1962-1975
RICHARD N. COOPER
US objectives during the Cold War were to prevent Soviet attacks on the United States and its allies and to prevent the spread of Communism as a political and economic system to other countries, whether by force or by threat, subversion, persuasion, or bribery. The principal instrument to prevent attack was an extensive build-up of defensive and retaliatory military forces, combined with political and military alliances that extended US protection to other countries in exchange for their engagement and support. The principal instruments for preventing the spread of Communism by nonmilitary means involved building an international economic system conducive to economic prosperity; engaging in persuasion, providing incentives, and occasionally imposing economic sanctions; and, not least, promoting a robust US economy that could serve as a stimulant to others and as a beacon for the benefits of a free, enterprise-based, market-oriented economy.
This chapter will examine the second set ofinstruments, usually neglected by historians of the Cold War in favor of a focus on the actual or threatened military actions and the diplomacy associated with them. Following some introductory remarks, the chapter will discuss developments in the world economy and will highlight the comparative economic performance between Communist countries and what was called the "free world." I will then analyze the actions taken by the United States, including public expenditures on national security and international affairs that were motivated, at least in part, by their international implications. Subsequent sections will consider US economic policies toward the Communist countries, toward US allies (mainly Western Europe and Japan), and toward the international economic system as a whole. The chapter will conclude with a discussion of actions toward other nonCommunist countries, often loosely albeit unhelpfully called the Third World, where the competition was most visible. The main focus will be on the United States, which typically took the initiative, but other countries played important, somewhat critical, supporting roles.
Economic policy, broadly interpreted, was an essential complement to the policy of deterrence. In the end, the Soviet Union was not defeated in military combat, but rather it collapsed because of internal economic weaknesses that were increasingly evident to the Soviet people and, more gradually, to their leaders. These emergent internal weaknesses marked a sharp contrast to the robust performance of economies in the orbit of the United States and its allies - first in Western Europe and in Japan, followed soon by southern Europe and the four Asian tigers (South Korea, Taiwan, Hong Kong, and Singapore), with Thailand, Malaysia, Indonesia, and others starting down the same successful path. It was increasingly evident that Communism did not work well economically - it did not deliver significantly higher standards of living to ordinary people - as became evident especially with the growing contrast between Eastern and Western Europe, between North and South Korea, and between the People’s Republic of China (China hereafter) and Taiwan and Hong Kong. After some initial successes, the Communist countries became mired in inflexible systems of resource allocation and low levels of innovation in a world increasingly dominated by rapid technological advances. Not that all countries in the non-Communist world did well. But many did, yet after an initial spurt of capital-intensive industrialization, economic performance deteriorated significantly in all Communist countries. Gradually those countries in the non-Communist world that experimented with central planning and control drew away from it - including eventually even China and Vietnam, which remained under political control by Communist parties.
It is necessary to recall the high promise which Communism and central planning of the economy held out to many. Kim Philby, the Russian spy who was high in the British diplomatic corps, could still write from his Moscow exile as late as 1968 that he had no doubt that the verdict of history would be victory for Communism.41 The battle of ideas was not decisive; but the cumulative experience was increasingly difficult to ignore. In the end, this cumulative comparative experience was at least as important in preventing the spread of Communism as was deterrence. And, of course, economic prosperity in the West made it easier to carry the financial burdens of defense, deterrence, and containment.
All this would become evident with the passage of time. In the 1960s, however, Communism was still seen as an aggressive, vigorous ideology, with continuing support from the Soviet Union but drawing also on indigenous revolutionary groups and idealistic new leaders around the world. Nearly every year brought forth some perceived new Communist threat. Fidel Castro’s Cuba became increasingly Communist from 1960. The Soviet Union sent funds and advisers to the leftist prime minister Patrice Lumumba of Congo immediately following the abrupt abandonment of its colony by Belgium, threatening the break-up of that newly independent country, and leading President John F. Kennedy to take countervailing measures. The Soviet Union under Nikita S. Khrushchev tried once again to isolate Berlin in 1961, and a wall was built to prevent increasing migration of East Germans into more appealing West Berlin, thence into Western Europe. The Soviet Union tried, with Cuban encouragement, to place missiles in Cuba in 1962, leading to the Cuban missile crisis. In 1962, China, still (erroneously) considered by many Americans to be a surrogate of the USSR, fought Indian troops in areas claimed by India. In 1964, indigenous Communist groups were disciplined enough to emerge successfully from anarchy in the Dominican Republic, prompting President Lyndon B. Johnson to send in US marines to reestablish order and an interim government. In 1965, Communists in Indonesia staged a coup, possibly with the support of President Sukarno, threatening to take the world’s fourth most populous country into the Communist "orbit"; it was brutally suppressed by Indonesia’s army. In 1967, Syria, with Soviet encouragement and support, promoted terrorist raids in Israel, leading ultimately to the Six Days War in June. In 1968, Soviet troops marched into Czechoslovakia, suppressing the "Prague Spring" and ushering in the Brezhnev Doctrine. In 1971, a left-wing president, Salvador Allende, was contentiously elected in Chile. Even as late as 1975, Communists made a serious run at taking over Portugal after the collapse of the dictatorship there; immediately thereafter they tried to do the same in Angola, newly liberated from Portugal.
And, of course, the conflict in Vietnam ran right through the entire period. So while the Communists had few successes between 1960 (Cuba) and 1975 (Vietnam), they were vigorously pursuing opportunities around the world, always with encouragement and often with material support from the Soviet Union. President Richard M. Nixon could say to his senior officials in 1971 "the impressive thing about the Communist leaders is their total absolute conviction that they’re going to win, and their determination to do everything to win. "42
These continuing episodes provide a backdrop for the efforts by leaders in the United States, Western Europe, Canada, and Japan to attempt to assure economic prosperity, both through national policy and through international cooperation. The main components of the strategy were already laid down in the late 1940s, with Marshall Plan aid to Europe, trade liberalization through the General Agreement on Tariffs and Trade (GATT), and President Harry S. Truman’s "Point Four," calling for aid to developing countries. Private US investment abroad typically followed, although it was not a reliable instrument of policy. The International Monetary Fund (IMF) and the World Bank, created in 1946, were also important features of the international economic architecture. The United States, with the sometimes reluctant cooperation of others, tried also to penalize countries within or too close to the Soviet orbit.
World History
