So, when the United States votes $400 million to help that war, we are not voting for a giveaway program. We are voting for the cheapest way that we can to prevent the occurrence of something that would be of the most terrible significance for the United States of America—our security, our power and ability to get certain things we need from the riches of the Indonesia territory, and from Southeast Asia.
Tin and tungsten? Was that it? Is that why the United States bankrolled the French war and then went on to fight its own disastrous war? “Certain things we need”?
Not exactly. There was a strong economic motive behind America’s effort to build a non-Communist nation in South Vietnam, but it requires a global context to understand it. U.S. policy was not rooted in a desire to gain a few specific resources or to help out a few U.S. corporations. Policymakers did not regard Vietnam itself as a significant economic prize. Nor were American corporations chomping at the bit to gain access to its resources. At a 1956 conference, America’s Stake in Vietnam, Leo Cherne tried to drum up enthusiasm for Vietnam’s long-term business potential, but his boosterism fell flat. He conceded that Vietnam’s “primitive economy” had so far been limited to an emphasis upon two crops—rice and rubber—by geography, French colonial rule, Japanese occupation during World War II, and a disastrous war with France. Yes, there had been surveys indicating the existence of substantial offshore oil reserves (which now make Vietnam the region’s third-largest producer of oil), but Cherne did not even mention that future possibility and historians have failed to unearth persuasive evidence that U.S. policymakers intervened in Vietnam primarily because of that country’s economic potential.
So what did Eisenhower mean? First, the “tin and tungsten that we so greatly value” came from Malaya (Malaysia after 1957), not Vietnam. He also refers to the “riches” of Indonesia, already a substantial producer of oil. Those countries were Southeast Asia’s most significant economic gold mines in the eyes of American policymakers. Indochina had to be kept non-Communist not so much because of its economic potential but because policymakers believed it was the strategic key to keeping the entire region open to capitalist development. Economic considerations were central to the domino theory, though not usually stated so explicitly. As Eisenhower put it, if Indochina “goes” (Communist), then “several things happen right away.” The neighboring countries would also “go” and so too would their free markets. Under Communist control important products would “cease coming.”
U.S. policymakers never lost sight of global economic priorities, especially after World War II. When Eisenhower addressed U.S. governors in 1953, he stressed the impact of lost markets on the United States because he wanted their support for the French war in Indochina. If he could convince them that American economic interests were directly threatened, they might be less inclined to believe that massive aid to France was merely a “giveaway program” for which the United States got nothing in return. But Eisenhower was not just worried about the American economy. He was thinking globally.
The Malayan tin and tungsten provides a telling example. The United States had indeed bought a great deal of it, but maintaining access to Malayan metals was not essential to U.S. wealth and power. They could be gotten elsewhere. But those products, along with rubber, were crucial to a triangular trade that bolstered global capitalism. American dollars spent in Malaya allowed Malayans to use those strong U.S. dollars to buy lots of British goods. That, in turn, strengthened a British economy still recovering from the wreckage of World War II and allowed the British to buy more U.S. products.
For the U.S. economy to grow, global capitalism had to be healthy. Therefore, when the United States gave $25 billion in aid to Europe after World War II, most of it through the Marshall Plan, it was not simply a humanitarian effort to help war-ravaged allies, but an investment in the future of capitalism—a way to revitalize key trading partners and secure their Cold War allegiance. For U.S. policymakers, supporting capitalism and building anti-Communist alliances were indistinguishable goals; they were “two halves of the same walnut,” to use Harry Truman’s phrase.
Of all the capitalist Asian “dominoes” that might fall to Communism, Japan was by far the most important to U.S. security managers. The recent archenemy of World War II was suddenly the indispensable ally, especially after China fell to the Communists in 1949. Keeping Japan in the U.S.-dominated Free World orbit was regarded as the top Asian priority. To make sure that happened, the United States occupied Japan until 1952 and continued to post more than 100,000 troops there and in Okinawa (which remained under U.S. administration). Washington understood that Japan’s economic success depended on more than trade with the United States and provisioning contracts from the U.S. military. It required trading partners throughout the Pacific and beyond. If Southeast Asia went Communist, U.S. policymakers feared, Japan might fall under the sway of Communist China. Keeping China surrounded by non-Communist nations was part of an integrated plan to build capitalist interdependency with Japan at the center.
This objective was put succinctly in a 1954 memo written by Admiral Arthur Radford, chairman of the Joint Chiefs of Staff: “Orientation of Japan toward the West is the keystone of United States policy in the Far East. In the judgment of the Joint Chiefs of Staff, the loss of Southeast Asia to Communism would, through economic and political pressures, drive Japan into an accommodation with the Communist bloc. The communization of Japan would be the probable ultimate result.” A decade earlier, the United States fought a brutal Pacific war to destroy the Japanese empire—the Greater East Asia Co-Prosperity Sphere. A decade later, U.S. Asian policy was founded on promoting Japan’s economic power throughout the region. The major difference was that U.S. military power, not Japan’s, now presided over the “co-prosperity sphere.”
The growth of a U.S.-dominated world economic system was such a primary goal, policymakers rarely felt a need to articulate it, even to each other. But when they did, it was sometimes put quite baldly. For example, a 1953 National Security Council memo to Eisenhower included this summary: “Economic expansion is the driving force upon which U.S. strength is based, and is basic to our concept of successfully coping with the Soviet Union.”
However, the more typical anti-Communist rhetoric called for global freedom and democracy, not global capitalism. It would be shocking to hear a U.S. president say, for example: “If we are to remain the richest nation in the world and consume more per capita than any other, we must continue to be the world’s greatest military superpower. The very survival of the American Dream at home depends on our global supremacy and our willingness to fight wars in faraway places.” It would be even more surprising to hear a president make the opposite case: “Our far-flung military interventions are making us weaker, not stronger. Not only have they harmed our reputation and inspired greater anti-American hostility, but they are driving us into bankruptcy. If we are to preserve our national wealth and make the American Dream a real possibility for every citizen, we must dismantle our global military empire.”
Foreign policy decision makers typically describe the use of American power as a force for good in the world that asks nothing in return. As LBJ said in 1965, “We want nothing for ourselves—only that the people of South Viet-Nam be allowed to guide their own country in their own way.” In dozens of other situations, many American presidents have made the same claim.
Since the nation’s beginning, territorial and economic expansion has been touted by American leaders primarily as an extension of freedom and opportunity, as a blessing to all it encompasses, what Thomas Jefferson described as an “empire for liberty.” The denial of crude imperial ambition has been a hallmark of American national identity. The greater our power and wealth, the less we have acknowledged any selfish motives in our foreign relations.
In practice, however, the United States has been far more consistent in its support of capitalism than democratic rights—the right to vote,
to dissent, to a trial by jury, to organize a union, and so on. As long as a foreign government allowed “free enterprise” and was generally supportive of American foreign policy, the United States almost invariably backed that government no matter how brutally it repressed its own people. The United States backed not only liberal capitalist democracies like Britain and France, but scores of capitalist dictators—Mobutu in the Congo (Zaire), Marcos in the Philippines, Somoza in Nicaragua, Stroessner in Paraguay, the Duvaliers in Haiti, Pahlavi in Iran, and many others.
This hypocrisy was not just a Cold War phenomenon. It predated the Berlin Blockade of 1948 and continues to the present, decades after the dismantling of the Berlin Wall. But the Cold War provided a powerful ideological cover for economic goals. The Communist threat to “freedom” always got more public attention than the Communist threat to profits.
Policies designed to incorporate South Vietnam into a global capitalist system expanded along with U.S. intervention. Even as the United States sponsored an increasingly violent counterinsurgency in the late 1950s and early 1960s, it also sought to build up South Vietnam’s economy. The key goals of economic development were to reduce the appeal of Communism while preparing South Vietnam for a capitalist future.
A major component of that project was the Commercial Import Program (CIP). Begun in 1955 and lasting until the Communist victory in 1975, the CIP was the conduit through which virtually all U.S. economic aid flowed into South Vietnam. Billions of dollars went to the South Vietnamese government in Saigon through the CIP. The main purpose of the aid was to pay for the South Vietnamese military and the government’s civil administration. But the United States had a larger aim. It wanted the money to move in and out of Vietnam in a way that would not just pay for the ongoing war, but would hold down inflation and stimulate the development of a capitalist economy.
Here’s how it worked. First, the United States sent dollars to the government of South Vietnam (GVN). But the GVN was not allowed to pay its bills directly. The presence of all those American dollars in South Vietnam’s economy was a prescription for skyrocketing inflation. So instead, the Commercial Import Program required the GVN to exchange its American dollars for piasters with a select group of Vietnamese importers. These entrepreneurs, in turn, were supposed to spend the U.S. dollars on American products and import them to Vietnam. That way the inflationary U.S. dollars would come back to the United States, leaving behind Vietnamese currency to pay for the South Vietnamese military and civil administration. In addition, U.S. policymakers hoped that the entrepreneurs would help transform South Vietnam into an urban, industrialized, commodity-based economy.
This system held down rampant inflation for a few years (later in the war it soared), but as a means to promote economic development and nation building, it was a colossal failure. It merely enriched an elite few and flooded South Vietnam with commodities only the privileged could buy. It did little to create sustainable businesses or raise the general standard of living. The people who received the import licenses were well-connected businessmen. For them, the Commercial Import Program was a windfall of vast proportions. Many of them sold U.S. dollars on the black market for two or three times the official rate. Any importing they did just added to their profits.
Few entrepreneurs used the CIP money to help establish ambitious building projects or manufacturing businesses. Instead of importing construction equipment or factory machinery, they mostly imported motorbikes, refrigerators, watches, and air conditioners. After all, commodities, not capital goods, were the quickest and safest way to make money. And who could blame them for avoiding risky “nation building” projects when their nation was being destroyed by war? So, in practice, the CIP did not advance economic development as much as live-for-the-moment consumerism.
The U.S. media did little reporting on the nuts and bolts of U.S. aid and how it exacerbated economic inequalities in South Vietnamese society. But there were occasional stories about corruption. It was nearly impossible to ignore. Opportunities for illegal gain were rife, especially among the South Vietnamese elite in business, government, and the military. Every sort of corruption flourished—bribery, embezzlement, smuggling, extortion, black marketeering, and outright theft; much of it was orchestrated and protected by the most powerful members of South Vietnamese society. So it was possible, for example, to read stories in the U.S. press about Premier Nguyen Cao Ky getting $15,000 a week in kickbacks from a Saigon racetrack, or the wife of a general making a fortune exporting brass salvaged from U.S. ammunition. But until the final years of the war, most corruption stories failed to convey the full scale and intractability of the problem.
More typically the subject was treated as a slightly lurid sidebar, allowing readers to relish some of the seedy underside of wartime urban culture. GIs, bar girls, prostitutes, thieves, peddlers, hucksters, refugees, scam artists, gamblers—all these characters and more were typically thrown together in tabloid fashion, conveying the impression that cultural degradation, economic dislocation, and rampant corruption were the regrettable, but inevitable, by-products of war, not the direct result of American intervention. A typical story in this genre appeared in Life magazine (February 1966):
The capital of South Vietnam, once a lovely, gracious city praised as the “Pearl of the Orient,” and the “Paris of the East,” has become—under the pressure of war—a grubby, frantic city, choked by a population boom, cheapened by greed and corruption, paralyzed by traffic that doesn’t move. . . . Many of Saigon’s new citizens are refugees from battle areas in the countryside. But just as many are the usual denizens of a wartime boom area—peddlers, profiteers, black-marketeers, pimps, prostitutes, beggars attracted by the smell of the Yankee dollar.
The pearl of the Orient is “almost a jungle now and jungle law prevails,” says one Vietnamese official bitterly. “Everything is for sale and almost anything will find a buyer. More than with her refuse, Saigon stinks with her corruption.” But there is a sign of hope: no one is more aware of the problem—or what must be done about it—than the military junta which is now in command.
The unintentional irony of the last line is stunning. Of course the junta was “aware of the problem”—it was a major participant in the corruption—but it had no intention of doing anything about it. Nor does the article hint that one obvious response to the problem would be to remove the Yankees. Nor is it pointed out that most of the refugees pouring into South Vietnamese cities were poor farmers who had been forcibly removed from the countryside by U.S. military policy in a planned effort to deny the Viet Cong rural supporters.
Because “nation building” proved such a failure in Vietnam, it is hard to recall how much enthusiasm it generated in certain sectors of the U.S. government and academia in the late 1950s and 1960s. An enormous ensemble of institutions and individuals developed and debated the subject. Major careers were founded on the proposition that the United States could transform “backward” or “traditional” nations into rapidly modernizing capitalist democracies.
Among the most fervent advocates of nation building was a group of social scientists known as modernization theorists. Their ideas about how societies move toward modernity constituted more than a blueprint; they formed a potent and deeply held ideology, one that went hand in glove with conventional Cold War anti-Communism and the belief that the United States had a right and responsibility to direct the world—especially the Third World nations of Asia, Africa, and Latin America—along an American-prescribed path.
The most famous and influential modernization theorist was Walt Whitman Rostow. Rostow’s father was Victor Rostowsky, a Ukrainian Jew who emigrated to New York at the turn of the last century after czarist police discovered that he was publishing a socialist newspaper in his basement. (He dropped the “sky” from his name upon arrival at Ellis Island.) Rostow’s mother, Lillian, shared her husband’s commitment to socialism and faith in the transcendent value of education. Their
deep ambition for their three sons, and their eager embrace of American political and literary traditions, was reflected in their decision to name all of the boys after famous Americans—Eugene Victor Debs Rostow, Ralph Waldo Emerson Rostow, and Walt Whitman Rostow.
Walt received a full scholarship to Yale at age fifteen, graduated at nineteen, and sailed off to Oxford as a Rhodes scholar. He returned to Yale and completed his PhD at twenty-four. Then came World War II, and Rostow went back to England as a bombing analyst, an experience that infused him with inordinate confidence in the effectiveness of aerial warfare. After the war, he returned to academic life and his boyhood dream of writing a capitalist alternative to the work of Karl Marx. That project culminated in his best-known book, The Stages of Economic Growth: A Non-Communist Manifesto (1960).
Rostow’s book received admiring reviews and a degree of public acclaim rarely accorded books about the “dismal science” of economics. Part of its appeal was its far-from-dismal conclusion. His cheerleading for American capitalism could hardly be rivaled. The United States, he argued, had reached the final stage of economic development. It was the world’s leading example of “mature” capitalism and stood as a model of progressive prosperity for all nations. Even better, Rostow was convinced that all nations, even the poorest, would eventually be swept along on the same tidal wave of history, through five stages of growth that would inevitably take them from “traditional society,” through (economic) “take-off,” and ultimately to “the age of high mass consumption,” the nearly utopian end of history with widely distributed abundance and no significant class conflict.
American Reckoning: The Vietnam War and Our National Identity Page 13
