Super Imperialism. Michael Hudson
basis; a marked increase in the potentiality of business disputes to generate international friction,” and so forth. From this perspective national rivalries as conceived and carried out by governments were inherently more belligerent than commercial rivalries among private exporters, bankers and investors.
Viner did not, however, cite the U.S. Government’s own behavior in the 1920s. Inverting the Hobson–Lenin view of international commercial rivalries, his view had little room for such phenomena as IT&T’s involvement in Chile in the early 1970s to oppose Allende’s socialism, Lockheed’s bribery scandals in Japan or other international bribery of foreign and domestic officials, or even presidential campaign promises to protectionist interests such as those made by Richard Nixon to America’s dairy and textile industries in 1968 and again in 1972. Government planning was the problem as an autonomous force based on the inherently nationalistic ambitions of political leaders. No room was acknowledged for planning even of the kind that had led American industry to achieve world leadership from the end of the U.S. Civil War in 1865 to the end of World War I under a program of industrial protectionism and active internal improvements. “Insofar as, in the past, war has resulted from economic causes,” Viner insisted,
it has been to a very large extent the intervention of the national state into the economic process which has made the pattern of international economic relationships a pattern conducive to war . . . socialism on a national basis would not in any way be free from this ominous defect . . . economic factors can be prevented from breeding war if, and only if, private enterprise is freed from extensive state control other than state control intended to keep enterprise private and competitive . . . War, I believe, is essentially a political, not an economic phenomenon. It arises out of the organization of the world on the basis of sovereign nation-states . . . This will be true for a world of socialist states as for a world of capitalist states, and the more embracing the states are in their range of activities the more likely will be the serious friction between states. If states reduce to a minimum their involvement in economic matters, the role of economic factors in contributing to war will be likewise reduced.5
It seemed to many observers that U.S. officials were structuring the IMF and World Bank to enable countries to pursue laissez-faire policies by insuring adequate resources to finance the international payments imbalances that were anticipated to result from countries opening their markets to U.S. exporters after the return to peace. Special reconstruction lending would be made to war-torn Europe, followed by development loans to the colonies being freed, and balance-of-payments loans to countries in special straits so that they would not need to resort to currency depreciation and tariff barriers. It was believed that free trade and investment would settle into a state of balanced international trade and payments under the postwar conditions being created under U.S. leadership. Bilateral foreign aid would serve as a direct inducement to governments to acquiesce in the United States’ postwar plans, while ensuring the balance-of-payments equilibrium that was a precondition for free trade and an Open Door to international investment.
When President Truman insisted, on March 23, 1946, that “World trade must be restored – and it must be restored to private enterprise,” this was a way of saying that its regulation must be taken away from foreign governments that might be tempted to try to recover their prewar power at the expense of U.S. exporters and investors. America’s laissez-faire stance promoted the United States as the center of a world system vastly more extensive and centralized, yet also more flexible, less costly and less bureaucratic than Europe’s imperial systems had been.
Given the fact that only the United States possessed the foreign exchange necessary to undertake substantial overseas investment, and only the U.S. economy enjoyed the export potential to displace Britain and other European rivals, the ideal of laissez-faire was synonymous with the worldwide extension of U.S. national power. It was recognized that American commercial strength would achieve the government’s underlying objective of turning foreign economies into satellites of the United States. The objectives of U.S. exporters and international investors thus were synonymous with those of the government in seeking to maximize U.S. world power, and this was best achieved by discouraging government planning and economic statism abroad.
The laissez-faire ideology that American industrialists had denounced in the nineteenth century, and that the U.S. Government would repudiate in practice in the 1970s and 1980s, served American ends after World War II. Europe’s industrial nations would open their doors and permit U.S. investors to buy in to the extractive industries of their former colonies, especially into Near Eastern oil. These less developed regions would provide the United States with raw materials rather than working them up into their own manufactures to compete with U.S. industry. They would purchase a rising stream of American foodstuffs and manufactures, especially those produced by the industries whose productive capacity had expanded greatly during the war. The resulting U.S. trade surplus would provide the foreign exchange to enable American investors to buy up the most productive resources of the world’s industry, mining and agriculture.
To the extent that America’s export surplus exceeded its private sector investment outflows, the balance would have to be financed by growth in dollar lending via the World Bank, the Export-Import Bank and related intergovernmental aid-lending institutions. Under the aegis of the U.S. Government, American investors and creditors would accumulate a growing volume of claims on foreign economies, ultimately securing control over the non-Communist world’s political as well as economic processes.
This idealized model never materialized for more than a brief period. The United States proved unwilling to lower its tariffs on commodities that foreigners could produce less expensively than American farmers and manufacturers, but only on those commodities that did not threaten vested U.S. interests. The International Trade Organization, which in principle was supposed to subject the U.S. economy to the same free trade principles that it demanded from foreign governments, was scuttled. Private U.S. investment abroad did not materialize to the degree needed to finance foreign purchases of U.S. exports, nor were IMF and World Bank loans anywhere near sufficient to buoy up the payments-deficit economies.
The result was that much of Europe’s remaining gold was stripped by the United States, as was that of Latin America in the early postwar years. By 1949 foreign countries were all but faced with the need to revert to the protectionism of the 1930s to prevent an unconscionable loss of their economic independence. The U.S. Treasury accumulated three-fourths of the world’s gold, denuding foreign markets of their ability to continue buying U.S. exports at their early postwar rates. Britain in particular floundered in a virtually bankrupt position with its overvalued pound sterling, having waived its right to devalue or protect its Sterling Area in exchange for receiving the 1946 British Loan from the U.S. Treasury. Other countries were falling into similar straits. America’s payments surplus position thus was threatening its prospective export potential.
In these circumstances U.S. economic planners learned what European, Japanese and OPEC diplomats subsequently have learned. Beyond a point, a creditor and payments surplus status can be decidedly uncomfortable.
It was in America’s enlightened self-interest to return some of Europe’s gold. What private investors failed to recycle abroad, the government itself would have to do via an extended foreign aid program, perhaps under the emerging Cold War’s military umbrella.
There were two potential obstacles to this strategy. First was the drive by foreign economies to regain a modicum of balance-of-payments equilibrium and to promote their own self-sufficiency through protectionism and other nationalist economic policies. This tendency was muted, however, as Britain led Europe’s march into the U.S. orbit. This seemed to preempt any drives that continental Europe might have harbored toward achieving economic autonomy from America.
The other major obstacle to U.S. Government plans for the postwar world did not derive from foreign countries, but from Congress. Despite the overwhelming domestic benefits gained by foreign aid, Congress was unwilling to extend funds to impoverished countries as outright gifts, or even as loans beyond a point. The problem was not that it failed to perceive the benefits that would accrue from extending further aid, after the pattern of the British Loan and the subsequent Marshall Plan. It was just that Congress gave priority to domestic spending programs. What was at issue was not an abstract cost-benefit analysis