The second event was nearly as significant, but that significance was apparent only to a few in the political and corporate establishment. In 1919 a gloomy report on domestic oil supplies from the US Geological Survey provided ammunition for those demanding that America receive a share in the carving up of the Ottoman Empire after the First World War. In November 1941 an obscure American state department official named William Ferris produced a similar report that caused almost as much consternation in some circles as the attack on Pearl Harbor the following month. The subject matter of the Ferris report was oil. The United States was thought at that time to have 20 billion barrels of oil reserves; as it was using 4 million barrels a day or 1.45 billion a year, within thirteen years all of its domestic reserves would be exhausted. For a nation that was already wedded to the automobile the prospect of running out of oil was unthinkable. It was even more alarming to the oil companies, which were coming to dominate corporate America: at the end of the First World War four of the top sixteen US corporations were oil companies; by the end of the Second World War eight were. The report’s conclusion was unequivocal: the United States should pursue a ‘more aggressive foreign oil policy aimed at assuring access to petroleum overseas’. As the war progressed the United States found itself supplying not just its own oil requirements but those of its allies, and the expectation of even thirteen years of oil reserves started to look optimistic; securing overseas supplies moved to the top of the foreign policy agenda.
The most obvious place to look for overseas reserves was Saudi Arabia. If the US could control the Saudi oilfields the US navy estimated that American reserves would effectively be doubled. Seizing them by force was no longer the American way and Roosevelt set out to buy control. He signed a declaration that ‘the defense of Saudi Arabia is vital to the defense of the United States’, and on that basis extended Lend-Lease aid to the oil-rich kingdom (not what Congress had in mind when it approved the Lend-Lease legislation). Soon he went further and proposed that the US government buy the Saudi oil concession, but Congress refused; corporate lobbyists were happy for the government to protect their oil interests overseas, but they had no desire to see the government entering the oil business itself – war or no war.
In 1945 Roosevelt travelled to the Crimea to meet Stalin and Churchill at Yalta. The meeting was monumentally important. The formal declaration spelt out the principles of the United Nations and committed the three leaders to peace and democracy. Informally Stalin seems to have believed that the conference effectively carved up much of the world into Russian and American spheres; he returned home well satisfied. Roosevelt did not return home; instead he flew south to one of the most bizarre diplomatic encounters of the twentieth century. Fresh from signing a conference declaration that among other things committed the signatories to ending slavery, the American president boarded an American warship, the USS Quincy, to meet a man who arrived with a royal astrologer and a retinue of personal slaves. Roosevelt and the King of Saudi Arabia Abdul Aziz ibn Saud spent more than five hours in friendly discussion accompanied only by their interpreters. They had much to discuss – the shape of the post-war world, the future of Palestine and oil. There is no record that they touched on the commitment to eradicate slavery that Roosevelt had signed a few days earlier. They agreed that Saudi Arabia would guarantee to supply the US with oil and the US would guarantee to protect the Saudi despot from external and internal threats. To help the United States to extend this protection the king agreed to the construction of a US airbase in his country. The base was built not on the Red Sea coast, where it could have protected traffic through the Suez canal, or in the north, near the bubbling cauldron of Palestine, but in the east, near the oilfields of Iran, Iraq and the Gulf states. It was a sign that the end of the Second World War was the beginning of a new chapter for the American empire, just as it evidently was for the Russian.
On their side of the ‘iron curtain’ that now descended across Europe, the Red Army was an army of occupation in exactly the sense that would have been understood not just by the tsars but by the Mongols, Romans and conquering armies since history began. The Baltic states were simply annexed and became parts of the Soviet Union; somewhat more subtle approaches were followed elsewhere. The detailed mechanics of occupation might differ – hymns of imperial glory might be replaced by slogans of worker solidarity and tame local commissars might occupy presidential palaces from Warsaw to Sofia – but in terms of power all roads led to Moscow.
With a few very minor exceptions in the Caribbean and Pacific, America had abandoned the traditional forms of imperialism favoured by Russia. In 1946 the last large American colony, the Philippines, received its political independence, although American troops maintained a presence there and in numerous places around the world. In Germany and Japan US forces were formally an ‘army of occupation’. Theoretically their position was similar to that of the Red Army in eastern Germany and in an earlier age that might have led to eventual annexation. By the 1940s, however, the interlinked ideologies of democracy and imperialism in America had evolved so much since the Spanish-American War that it was inconceivable that either Germany or Japan would ever become an American colony in the way that the Philippines had become, or as was happening in Russian-controlled territories.
Roosevelt’s negotiations with the Saudi monarch illustrated the fundamental differences between the way that America and Russia were to use their newfound status as the world’s superpowers. America would buy what it wanted; Russia would seize it. America’s economy had benefited enormously from the war, and Roosevelt and his successors were determined to use that wealth to consolidate their position in the world. The Russian economy, by contrast, had been devastated (although it is worth remembering that Russia as we know it today was not as badly damaged as the western part of its empire: with the exception of the battles in and around Stalingrad most of the fighting and destruction in the Soviet Union took place in what are now the independent nations of Ukraine and Belarus). Stalin’s priority was reconstruction, and he used the Red Army to take what he needed. The Russians dismantled two-thirds of the industrial capacity in their zone of Germany and shipped it back to the USSR. Similarly Soviet forces that occupied Manchuria from July 1945 to May 1946 dismantled and removed over half of the Manchurian industrial plant. It was not just machinery that Russia grabbed. Thousands of the fittest and most skilled German prisoners of war were charged with ludicrous crimes like ‘aiding the world bourgeoisie’ and sentenced to further imprisonment. By 1950 they had ‘donated’ a billion days of forced labour, and it is estimated that in the immediate post-war period 8 per cent of the Soviet Union’s GDP was produced by POWs.
The styles of the two powers were so different that using the term ‘empire’ to describe both is equivocal. The Soviet bloc was clearly an empire in the sense in which the term had been used for centuries. The United States preferred to see itself as the leader of the free world, but it exerted in practice a degree of control over the economic, political and cultural lives of millions of people beyond its borders that in earlier times had only been achieved by imperial might. For want of a better term, ‘empire’ remained an easier way to describe America’s overseas interests than the academically more precise term hegemony.
After the war the two imperial powers quickly moved to establish their zones of influence. Having failed in his attempt to accomplish Peter the Great’s ambition of controlling the Baltic, Stalin demanded parts of Turkey and military bases that would allow him to dominate the Bosporus, thus realising Catherine the Great’s ambition of controlling the Black Sea. He went further, demanding naval bases in North Africa and ignoring a previously agreed deadline to remove his troops from Iran. Unlike Central Europe these were all areas that were dangerously close to the oilwells of the Middle East. The United States refused any compromise in the region; after three months of tense sabre-rattling by the US navy the Russians withdrew from Iran and gave up their other demands. (Russia finally pu
lled out of Iran after Stalin was promised access to Iranian oil and the creation of a joint Russo-Iranian oil company – a promise the Iranian parliament, encouraged by the United States, later reneged on.)
Both Russia and America acted to ensure that their supporters would take power in the areas they controlled. Stalin had signed up to democratic principles at Yalta but had absolutely no intention of observing them – as events in Czechoslovakia soon made clear. The Americans, on the other hand, were genuinely committed to the principles of democracy, but democracy defined in a way that suited them – as events in Italy soon proved.
A Czechoslovak government in exile had been established in Britain in 1940. It included the charismatic Jan Masaryk, son of Czechoslovakia’s first president, as foreign minister. Masaryk retained this post in the coalition government that was set up following the country’s liberation. Following elections in 1946 the Communist party, which had won 38 per cent of the vote, took an increasingly prominent role in the government and vetoed Masaryk’s attempt to join the Marshall Plan, America’s proposal for post-war reconstruction. By then American and Russian occupying troops had left, but Russian forces remained poised on the border. In February 1948 a Russian mission flew to Prague demanding further concessions, and the majority of the non-communist cabinet members resigned hoping to force new elections. Instead Stalin installed a communist government with Masaryk as a token independent, continuing as foreign minister. He was not to do so for long. On 10 March, two weeks after the Communist party coup, Jan Masaryk’s body was discovered below the window of his second-storey apartment at the foreign ministry. Whether suicide or murder, Masaryk’s death closed a chapter in eastern European history; for the next forty years the hammer and sickle flew over Russia’s European colonies.
America adopted a somewhat different approach. Where Russia used force and fear to ‘enhance’ the results of a democratic election, the United States used money. Immediately after the war Communist parties throughout Europe were making impressive gains: one of their next targets after Czechoslovakia in 1946 was Italy. The Italian Communist party had led the fight against fascism and did well in the first post-war elections, so many expected an alliance of communists and socialists to sweep to power in the 1948 elections. It did not because the infant Central Intelligence Agency of the United States channelled millions of dollars to the right-wing Christian Democrats and helped mount a massive media campaign in their favour. Much of the campaign was organised out of the offices of two remarkable brothers at the Sullivan & Cromwell law firm in New York, Allen and John Foster Dulles. Their grandfather had been the archetypal American hero: a millionaire lawyer born in a log cabin and a brigadier general in the civil war before serving as United States minister to Mexico and Russia and as secretary of state, a position his grandson John Foster would occupy under President Eisenhower. Allen Dulles had in many ways an even more powerful position than John Foster as founder and director of the CIA. Together the two men would establish the framework within which US interventions overseas would be managed into the twenty-first century. Nearly sixty years later British newspaper stories about Saddam Hussein’s biological and chemical warfare programmes by such reputable authors as Marie Colvin in the Sunday Times and Christopher Hitchens in the Evening Standard and the Guardian were found to be totally bogus: many in the media had been taken in by what appeared to be genuine and well-founded reports. They had been based on ‘information’ provided by the Iraqi National Congress, which had been paid millions of dollars by the US government to influence world opinion.
Both the Russian and American regimes were well satisfied with their respective strategies in Czechoslovakia and Italy and continued in the same vein. The United States continued to distribute dollars funding a wide range of ‘anti-Communist’ factions within such supposedly revolutionary groups as the National Union of Students in Britain. The Russians continued their own manipulations.
In Hungary the communists rigged the 1947 elections, purged the socialist opposition and solidified Soviet control. The almost random purges that were a central characteristic of Stalin’s rule were quickly extended to the new colonies in the west. In 1952 Rudolf Slansky, former secretary of the Czechoslovakian Communist party, and ten other prominent party members (most of whom were Jewish) were convicted of high treason in a Prague show trial, and hanged. Similar judicial and extra-judicial murders continued throughout the empire. Russian oppression became ever more brutal: Russian tanks were rolling again to suppress revolts in East Germany in 1953, Hungary in 1956 and Czechoslovakia in 1968. But there were limits to what could be achieved by Stalin’s crude bullying. In Yugoslavia Tito, the wartime leader of the communist partisans, not only refused to implement Stalin’s whims but organised his own purge of Stalin’s adherents, safe in the knowledge that while the Red Army’s tanks might be omnipotent on the streets of Berlin they would have a much harder time in the mountains, where he had so recently resisted the German Reich.
The relationship between the Russian and Chinese empires deserves a book on its own. Although Mao Tse-tung eulogised Stalin and it suited many in the west to imagine a monolithic Sino-Soviet bloc, the reality is that China never formed part of Stalin’s empire, and long before the two nations started firing shots at each other in 1969 China’s communists were following an independent path determined entirely by their own self-interest.
While Russia was consolidating power on its borders the US was reaching out more widely. Once the atomic bomb had been dropped the US moved quickly to seize control of Japan. Earlier plans for a joint occupation commission with British, Chinese and Russian representatives were abandoned. During the war America had agreed to restore the territory and naval bases that Russia had lost to Japan in the 1905 Russo-Japanese War, but this pledge too was abandoned. The US occupation forces enforced an economic policy drawn up by an American banker Joseph Dodge. His objective was to stimulate the Japanese economy to reduce the country’s dependence on US aid, to help pay for the costs of occupation and above all to create a bastion of American influence in the face of the communist wave that had already swept over China. Claims for reparations by a string of countries (Australia, Britain and China, for example) were dismissed. Dodge’s policy was highly interventionist, with little space for the free flow of market forces: import controls ensured that limited resources were directed at those sectors approved by the US authorities, price controls stopped the unfettered oscillations of supply and demand, and wage controls kept the workers in their place. The policies were the exact opposite of the free market nostrums later imposed on third world countries at America’s insistence by the World Bank and IMF, but they worked: by pushing Japanese industry to produce for export rather than for domestic consumption, the basis was laid for the Japanese miracle that eventually allowed Japanese firms to rival their US competitors. It was simultaneously a glowing example that other nations would try to repeat and an alarming mistake that US corporations were determined should not happen again.
In Europe America’s post-war policy was similarly driven by the need to contain communism. Where Stalin was rebuilding his economy by looting his new imperial possessions, Truman was determined to strengthen the economies in his half of Europe.
In the Marshall Plan, named after the American general who as President Truman’s secretary of state devised and pushed the proposal through, $28bn of US aid was pumped into Europe. The sum was gigantic, and dwarfed the copycat Molotov Plan that Stalin belatedly trumpeted for eastern Europe. Like Lend-Lease before it, the Marshall Plan had strategic objectives, to prevent the conditions that might give rise to communist revolution, and economic objectives, to create demand in Europe that would provide profitable opportunities for American corporations; but underlying both was a remarkable degree of generosity on behalf of the American people. Pictures of war-torn cities and starving children were every bit as powerful as the cold calculations of military and corporate strategists. Nevertheless the Marshall Plan was n
ot adopted without debate, and that debate echoed divisions that had been present since the nation’s founding.
From their earliest days the imperialism of the north-eastern states was largely commercial. Much of their wealth came from trade, particularly in the early days from the slave trade, and their merchants wanted above all to have easy access to foreign markets and to stop foreigners having access to theirs. The southern states were primarily concerned with direct conquest, in order to gain more land for cultivation. The two imperialisms fused – especially in the march west – but the two strands could still be distinguished: in the debates on the League of Nations after the First World War and most clearly in the debates about the Marshall Plan after the Second. The Marshall Plan was very much the work of the north-eastern establishment, whose bankers occupied key positions in its administration and made huge profits from its implementation. A major beneficiary of the scheme was the investment bank Brown Brothers, Harriman, one of whose partners, Averell Harriman, was sent to Europe to run the plan. By and large southern and western states would have much preferred the funds to be spent at home or devoted to projects in Latin America and Asia, where US corporations would find it easier to exert quasi-colonial control.
Cynics have also pointed out that a large part of the Marshall Plan aid did not end up in Europe. $2bn went to American oil companies, and much of the rest was spent with other US corporations. The aid to France, for example, roughly covered the cost of France reconquering Indo-China, something achieved largely with weapons bought from the US. Similarly the Netherlands was funded to reconquer Indonesia.
Empires Apart Page 48