Mises Daily

The Cold War

Mises Daily Joseph R. Stromberg

Ah, the Cold War, that heroic exercise in U.S. global philanthropy and unrelieved humanitarianism! In the end, however, we may find that it brings to mind Ozymandias, Pyrrhus, and other associations inconsistent with the prevailing mood of triumph. We may find that the Cold War perfected the witch's brew of retail Puritanism, centralism, pragmatism, corporatism, imperialism and general humbug we have come to know from McKinley, TR, and Wilson to FDR, Truman, JFK, LBJ, Nixon, Reagan, Clinton, and the lot.

As a program and ideology, the Cold War reached back into the 1890s when a U.S. elite chose neomercantilist engrossment of foreign markets as the cure for what ailed us. (In this period, they wanted more trade without lowering tariffs.) Their policy--the Open Door--paralleled European colonialism but was far more ambitious. Its domestic counterpart was the "liberal" corporatism of Progressivism - regulation to cartelize markets here just as the empire would do abroad.

The war against Spain was the first overt operation of this "large policy," then the U.S. intervened in two World Wars, disrupting the European balance of power, to meet threats to the Open Door. During the second invasion of Europe, neomercantilists outlined U.S. economic hegemony. It rested on a militarized Keynesianism pushing our heroic allies out of their colonies.

The self-named "Wise Men" of the northeastern elite were supremely confident of their ability to manage the world. With the fascist autarchists bombed flat, the Wise Men looked forward to an American Century of bureaucratic manipulation.

As they admitted in the infamous NSC-68, had there been no Soviet Union, they would still have pursued an imperial foreign policy. But, alas, Josef Stalin, Tsar of All the Proletarians, stood as an obstacle. Having rejected any spheres-of-influence deals on Eastern Europe and having let the Russians take the heaviest casualties, U.S. policy makers could not feign surprise at how far west Soviet armies had come.

Without apologizing for Stalin (the U.S. Establishment having done enough of that before and during the war), it seems obvious that, absent Germany, Russia would dominate Eastern Europe. A timely deal with Stalin might have allowed for "Finlandization" or "Austrianization," with a tier of neutral states giving the Russians a security perimeter between themselves and Germany. (Finland came out of the Russo-Finnish War, which overlapped World War II, with a Russian agreement not to interfere in Finland's internal affairs in exchange for Finnish neutrality.)

As World War II wound down, Churchill and Truman tried to undo previous promises made to Stalin. Suddenly concerned about Polish frontiers, Truman cornered Stalin, who especially wanted "reparations" from a single rebuilt Germany (already agreed), into accepting economic control over the Soviet "zone" instead.

Throwing aside the Polish bargaining chip, the Americans now felt free to integrate the most productive parts of Germany into their world economic system and, in time, their military alliance, prolonging the division of Germany into the indefinite future. This, and other U.S. pressures, convinced Stalin that he had to impose communist regimes in Eastern Europe, a step not fully taken until 1948 with the coup in Czechoslovakia.

Already in 1946, Stalin had withdrawn Soviet troops from Iran, showing caution in the face of U.S. pressure. Soviet departure in 1955 from their zone in Austria in exchange for neutralization suggests that the Cold War as we know it was not so inevitable. (In the mid fifties, Khrushchev was still proposing a reunified neutral Germany as an alternative to the U.S. putting nuclear weapons on West German soil.) Instead of considering a range of options in 1945-1947, the U.S. leadership, emboldened by their new weapon of mass destruction, proclaimed that their ideals were not negotiable (somewhat at the expense of the Eastern Europeans).

But the U.S. had fought the war with few political goals beyond defeat of the enemy, world economic dominance, and the ridiculous United Nations treaty. As fraternization with Stalin soured, a U.S. world order emerged. George Kennan's famous 1947 "X" article supplied an inverted frontier theory: "contain" the Soviets. The thesis suited the Wise Men, for whom negotiations always took place in Munich, 1938.

In March 1947, President Truman--taking Arthur Vandenberg's advice to "scare the hell out of the American people" to keep the warfare state in operation--overstated his case for taking over the British war in Greece against leftist guerrillas (not supported by Stalin). He rattled the dominoes and called for intervention everywhere to stop communism. Right-wing Republicans, speaking for voters tired of wartime controls and spending, fought the bill fiercely. This was the last stand of the "isolationist" Old Right.

They were too late. The U.S. leadership had turned a manageable great power rivalry into a titanic world-embracing contest. In its wake followed the Berlin Blockade, the Marshall Plan (an export subsidy to beat all others), the Nato treaty, the "fall" of China, the Soviet A-bomb, the independent Air Force (a mistake, especially given the U.S. obsession with bombing), the H-bomb, "McCarthyism," Korea.

The unconstitutional Korean War saved the expensive interventionist plans of the postconstitutional NSA and CIA. NSC-68--their master plan--called for quadrupling "defense" expenditures and building a virtual garrison state. Now Congress would vote the money and abdicate responsibility. Universal Military Training rushed through. The young interventionist Bill Buckley wrote that to wage the struggle effectively, "we must think in terms of institutionalizing a native despotism." (In Buckley's view this could all be dismantled if we ever "won." We're waiting.)

The permanent "crisis" provided a rationale for the Cold Warriors' pre-existing plans. They exaggerated the Soviets' capacity to do things they were said to be contemplating. It is doubtful that very many Cold Warriors expected a Russian assault on Western Europe, and few really wanted to liberate Eastern Europe by force. So they invented Nato, the Soviets invented the Warsaw Pact, and confrontation became ritualized.

A bureaucratized America grew up, overseen by National Security Managers unimpressed with the framers' fear of militarism. Robert Taft observed that interventionists were "inspired by the same kind of New Deal planned-control ideas abroad as recent Administrations have desired to enforce at home."

Marginalizing Taft, and cheating at the convention, "internationalist" Republicans captured the presidency in 1952 running against "Korea, communism, and corruption" ("K1C2," as Karl Mundt put it). Eisenhower, as a relative penny-pincher, followed a policy of "more bang for a buck"--more nukes, bombers, and missiles.

In 1956 the U.S. eased Britain and France out of the Middle East but acquiesced in the Soviet invasion of Hungary. A slight "thaw" began, symbolized by the Gulag-emptying Krushchev's visit to Disney Land. Bemoaning an imaginary "missile gap" in 1960, John F. Kennedy refroze the Cold War.

Scorning the boring 1950s, the Liberal Imperialists on JFK's team blundered into the Cuban Missile Crisis and into Indo-China. Johnson and Nixon turned Vietnam into the American Boer War (in terms of damage to the system), while pursuing detente with the Soviets and, in Nixon's case, China. Withdrawal from Indo-China and relative quiet under Jimmy Carter yielded to mad neoconservative activism under Reagan and Bush.

And, then, the Great Enemy faltered. Suddenly revealed as more neolithic than monolithic, the ramshackle Evil Empire imploded. Essentially, at a conjuncture made up of the internal contradictions of the Soviets' non-calculating mode of production (as described by Mises), the Soviet "Vietnam" in Afghanistan, and developments in the Bloc itself, Eastern Europeans took advantage of Soviet weakness, incompetence, etc., to liberate themselves.

The Cold Warriors, as stunned as Monty Python's Dead Parrot, looked around in wonder, took the credit, and called for no slackening of world-management. Retargeting, yes. They drew no lesson other than that "we won," although scholars had warned for years that even the prosperous and productive U.S. would pay a price for empire. Their first and only instinct was to address the world in the Athenian mode: "We have a right to rule, because we overthrew the Persians."

The public naively supposed that wartime levels of mobilization and control would vanish with the Soviets, and for five or ten minutes there was talk of a "peace dividend." In its context, the Gulf War seemed contrived to sidetrack any U.S. readjustment.

Looking at the entire period, what exactly were the costs of the Cold War? Some were "merely" economic. Peacetime defense budgets well above normal levels led to gross economic distortion, reduction of private savings, capital consumption, deficit spending, massive monetized public debt, and consequent inflation. The Military-Industrial-University Complex presided over foreign and domestic mercantilism, state-sponsored Big Science, constitutionally suspect federalization of education, and a federal takeover of research and development.

Felix Morley, John T. Flynn, Robert Nisbet, Richard M. Weaver, and C. Wright Mills found this troubling, but most everyone else went along. Overseas, the U.S. monetary regime could dump export-quality Keynesian inflation on friend and foe alike, as Henry Hazlitt noted.

Along with enormous leverage over the political economy, the Cold War helped Washington abridge the republican liberty of Americans. Agencies like the FBI and NSA policed dissent using powers not exactly enumerated in Article One. And no one, not even Congress, cared to know what the CIA was doing (other than making bad forecasts about the fairly obvious). All in all, the Cold War empowered the New Class priests and the New Model warriors over "those who work."

In republican terms, the Cold War was one long moment of anti-constitutional corruption carried out by an entrenched Court Party. Early on, industrialist Ernest Weir warned that in twenty years, we "will have two whole generations of Americans who have never had the opportunity to know the real America." They will accept as normal "detailed control over their private lives by a powerful central government."

Along with economic and political distortions, there were also ideological distortions. One was the habit of seizing on woolly abstractions and pursuing them. Thence flowed all the invincible optimism about lights and tunnels, "winning hearts and minds," "destroying the village to save it," "new world order," the Atlantic Charter, the Four Freedoms (why only four?), and the general notion that it was an outrage for anyone, anywhere, not to live just as we do. Most of the Right defected to the interventionist Vital Center, where neocons commune with social democrats.

"Anticommunism" allowed every foreign thug with a political problem to extort money from Congress, while the U.S. empire widened its scope under the same banner. This obscured the battle against statism, and since communism had been around since 1848, why was U.S. megastatism suddenly necessary (as Murray Rothbard asked) to fight it, starting in 1947?

The Cold War brought about a false consensus in domestic politics. Literally everything--desegregation, interstate highways, science education--could be dressed up as a Cold War necessity and thrown in the Congressional hopper. (One National Conservative even called for a federal building code so that everyone would have a bomb shelter). What emerged was an expanded state with limitless plans for reconstructing American life, the Universal New Deal.

When the Soviets fell and the masses began resisting their remodeling, the Establishment felt real fear. "National interest" and "national security" had justified any activist seizure of power. Given the unlimited nature of U.S. goals, even "security" was not what it seemed. Dean Rusk averred that "this has become a very small planet" and "we have to be concerned with all of it"; years later Casper Weinberger announced that "there is no corner of the world so remote...that it does not represent a vital interest of the United States."

All this baffled some foreigners, who never understood why U.S. policy makers acted on ideological obsessions while cynically pursuing concrete economic advantage. (Charles DeGaulle did get it.) Possibly the foreigners would have done better if they had realized that the Cold Warriors were running their own Gnostic Church with the characteristic Two Doctrines. The Outer Doctrine, taught to the laity, was that U.S. policy embodies the Golden Rule. The Inner Doctrine, taught to the Elect, was neomercantilism.

Policy makers deployed, as needed, the "communist timetable for world conquest" and the "lessons of Munich" alongside bloody-minded bomb-waving. Defense Secretary Robert McNamara mused about incinerating fifty million Chinese. During the high Cold War few stopped to ask just why we would want to do such a thing. This was the heyday of the New Defense Intellectuals and Herman Kahn's "thinking the unthinkable," easy and liberal use of atomic weapons.

In the matter of damage to foreigners, we might mention that under cover of containing the Soviets, the U.S. was actually containing Germany and Japan, delaying their re-emergence as economic and political competitors. There are also several million foreign persons, mainly civilians, rendered dead rather than Red, from Indo-China to Iraq.

Finally, there were our good and faithful servants. John Quincy Adams famously said "America goes not abroad in search of monsters to destroy." Indeed not. The Cold War allowed the U.S. to create and lionize a series of monsters (Somoza, Marcos, the Shah, Mobutu, etc.) and then destroy some of them (Diem, Noriega, and the semi-destroyed Saddam Hussein).

As attempts to pick out "the George Washington" of Outer Centralia or Inner Peripheristan, these exercises seem on average rather dismal failures. But what would disillusion an Frankenstein never fazes the U.S. wonderkids, who apparently believe that infinite self-righteousness combined with indiscriminate firepower will make their newest protege turn out much better than his predecessors.

A while back, Charles Krauthammer wrote up his wish-list of potential intervention--a plan for perpetual war against endless enemies--now that the U.S. was the "one remaining superpower." It was global New Dealism with the JFK Flexible Response Legions. But Krauthammer feared a coalition of left-wing isolationists (old hippy peaceniks traumatized by Vietnam) and right-wing isolationists (Midwestern boneheads who won't learn French).

Leftists say that U.S. intervention corrupts the world and rightists that it corrupts America, he scoffed. Actually, both are right, and that is reason enough to dismantle the institutional legacies of the Cold War. For that dreadful episode was worse than a mistake. It was a crime.


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