Foundations of the American Century

by Inderjeet Parmar

  Additionally, I will explore this issue at the level of the foundations’ roles in forming and mobilizing elite, attentive, and public opinion. As the U.S. political system is especially responsive to public opinion, American elites developed sophisticated means of engineering consent. The role of the foundations in opinion formation will be considered through their financing of important prointernationalist and anti-isolationist publicity organizations; women’s conferences, labor unions, and business associations; workshops and educational materials for school teachers and students; research on internationalist public opinion formation strategies and the effectiveness of specific kinds of radio broadcasts; and building connections with interest groups promoting policies such as the abolition of American neutrality legislation in the late 1930s and American belligerence before the Japanese attacks on Pearl Harbor in December 1941.

  The book also considers how the Big 3 foundations directly promoted American hegemony through their networks of U.S. universities’ area studies programs and linkages with overseas universities in countries strategically vital to American interests. In particular, the project explores three case studies (of regionally and strategically pivotal countries: Indonesia, Nigeria, and Chile) to show how the foundations constructed knowledge networks that promoted specific forms of economic development strategies (capitalist modernization), positivistic social-scientific research methodologies, and financed American-foreign university collaborations.

  The flows of people (academics, doctoral students, policy practitioners), ideas (capitalist economic and political development via international loans, aid, and investment), and money (foundation grants) that the networks facilitated were the means by which foundations concretely built American hegemony. Research suggests that the construction of networks is both a means of hegemony construction as well as an end in itself because, once established, the network connects and maintains flows of people, ideas, and finances, ensuring that Third World elites remain within the orbit of powerful American/Western institutions.

  The third question—the roles of foundations in globalization, democracy promotion, and global civil society—will be addressed by examining an emerging secondary literature on philanthropy in the twenty-first century71 as well as the activities of the International Network of Strategic Philanthropy, the Asia-Pacific Philanthropy Consortium, and the major American foundations and their European counterparts (Soros’s Open Society Network, Europe in the World, and the European Foundation Centre). Such networks of philanthropy—and philanthropic networks of networks—have played a major role in the development of globalization forums such as the World Economic Forum and World Social Forum, in addition to significant funding for the United Nations’ globalization-related institutions and the World Bank’s development and poverty-reduction programs.72 Finally, global philanthropy—following the American domestic model—is claiming to develop international nongovernmental and transnational advocacy organizations and coalitions that constitute part of a more representative and accountable “pluralistic” global civil society that plugs the “democratic deficit,” a claim challenged by new research.

  The chapter structure of the book aims systematically to address the issues above: chapter 2 examines the historical origins and aims, sociology, and worldview of the foundations’ leadership groups, considering the case for the foundations being central components of an East Coast foreign policy Establishment.

  Chapter 3 covers the period from the 1930s to the end of World War II, considering the ways in which, in a period of “isolationism” in U.S. foreign policy, the foundations fostered liberal internationalism and combated the forces of isolationism. It will also discuss how philanthropy assisted the United States’ rise to globalism during World War II by opposing neutrality legislation and sponsoring elite interventionist organizations like the Council on Foreign Relations, the development of university-based IR programs, and of realism as a dominant discourse within the IR discipline. It also examines in some detail the construction of elite knowledge networks and their planning for a new world order.

  Subsequent chapters of the book cover the Cold War period from 1950 to the late 1980s and consist of detailed analyses of the foundations’ promotion of Americanism and undermining of anti-Americanism through the development of an American Studies network, including the Salzburg Seminar in American Studies, Henry Kissinger’s Harvard International Seminar, and the rise of the British and European associations for American Studies (chapter 4). Chapter 5 explores the role of the Ford Foundation in Indonesia and the establishment of an Asian studies network; in particular, the chapter investigates the functions of the Cornell University Modern Indonesia Project and the role of the so-called Berkeley Mafia or Beautiful Berkeley Boys in the transfer of power from the leftist Sukharno to the military regime of Suharto and in the beginnings of the globalization of the Indonesian economy. Chapter 6 details the development by the Ford, Carnegie, and Rockefeller foundations of a capitalist modernizing elite in Africa, with special but not exclusive reference to Nigeria, and the development of an African studies network. Chapter 7 considers the roles of the Big 3 in Chile and the Latin American studies network, with special reference to Ford and the “Chicago Boys,” USAID, and the economics departments at the University of Chile and the Catholic University. In addition, chapter 7 examines the transition from Allende to Pinochet (1970–1975), the rise of neoliberalism, and the role of Ford’s economists.

  Chapter 8 examines the roles of American foundations in the post–Cold War and post-9/11 era: development and promotion of neoliberal globalization, democracy, and global civil society; combating the upsurge in post-9/11 anti-Americanism; and developing a post–Bush era approach to global power. Chapter 9 concludes the book by considering the significance of American foundations to the development and consolidation of the American Century of imperial hegemony; the foundations’ appreciation of the power of politically motivated elite knowledge networks; and the theoretical implications of the historical and contemporary evidence.

  2

  AMERICAN FOUNDATION LEADERS

  This chapter considers the historical context of modern American philanthropy, the men who created and led the foundations, and the views of the world that shaped their activities. The evidence shows that foundation leaders were a core part of the power elite of the United States—unrepresentative, unaccountable, yet highly influential in the nation’s foreign relations, undermining pluralistic notions of competing elites. The evidence supports the Gramscian case that the foundations were part of a historic bloc of private and state elites cohered by a long-term globalist hegemonic project. The evidence challenges accounts of American philanthropy that argue that the foundations were disinterested investors in ideas for their own sake or for the betterment of society or mankind in general. The leaders of U.S. philanthropy were both products and producers of history, playing a vital role in America’s rise to globalism, despite their neglect by mainstream political science and international relations.1

  American foundations occupy a distinct place in national life, though one at odds with some of its core values. In a society dedicated to democratic accountability and responsibility, they are answerable to no shareholders, market forces, or electors. Just as the great concentration of corporate wealth and power worried Americans raised on the ideal of the “small manufacturer, artisan and unrestricted competition,” so are there periodic anxieties about the robber barons’ philanthropic largesse.2 They are blocs of concentrated “venture” capital generating “political” and intellectual influence, weighty players skewing the “free market of ideas,” violating a value and expressing a contradiction that sits at the heart of the American liberal tradition. Foundation leaders’ attitudes reflect their vaunted positions: they tend to be “democratic elitists” who take a rather dim view of the “masses.” The latter are seen as objects fit for philanthropy-funded experts’ investment and intervention but not as subjects in their own right.3 />
  Of course, the Big 3 foundations are not without their democratic or liberal features: they value free speech, intellectual inquiry, and pluralistic features of the political system, including the role of public opinion. The foundations also claim to be meritocratic, with trustees recruited from all walks of life. Each of those characteristics, however, is hemmed in by qualifications. Their commitment to intellectual freedom is bounded by their political centrism, their opposition to the left, right, and isolationists, for example. Their commitment to public opinion is fundamentally a belief in the pervasiveness of popular ignorance and the consequent need for elites to “educate” the people in “right thinking.” Their meritocratic outlook is tempered by the consistent practice of recruiting white, male trustees overwhelmingly from elite social and economic backgrounds. And those trustees recruited from nonelite backgrounds are normally already acculturated and assimilated to elite culture.4

  That such organizations have developed in a relatively open political democracy may at first appear to be a contradiction. In fact, for elites, such organizational forms are an absolute necessity in democracies, in which public opinion is valued and potentially very influential at decisive historical moments.5 Elite interests in democratic polities are protected precisely by well-organized small groups that build networks to promote particular kinds of thinking among publics, adherence or acquiescence among the masses, coherence and consensus among elites, and specific political programs at the level of the state. Such patterns of organization may specifically be sourced in the institutional innovations developed by the “founding fathers” of American philanthropy. This chapter shows that Carnegie, Rockefeller, and Ford were at their most innovative in engineering systems of organization, the technologies of power: combination, centralization, networking vast corporate undertakings across America and the world, modernizing America into a single “system” suited to their own corporate purposes, building a new “administrative” state at home, and, looking outward, increasingly internationalizing their power. Their philanthropies were molded in the slipstream of organizational innovations fundamental to managing and maximizing the power of gigantic corporations with global reach. “Giving”—in the “scientific” and systematic ways that characterized early twentieth-century philanthropy—was in very large part also a means of increasing the power and influence of the givers. While their appetite for wealth could be sated, in most cases, philanthropists’ “desire for power… was not subject to the same law of diminishing returns,” as Wall argues. Philanthropists’ appetites were imperial in character and content—they wanted to reign supreme.6 This was particularly important at a time when the institutional capacity of the American federal government, though developing, was limited.

  Plainly, the changing position of the United States in the world, allied with profound domestic transformations, played a fundamental role in giving birth to modern American philanthropy. The personal and impersonal forces of history created the contexts for emerging elites in the United States to see their country differently from the late nineteenth and early twentieth centuries onward. For East Coast elites, America was economically, politically, and morally superior, ready not merely to sit at the “high table” of world politics but to supersede moribund colonialism by exporting the “American dream” to the world.7 Born in anticolonial revolt, the United States laid claim to being a relatively mature democracy, an attractive and open society based on individual opportunity.8 In today’s language, East Coast elites believed that the United States had an abundance of “soft power.”9 Foundation elites wanted better to project their “soft power” alongside their aspiration that the American state develop and promote its own soft and hard power.

  Two of the Big 3 American foundations or, rather, “families” of foundations—Rockefeller and Carnegie—were formed at the very end of the nineteenth and beginning of the twentieth centuries. The Ford Foundation was formed in 1936 but only became a national organization in the early 1950s, and it was constructed on the Rockefeller/Carnegie model. Therefore, the foundations were active through two world wars, the “roaring” (and isolationist) 1920s, the Great Depression, and the Cold War. They remain highly activist in today’s post–Cold War, post-9/11 world, a world characterized by the American-led “global war on terror.” They are seasoned organizations that have learned skillfully to adapt to their environments as well as to play key roles in shaping those very environments, domestically and internationally.

  It is all the more remarkable, then, to note that despite the tumultuous events of the twentieth century, the foundations’ overall strategic goals with regard to promoting America’s position in the world have remained virtually unchanged. There have clearly been organizational and programmatic developments and adaptations, but their commitment to a strategic mission has remained constant. This tactical dynamism has been essential to their survival, development, and influence. As liberal internationalists in the 1920s and 1930s, for example, Rockefeller and Carnegie philanthropies found themselves marginalized in an era of relative isolationism in U.S. foreign policy. Yet their modus operandi proved highly adaptive. Rather than giving up, foundation leaders strenuously incubated an internationalist “counterhegemony” to the prevailing (and, admittedly, uneven) isolationist mainstream.10

  The Big 3 are adept at fending off political attacks from left and right on their very existence, including their claims to “Americanism.” In 1915, for example, the fledgling Rockefeller Foundation was attacked in the U.S. Congress from the left, as being an undemocratic influence in the American body politic. In the McCarthyite 1950s and the neoconservative-dominated post-9/11 years, the Big 3 foundations were and are still challenged from the right for acting in anti- or “un-American” ways, such as “losing” China in 1949 and supporting Palestinian “terrorists” since 9/11.

  Of course, wars have had a major influence on foundations’ activities, accentuating their central strategic mission. The drive to war in the mid-to-late 1930s and the opportunities offered and threats posed to the United States influenced the precise mechanics of Rockefeller and Carnegie’s mission but did not alter the mission itself. World War II, the onset and demise of the Cold War, and the terrorist attacks on September 11, 2001, worked in much the same way on the foundations’ strategic thinking and operations. The onset of the era of globalization affected foundations’ programs but not their underlying rationale: the promotion of American power.

  Finally, the point about tactical dynamism and strategic consistency may also be made with reference to the character of the foundations’ leadership cadres—boards of trustees and organizational managers: elite, white, and male. Of course, in an era of globalization and transnationalization, i.e., since the 1980s, the foundations have recruited some women, African Americans, and foreign nationals to their boards.11 Yet their elitism remains intact; the foundations leaders remain wedded to the institutions and aspirations to global preponderance of the American foreign policy Establishment.

  THE INTERNATIONAL CONTEXT

  It hardly needs to be stressed here that the structure of world economic, political, and military power was undergoing profound change in the late nineteenth and early twentieth centuries, when the foundations emerged. By 1950, the contours of world power were almost unrecognizable by the benchmarks of the 1890s or even the Great War. Britain famously declined from heading a global empire to being a power struggling to find a role, as Dean Acheson, an arch-Anglophile, remarked.12 The flip side to one power’s decline, of course, is frequently another’s ascendancy. The United States benefited enormously from Britain’s pyrrhic military victories, principally economically and financially. While Britain used up its blood and treasure, the United States operated as the “arsenal of democracy” (not to mention its bank)—the producer of the materiel of war but itself guaranteed protection by oceans to east and west and weak powers to its north and south.

  America’s economic and financial transformation following the
Civil War (1861–1865) is remarkable. The facts are well known: agricultural output expanded in all areas—wheat (by 256 percent) and refined sugar (460 percent), for example. Coal production increased by 800 percent between 1865 and 1898, while steel-rail production burgeoned by over 500 percent. In 1901, when they were sold to J. P. Morgan, Andrew Carnegie’s mills alone produced more steel than the entire British steel industry.13

  By 1937, the United States accounted for one-fifth of the world’s total manufactured exports; by 1939, the nation’s overseas capital stood at over $12 billion, outstripping Britain’s holdings by $3 billion. As early as 1918, the United States had become the world’s largest creditor nation: the world owed the United States $1.2 billion, not including government loans. By the late 1930s, the City of London’s preeminent position as the world’s financial center was overtaken by New York’s Wall Street.14

  Such preeminence created the basis for a more assertive and nationalistic foreign policy. Many economic, commercial, and other interest groups demanded that the United States “punch its weight” in global affairs. According to Hofstadter, the Europeans’ “scramble for Africa” in the 1890s was viewed with alarm by many American elites, fearing that the carve-up of the world would exclude the United States from a share of the spoils.15 Presidents McKinley (1897–1901) and Roosevelt (1901–1909) were particularly assertive, militarily defeating Spain in 1898, facing down German encroachments in Venezuela in 1902, generally enforcing the Monroe Doctrine of 1823 (“America for the Americans”), and intervening in Latin America as it suited U.S. interests. As Paul Kennedy argues, however, American policy makers were also more active in global affairs beyond the Western hemisphere: 2,500 American troops were dispatched to “restore order” in China in 1900; Roosevelt acted as mediator in the Russo-Japanese War of 1904–1905 (for which he won the Nobel Peace Prize) and insisted on American participation in the Algeciras Conference in 1906 over the future of Morocco.16 Roosevelt was an Anglo-Saxonist imperialist who believed that “backward” peoples needed the tutelage of superior races. “More and more,” he argued in 1902, “the increasing interdependence and complexity of international political and economic relations render it incumbent on all civilized and orderly powers to insist on the proper policing of the world.”17 Roosevelt was no outlier but was strongly representative of a dominant tendency within an emerging East Coast foreign policy elite.