate to deter a Russian nuclear strike or conventional-force invasion of western Europe struck Russian planners as dangerously close to the forces the U.S. would need to wage and win a nuclear devastation or conventional occupation of Russia. And all Russian planners remembered the burning of Moscow by the Crimean Tartars in 1571, the occupation of Moscow by the Poles in 1610, the invasion by the Swedes in 1709, the occupation of Moscow by the French in 1812, the German-dictated Peace of Brest-Litovsk in 1918, and Hitler’s invasion in 1941. From 1956 on the formal policy of the Soviet Union was “peaceful coexistence”. The Russians would, of course, continue to support just revolts against colonialism and capitalism. But war between the superpowers? Off the table. The U.S. and the U.S.S.R. would coexist. Really existing socialism would triumph in the end, of course. But its triumph would be by example, not by military force. 
From the other side of the hill, the U.S. policy became one of “massive retaliation”: “contain[ing] the mighty landpower of the communist world… by be[ing] willing and able to respond vigorously at places and with means of its own choosing”. This policy, pointedly, did not take a nuclear-weapon response to a conventional provocation off the table, and did not restrict retaliation and deterrence to the particular theater of conflict. But the keyword, I believe, is “contain”: the U.S. and indeed the western NATO alliance policy for the Cold War was one of containment. As U.S. diplomat George Kennan put it, the right strategy was one of “holding the line and hoping for the best”, for since “ideology convinces the rulers of Russia that truth is on their side and they they can therefore afford to wait”, it was the case that “Soviet pressure… can be contained by the adroit and vigilant application of counter-force at a series of constantly shifting geographical and political points”.

And there was more: “the issue of Soviet-American relations is in essence a test of the overall worth of the United States as a nation among nations”. Thus:

The thoughtful observer of Russian-American relations will find no cause for complaint in the Kremlin's challenge to American society. He will rather experience a certain gratitude to a Providence which, by providing the American people with this implacable challenge, has made their entire security as a nation dependent on their pulling themselves together and accepting the responsibilities of moral and political leadership that history plainly intended them to bear…

If only the United States could, Kennan believed, truly be a City Upon a Hill. If only it could, as John Winthrop had preached back in 1630: “follow the counsel of Micah, to do justly, to love mercy, to walk humbly with our God” so that “he shall make us a praise and glory that men shall say of succeeding plantations, ‘may the Lord make it like that of New England’…”—then the U.S. and the western NATO alliance would have nothing to fear from the Cold War. The Americans who ran foreign policy overwhelmingly agreed. The only possible exception was 1969-1976 Secretary of State Henry Kissinger and his erratic boss President Richard Nixon. Kissinger’s international-relations professor colleague Stanley Hoffman believed that “Henry, in his melancholy, seems to walk with the spirit of Spengler at his side”; and Admiral Elmo Zumwalt said that Kissinger talked to him about how America was part of a civilization that had seen its best days and needed to accommodate the rising power of Russia, which was a Peloponnesian War-era “Sparta to our Athens”. The others saw no reason to panic.

Soviet paramount leader Nikita Khrushchev said the same thing, but less… diplomatically, in 1956: “Whether you like it or not, history is on our side. We will bury you.” Probably the Russian “Мы вас похороним” would have been better translated as: “we will have to dig your grave” or as “we will outlast you”. Later on Khrushchev clarified: “I once said, ‘We will bury you’, and I got into trouble with it. Of course we will not bury you with a shovel. Your own working class will bury you.” The Soviet Union had lost perhaps 27 million people killed and starved in World War II. Nobody in it wanted a World War III.

 

Non-Aligned Nations for Which the Cold War Was an Opportunity

For leaders and would-be leaders of both independent and colonized nations and nations-to-be during the first post-World War II generation, the Cold War was, more often than not, a blessing. Leaders could press the United States to encourage Britain and France to accelerate decolonization. Before independence, they could observe that if decolonization was delayed, the Russians and the Chinese would use the grievances justly felt by the colonized to build support for insurgencies that would add that nation to the Communist Bloc. After independence, they could declare themselves “nonaligned”, as the movement started at the Bandung Conference in Indonesia by then-Indonesian strongman Sukarno and then-Indian Prime Minister Nehru was called. Nonaligned nations could then call for bids of support from both sides in the Cold War. The hotter and more important the Cold War, the more both sides would be willing to spend to support a nonaligned government that was trying to decide what its political and economic system should be.

 

Nations for Which the Cold War Became a Threat

On the other hand, the hotter the Cold War, the more likely it was that a government or a popular movement trying to steer its own course would be pulled up short by the choke-chain of one of the superpowers, and people would die. Yugoslavia and Finland managed to pursue their own paths—but the Red Army stepped in to enforce the party line and discipline in East Germany in 1953, in Hungary in 1956, in Czechoslovakia in 1968, Afghanistan in 1978. The U.S. sponsored coups or sent troops to overthrow governments into Iran and Guatemala in 1954, Cuba in 1961, Cuba in 1973, the Dominican Republic Nicaragua in 1981, Grenada in 1983. Plus there were the cases where the Cold War turned genuinely hot: Korea (5 million dead), Vietnam (2.5 million dead), Ethiopia (1.5 million dead), Angola (500000 dead), and more.

And there were governments that attacked their societies because of the Cold War: somewhere between 100,000 and 500,000 of Indonesia’s hundred million were murdered in 1965 in The Year of Living Dangerously, when strongman Suharto used an attempted communist coup as a pretext to sideline previous strongman Sukarno and then slaughter everyone in Indonesia whom anyone said might be a communist. The Khmer Rouge in 1975-9 killed two of Cambodia’s 8 million people for no reason whatsoever—and still China and the U.S. backed the Khmer Rouge against the Cambodian government the Vietnamese installed in 1979. And there were many, many more.

 

Teetering on the Edge of Nuclear Armageddon

Even more, the world teetered on the edge of thermonuclear war during the Cuban Missile Crisis of 1962. Russian paramount leader Nikita Khrushchev was somewhat surprised by the bellicose reaction of American President John F. Kennedy to Russia’s deployment in Cuba of missiles like those the U.S. had previously deployed in Turkey next to Russia’s border. Khrushchev wrote to Kennedy: “We and you ought not now to pull on the ends of the rope in which you have tied the knot of war, because the more the two of us pull, the tighter that knot will be tied. And a moment may come when that knot will be tied so tight that even he who tied it will not have the strength to untie it, and then it will be necessary to cut that knot, and what that would mean is not for me to explain to you, because you yourself understand perfectly of what terrible forces our countries dispose…” The U.S. promised not to overthrow Cuban communist dictator Fidel Castro by force. Russia withdrew its missiles from Cuba. The U.S. withdrew its missiles from Turkey. Both agreed to keep the U.S. withdrawal a secret so as not to create a “Kennedy backed down” campaign issue that the Republicans could use against the Democrats in the 1962 and then 1964 elections. And a lot of misleading histories were written by and based on reports from Kennedy administration insiders over the following two decades.

There were other teeters. In 1960 the moonrise was mistaken by a NATO radar for a nuclear attack—and the U.S. went on high alert even though Russian paramount leader was in New York at the United Nations at the time. In 1967 NORAD thought a solar flare was Soviet radar jamming, and nearly launched its bombers. In 1979 the loading of a training scenario onto an operational computer led NORAD to call the White House, claiming that the U.S.S.R. had launched 250 missiles against the United States, and that the president had only between 3 and 7 minutes to decide whether to retaliate. In 1983 Lieutenant Colonel Stanislav Petrov refused to classify an early warning system missile sighting report as an attack, and dismissed it as an error. And in 1995 Russian President Boris Yeltsin opened his nuclear weapons control briefcase when the launch of a Norwegian northern lights-studying rocket was interpreted as an attack. In 1983 the Red Air Force mistook an off-course Korean airliner carrying 100 people for one of the U.S. RC-135 spy planes that routinely violated Russian air space to test the competence of Russia’s air defenders and shot it down; Red Air Force pilot Gennady Osipovich continues to believe he shot down a spy plane. In 1988 the U.S. Navy cruiser Vincennes—at the time in Iranian territorial waters without Iran’s permission—shot down on on-course Iranian airliner carrying 290 people.


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