How far was U.S. policy in Asia between years 1945-1953 driven by economic considerations?
The debate about the main drives behind U.S. foreign policy has been ongoing for many years, it is crucial to the national security and trade interests of many countries, so understanding the motivations behind it could prove invaluable. The public feared that the U.S. falling to communism would mean their rights to own property and their finances would be tampered with, but the genuine motivations behind U.S. foreign policy have been discussed at length. This has allowed answers to questions such as, ‘what were the main considerations of U.S. policymakers at the time?’, and, ‘what were the fundamental drives of policies?’. As such, we can evaluate the successes and limitations of the approach taken. U.S. foreign policy in Asia during the Cold War has traditionally been seen by historians as being driven by the geopolitical strategy of containment, that is, the spread of communism was the main concern of the U.S. policymakers at the time. This view gains credence when the U.S.’s domestic situation in the 1940’s is considered. Historian Gaddis disagrees that the main concern of U.S. Asian policy was economy, instead arguing that ‘leaders of the United States had become convinced … that the survival of the capitalist system at home required the unlimited expansion of American influence overseas.’ Gaddis believes that maintaining capitalism and executing the containment strategy were the main considerations of the U.S. in Asia. However, historian Neils Thoren agrees that the main concern was economy, claiming that the aid given to Asia during the Cold War years was ‘a campaign for commerce and export.’ Thoren is of the opinion that the Truman Doctrine was a way of seeking new markets and expanding the U.S. economy and as such economic considerations played a key role in forming U.S. policy in Asia. This view is reinforced when the motivation behind the Truman Doctrine is considered. The first section of this essay will discuss the basis upon which some believe economic considerations to be the main concern of U.S. policy in Asia, such as the economic condition of the U.S. at the time and trade motivations. The second section will analyse why it can be seen that national security shaped U.S. policy in Asia and that their actions were reactions to Soviet threats. The last section of this essay will discuss the policy of containment as a potential driving force behind U.S. policy in Asia, and provide evidence of that while economic concerns played a part, it was not the driving force behind decisions made and actions taken.
The cause and nature of the effects of the 1948-9 recession can be used in argument as evidence for the importance of economy as the main drive behind U.S. policy in Asia. According to C.A. Blyth, "the most important cause of the 1948-1949 recession was substantial fall in the fixed investments.” At the time in the U.S. there was a reduction in export trade and a reduced rate of growth in consumption domestically – this damage to the economy can be argued to have been a concern of U.S. policymakers. The domestic effects of the 11-month long recession on the U.S. also included the unemployment rate increasing from 2 million workers to 3.5 million, approximately 5.5% of the labour force, and department store sales falling by 22%. As such, it would be difficult to claim that domestic economic concerns were not considered by American policymakers when executing policy in Asia. The effects may have meant that the U.S potentially used foreign policy in Asia as a means by which they could exploit the position of other countries for economic gain, perhaps in terms of trade, in attempts to avoid the recession deepening and hampering the improvement of the post-war economy. However, the recession failed to develop into a major downturn for the U.S. and is often described as ‘mild’ by economists such as Arnold Zellner, who claims the recession was a ‘mild adjustment of the economy as it accustomed itself to peacetime production.’. C.A. Blyth accredits this ‘mildness’ to the “continued rise in consumption during 1949.”, and as such, the part played by the event must be questioned as the effects of it were unlikely to have been severe enough to be the driving force behind policy in Asia. The vast majority of historians argue that the recession was not serious enough to be a reason for why economic considerations were the primary concern of U.S. policymakers.
It has also been suggested by historians such as Robert Pollard that economy was a main concern of the U.S. at the time and therefore must have affected policy in Asia. Pollard along with many others believes depressions and undesirable economic conditions to be the root of future wars, and as such U.S. policy had a more pronounced focus on economy to avoid them. While the avoidance of war can in itself be seen as a concern of the U.S. government other than economy for to consider when determining policy in Asia, it must be mentioned that economy underpinned this issue and as such is the overarching concern. Government leaders believed that future wars could only be avoided if the United States took an active role in leading the world economy and kept it operational – free from any major depressions. The core principle of this view was the “classical economists’ assumption that depressions promoted wars, whereas free multilateral trade expanded international peace and prosperity.”. Pollard argues that for American policymakers in the 1940s, “this classical notion was underscored by three important historical experiences: the seemingly effortless workings of the nineteenth-century international economy, the problems of post-World War I finance and trade, and the Great Depression” As such, policy in Asia at the time will have been subject to the economic considerations of the U.S. at the time as a healthy economic condition was seen to have been an important means of avoiding war. This view must be treated with caution, however, as this interpretation does not consider that during this period the economy of the U.S. was thriving and as such the ‘undesirable economic conditions that were feared to be at the root of wars was unlikely to have been a substantial concern of policymakers.
Similarly, an excerpt of a speech by Truman on March 12th also appears to suggest economy as the main consideration of the U.S. when determining policy in Asia. In this speech, he told congress he “wanted to help Asia,”, and “believed that our help should be primarily through economic and financial aid which is essential to economic stability and orderly political processes.” In this direct quote it can be said that Truman claims economic considerations to be his government and policymakers ‘primary’ concerns. Historian Neils Thoren explored the idea that Marshall Aid and the Truman Doctrine were ways of seeking new markets and expanding U.S. economy. This view is reinforced when the motivation behind the Truman Doctrine is considered. While President Truman claimed that the Truman Doctrine was created with the intention of providing political, military and economic assistance to all democratic nations under threat from external or internal authoritarian forces, Thoren discusses the idea that the Truman Doctrine was perhaps less a ‘crusade for peace’ and more a ‘campaign for commerce and export’, suggesting it was ‘perhaps to secure stable trade markets for export and investment.’. The doctrine as U.S. policy was likely done to avoid social and economic upheaval on the domestic front, as and such it can be said that economic considerations were the primary concern in terms of policy applied to Asia – in this case Vietnam who were ‘at risk’ of falling to communism – as although there were concerns about social stability, they were underpinned by the desire for a stable economy, reinforcing it as the main consideration. Despite this evidence, it can be argued that the fundamental drive behind the use of the Truman Doctrine was to halt the progression of communism through Asia and as such the policy of containment can be argued to be more significant than economy in this sense.
Trade motivations, as pondered by historian Dean Cheng, can also be evidence for economic considerations being a primary concern of the U.S. policymakers at the time. “The American interest in China was economic. Americans were looking for new markets to buy goods, as the British refused to deal with Americans. And the Chinese preferred to work with Americans, who bought Chinese goods.” In terms of trade with Asia, China being one of the U.S’ biggest trading partners meant that their policy towards them had to be one that maintained a positive relationship between the two nations. However, relations between the U.S. and China throughout the whole period (1949-1953) were not very positive, with the civil war in China taking place, resulting in a communist government in 1949 and the onset of the Korean war in 1950 which essentially globalised the cold war. The U.S. was keen to prolong its post-war economic success following the conclusion of WWII in 1945, a consequence of providing about two-thirds of all the ordnance used by the Allies – warships, transports, artillery, tanks, warplanes and ammunition. U.S. government heads felt that this progress could be maintained through trade partnerships with China. Without good trade relations with China, the post-war economic boom would not have continued at the rate it did, which was a motivation of the U.S. government at the time. However, the U.S.’ trade condition during this time was positive, with agreements being made and Japans progress in the manufacturing sector meant relations with Asia in terms of trade were being handled well. As such, it can be said that trade motivations were not a primary concern of policymakers as trade opportunities were vast in the period following the war.
When put into context of the overall economic climate of the period, where an economic boom had just taken place in 1951 following WWII leaving the U.S. in a much more positive condition financially than previous years, it is not surprising that it has been extensively contended that economic considerations were not the primary concern of U.S. policy makers. The situation in China after 1949, for example, caused a suspension in American and Chinese diplomatic ties for 20 years.
The policy of containment was largely a response to what U.S. officials saw as threats from the Soviets who were attempting to increase communist influences in China, Korea and Vietnam, but it is the cause and nature of the effects of the creation of the People’s Republic of China (PRC), which appears to be the most convincing evidence for the importance of the containment of communism as the main drive behind U.S. policy in this area of Asia. On October 1, 1949, Chinese Communist leader Mao Zedong led the Chinese revolution of 1949, resulting in China becoming a communist nation. This led to the U.S. suspending diplomatic ties with the PRC for decades. Although officials in the Truman Administration didn’t believe maintaining relations with Nationalist China held any strategic importance to the U.S., ‘no one in government wanted to be charged with facilitating the “loss” of China to communism.’ The ‘Domino Theory’ was also something that shaped U.S. policy in Asia, which was the belief that if larger countries in Asia fell to communism, the surrounding ones would follow suit and undermine the strength of democracy and put the U.S. at risk. Additionally, the American public feared that communism posed a threat to aspects of their way of life, such as in terms of owning private property. As such, U.S. involvement in Asia was largely centred around the policy of containment. On March 6 1947, President Truman declared that, “If the expansion of state-controlled economies (such as the communists’) was not stopped, and an open world marketplace restored for private business, a depression would occur and Americans would then have to bid farewell to their traditional economic and personal freedoms: “freedom of worship, freedom of speech, and freedom of enterprise.”)” This demonstrated how the American government, as well as the public, felt the threat of communism approached them from all sectors of the system, from economy and trade to the ‘personal freedoms’ of everyday Americans. As such, the containment of communism was the main consideration of U.S. policy in Asia as it was felt by many that a fall to communism would mean a loss of freedom both individually and in government and economy proceedings. Additionally, in the excerpt “We had banked our foreign policy on the idea of keeping Russia contained, and we had succeeded in repulsing her attempts to break out.”, Truman and his government are confident that by focusing foreign policy on containment, they were able to resist the communist threat of Russia and were satisfied with the results it produced. It can be said that the U.S. then applied this successful strategy towards Asia in the hopes of achieving similar results, and as such, also suggests that containment was the main consideration of the U.S.’ policy in Asia. However, this could be due to trade concerns as “The United States tried to disrupt, destabilize, and weaken China’s communist government. Washington believed that China was an aggressive, expansionist power that threatened the security of its non-communist neighbours.”
Melvyn P. Leffler argues that “US policymakers believed that their nation’s security depended on a favourable balance of power in Eurasia, … prosperous world economy … an elaborate overseas base system, and continuation of the American monopoly of atomic weapons.” In this comment, Leffler contends that “the key obstacles to US objectives were socioeconomic dislocation, revolutionary nationalism, and vacuums of power in Europe and Asia, rather than the policies and actions of the Soviet Union.” As the policy of containment was a result of Soviet attempts to increase the influence of communism, Leffler claims it was not this that was the primary policy of the U.S. but rather national security. He believes that the U.S went too far in extending the conflict in Asia, and that their course of action was shaped by basic security considerations – then felt threatened by Soviets doing the same thing so reacted in Asia accordingly. This could provide evidence for the argument of national security as the main concern of US policymakers at the time as it demonstrates that it perhaps underpinned other policies and approaches taken towards Asia. Moreover, Historian Ross claims that “The rise of China posed a challenge to U.S. security in East Asia, because, unless balanced, China could reach regional hegemony … (and would) seek a dominant strategic position throughout East Asia … U.S. grand strategy was to secure balance-of-power objectives at the least possible cost to U.S. blood, treasure and honour.” Ross claims that in terms of policy towards Asia, U.S. policymakers’ main consideration was national security, as they had felt threatened by China’s growing power and Soviet influence in the area, which they perceived as endangering the U.S.’ safety. This concern is further demonstrated in a section of the President’s economic report, stating: “The support of China by the Soviet Union disclosed dangers of incalculable magnitude, and made necessary a vigorous increase in the speed and size of defence preparations.” Additionally, Ross argues that, “In the aftermath of WWII, US policymakers sought … a balance of power that assured divided regions opposite the eastern and western US coasts … thus balancing the Chinese power in Europe and East Asia.”. This demonstrated that the U.S. felt threatened on two fronts, which would have concerned the U.S. government following the war, with the U.S. having lost 416,800 soldiers thus perhaps considering themselves to be outnumbered. Furthermore, although WWII commenced on September 1939 with Nazi Germany's Poland attack, the U.S. didn’t enter the war until December 1941 after the Japanese bombed Pearl Harbour, attacking the American fleet. This could demonstrate how the U.S. were highly concerned with national security threats from Asia and that despite efforts to distance themselves from the war they were willing to enter once security was threatened by Japan – highlighting its great significance regarding policy in Asia. However, it can also be said that due this period just following WWII, the issue of national security will have been less of a concern due to the amount of armaments being produce within the U.S., suggesting they would be well prepared for any physical threats, as despite the loss of around 400,000 soldiers, the threatening Japan had 2,120,000 military deaths, hence, by comparison it can be said that the U.S. may have felt it was well equipped to handle any threats to national security.
In Truman’s 1951 economic report, he stated that, “There has been very recent demonstration of our economic power, and of our capacity for further growth. In the first half of 1950, the upsurge of business recovery from the mild recession of 1949 was swift and comprehensive. This demonstrated the soundness of our economic structure.” This revealed Truman and the economists confidence in the post-recession economy and suggested that the U.S. wasn’t in a position where trade with Asia was the primary concern of policymakers. Historian Gaddis discusses this idea, “Post-war American foreign policy approximated the classical Leninist model of imperialism – that is, that an unwillingness or inability to redistribute wealth at home produced an aggressive search for markets and investment opportunities overseas, without which, it was thought, the capitalist system in the United States could not survive.” This suggests that the previous interpretation was not fully comprehensive in its contents with perhaps the intention of concealing things from the American public – possibly due to the lack of both focus and funds Gaddis believed policy put into “wealth at home” – and foreign countries – in what Gaddis thought was an attempt mask their “aggressive search for markets overseas”. Here, Gaddis suggests that according to the Leninist model of imperialism, the U.S. policymakers will have been concerned about economy. Furthermore, in Asia the U.S. were keen to maintain a positive trade relationship with Asian countries like Japan, for whom the U.S. was the main supplier of iron, coal, and steel and in 1947 Congress had agreed to provide upwards of $400 million in military assistance to several Asian and European countries and received large quantities of imports from Japan who had made significant progress in their manufacturing capabilities by the end of the decade. However, Gaddis goes on to say, “If we can accept the testimony, both public and private, of the policy makers themselves, there is little evidence that they saw a crisis of capitalism as the most pressing issue facing the country at the end of WWII.”, claiming that “Economic instruments were used to serve political ends, not the other way around as the Leninist model of imperialism would seem to imply.” At this time, the U.S.’ economic strength was potent and far-reaching, being a major exporter of agricultural goods and using this economic strength to make political gains domestically and internationally, working towards a balance of power in the region. As such, it can be said that economy was not a huge concern of the U.S. at the time as their own economy was prospering and they already secured trade agreements with those in both Europe and Asia.
It can also be said that the U.S.’ policy towards Asia regarding Indochina was fuelled by decolonisation ambitions. Upon the death of the ‘strongly anti-colonial’ Roosevelt, Truman became president and had to continue a policy of ‘non-intervention and neutrality’ towards the situation, but historian McMahon argues this was “never truly impartial”. In Indochina, France wanted to restore their colony – which the U.S. recognised as significant due to the communist threat in the region – but were being challenged by the Viet Minh nationalists. This proved a problem for the U.S. who were conflicted as Truman “felt a sense of traditional anti-colonialism,” but feared he would distance nationalist activities and risk losing them to the Soviets. However, Truman’s government later revealed they would not prevent French attempts to restore the Indochina colony. This demonstrated that de-colonisation was not a key ambition of U.S. policymakers at the time as they were unwilling to antagonise European allies in defence of Vietnamese nationalist forces. However, this is likely because after 1950, the U.S. began to perceive the region as being more and more at risk of ‘falling’ to communism and as such this was an anticipatory employment of their containment policy. This would also serve to protect trade links in the area, as well as the U.S.’ first line of defence in the Pacific (Japan and the Philippines). As such, the de-colonisation ambitions were not primary concerns of U.S. policymakers in Asia, but instead took a backseat to their containment policy and trade concerns.
Overall, it would be difficult to argue that economic considerations triumphed against the policy of containment as the primary concern of American policymakers. This claim would ignore the events taking place in Asia, that seemingly threatened the survival of capitalism and undermined democracy, that were ultimately at the heart of policy towards Asia. This argument also fails to consider the economic position of America at the time, with the onset of the Korean War and WWII prompting a period of prosperous economic conditions, such as huge trade and ordnance production and sales. Any downturns in the economy during this period, like the 1949 recession, simply served as an adjustment to peacetime economy from which the recovery was swift and relatively ‘painless’. Most convincingly, the policy of containment was the most significant consideration of U.S. policymakers as it was the underlying premise of many actions taken by the U.S. during this period, such as softening anti-colonial attitudes and leaving the French to attack the opposing nationalists in apparent attempts to quash any potential communist threat in the area.