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Watershed of Empire: Essays on New Deal Foreign Policy

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The presidency of the George W. Bush has seen heightened claims of excutive power and privilege. It has also coincided with a series of extended wars, most notably in Iraq. Although the Iraq war is unpopular, the administration continues to pursue this policy without regard for popular sentiment. It has even had some limited success in redefining the war as various rationales for our continued presence in Iraq collapse. One element of the war that has not received as much attention is the broader use of the war on terror to control domestic policy. Americans have given up a substantial portion of their freedoms in order to fight an apparrently never ending war. The Patriot Act has received some limited criticism, but many other executive orders curtailing American freedom have gone completely overlooked. What many commentators fail to note, however, is that the origins of this administration go back quite a ways in American history. The two key elements of this paradigm, expanding executive privilege and using wars to promote domestic policies, date back to the New Deal. In this thoughtful collection of essays edited by Leonard Liggio and James J. Martin, a pair of revisionist historians from the 1970s, these trends are examined in some detail.

The New Deal was a watershed of American Empire in many ways. It was the period when the United States completely abandoned the neutrality policy, first articulated by President Washington, in favor of world wide intervention. The rationale for this intervention was that as part of a global economy, the United States had interests everywhere and therefore could justify intervening literally anywhere on the globe. Perhaps the most important essay in this volume is by the late Murray Rothbard who notes that the New Deal saw first the rise of dollar nationalism, in which the United States consciously inflated its currency as a means of trying to spend its way out of the depression, followed by a period of dollar imperialism. During the former period, Rothbard highlights how US policies forced the rest of the world into bilateral trade agreements and created conflicts over markets. During the second world war, the United States further attempted (with lasting success) to wrest financial control of the world's markets from London to New York. The dollar became the basis of the world economy. Rothbard also notes that those who stood in the way of this *progress*, notably Japan, but also Germany under the economic policies of Helmar Schacht, became our enemies. In short, Rothbard suggests, it was not the many moral failings of fascism that led to our conflict and eventual war with these powers. Rather, despite our claims of a moral high ground, it was our perceived national economic interests that led to war. One could make a similar argument about the war on terror today. Another essay in this volume that supports Rothbard's key points is Robert Freeman Smith's "Good Neighbor Policy" in which he examines how the paternalistic relationship between the US and Latin America began.

But if our foreign policy, beginning in the 1930s, was directed at achieving domestic ends like national control of the economy to help end the depression (which did end with the coming of the war) it was the imperial presidency which shaped such a policy. Many of the liberal critics of the Iraq War and the Bush administration have nothing critical to say of Roosevelt and the New Deal. After all, FDR was using executive power to promote "their" policies. But with increases in executive power comes any failings that may accompany the executive himself. William L Neumann's perceptive essay on Roosevelt's options and evasions in pursuing foreign policy highlights some of the weaknesses of the President. He really had very little understanding of either Japan or Europe, but he thought he did and some parts of policy were determined more by Roosevelt's personal quirks (a sentimental attachment towards China based on his relatives participation in the China trade for example) than on a sober analysis of the costs and benefits of a military confrontation with Japan. (This again reminds one of the rumors that the Bush administration plotted war with Iraq long before the Sept. 11 attacks based on a perception of family honor.) On a broader note, Robert J. Bresler's essay on the ideology of the liberal executive state draws convincing connections between the prevalence of wars and a powerful executive branch of government. Liberals have, for the most part, sought to actively increase the power of the Presidency and so they share some of the blame for the current administration of which they are so critical. Nonetheless, as Bresler points out, "conservatives" have done little to actually diminish the power of the executive. It seems that they too are very happy with power, although they might use it for different ends.

But if neither conservatives nor liberals really provide an alternative to an imperial presidency, what can we expect? One very real possibility is that we will engage in continuous wars while never really experiencing fundamental domestic reform. Indeed, in the 30 years since this book was published in 1976, this is precisely what citizens of the US have experienced. But the real question is whether or not there was, or is, a viable alternative. The final two essays in this book consider what the alternative was, and perhaps still is. Although stigmatized with the term "isolationist," writers such as Charles A and Mary Beard, and politicians such as Robert Taft did suggest another path for the country. While not strictly isolationist (they were open to trade with all) their alternative was to not view the rest of the world as America's economic oyster. Instead, they suggested Americans concentrate on their own economy and not expect the rest of the world to simply provide us with raw materials (like oil) for our dollars and patronage. Instead, they suggested a more limited form of nationalism, one that lacked imperial trappings. At this point, it may be too late for the US to turn away from proclaiming its interests everywhere on the planet. But one cannot help but wonder if our abysmally low image world wide would not be higher if we adopted a more laisse faire approach to international relations.

"Watershed of Empire. Essays on New Deal foreign policy" provides exactly what the title suggests, a series of essays on New Deal / WW2 foreign policy all from a revisionist point of view. Or should I say revisionist "points" of view..plural. For as the volume illustrates there is not just one revisionist interpretation or approach.

The book is edited by Leonard Liggio and James Martin and provides seven essays from seven distinctive authors. Disappointingly there are no chapters from editor James Martin, who is an excellent and entertaining historical essayist.

This book has been pigeonholed as a compendium of "New Left revisionist history". The label is partly fair as certainly insofar as most of the authors were identified with the New Left at one time or another. However, judging the content I don't think you could fairly characterise the book as particularly leftist or otherwise.

New Left revisionist history of WW2 has also sometimes been misrepresented as 'economic determinist', for example, explaining the war as a drive by US capitalism to create a global "Open Door" for American exports and foreign investment capital. Sometimes adding in a non-historical foray into economic theory or two by positing an underlying contradiction of capitalism or two, and it's usually underconsumption. To an extent the economic determinist label is a reflection of the downplaying of economic drivers in mainstream interpretations which can border on the pneumatic with the flow and resistance to "aggression" being the great explanation. In these essays only really Murray Rothbard and Lloyd Gardiner focus on economics but in neither case could their position be considered 'determinist'.

Rothbard in particular provides an excellent overview to the crisis in international monetary policy that more or less began with the Great War and unravelled through to the depression decade. He charts the US position covering Hoover, the 'monetary nationalism' of the early New Deal and the 'monetary imperialism' of the late New Deal. Rothbard manages to make this field, obscure to most of us, understandable to the intelligent layman. Rothbard argues, in short, that a viable international monetary system existed before WW1, the international gold standard (which was never a 'pure' gold standard in any case). The demands of wartime finance saw most european states off the system as it obstructed their plans for deficit spending and inflation as a source of war revenue. Post-war various attempts to revive the gold standard, if only in a watered down 'gold exchange standard' floundered. In the beginning the fault lay heavily with the UK which, with a friendly US Federal Reserve director in place, hoped to tie the US into a tiered system of payments which the US would ultimately subsidise. This system could not last and London's return to gold set at an unrealistic 'pre-war equivalent' exchange rate led to the collapse of the system. In the next phase most nations scrambled to various forms of monetary nationalism and many hoped that the US would oppose this dangerous trend. Instead the US, under the newly elected FDR presidency, "dropped a bombshell" and scrambled itself. FDR wanted as free a hand as possible to deal with the depression at home, international economics was not high on his agenda. Later as the monetary nationalism hardened and Germany developed a web of bilateral barter trading agreements, the US increasingly saw these as a threat. Into and through the war Washington pushed for a new international monetary order, this time based on the US dollar, rather than gold, which was ultimately establish at Bretton Woods after WW2. To some commentators, for good or ill, it was this desire to rebuild an open multilateral order of this type that really drove the US into the war.

Rothbard's essay plus William Neumann's more biographic treatment of Roosevelt are the 'stand out' essays of the volume. Neumann's essay is easy and quick to read like all good writing and his focus on the personality and psychology of FDR. This personality approach would seem to me to be the polar opposite of 'economic determinism'. Neumann paints a portrait of FDR that is somewhat sympathetic and human, in contrast to the hagiographies and hero worship that is more common. Neumann sees a man of charm, wit and supreme self confidence. Impatient with advisors, and advice; indeed as the years wore on there were fewer and fewer people who could either say "no" to FDR , or who he would even listen to anyway. FDR was not interested in detailed intellectual debate or argument, flexibility was the one thing he was inflexible about.

Neumann doesn't delve into the monetary issues like Rothbard but this 'quest for flexibility' suggests a link between these superficially quite different approaches. In the early days of the New Deal FDR rejected the gold standard (or indeed any multilateral international monetary system) to give him the flexibility he believed he needed to deal with the crisis at home. Gold, indeed any kind of monetary internationalism didn't suit his plans. Then as the second depression hit, the late 1930s spike in unemployment, he saw the need to turn to more internationally focused solutions, just as he was bringing more members of the business establishment into his administration. The apparently autarkic plans of Germany and, to a lesser extent, Japan, were increasingly seen as rivals. So economic conflict poisoned a well already muddy with diplomatic and ideological conflict, compromise became increasingly unlikely.

Justus Doenecke in his essay surveying the isolationist response to FDR finds them to be a diverse bunch and indeed the 'usual' isolationist / interventionist split is somewhat false. For a while there even FDR could have been labelled as isolationist. What is interesting is that in general the isolationists were generally less worried about international economics as a source of existential threat to the US or it's democratic institutions. As James Patterson points out in his essay discussing the career of Congress's lead 'isolationist' Robert A Taft, only about 5% of US national income in that less globalised era was derived from foreign trade. Japan too was one of America's major trading partners and America was definitely Japan's biggest foreign market. Taft who was always focused primarily on domestic economic matters saw war scares and war as an alarmist distraction and a diversion.

Taft and many fellow isolationists were more inclined to see existential threats to America's institutions from war generated centralisation. Certainly some of their fears were realised but hyperbole, then as now, was often the language of debate. As it turned out domestic totalitarianism wasn't the 'inevitable' result of America's wars, but civil liberties certainly suffered. They had no monopoly on hysteria. Many interventionists apparently imagined that German victory in Europe would undermine American liberty by remote economic strangulation. Or worse. Unable to breach the English channel the Nazis were expected to make a jump across the Atlantic from West Africa to Brazil and turn right towards Chicago. (Neumann also says FDR harboured a genuine personal belief in a long term Japanese plan for world conquest as told to him by a Japanese fellow student at Harvard in 1902!)

Lloyd Gardiner's essay provides the most detailed analysis of the diplomatic history including a valuable outline of the rise and fall of the Washington Naval Convention which regulated the fleets of the US, Britain and Japan. Gardiner doesn't mention it but the Washington treaty's focus on battleships encouraged the Japanese to develop aircraft carriers, a class of ship low in the Treaty's priorities. So an unpredicted consequence of the Treaty's battleship production restrictions was to foster their technical demise. Gardiner's essay is a valuable resource but not exactly the easiest reading experience.

Robert Smith, another diplomatic historian provides a second look at FDR's "Good Neighbor" policy towards Latin America. He contrasts it to Wilson's Gunboat Diplomacy. This is one area where FDR certainly did not follow his mentor and, often, model. However not all the credit for the reform belongs to FDR. Smith shows that Hoover was the real pioneer bringing home the marine garrisons. Murray Rothbard has written elsewhere that much of the New Deal economic program was derived from Hoover. Maybe here is another example of Hoover being unfairly overshadowed by his more popular successor.

Last but not least is Robert Bresler's essay which is actually the first in the book. He deals with "(t)he ideology of the executive state: (the) legacy of liberal internationalism." In a sense this is the most modern of the essays. Published in 1976 when controversy and social division over the Vietnam war ran hot, the "New Left revisionists" were seeking to find the roots of the then current crisis. The precedent of FDR and the rise of the executive state was thus highlighted, as it is again today as US foreign policy generates a renewed public crisis. As Patterson's essay on Taft indicates there were certainly options proposed in the handling of WW2 crisis and of post-war international institutions that would have reduced the risk of Presidential centralism. For example, Taft advocated that the US ambassador to the UN should be a congressional not an executive appointment. It remains for another generation to now attempt reform, if indeed it is not too late.

"Watershed of Empire" provides informative essays on WW2 from distinctive and in some ways competing revisionist perspectives. All the essays are high quality with a scholarly standard of referencing and indexing. A useful aid for for further study. Recommended.