US drug stockpiling and control efforts went forth in the dual context of the need to handle drug commodity surpluses from war demobilization, as well as facilitating the international flow of raw materials and US-manufactured drug commodities to meet the adjusting demands of remobilizing for defense—a cold war of US expansion.
National security was defined in relation to the military’s capacity to maintain circumstances where “private enterprise flourishes,” which meant the state had a role in facilitating US private capital’s international expansion. This expansion was predicated upon generating a demand—a market—for US-manufactured goods, so as to keep the cycle of growth and expansion operative. Working within an ideological framework whereby overseas consumption of US-manufactured goods was presented as the most desirable route to global economic development, the authors of Resources for Freedom characterized US expansion as a service, geared toward meeting the “needs” and demands of the world. The global consumption of American goods and resources was the path of the future. The commission explained that the report’s “central task [was] an examination of the adequacy of materials, chiefly industrial materials, to meet the needs of the free world in the years ahead.”36 By the early 1950s when Resources for Freedom was compiled, the national resources “mobilization” effort had already been largely transitioned from its structural foundations in wartime US policies to a postwar state of permanent “defense mobilization” whose “supreme objective,” according to the ODM, was “not war, but peace.”37
This particular “peace” embodied US international ambition and was premised upon the accumulation of raw materials and control over the flow of finished goods, a program that gained urgency from the threat of Soviet competition. The commission described the best interests of the “free world” as dependent on the US extraction and stockpiling of the world’s raw materials and their processing, repackaging, and global redistribution as American-manufactured goods. The possibilities for both deploying and expanding the Resources for Freedom charter were grand. As the commission concluded, “The less developed nations have the materials; the industrial nations have the capital and the technical and managerial skills. These facts suggest the possibility of a new era of advancement for the world which is dazzling in its promise.”38 But there were obstacles to the implementation of America’s promise of global development. In the aftermath of World War II and in the context of global imperial reorderings, the US government worried that “Less developed countries . . . resent the stigma of ‘colonialism’ which to their way of thinking attaches to economies heavily dependent on raw materials exports.” The United States, however, argued that national ambitions to industrialize—at least in the “less developed world”—were impractical to the new world order, dismissing the sentiment as an unproductive relic of resentment toward European colonialism. Looking at the global marketplace, the commission lamented that these countries “are often more intent on industrialization than materials development.” The “free world” needed to contribute the raw material resources to hold onto freedom, which in the realm of a sought-after US hegemony meant an accompanying dependency on US-manufactured goods. Thus the US government envisioned the commodity control apparatus as a critical component of securing and extending its powers in the postwar world. This US vision of stability and control required maintaining various countries’ unequal participation in the world economy. The commission’s answers to the colonial “resentments” of the less developed world was to seek to lessen market “instability” so as to help these countries overcome their fears of vulnerability to market fluctuations in the context of producing a few major materials for export. US ideology promoted market structures that might eclipse (in language quite self-conscious of this) the former colonial might of European countries.
Beyond providing leverage in the global political economy, the Government Commission on Resource Mobilization concluded that stockpiling as a “device” “offers an attractive alternative to subsidies” in federal efforts to generate national production for defense mobilization.39 Holding materials for future use was cheaper, reduced foreign dependency in times of crisis, and also provided what the commission described as the “security advantage of certain possession.”40 This policy underwrote enormous power and profit for both the government and private producers who gained disproportionate access to commodity stores and significant leverage over material flows within the international marketplace. This advantage did not only reside in having access to the market and use-value of the stockpiled materials themselves. It also freed up labor and other critical resources. In a formulation that echoed the US Military Academy’s logic presented in this chapter’s epigraph, the president’s commission explained, “When materials are stockpiled, other economic resources such as manpower, energy, and transportation are automatically stored with them as constituents of extracted and processed materials.”41 Thus the stockpiles were a reserve supply not only of critical and strategic commodities, but also of the international labor power, energy, supply networks, and other resources that had gone into their production. As globally derived American stores, these stockpiles provided the necessary pool of resources to fuel US capitalism’s postwar expansion.
DRUGS AND NATIONAL POWER
The government’s overarching vision of the necessary intersection between economic policy, national security, and US global influence was particularly attuned to the central importance of the nation’s pharmaceutical industry. As the Commission on Resource Mobilization explained, “Practically every industry is dependent on the chemical industry to a considerable degree, and this is also true of every household and consumer.” The array of products churned out by the nation’s chemical and pharmaceutical laboratories provided the foundational building blocks for both America’s expanding consumer culture and for strengthening the country’s capacity to confront challenges in the world. The peculiar qualities of the commodities themselves made them exceptionally adaptive to the changing demands of the time. The commission detailed that the “Chemical industry also, above all other industries, has a great capacity for adapting itself to variations in raw materials, because to a large extent it can work out methods for using raw materials interchangeably. Finally, it has a great capacity for meeting crises.”42
The report continued, “Examples are many—dyestuffs, fixed nitrogen, medicinals, synthetic rubber, silk, quinine, ivory, camphor.” The capacity of the industry to transform substances at the molecular level meant that the largest companies in the market were involved in both pharmaceutical and chemical production. It was the alchemical power of the industry, its capacity to use raw materials “interchangeably,” to have laboratory science parse and reconstitute substances into an array of products spanning medicinal, industrial, and even nutritional uses, that made it so valuable to a national defense policy premised on mobilizing production to ensure preparedness for crisis.
The new and special importance of the industry was particularly dramatic when compared to other sectors of national production. From 1939 to 1949, the chemical industry grew much faster than other industries, with its growth measuring almost two times the rate of all other industrial growth combined.43 The importance of the pharmaceutical industry and drug commodities specifically was evident in the fact that they were stockpiled not only in the national stockpile, but also by the Army’s own war reserve stockpile, in the Federal Bureau of Narcotics’ Treasury stockpile, and in the inventory stockpiles of private manufacturers. The government estimated private manufacturers’ “inventory building [was] many times greater than stockpile acquisitions” by the federal government. And, in fact, the “Government deliberately encouraged private accumulation of raw materials” through “credit, inventory control, and import policies” as aspects of mobilization for national defense.44
The US government’s interest in subsidizing expansion in pharmaceutical output had the mutually reinforcing goals of retaining adequate stockpiles of drugs to meet
civilian and military needs in response to domestic attack or war, while also providing the groundwork for US expansion. These ambitions were forged through the experience of World War II, were premised on a vision of US global dominance, and became amplified as the Cold War invigorated corporate and government collaboration. The US government and pharmaceutical industry emerged from the war in unprecedented positions of influence. The challenge consequently, as both saw it, was not just to maintain but also to actively expand their authority in the world. The Department of Commerce joined the president and the ODM in articulating this sentiment. In 1949, the department’s bulletin, World Trade in Commodities, invoked the pharmaceutical industries’ wartime expansion in the Western Hemisphere as a model for the future. “Surely with the knowledge acquired in cultivating Latin America,” the bulletin opined, “more visionary promotion should be conducive to somewhat comparable per capita results in the Eastern Hemisphere. In conjunction with Western Europeans, perhaps the drug-consuming possibilities of Eastern Europe, Africa, the Near and Far East may be developed as never before. Some United States drug houses are thinking and acting on this premise but many more might profitably do so. . . . As the outstanding medical center and source of efficacious therapeutic products, the world expects us to display this type of leadership.”45
Segmenting the world into frontiers for US market expansion, the Commerce Department encouraged companies to build from the model of success in Latin America to exploit the “drug-consuming possibilities” of the rest of the world. Pairing a celebration of economic promise with a refashioned version of the white man’s burden (“the world expects us to display this type of leadership”), the department’s Office of International Trade latched onto another key aspect of the unique capacity of drugs to advance US dominance. The power of drugs to advance human health meant US companies, the primary producers of “efficacious therapeutic products,” had a unique role to play as both emissaries of the benevolent goals of US foreign policy and as engines propelling national economic growth.
While the Commerce Department delighted in visions of “cultivating” an expanding market for US pharmaceutical goods, the pharmaceutical trade press celebrated its material realization with the “fantastic growth of the US foreign market.” Whereas in 1939 only $22.5 million of pharmaceuticals were exported, by 1954 the figure was anticipated to have “topped half a billion dollars.” This phenomenal growth was a low figure at best given the fact that the “biggest U.S. drug companies [had] moved major sections of their manufacturing, processing, and packaging operations to overseas subsidiaries since the war.”46 The trade press joined the Commerce Department in viewing Latin America as having been the initial site of this expansion. Explaining in 1949 the “industry trend” to increasingly export “finished products,” Business Week suggested, “The war had a lot to do with this, too. It opened up markets once controlled by the German drug industry—particularly Latin America.”47 While international raw material extraction to sustain national defense stockpiles remained a vital aspect of US foreign policy, during World War II the establishment of distributors and the marketing of US-manufactured goods to consumers became a primary policy objective. Increasingly in the war’s aftermath, sitting on top of materials stockpiles, the latter aspect of market penetration became an essential instrument of US imperialism. The term imperialism here is deployed as a category of analysis that, as Paul A. Kramer points out, “foregrounds the analysis of power and politics on a global scale.” In the context of examining US efforts to control drug commodity flows, the imperial framework is useful for “tracing trajectories from production to consumption in order to illuminate uneven, hierarchical relationships between and within nation states.”48
The creation of markets for US-manufactured goods became the central object and indicator of US capitalism’s success. There had been two principal components behind the effective introduction of US-manufactured goods into Latin America that the government and private industry believed had been critical: decentralization of operations and effective marketing. By the end of the 1940s, the Commerce Department viewed the decentralization of pharmaceutical companies as a measure of US advance. It explained the process had begun in Latin America, was brought by US companies into Europe in the war’s aftermath, and was being introduced in the developing world (initially into the geography of the former British empire) with the growing penetration of US capital:
For the past decade, interest and participation by United States producers in decentralized operation have been focused on the major countries of Latin America. Following the end of the war, however, there has been a progressive focusing upon western European prospects. Since January 1949 pharmaceutical production and marketing teams from the United States, averaging two firms a month, have been investigating the situation in prewar competitive countries, and the trade press has chronicled plans, agreements, and the inauguration of facilities in many instances. Recently this same interest has become evident in Egypt, South Africa, India, and the Philippines.49
As this description suggests, the government tracked and facilitated private business connections and exploratory investigations into foreign markets, so as to ensure not just the maintenance, but also the extension of US dominance in global pharmaceutical manufacturing. US manufacturers benefited from the privileged access to markets they gained as a result of war, new alliances and dependencies, and, in the case of Germany and Japan, the postwar occupation of former “competitive countries.” While US pharmaceutical houses had already decentralized operations to some extent in the Latin American market, the war provided an opportunity for accelerated US decentralized expansion into Europe—and Europe’s former colonial territories.
International decentralization within the pharmaceutical industry helped US companies avoid national tariffs for foreign-manufactured goods, and brought US commodities competitively closer to the sites of sale. It also tended to enshrine the American industry’s dominance as local industrialists could rarely outmatch the production capacity of multinationals already established in a capital-intensive industry.50 Most often decentralization occurred in local packaging and distribution operations for goods that had been manufactured in the United States. In fact, it was the US goods themselves, along with the capitalist toolbox they traveled with, that would be the emissaries of American imperialism. Marketing US-manufactured goods—despite the international origins of the time, labor, energy, and raw materials stored in them—as “American” brought the “Resources of Freedom” to the rest of the world, while the bulk of the profits—ideological, political, and economic—accrued to the nation. Marketing then, the Commerce Department argued in the January 1949 edition of World Trade in Commodities, was the other critical tool to be gleaned from successes in Latin America: “It would seem as though our sales grew in proportion to the scope and intensity of promotional efforts. Indicative of this, sales of all commodity groups increased in the Western Hemisphere. . . . In fact, 56 percent of total drug exports are for nearby neighbors numbering about 140,000,000 customers, primarily Latin Americans.”51
Interestingly this assessment was made as an explanation for why sales in the pharmaceutical industry had not been as strong outside the Western Hemisphere. De-emphasizing other factors—including the majority of the world’s lack of access to dollars to buy US goods (the postwar Dollar Gap)52—the Commerce Department proselytized that sales of US commodities grew in direct proportion to marketing: “the scope and intensity of promotional efforts.” Marketing was critical. Capturing new markets entailed promoting the distribution and consumption of US-manufactured goods, along with the capitalist ideology, operations, and packaging necessary for their dispersal.
The pharmaceutical industry’s valued contribution to the nation’s “Resources for Freedom” had its origins in the close collaboration between the industry and the government during World War II. After the war, as US global economic ambition confronted a new geopolitical climate, this
partnership intensified to the mutual advantage of key industry players and government agencies intent on entrenching an international economic order attuned to a new vision of US national defense. The linking of defense to economic expansion, with the United States acting as the largest global accumulator of key raw materials and primary exporter of manufactured goods, had significant ramifications for growth in the pharmaceutical industry and, importantly, for the elaboration and implementation of a drug regulatory apparatus. The partnership between the government and pharmaceutical companies to sustain stockpiles and penetrate international markets encouraged the growth of concentrated economic power. This model envisioned the United States as the powerhouse behind global economic and political integration, and it relied on an increasingly limited number of private corporations working with the state. This tendency toward monopoly was clearly on display in the pharmaceutical industry, which during the postwar period underwent rapid vertical integration, with firm sizes increasing dramatically and reorienting their expenditures toward research development, and marketing.53 These organizational changes aligned well with the government’s new desire to encourage the creative exploration of raw materials’ “interchangeable” properties while advocating increased efforts at marketing and exporting American goods abroad. Significantly, public and private collaboration to these ends required the parallel growth of a regulatory system to police the entire drug commodity chain: the supply of raw materials, the participation in industrial production, and the circulation of the finished goods. The remainder of this chapter examines this process in relation to the postwars government regulation of coca commodities in collaboration with companies involved in the trade.
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