We Sell Drugs: The Alchemy of US Empire

by Suzanna Reiss

  These public programs and policies were paired with more covert levels of collaboration between business and government officials. The United States gathered intelligence through business contacts acting as undercover agents across Latin America. Even before the United States officially entered the war, US businessmen had access to extensive market information that they shared with the government.118 For example, in 1940, responding to a request from the Federal Bureau of Narcotics, Maywood provided information about the state of the coca industry in Peru, including statistics on quantities of cocaine exported as well as a list of cocaine manufacturers in the country.119 After the BEW’s initiative began, these business intelligence networks were more aggressively used. As an expression of his “loyalty to this country,” Maywood’s Peruvian supplier began providing the company with information on businessmen in the region, and Maywood in turn passed the information on to the US government to facilitate the implementation of the Proclaimed List.120 The government actively coordinated these covert intelligence-gathering efforts, as recommendations made by the Board of Economic Warfare made clear: “To handle the job effectively for the whole country, however, at least two experienced Spanish-speaking American business-men should be employed for field investigation. It is suggested that these men ostensibly retain their private positions as representatives of American business so that their moving about the country unobtrusively will be facilitated.”

  These “undercover agents” were only one part of a much larger “corps of unofficial observers” culled from “friendly firms” who monitored Proclaimed List matters for the US government.121 All of these sites of public and private collaborations ultimately placed the US government and pharmaceutical industry in a decisive position to capitalize on the drug trade and the regulatory principles and powers that traveled with it in the war’s aftermath.

  SCENE SET FOR DRUG CONTROL

  The experience on the ground in Peru and Bolivia during the war served as a laboratory for US-promoted drug control policies around the world. By the end of the war, the economic warfare policies had effectively squeezed German-manufactured pharmaceuticals out of the Andean market, replacing them with the more “desirable” US-manufactured equivalents. In Peru, economic warfare policies not only helped US corporations triumph over German business in the realm of pharmaceuticals, but even before the end of the war the United States “ranked in the first place as a supplier of merchandise” and was “by far the principal source of Peruvian imports,” while also being the most lucrative export market for Peruvian raw materials.122 US pharmaceutical companies gained knowledge and access to the Andean market and acquired a preferential trade status for US “pharmaceutical specialties.”123 Bolivia similarly emerged from the war increasingly dependent on exports to the United States, particularly as the price of tin began to drop and Southeast Asian sources of supply returned to the market. Glenn Dorn has described the testy negotiations between the State Department, the Foreign Economic Administration, large mining companies, and the Bolivian government over a new tin contract, where the desire to maintain labor protections was counterbalanced by the power of large mining companies, the sinking price industrial countries were willing to pay, and the vulnerable negotiating position of the Bolivian government (which would subsequently fall in a coup) ever dependent on tin revenues.124

  By the end of the war there was a huge influx of US drug companies and products into the region.125 This was concurrent with the implementation in Peru of a drug control apparatus based largely on that advocated by the United States. While Bolivia had no industrial production of pharmaceuticals, Peru’s limited output made regulatory oversight of special concern to American officials. In October 3, 1944, the Peruvian government issued a decree “establishing regulations for the control of the sale and distribution of narcotics in pharmaceutical establishments in Peru.” The decree followed the system of control already in place in the United States by making physician prescriptions necessary for sales to the public, closely monitoring distribution, and requiring drug manufacturers to notify an inspector general of pharmacy about levels of output.126 The logic of drug control promoted by the United States clearly had penetrated the upper echelons of the Peruvian government. While expressing enthusiasm for these measures, the United States maintained its desire to limit the Peruvian manufacturing of narcotics, preferring that Peru remain primarily a provider of raw materials. As the Treasury secretary explained to the State Department in 1944, with regard to an anticipated Peruvian government monopoly for the manufacturing of cocaine, “It would be desirable, however, from the American point of view if the monopoly were confined solely to the production and sale of coca leaves and not the production of cocaine.”127 Seeking to maintain the prewar status quo within the coca commodities circuit, the United States continued in its efforts to ensure that Peruvian involvement was limited to the production and sale of raw materials.

  The war also facilitated US dominance in drug manufacturing in other ways. For example, in 1944 the US government asked pharmaceutical manufacturers to help organize “intelligence teams” to travel with troops deployed in Europe. The Drug Resources Industry Advisory Committee (established early in the war and led by the executive vice president of AmPharMA) “set up a committee on intelligence objectives” that organized the military-escorted travel of pharmaceutical representatives from Eli Lilly, Winthrop, Abbott, American Cyanamid, and Dow Chemical, among others, through Europe to assess the drug industry and obtain information regarding “formulae, microfilms, samples of products and other data found in captured German plants or obtained from technicians or other personnel of these plants.”128 In this way drug manufacturers benefited from their close ties to the government, gaining privileged access to knowledge of competitors’ products and manufacturing processes, while strengthening the collaborative relationship between US drug manufacturers and the government.

  The end of the war also brought about the implementation of US drug control policies in the Allied occupied territories, making the US model the de facto global model for the postwar implementation of an “international” control apparatus. As early as February 1944, the US Department of State was encouraging international support for drug control in former Axis territories: “In view of the possibility that after the war there will be an increase in the illicit narcotics traffic and in drug addiction in Europe as there was after the last war, it would seem desirable that consideration be given to the question of effecting complete control over the narcotic drugs in the areas which come under the military or civil authorities of the United Nations.”129

  And indeed among the first steps taken after the war’s conclusion, in the US Zone in Germany and the Allied Command in the Pacific, was the “re-establishment of narcotics control.” In Germany, the US proposal to establish a Narcotics Control Working Party was adopted to centralize drug control across the four occupied zones. In Japan and South Korea, US occupying authorities established a centralized supervision of narcotics, and the Permanent Central Opium Board (PCOB) (created by the League of Nations) expressed its “appreciation of the initiative taken by the military authorities responsible for Pacific Headquarters, by the Department of State and by the Commissioner of Narcotics of the US in bringing about this desirable result.”130 As the FBN reported, these initiatives extended beyond occupied territory: “We are cooperating with the Civil Affairs Division of the War Department as they go into liberated territories. They are engaged in reestablishing narcotics control and trying to see that the stocks are properly safeguarded and distributed.”131

  As in South America, what this meant was that the United States became the primary supplier of manufactured pharmaceuticals in each of these regions and a guiding force behind the implementation of a drug control and policing apparatus. For instance, since Germany was experiencing an “acute shortage” of narcotics—an effect largely of Allied warfare policies targeting the German drug industry—the United States began increasing
its manufacturing output. The Allied Control Authority also began policing the legitimate market and making arrests for drug “violations.” These policies were consolidated under the US’s proposed Narcotic Control Working Party, which was constituted under the Allied Health Committee of the United Nations.132

  In Japan, the US instituted an even more dramatic restructuring of the drug manufacturing economy. As the FBN commissioner testified before Congress: “We sent our best narcotic investigators to Japan, at the request of General MacArthur, and we have, in conjunction with the War Department, briefed about 2,000 civil-affairs officers who went out there to shut down the narcotic plants in Japan, in Korea, and Formosa (Taiwan). General MacArthur has ordered a very strict control over drug producing, manufacturing and distributing.”133

  Among the war crimes leveled against Japan would be the charge of drug trafficking. The UN Commission on Narcotic Drugs (CND) in 1947 accused the Japanese of using revenues from the drug trade “to finance the preparation for waging of wars of aggression” and “to establish and finance the puppet governments” under its control. Such charges attest to the politically charged nature of designating legal and illegal participation within the drug market in a context where arguably all major combatants had sought to capitalize on the drug trade to wage war. Yet, to the victors come the spoils. The United Nations demanded the Far East Commission and Allied Military Authorities allow “no production of raw materials for the purpose of manufacturing narcotic drugs” in Japan, adding that “the manufacture or conversion of narcotic drugs shall be prohibited.” At the same time, the head of the FBN advised stronger controls. Previously, the commissioner explained, there had been “no limitation as to quantities of narcotics drugs they [Japanese manufacturers] could sell and no records or reports of sales was required. There was no governmental supervision of these plants,” no licensing, no inspections, and no safeguarding of stocks. However, he assured the assembled delegates that with the Allied Command, “this situation has been corrected by the installation of brick storage vaults, heavy steel doors and dial combination locks.” Moreover, the “American Armed Forces in Japan seized . . . crude and finished narcotic drugs” and as of June 19, 1946, there was the “enactment of legislation similar to the American narcotic law which provides for annual registration, monthly reports, sales by means of order forms or prescriptions, et cetera.” As in Germany, the grounds of a drug enforcement apparatus were being laid: “Courts are now meting out five-year sentences which inaugurates a new era in narcotic enforcement in Japan.”134

  The United States continued to pursue its drug market regulatory priorities both independently and through multiparty organizations like the newly constituted United Nations. The war forced the two regulatory bodies that had previously been responsible for monitoring international drug control to relocate from Geneva to Washington.135 The close relationship this facilitated between drug regulators, US officials, and the pharmaceutical industry persisted after the war when the United Nations became the primary vehicle for multilateral efforts to control the international drug trade. Anslinger himself became the first US representative to the CND where he “dominate[d] deliberations” on international drug control.136 It was no coincidence that one of the first matters of business pursued by the CND was the effort to stamp out (the vast majority of) coca production and consumption in Peru and Bolivia that was not destined for export to North American pharmaceutical houses.137 Significantly, the designation of illegality within the drug industry was no longer tied to an enemy national, but broadly and flexibly applied to those who participated in the pharmaceutical industry outside of the drug regulatory regime’s sanction.

  •••

  In the midst of world war, the US government increasingly valued drugs as a cure-all for everything from keeping soldiers out of pain, energized, and ready for battle, to maintaining the health and well-being of the general population. The ability to provision valuable pharmaceuticals bolstered state authority and cultivated loyalty toward the international networks that supplied them—in this context both the United States and the broader Allied cause. The US military victory gave US drug firms an advantage in the global restructuring of the pharmaceutical industry that came about with the defeat of Germany and Japan in WWII. Securing drug supply networks and disrupting Axis access to the market also meant, in part, interfering in national economies of the Western Hemisphere. At the same time, US troop deployments, and the framing of drug procurement and distribution as critical defense issues, gave US firms a global advantage. Control over the flow of commodities and the power to designate legitimate participation within the drug economy were critical tools deployed by the US government in its wartime efforts, which linked winning the war with US economic expansion. As a result of this process, American-manufactured and -branded drugs were substituted for the same chemical compounds produced by Axis firms, and the legitimate status of any given commodity—its legality—became dependent on the geography of its production and the national, political, and economic alignment of its producers, rather than the inherent properties of the drug itself.

  US economic warfare efforts in the drug field laid the foundation for the growing dominance of the American pharmaceutical industry, and the principles guiding the policing apparatus that traveled with it. To ensure steady raw material flows, the state had to establish drug control on an international scale, fusing an economic principle with an imperial ambition. In the anticipations of FSA administrator McNutt, who had called upon the pharmaceutical industry to mobilize for war, “Will our old sources of opium become readily available, or must we be thinking of new sources of supply? And will those new sources be new lands—lands which must then straightaway be integrated into the international controls which hold in check that dangerous drug? Or will research find a synthetic to replace morphine?”138 The United States needed to pursue global controls even while trying to stay one step ahead of chemical dependence by cultivating domestic technological innovation. The war furthered US goals in relation to regulating both the raw materials and finished goods in the pharmaceutical trade. Drug stockpiling became a critical component of US defense mobilization as the society and economy became oriented toward a permanent state of war readiness and war. Global demand for US pharmaceuticals grew as a direct consequence of the war. Looking back on the decade, the Department of Commerce anticipated that 1949 “will represent the tenth consecutive year in which drug exports will have attained a new peak.” Fifty-six percent of those exports went to Latin America.139 As in South America, what this meant on the ground around the world was that the United States became the primary supplier of manufactured pharmaceuticals and a guiding force behind the implementation of a drug control and policing apparatus. The influence of the pharmaceutical industry and the drug control apparatus that traveled with it persisted as critical components of the projection of US economic and political power on a global scale.

  CHAPTER 2

  “Resources for Freedom”

  American Drug Commodities in the Postwar World

  Nations, like men, can be spendthrifts, consuming their substance as fast as it comes to hand. For the individual, such a policy leads to bankruptcy and ruin; for the nation it may spell major disaster. The remedy for both lies in the creation and maintenance of a reserve against the rainy day . . .

  Energy, industrial or human, being the item in highest demand in war, can and should be “canned” in peacetime. Stockpiled through wise foresight and carefully planned action, it makes available in a critical hour a greater volume of energy for the business of fighting, the actual prosecution of the war.1

  —United States Military Academy, 1947

  American officials began imagining and planning for a future of war while the embers of World War II devastation still smoldered. For the nation, and its citizens, the accumulation of goods seemingly provided a bulwark against “major disaster” and shored up an economy and economic behaviors intent on being ever rea
dy for the “actual prosecution of the war.” This pairing of war preparation with market manipulation became a fundamental characteristic of US policies and power. Mass consumption emerged as a central feature of postwar American society along with a steady stream of advice on how to gain economic advantage; the practice and discourse saturated popular culture and became a defining trait of the emergent national security state. These postwar transformations were evident in consumer culture where the rise in families’ discretionary income encouraged the accumulation of goods in the new homes of a burgeoning suburban America, with kitchen pantries readily stocked from the dizzying array of packaged products lining supermarket shelves. They were also central to the policies advocated by the nation’s defense planners who, as quoted above, embraced and celebrated the value of the “canned good.” Historian Lizabeth Cohen describes this new “Consumer’s Republic” where over the course of the 1940s and 1950s, “the mass consumption economy offered an arsenal of weapons to defend the reputation of capitalist democracy against the evils of communism.”2 And indeed, the ready availability of consumer goods became a powerful symbol in the superpower standoff over competing models of economy, governance, and their respective global reach, as famously captured in the so-called “Kitchen Debate” of 1959 between Vice President Richard Nixon and Soviet Premier Nikita Khrushchev.3

  Beneath such symbolism, there existed for US officials a very material commitment to reorganize national and international patterns of consumption to enhance the geopolitical influence of the US government and US capital. In a striking formulation of this new orientation, researchers at the US Military Academy explained in a 1947 study, entitled Raw Materials in War and Peace, the importance of continuing to maintain raw materials stockpiles as “reserve against the rainy day” of war. The military’s social scientists warned that a lack of stockpiling preparedness at the outset of World War II had been the foremost obstacle to rapid wartime mobilization and presented a case for the necessary permanence of raw materials accumulation for national security policy. For them, the accumulation of goods constituted a store of reserve energy, “industrial or human,” available to be plucked out of peacetime cans at the “critical hour.” In fact, through public and private collaborations, the nation’s capacity to produce excess stocks of consumer goods became more than a bulwark of emergency preparedness; the goods themselves became an arsenal for exporting US economic and political influence.