A Cold War History Colloquy

A Discussion on PPS-23: Rick Perlstein, Greg Grandin, Seth Ackerman, Andrew Harman and Noam Chomsky

The following is an exchange in response to my piece PPS-23 which uses as a text George Kennan’s Policy Planning Staff memo the best known fragment of which reads as follow:

We have about 50% of the world’s wealth, but only 6.3% of its population. … In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity. … To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives. … We should cease to talk about vague and … unreal objectives such as human rights, the raising of the living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better.

Here are the responses I received in chronological order beginning with my initial solicitation.

1) John Halle (1/25/2013):

(In researching some of the subsequent commentary on PPS-23) I became aware that mainstream historians have objected to the standard left interpretation implicitly endorsed in my piece that (the document) says exactly what it says-i.e. we plan to exercise our power to maintain our disparity in wealth and privilege. I’m wondering whether my historian friends Andrew Hartman, Greg Grandin, Rick Perlstein, and others know about these debates and can refer me to any place where this has been hashed out.

2) Rick Perlstein (1/25/2013):

I would say though that at least in most instances the moment in which these elites decided to deal just in “straight power concepts”

never quite came, and, for instance, a geopoltics based in things like “raising living standards” was pretty much the name of the game. I would point you for example to evidence in the Judith Stein book I write about here: “Stein’s proposition is that, besotted by hubris that the good times would never end, and also by perceived cold war strategic imperatives, America gifted the rest of the industrial world with unprecedented trade concessions: unfettered access to the US market, a blind eye to others’ protectionism and a willful indifference to the possibility that these policies could render American industry vulnerable (indeed, we even encouraged Europe to form an economic cartel that “allowed Western Europeans to trade more with each other, even though this trade came at the expense of America’s own commerce”). We worked a similar generosity on one strategic corner of the industrializing world. Japan’s per capita GDP in 1950, Stein points out, was about the same as ours was in 1850. We helped that country catch up…. In 1953 “the National Security Council urged the entry of Japanese goods to the United States to halt ‘economic deterioration and falling living standards’ in Japan that ‘create fertile ground for Communist subversion.'” Walter Heller, chair of the Council of Economic Advisers during the Kennedy and Johnson administrations, said one of the advantages of the 1964 income tax cut was that it would make it easier for Americans to buy Japanese products.” This is not to say that there weren’t moments of profound wickedness and American violence along the way.

3) Perlstein ((1/25/2013, continued):

I also write about this here, noting that PPS/23 is an outlier, “illusion-stripping smoking guns like this are rare in any archive. But they are rare, Peck stresses, not merely because mandarins have wanted to hide the mercenary foundations of our foreign policy from everyone else. They have also deceived themselves. It’s fascinating to see texts meant for no one’s eyes but top officials marked by sentimentality and daydreaming, luxuriating in fantasies of altruism and world benefaction. For instance, Kennan in PPS/51 stresses “the heritage and philosophical concepts which are the inner reasons that we are… not only great but good, and therefore a dynamic force in the mind of the world.” And the preamble to NSC 5602/1: “The genius, strength and promise of America are founded in the dedication of its people and government to the dignity, equality and freedom of the human being under God. These concepts and our institutions which nourish and maintain them with justice are the bulwark of our free society, and are the basis of the respect and leadership which have been accorded our nation by the peoples of the world. Where conviction stops and propaganda starts is all but impossible to sort out in NSC documents of these years,” Peck observes. They propagandized themselves, the better to propagandize the world. “The Achesons, McCloys, Lovetts, and Harrimans were anything but moderates,” Peck points out. “Their triumph, to themselves and others, was the claim [my emphasis] that they actually embodied the [his emphasis] national interest for the presidents they served.” You see the architects of those ideas struggling to make this seem natural and self-evident. Like America’s world-shaping elites today, they resembled a “Community of Faith.” Their attitude was “fervently visionary.”

4) Seth Ackerman (1/25/2013):

In the document, those lines appear in the “Far East” section, where Kennan’s recommendations are to follow a hands-off policy toward most of Asia, and not to try to stop the advance of Communism there outside of Japan. When he said dispense with human rights talk he probably meant dispense with anticommunist human rights talk (e.g. “we must stop brutal communism in Asia”).

5) Andrew Hartman (1/25/2013):

I would say that, generally speaking, the William Appleman Williams argument that he made in “Tragedy of American Diplomacy” holds true, particularly for early Cold War types, about whom WAW implicitly had in mind when writing that book in the late 1950s. For WAW, it was a “tragedy” rather than a crime because policymakers actually believed what was best for them, best for US power, was also best for the world, best for the nations where the US intervened. Perhaps better than others, Kennan might have been more self-aware of such illusions, and so I think Seth Ackerman is correct that Kennan wanted to dispense with the more idealistic anticommunist talk and deal in more strictly geopolitical terms.

6) Greg Grandin (1/25/2013):

Andrew Hartman beat me to it, I was going to say that Williams is the best response to dealing with the endless and pointless debate over realism/idealism. He coined a great phrase in a Nation essay, which I don’t think he used anywhere else: “containment-liberation,” how the two poles of realism and idealism feed off each other. Not just in Tragedy but in Contours of American History, which Verso reissued at its 50th anniversary a few yeas back (and for which I wrote the intro).

PS: It might have been Kennan who gave Williams his title for Tragedy. Speaking at the 1955 meeting of the American Historical Association, Kennan lamented the way foreign policy often fell hostage to domestic partisan politics. It was a “pity” Kennan said, and a “tragedy.” It was quite common then, as now, for policy makers and their allied intellectuals to take about US actions as tragic mistakes — so while Williams too might have been seriously using the word “tragedy” in his title (for which he has been criticized by the left), he was also at the same time mocking, I think, this tendency, or at least trying to bring the meaning of ‘tragedy’ to a different level.

7) Halle email to Noam Chomsky (1/26/2013):

Noam: This is about a discussion I’ve been engaged in with the historian Rick Perlstein surrounding the Kennan document PPS-23 which you were the first-I believe-to bring attention to.  (Correct me if I’m wrong on this.)

In any case, my position is that a) the document says what it says-i.e. that we plan to exercise our power to maintain our disparity in wealth and privilege and b) that these recommendations were influential and were to a large extent carried out in subsequent years.

Perlstein seems not to object to a) but he takes issue with b)

(quotes from Perlstein above appended)

8) Noam Chomsky (1/27/2013):

Your position is quite accurate.  PPS 23 went beyond the paragraph cited (and note that that passage was specifically about Asia, not the industrialized world, Europe and Japan), and was one of a series of policy statements produced under Kennan’s direction by his Policy Planning Staff.  The general idea was that the industrial societies should be reconstructed, but within the framework of world order that the US would administer.  Other parts of the world were assigned particular “functions” within this system.  Thus Africa was to be “exploited” (Kennan’s phrase, in PPS 23) for the reconstruction of Europe, Southeast Asia would “fulfill its major function as a source of raw materials for Japan and Western Europe”, etc.  Of course the industrial world had to be reconstructed.  The primary reason was the “dollar gap.” The US had a huge manufacturing surplus, and the only countries that could serve as markets and targets for investment were the industrial societies — that’s aside from the obvious geostrategic concerns about world domination.  Triangular trade relations were therefore established linking the US, Europe, Japan, and their former colonies — for Japan, as Kennan put it, the US must provide it with “an empire toward the South” — in other words, its “New Order in Asia,” but now under US control.  That was the motivating factor for the Indochina wars, from 1950, after the “loss of China”.  In Europe, the Marshall plan was a bonanza for American capitalists.  And they knew it.  Here’s a passage lifted from my book World Orders Old and New, where all of this is discussed, with documentation and scholarly sources cited (notably Willam Borden’s excellent study):

The Marshall Plan “set the stage for large amounts of private U.S. direct investment in Europe,” Reagan’s Commerce Department observed in 1984, laying the groundwork for the Transnational Corporations (TNCs) that increasingly dominate the world economy.  TNCs were “the economic expression” of the “political framework” established by postwar planners, Business Week observed in 1975, lamenting the apparent decline of the golden age of state intervention in which “American business prospered and expanded on overseas orders,…fueled initially by the dollars of the Marshall Plan” and protected from “negative developments” by “the umbrella of American power.”

So Perlstein is partially right, but apparently missing the point of the elaborate and sophisticated planning of which PPS23 was a central part – not an outlier at all, as is clear from reading it through and understanding that it is part of a series of policy proposals, then implemented.

He’s right that open admissions of intent are rare and that mostly policy makers bask in self-serving rhetoric.  I doubt, frankly, that it’s deceiving themselves.  There’s every reason to suppose that they believe it – and as everyone knows, it’s not hard to convince oneself of what it’s convenient to believe.  I’ve reviewed material from captured Japanese archives and from recently released Kremlin records, which reveal the same commitment to noble goals, overflowing humanity, etc., right at the times of the worst atrocities.  And it’s painfully familiar from the history of imperialism, slaveowning, patriarchy, and much else.

The most naïve part of Perlstein’s comments is the reference to American “generosity.” Policies aren’t made by and for the public.  There was plenty of generosity, but from the taxpayer to US investors, owners, managers – internal class war.  That holds of every one of the cases he cites, and as I just quoted, they’re quite aware of it, even if liberal intellectuals prefer tales about “our” generosity.

9) Perlstein (1/25/2013): (in response to Chomsky):

The problem with Professor Chomsky’s response is that it fundamentally contradicts itself. Is he defending the notion that American Cold War planning was single-mindedly dedicated to the goal of preserving a state of affairs where America controlled 50 percent of the world’s wealth in perpetuity, even though it only had six percent of the world’s population, as the Kennan fragment proposes? If so, how to explain, for example, how America’s cold war policies toward Japan enabled and encouraged that country, which manufactured 10,000 cars a year in 1950 (when its gross domestic product per capita was the same as America’s in 1850), to manufacture over a million a year by 1975. This most decidedly helped Japan draw down America’s share of world GDP. Was this “generosity…from the taxpayers to U.S. investors, owners, managers”? Not really. The rise of Japan as an industrial giant very much harmed U.S. investors, owners, and mangers, whose fallings rates of profit in the 1970s Professor Chomsky will be well familiar with. By 1979, Chrysler was on the verge of bankruptcy and was bailed out by the U.S. government. This was an unintended consequence of the various actions the U.S. directly took encourage Japanese industrial growth. It was not copacetic for U.S. investors, owners, and managers at all.

Likewise, of the idea that “the Marshall plan was a bonanza for American capitalists.” The evidence powerfully adduced by Judith Stein suggests, well, sometimes yes, sometimes no. “After the war,” Stein reports, “the United States contained 60 percent of all the capital stock of the advanced capitalist countries and produced 60 percent of all output.” By the 1970s this was down to 50 percent, and plunging. Europe got richer, but not, necessarily, American capitalists.

Now, the problem is that Professor Chomsky then shifts the terms of the discussion, making it about transnational corporations—”the economic expression” of the “political framework” established by the Marshall Plan. He would extend that, presumably, to the parallel project of economically developing Japan. Now, you can argue that the Japanese auto manufacturers, being transnational corporations, are in some abstract sense still the beneficiaries of the sort of early cold war State Department “elaborate and systematic planning” we’re discussing here—planning that ended up with U.S. companies being worse off. But if so, I’m confused. Are we having an argument about the evils of nationalism, of an American will to power, a class war in the interests of “U.S. investors, owners, managers”—”America controls 50 percent of the world’s wealth, even though it only had six percent of the world’s population, and our aim is to keep it that way”—or are we talking about a class war in which the relevant actors are cosmopolitan corporate elites?

It doesn’t really matter, really, to my point, which is about how history works in general. It’s not neat. People try to “plan.” They fail. To believe that elites can simply order the world of their sovereign will is, to borrow one of Professor Chomsky’s is “naive.” And gets you tangled up into confusions in which you forget whether the malefactor is supposed to be jingoist capitalists or a cosmopolitan capitalists. Because the simplicities of the scheme simply break down.

Writes Stein, “Many believed that American industry was so strong that it would not suffer from unilateral trade trade measures that drew imports from Europe and Japan…Trade policy could be hijacked by diplomatic elites because trade never figured prominently in U.S. economic planning. [For example Henry Kissinger was always railing angrily at aides who called his attention the trade consequences of American strategy. “Working as an economist for Kissinger,” said the man whose job it was to make sure the National Security Council paid attention to domestic industrial interests, was comparable to “being in charge of the military for the Pope.”] She continues, “even Americans who predicted economic harm supported unilateral reductions…. The United States looked the other way as Europe and Japan protected markets and discriminated against American producers.”

Was this “generous”? Maybe that’s not the right word. But what I am certain it was not was some simple, unsentimental attempt to keep America controlling half the world’s wealth—for other interests within the governments had, well, other interests. That’s all: that it’s complicated. I’m not a sentimentalist. Just an empiricist.

10) Chomsky  (1/30/13) (in response to Perlstein)

If Perlstein takes the trouble to look at the documentary record, or even the secondary literature, or for that matter even what I wrote to you, he’ll learn that the US tried hard to help the industrial powers, including Japan, to reconstruct, for the reasons I mentioned, which are well-documented in the sources I referred you to.  In the case of Japan, there were additional reasons after “the loss of China” and the feared “loss of Indochina.” For details, see, e.g., John Dower’s work on Japan as the “superdomino” in vol. 5 of the Pentagon Papers, or my article on the background for the US war in IC in For Reasons of State, citing the PP and others sources.  That’s how the US became involved in the IC wars in 1950.  A further look will show that Japan’s rise as a competitor was not anticipated in the 1940s, when these plans were laid, or indeed until the late 1960s, when the Vietnam war gave a huge shot in the arm to the Japanese economy.  Here’s a paragraph from my Year 501 on the matter.

With regard to Asia, the principles were first given a definitive form in an August 1949 draft of NSC 48, Bruce Cumings observes.  The basic principle it enunciated was “reciprocal exchange and mutual advantage.” A corollary, again, is opposition to independent development: “none of [the Asian countries] alone has adequate resources as a base for general industrialization.” India, China, and Japan may “approximate that condition,” but no more.  Japan’s prospects were regarded as quite limited: it might produce “knick-knacks” and other products for the underdeveloped world, a US survey mission concluded in 1950, but nothing more.  Though doubtless infused by racism, such conclusions were not entirely unrealistic before the Korean war revived Japan’s stagnating economy. “General industrialization in individual countries could be achieved only at a high cost as a result of sacrificing production in fields of comparative advantage,” the draft continued.  The US must find ways of “exerting economic pressures” on countries that do not accept their role as suppliers of “strategic commodities and other basic materials,” the germ of later policies of economic warfare, Cumings observes.

Even if Perlstein were familiar with the history of this period, his claim is senseless on internal grounds.  The fact that Kennan intended to “maintain the disparity” with Asia (and the non-industrial world generally) is not in the least inconsistent with the fact that the plan did not fully succeed.  That’s like saying that Hitler didn’t intend to conquer Russia because he failed.  In fact, the failure came long before Japan’s rise in the ‘70s.  The major “loss” was of course the famous “loss of China” by 1949.  Recall that the plans were that the US would control all of the Far East, certainly China.

The same is true of his citation of Stein on the Marshall Plan.  The goal was to enrich American capitalists (who were very pleased about it, as I noted) and also to enrich Europe, for the reasons I mentioned.  His response is plainly irrelevant.

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