1. The Preference for Democracy
2. The General Outlines
3. The "Great Workshops": Japan
4. The "Great Workshops": Germany
5. The Smaller Workshops
6. Some Broader Effects
From Z Magazine, January 1989.
No belief concerning U.S. foreign policy is more deeply entrenched than the one expressed by New York Times diplomatic correspondent Neil Lewis, quoted earlier: "The yearning to see American-style democracy duplicated throughout the world has been a persistent theme in American foreign policy." 1 The thesis is commonly not even expressed, merely presupposed as the basis for reasonable discourse on the U.S. role in the world.
The faith in this doctrine may seem surprising. Even a cursory inspection of the historical record reveals that a persistent theme in American foreign policy has been the subversion and overthrow of parliamentary regimes, and the resort to violence to destroy popular organizations that might offer the majority of the population an opportunity to enter the political arena. Nevertheless, there is a sense in which the conventional doctrine is tenable. If by "American-style democracy," we mean a political system with regular elections but no serious challenge to business rule, then U.S. policymakers doubtless yearn to see it established throughout the world. The doctrine is therefore not undermined by the fact that it is consistently violated under a different interpretation of the concept of democracy: as a system in which citizens may play some meaningful part in the management of public affairs.
This framework of analysis of policy and its ideological image is well confirmed as a good first approximation. Adopting the basic outline, we do not expect that the United States will consistently oppose parliamentary forms. On the contrary, these will be accepted, even preferred, if the fundamental conditions are met.
In the client states of the Third World, the preference for democratic forms is often largely a matter of public relations. But where the society is stable and privilege is secure, other factors enter. Business interests have an ambiguous attitude towards the state. They want it to subsidize research and development, production and export (the Pentagon system, much of the foreign aid program, etc.), regulate markets, ensure a favorable climate for business operations abroad, and in many other ways to serve as a welfare state for the wealthy. But they do not want the state to have the power to interfere with the prerogatives of owners and managers. The latter concern leads to support for democratic forms, as long as business dominance of the political system is secure.
If a country satisfies certain basic conditions, then, the U.S. is tolerant of democratic forms, though in the Third World, where a proper outcome is hard to guarantee, often just barely. But relations with the industrial world show clearly that the U.S. government is not opposed to democratic forms as such. In the stable business-dominated Western democracies, we would not expect the U.S. to carry out programs of subversion, terror, or military assault as has been common in the Third World.
There may be some exceptions. Thus, there is evidence of CIA involvement in a virtual coup that overturned the Whitlam Labor government in Australia in 1975, when it was feared that Whitlam might interfere with Washington's military and intelligence bases in Australia. Large-scale CIA interference in Italian politics has been public knowledge since the congressional Pike Report was leaked in 1976, citing a figure of over $65 million to approved political parties and affiliates from 1948 through the early 1970s. In 1976, the Aldo Moro government fell in Italy after revelations that the CIA had spent $6 million to support anti-Communist candidates. At the time, the European Communist parties were moving towards independence of action with pluralistic and democratic tendencies (Eurocommunism), a development that pleased neither Washington nor Moscow, Raymond Garthoff observes, neither of which may "have wanted to see an independent pan-Europe based on local nationalism arise between them." For such reasons, both superpowers opposed the legalization of the Communist Party of Spain and the rising influence of the Communist Party in Italy, and both preferred center-right governments in France. Secretary of State Henry Kissinger described the "major problem" in the Western alliance as "the domestic evolution in many European countries," which might make Western communist parties more attractive to the public, nurturing moves towards independence and threatening the NATO alliance. "The United States gave a higher priority to the defensive purpose of protecting the Western alliance and American influence in it than to offensive interests in weakening Soviet influence in the East" in those years, Garthoff concludes in his comprehensive study of the period; the phrase "defensive purpose of protecting the Western alliance" refers to the defense of existing privilege from an internal challenge. This was the context for renewed CIA interference with Italian elections, and possibly a good deal more. 2
In July 1990, President Cossiga of Italy called for an investigation of charges aired over state television that the CIA had paid Licio Gelli to foment terrorist activities in Italy in the late 1960s and 1970s. Gelli was grandmaster of the secret Propaganda Due (P2) Masonic lodge and had long been suspected of a leading role in terrorism and other criminal activities. In those years, according to a 1984 report of the Italian Parliament, P2 and other neofascist groups, working closely with elements of the Italian military and secret services, were preparing a virtual coup to impose an ultra-right regime and to block the rising forces of the left. One aspect of these plans was a "strategy of tension" involving major terrorist actions in Europe. The new charges were made by Richard Brenneke, who claims to have served as a CIA contract officer, and who alleged that the CIA-P2 connections extended over more than 20 years and involved a $10 million payoff. Close links between Washington and the Italian ultra-right can be traced to the strong support for Mussolini's fascist takeover in 1922. 3
Nevertheless, the pattern has been one of general support for the industrial democracies.
The historical evidence, to be sure, must be evaluated with some care. It is one thing to overthrow the democratic government of Guatemala and to maintain the rule of an array of murderous gangsters for over three decades, or to help lay the groundwork for a coup and successful mass slaughter in Indonesia. It would be quite a different matter to duplicate these successes in relatively well-established societies; U.S. power does not reach that far. Still, it would be a mistake to suppose that only lack of means prevents the United States from overturning democratic governments in the industrial societies in favor of military dictatorships or death squad democracies on the Latin American model.
The aftermath of World War II is revealing in these respects. With unprecedented economic and military advantages, the U.S. was preparing to become the first truly global power. There are extensive records of the careful thinking of corporate and state managers as they designed a world order that would conform to the interests they represent. While subject to varying interpretations, the evidence nonetheless provides interesting insight into the complex attitudes of U.S. elites towards democracy at a time when the U.S. was in a position to influence the internal order of the industrial societies.
Taking as general background the sketch in chapter 1, section 5, let us turn to the central concern of global planners as they confronted the problem of reconstructing a world ravaged by war: the industrial societies that were to be at the core of the world system. What can we learn from this experience about the concept of democracy as understood by the architects of the new global order and their inheritors?
One problem that arose as areas were liberated from fascism was that traditional elites had been discredited, while prestige and influence had been gained by the resistance movement, based largely on groups responsive to the working class and poor, and often committed to some version of radical democracy. The basic quandary was articulated by Churchill's trusted adviser, South African Prime Minister Jan Christiaan Smuts, in 1943, with regard to southern Europe: "With politics let loose among those peoples," he said, "we might have a wave of disorder and wholesale Communism." 4 Here the term "disorder" is understood as threat to the interests of the privileged, and "Communism," in accordance with usual convention, refers to failure to interpret "democracy" as elite dominance, whatever the other commitments of the "Communists" may be. With politics let loose, we face a "crisis of democracy," as privileged sectors have always understood.
Quite apart from the superpower confrontation, the United States was committed to restoring the traditional conservative order. To achieve this aim, it was necessary to destroy the anti-fascist resistance, often in favor of Nazi and fascist collaborators, to weaken unions and other popular organizations, and to block the threat of radical democracy and social reform, which were live options under the conditions of the time. These policies were pursued worldwide: in Asia, including South Korea, the Philippines, Thailand, Indochina, and crucially Japan; in Europe, including Greece, Italy, France, and crucially Germany; in Latin America, including what the CIA took to be the most severe threats at the time, "radical nationalism" in Guatemala and Bolivia. 5 Sometimes the task required considerable brutality. In South Korea, about 100,000 people were killed in the late 1940s by security forces installed and directed by the United States. This was before the Korean war, which Jon Halliday and Bruce Cumings describe as "in essence" a phase -- marked by massive outside intervention -- in "a civil war fought between two domestic forces: a revolutionary nationalist movement, which had its roots in tough anti-colonial struggle, and a conservative movement tied to the status quo, especially to an unequal land system," restored to power under the U.S. occupation. 6 In Greece in the same years, hundreds of thousands were killed, tortured, imprisoned or expelled in the course of a counterinsurgency operation, organized and directed by the United States, which restored traditional elites to power, including Nazi collaborators, and suppressed the peasant- and worker-based Communist-led forces that had fought the Nazis. In the industrial societies, the same essential goals were realized, but by less violent means.
In brief, at that moment in history the United States faced the classic dilemma of Third World intervention in large parts of the industrial world as well. The U.S. position was "politically weak" though militarily and economically strong. Tactical choices are determined by an assessment of strengths and weaknesses. The preference has, quite naturally, been for the arena of force and for measures of economic warfare and strangulation, where the U.S. has ruled supreme. In the early post-war period, this was a global problem. Tactical choices largely observed these general conditions, adapted to particular circumstances.
These topics are central to a serious understanding of the contemporary world. The actual history can be discovered in specialized studies devoted to particular instances of what was, in fact, a highly systematic pattern. 7 But it is not readily available to the general public, which is offered a very different version of the general picture and particular cases within it. Take the case of Greece, the first major postwar intervention and a model for much that followed. The U.S. and world market are flooded with such material as the best-selling novel and film Eleni by Nicholas Gage, reporting the horrors of the Communist-led resistance. But Greek or even American scholarship that gives a radically different picture, and seriously questions the authenticity even of Gage's special case, is unknown. In England, an independent TV channel attempted in 1986 to allow the voices of the Communist-led anti-Nazi Greek resistance, defeated by the postwar British and American campaigns, to be heard for the first time, to present their perception of these events. This effort evoked a hysterical establishment response, calling for suppression of this "one-sided" picture inconsistent with the official doctrine that had hitherto reigned unchallenged. The former head of British political intelligence in Athens, Tom McKitterick, supported the broadcast, observing that "for years we have been treated to a one-sided picture, and the series was a brave attempt to restore the balance." But the establishment counterattack prevailed in an impressive display of the totalitarian mentality and its power in the liberal West. The documentary was barred from rebroadcast or overseas marketing, particularly in Greece, only one example of a long history of suppression. 8
In the international system envisioned by U.S. planners, the industrial powers were to reconstruct, essentially restoring the traditional order and barring any challenge to business dominance, but now taking their places within a world system regulated by the United States. This world system was to take the form of state-guided liberal internationalism, secured by U.S. power to bar interfering forces and managed through military expenditures, which proved to be a critical factor stimulating industrial recovery. The global system was designed to guarantee the needs of U.S. investors, who were expected to flourish under the prevailing circumstances. This was a plausible expectation at the time, and one that was amply fulfilled. It was not until the late 1950s that Europe, primarily the Federal Republic of Germany, became a significant factor in world production and trade. 9 And until the Vietnam war shifted the structure of the world economy to the benefit of its industrial rivals, the problem faced by the U.S. government with regard to Japan was how to ensure the viability of its economy. Highly profitable foreign investment rapidly grew and transnational corporations, primarily U.S.-based in the earlier period, expanded and flourished.
Within the industrial world, the "natural leaders" were understood to be Germany and Japan, which had demonstrated their prowess during the war years. They were the "greatest workshops of Europe and Asia" (Dean Acheson). It was, therefore, critically important to guarantee that their reconstruction followed a proper course, and that they remained dependent on the United States. Accordingly, East-West trade and moves towards European détente have always been viewed with some concern. Great efforts were also expended to prevent a renewal of traditional commercial relations between Japan and China particularly in the 1950s, well before China too became integrated into the U.S.-dominated global system. A major goal of American diplomatic strategy, outlined by John Foster Dulles at a closed regional meeting of American Ambassadors in Asia in March 1955, was "to develop markets for Japan in Southeast Asia in order to counteract Communist trade efforts and to promote trade between Japan and Southeast Asia countries," Chitoshi Yanaga wrote in the 1960s. The general conclusion is amplified by documentation subsequently released in the Pentagon Papers and elsewhere. U.S. intervention in Vietnam was initially motivated, in large measure, by such concerns. 10
At the time, Japan was not regarded as a serious competitor; we may dismiss self-serving illusions about how Japanese recovery and competition proves that the U.S. was selfless in its postwar planning. It was taken for granted that Japan would, one way or another, regain its status as "the workshop of Asia" and would be at the center of something like the "co-prosperity sphere" that Japanese fascism had attempted to create. The realistic alternatives, it was assumed, were that this system would be incorporated within the U.S. global order, or that it would be independent, possibly blocking U.S. entry, perhaps even linked to the Soviet Union. As for Japan itself, the prospect generally anticipated was that it might produce "knick-knacks" and other products for the underdeveloped world, as a U.S. survey mission concluded in 1950. 11
In part, the dismissive assessment of Japan's prospects was based on the failure of Japanese industrial recovery prior to the economic stimulus of military procurements for the Korean war. In part, there was doubtless an element of racism, illustrated, for example, in the reaction of the business community to the democratic labor laws introduced by the U.S. military occupation. These laws were opposed by business generally. They were bitterly denounced by James Lee Kauffman, one of the influential members of the business lobby that worked to impede the democratization of Japan. Representing industrialists with an interest in cheap and docile labor, he wrote indignantly in 1947 that Japanese workers had to be treated as juveniles. "You can imagine what would happen in a family of children of ten years or less if they were suddenly told...that they could run the house and their own lives as they pleased." Japanese labor had gone "hog wild," he wrote. "If you have ever seen an American Indian spending his money shortly after oil has been discovered on his property you will have some idea of how the Japanese worker is using the Labor Law." The racist attitudes of General MacArthur, American proconsul for Japan after World War II, was notorious. Thus, in congressional testimony in 1951, he said that "Measured by the standards of modern civilization, they would be like a boy of twelve as compared with our development of forty-five years," a fact that allowed us to "implant basic concepts there": "They were still close enough to origin to be elastic and acceptable to new concepts." In more recent years the compliment has been returned by right-wing Japanese commentators on U.S. culture and society. 12
Nevertheless, some foresaw problems down the road, notably the influential planner George Kennan, who recommended that the U.S. control Japanese oil imports so as to maintain "veto power" over Japan, advice that was followed. 13 This is one of many reasons why the United States has been so concerned to control the oil reserves of the Middle East throughout the postwar period, and presumably also a reason for Japanese reluctance to follow the U.S. lead on Middle East problems.
In Japan the United States was able to act unilaterally, having excluded its allies from any role in the occupation. 14 General MacArthur encouraged steps towards democratization, though within limits. Militant labor action was barred, including attempts to establish workers control over production. Even the partial steps towards democracy scandalized the State Department, U.S. corporations and labor leadership, and the U.S. media. George Kennan and others warned against a premature end to the occupation before the economy was reconstructed under stable conservative rule. These pressures led to the "reverse course" of 1947, which ensured that there would be no serious challenge to government-corporate domination over labor, the media and the political system.
Under the reverse course, worker-controlled companies, which were operating with considerable success, were eliminated. Support was given to right-wing socialists who had been fascist collaborators and were committed to U.S.-style business unionism under corporate control, while leftists who had been jailed under fascist rule were excluded, the normal pattern worldwide. Labor was suppressed with considerable police violence, and elimination of the right to strike and collective bargaining. The goal was to ensure business control over labor through conservative unions. Industrial unions were undermined by the late 1940s, as the industrial-financial conglomerates (Zaibatsu), which were at the heart of Japan's fascist order, regained their power with the assistance of an elaborate police and surveillance network and rightist patriotic organizations. The Japanese business classes were reconstituted much as under the fascist regime, placed in power in close collaboration with the authorities of the centralized state. George Kennan, who was one of the leading architects of the reverse course, regarded the early plans to dissolve the Zaibatsu as bearing "so close a resemblance to Soviet views about the evils of `capitalist monopolies' that the measures themselves could only have been eminently agreeable to anyone interested in the further communization of Japan." 15 By 1952, Japan's industrial and financial elites had not only established themselves as the dominant element in Japan, but were exercising "control over a more concentrated and interconnected system of corporations than before the war" (Schonberger). The burden of reconstruction was placed upon the working class and the poor, within a system described as "totalitarian state capitalism" by Sherwood Fine, who served as Director of Economics and Planning in the Economic and Scientific Section throughout the U.S. military occupation. These policies "allowed Japanese corporate elites to avoid the social rationalization that would have provided a thriving domestic market to sustain industry" (Borden) -- by now, posing a problem for Japan's Western rivals.
Borden observes that Britain, with its powerful labor unions and welfare system, was concerned over "ultracompetitive export pricing made possible by exploiting labor and enfeebling unions" in Japan under U.S. pressure. "The British response was to defend the rights of Japanese workers and to promote China as the logical outlet for Japan's exports." But those ideas conflicted with U.S. global planning, which sought to prevent Japan from accommodating to Communist China, and with the development model preferred by the U.S. and its Japanese corporate allies. While Japanese corporate conglomerates were reinforced, labor was weakened and splintered, with the collaboration of U.S. labor leaders, as elsewhere in the world. Britain itself was to face a similar attack on unions and the welfare system, as did the United States itself, beginning with the assault on labor in the early postwar period, renewed by the bipartisan consensus of the post-Vietnam period in support of business interests.
The United States essentially reconstructed the co-prosperity sphere of Japanese fascism, though now as a component of the U.S.-dominated global order. Within it, Japanese state capitalism was granted a relatively free hand. The U.S. undertook the major military burden of crushing indigenous threats to this system, renewing a traditional perception of Japan as a junior partner in the exploitation of Asia.
By now, Japan has perhaps the weakest labor movement in the industrial capitalist world, with the possible exception of the United States itself. It is a disciplined society, under the firm control of the traditional state capitalist management. The Korean war sparked Japanese economic recovery. U.S. military procurement through the 1950s "played a critical role in supplying the dollars, demand, technology, and market for the modernization of the industrial base in Japan," and the rapid increase from 1965 accelerated the process. 16 By the 1970s, these developments were raising serious and unanticipated problems for the U.S. government and corporations, problems that are likely to intensify as it becomes necessary to face the consequences of Reaganite economic mismanagement.
Germany posed many of the same problems, compounded by four-power control. After the consolidation of the three Western zones in 1947, the U.S. began to move towards the partition of Germany. These steps were undertaken at the same time as the reverse course in Japan, and for similar reasons. One reason was the fear of democracy, understood in the sense of popular participation. Eugene Rostow argued in 1947 that "the Russians are much better equipped than we are to play the game in Germany," referring to the "political game"; therefore we must prevent the game from being played. Kennan had noted a year earlier that a unified Germany would be vulnerable to Soviet political penetration, so we must "endeavor to rescue Western zones of Germany by walling them off against Eastern penetration" -- a nice image -- "and integrating them into an international pattern of Western Europe rather than into a united Germany," in violation of wartime agreements. Like George Marshall and Dean Acheson, and knowledgeable analysts generally, Kennan did not expect a Soviet military attack, but rather "described the imbalance in Russian `political power' rather than `military power' as the immediate risk faced by the United States" (Schaller). 17
The main problem, again, was the labor movement and other popular organizations that threatened conservative business dominance. Surveying the declassified record, Carolyn Eisenberg concludes that the fear -- indeed "horror" -- was "a unified, centralized, politicized labor movement committed to a far-reaching program of social change." After the war, German workers began to form works councils and trade unions, and to develop co-determination in industry and democratic grass roots control of unions. The State Department and its U.S. labor associates were appalled by these moves towards democracy in the unions and the larger society, with all the problems these developments would pose for the plan to restore the corporate-controlled economic order ("democracy"). The problem was heightened by the fact that in the Soviet zone, semi-autonomous works councils had been established which exercised a degree of managerial authority in de-Nazified enterprises. The British Foreign Office also feared "economic and ideological infiltration" from the East, which it perceived as "something very like aggression." It preferred a divided Germany, incorporating the wealthy Ruhr/Rhine industrial complex within the Western alliance, to a united Germany in which "the balance of advantage seems to lie with the Russians," who could exercise "the stronger pull." In interdepartmental meetings of the British government in April 1946, the respected official Sir Orme Sargent described moves towards establishing a separate Western Germany within a Western bloc as necessary, though it was agreed that they might lead to war: "the only alternative to [partition] was Communism on the Rhine," with the likely eventuality of "a German Government that would be under Communist influence." In the major scholarly monograph on the British role, Anne Deighton describes his intervention as of "critical" significance. 18
The United States was determined to prevent expropriation of Nazi industrialists and was firmly opposed to allowing worker-based organizations to exercise managerial authority. Such developments would pose a serious threat of democracy in one sense of the term, while violating it in the approved sense. The U.S. authorities therefore turned to sympathetic right-wing socialists, as in Japan, while using such means as control of CARE packages, food and other supplies to overcome the opposition of rank-and-file workers. It was finally necessary to "wall off" the Western zone by partition, to veto the major union constitutions, to forcefully terminate social experiments, vetoing state (Laender) legislation, co-determination efforts, and so on. Major Nazi war criminals were recruited for U.S. intelligence and anti-resistance activities, Klaus Barbie being perhaps the best known. A still worse Nazi gangster, Franz Six, was pressed into service after his sentence as a war criminal was commuted by U.S. High Commissioner John J. McCloy. He was put to work for Reinhard Gehlen, with special responsibility for developing a "secret army" under U.S. auspices, along with former Waffen-SS and Wehrmacht specialists, to assist military forces established by Hitler in Eastern Europe and the Soviet Union in operations that continued into the 1950s. Gehlen himself had headed Nazi military intelligence on the Eastern front, and was reinstated as head of the espionage and counter-espionage service of the new West German state, under close CIA supervision. 19
Meanwhile, as in Japan, the burden of reconstruction was placed upon German workers, in part by fiscal measures that wiped out the savings of the poor and union treasuries. "So thoroughgoing was the U.S. assault on German labor that even the AFL complained," Eisenberg comments, though the AFL had helped lay the basis for these consequences by its anti-union activities. Union activists were purged and strikes were blocked by force. By 1949, the State Department expressed its pleasure that "industrial peace had been attained," with a now docile and tractable labor force and an end to the vision of a unified popular movement that might challenge the authority of owners and managers. As Tom Bower describes the outcome in a study of the rehabilitation of Nazi war criminals, "Four years after the war, those responsible for the day-to-day management of post-war Germany were remarkably similar to the management during the days of Hitler," including bankers and industrialists convicted of war crimes who were released and restored to their former roles, renewing their collaboration with U.S. corporations. 20
In short, the treatment of the two "great workshops" was basically similar.
In later years, as we have seen, the U.S. was distinctly wary of apparent Soviet initiatives for a unified demilitarized Germany and steps towards dismantling the pact system. Western European elites have been no less concerned, for the decline of East-West confrontation might "let politics loose among those people," with all of the dire effects. That has been one of the undercurrents beneath the debate of the 1980s over arms control, security issues, and the political prospects for a united Europe.
In France and Italy, U.S. authorities pursued similar tasks. In both countries, Marshall Plan aid was strictly contingent on exclusion of Communists -- including major elements of the anti-fascist resistance and labor -- from the government; "democracy," in the usual sense. U.S. aid was critically important in early years for suffering people in Europe and was therefore a powerful lever of control, a matter of much significance for U.S. business interests and longer term planning. "If Europe did not receive massive financial assistance and adopt a coherent recovery program, American officials were fearful that the Communist left would triumph, perhaps even through free elections," Melvyn Leffler observes. On the eve of the announcement of the Marshall Plan, Ambassador to France Jefferson Caffery warned Secretary of State Marshall of grim consequences if the Communists won the elections in France: "Soviet penetration of Western Europe, Africa, the Mediterranean, and the Middle East would be greatly facilitated" (May 12, 1947). The dominoes were ready to fall. During May, the U.S. pressured political leaders in France and Italy to form coalition governments excluding the Communists. It was made clear and explicit that aid was contingent on preventing an open political competition, in which left and labor might dominate. Through 1948, Secretary of State Marshall and others publicly emphasized that if Communists were voted into power, U.S. aid would be terminated; no small threat, given the state of Europe at the time.
In France, the postwar destitution was exploited to undermine the French labor movement, along with direct violence. Desperately needed food supplies were withheld to coerce obedience, and gangsters were organized to provide goon squads and strike breakers, a matter that is described with some pride in semi-official U.S. labor histories, which praise the AFL for its achievements in helping to save Europe by splitting and weakening the labor movement (thus frustrating alleged Soviet designs) and safeguarding the flow of arms to Indochina for the French war of reconquest, another prime goal of the U.S. labor bureaucracy. 21 The CIA reconstituted the mafia for these purposes, in one of its early operations. The quid pro quo was restoration of the heroin trade. The U.S. government connection to the drug boom continues until today. 22
U.S. policies towards Italy basically picked up where they had been broken off by World War II. The United States had supported Mussolini's Fascism from the 1922 takeover through the 1930s. Mussolini's wartime alliance with Hitler terminated these friendly relations, but they were reconstituted as U.S. forces liberated southern Italy in 1943, establishing the rule of Field-Marshall Badoglio and the royal family that had collaborated with the Fascist government. As Allied forces drove towards the north, they dispersed the anti-fascist resistance along with local governing bodies it had formed in its attempt "to create the foundations for a new, democratic, and republican state in the various zones it succeeded in liberating from the Germans" (Gianfranco Pasquino). 23 A center-right government was established with neo-fascist participation and the left soon excluded.
Here too, the plan was for the working classes and the poor to bear the burden of reconstruction, with lowered wages and extensive firing. Aid was contingent on removing Communists and left socialists from office, because they defended workers interests and thus posed a barrier to the intended style of recovery, in the view of the State Department. The Communist Party was collaborationist; its position "fundamentally meant the subordination of all reforms to the liberation of Italy and effectively discouraged any attempt in northern areas to introduce irreversible political changes as well as changes in the ownership of the industrial companies,...disavowing and discouraging those workers' groups that wanted to expropriate some factories" (Pasquino). But the Party did try to defend jobs, wages, and living standards for the poor and thus "constituted a political and psychological barrier to a potential European recovery program," historian John Harper comments, reviewing the insistence of Kennan and others that Communists be excluded from government though agreeing that it would be "desirable" to include representatives of what Harper calls "the democratic working class." The recovery, it was understood, was to be at the expense of the working class and the poor.
Because of its responsiveness to the needs of these social sectors, the Communist Party was labelled "extremist" and "undemocratic" by U.S. propaganda, which also skillfully manipulated the alleged Soviet threat. Under U.S. pressure, the Christian Democrats abandoned wartime promises about workplace democracy and the police, sometimes under the control of ex-fascists, were encouraged to suppress labor activities. The Vatican announced that anyone who voted for the Communists in the 1948 election would be denied sacraments, and backed the conservative Christian Democrats under the slogan: "O con Cristo o contro Cristo" ("Either with Christ or against Christ"). A year later, Pope Pius excommunicated all Italian Communists. 24
A combination of violence, manipulation of aid and other threats, and a huge propaganda campaign sufficed to determine the outcome of the critical 1948 election, essentially bought by U.S. intervention and pressures.
U.S. policies in preparation for the election were designed so that "even the dumbest wop would sense the drift," as the Italian desk officer at the State Department put it with characteristic ruling class elegance. As 30 years earlier, "the Italians are like children [who] must be led and assisted" (see p. 38). The policies included police violence and threats to withhold food, to bar entry to the U.S. to anyone who voted the wrong way, to deport Italian-Americans who supported the Communists, to bar Italy from Marshall Plan aid, and so on. State Department historian James Miller observes that subsequent economic development was carried out "at the expense of the working class" as the left and the labor movement were "fragmented with U.S. support," and that U.S. efforts undercut a "democratic alternative" to the preferred center-right rule, which proved corrupt and inept. The basic policy premise was that "as a key strategic entity, Italy's fate remained too important for Italians alone to decide" (Harper) -- particularly, the wrong Italians, with their misunderstanding of democracy.
Meanwhile, the U.S. planned military intervention in the event of a legal Communist political victory in 1948, and this was broadly hinted in public propaganda. Kennan secretly suggested that the Communist Party be outlawed to forestall its electoral victory, recognizing that this would probably lead to civil war, U.S. military intervention, and "a military division of Italy." But he was overruled, on the assumption that other means of coercion would suffice. The National Security Council, however, secretly called for military support for underground operations in Italy along with national mobilization in the United States, "in the event the Communists obtain domination of the Italian government by legal means." 25 The subversion of effective democracy in Italy was taken very seriously.
Washington's intention to resort to violence if free elections come out the wrong way is not very easy to deal with, so it has been generally suppressed, even in the scholarly literature. One of the two major scholarly monographs on this period discusses the NSC memoranda, but with no mention of the actual content of the crucial section; the second passes it by in a phrase. 26 In the general literature, the whole matter is unknown.
The CIA operations to control the Italian elections, authorized by the National Security Council in December 1947, were the first major clandestine operation of the newly formed Agency. As noted earlier, CIA operations to subvert Italian democracy continued into the 1970s at a substantial scale.
In Italy too, U.S. labor leaders, primarily from the AFL, played an active role in splitting and weakening the labor movement, and inducing workers to accept austerity measures while employers reaped rich profits. In France, the AFL had broken dock strikes by importing Italian scab labor paid by U.S. businesses. The State Department called on the Federation's leadership to exercise their talents in union busting in Italy as well, and they were happy to oblige. The business sector, formerly discredited by its association with Italian Fascism, undertook a vigorous class war with renewed confidence. The end result was the subordination of the working class and the poor to the traditional rulers. In the major academic study of U.S. labor in Italy, Ronald Filippelli observes that American aid "had largely been used to rebuild Italy on the old basis of a conservative society" in a "rampant capitalist restoration" on the backs of the poor, "with low consumption and low wages," "enormous profits," and no interference with the prerogatives of management. Meanwhile AFL President George Meany angrily rejected criticism of his anti-labor programs on the grounds that freedom in Italy was not the exclusive concern of its own people; the AFL would therefore pursue its higher goal of "strengthening the forces of liberty and social progress all over the world" -- by ensuring that U.S. business interests remain in the ascendant, class collaboration with a vengeance. The result was "a restoration to power of the same ruling class that had been responsible for, and benefited from, fascism," with the working class removed from politics, subordinated to the needs of investors, and forced to bear the burden of the "Miracolo italiano," Filippelli concludes.
The policies of the late 1940s "hit the poorer regions and politically impotent social strata hardest," Harper observes, but they did succeed in breaking "rigid labor markets" and facilitating the export-led growth of the 1950s, which relied on "the continuing weakness and remarkable mobility of the Italian working class." These "happy circumstances," he continues, brought further economic development of a certain kind, while the CIA mounted new multimillion dollar covert funding and propaganda campaigns to ensure that the "felicitous arrangements" would persist. 27
Later commentators tend to see the U.S. subversion of democracy in France and Italy as a defense of democracy. In a highly-regarded study of the CIA and American democracy, Rhodri Jeffreys-Jones describes "the CIA's Italian venture," along with its similar efforts in France, as "a democracy-propping operation," though he concedes that "the selection of Italy for special attention...was by no means a matter of democratic principle alone"; our passion for democracy was reinforced by the strategic importance of the country. But it was a commitment to "democratic principle" that inspired the U.S. government to impose the social and political regimes of its choice, using the enormous power at its command and exploiting the privation and distress of the victims of the war, who must be taught not to raise their heads if we are to have true democracy. 28
A more nuanced position is taken by James Miller in his monograph on U.S. policies towards Italy. Summarizing the record, he concludes that
In retrospect, American involvement in the stabilization of Italy was a significant, if troubling, achievement. American power assured Italians the right to choose their future form of government and also was employed to ensure that they chose democracy. In defense of that democracy against real but probably overestimated foreign and domestic threats, the United States used undemocratic tactics that tended to undermine the legitimacy of the Italian state. 29
The "foreign threats," as he had already discussed, were hardly real; the Soviet Union watched from a distance as the U.S. subverted the 1948 election and restored the traditional conservative order, keeping to its wartime agreement with Churchill that left Italy in the Western zone. The "domestic threat" was the threat of democracy.
The idea that U.S. intervention provided Italians with freedom of choice while ensuring that they chose "democracy" (in our special sense of the term) is reminiscent of the attitude of the extreme doves towards Latin America: that its people should choose freely and independently, "except when doing so would affect U.S. interests adversely," and that the U.S. had no interest in controlling them, unless developments "get out of control" (see chapter 8, p. 261).
The democratic ideal, at home and abroad, is simple and straightforward: You are free to do what you want, as long as it is what we want you to do.
Apart from the rearmament of Germany within a Western military alliance, which no Russian government could easily accept for obvious reasons, Stalin observed all of this with relative calm, apparently regarding it as a counterpart to his own harsh repression in Eastern Europe. Nevertheless, these parallel developments were bound to lead to conflict.
In his review of the reverse course in Japan, John Roberts argues that "the American rehabilitation of the monopolistic economies of Western Germany and Japan (largely under prewar leadership) was a cause, not a result, of the cold war. Their rehabilitation was, undoubtedly, a vital part of American capitalism's strategy in its all-out vendetta against communism" -- meaning, primarily, an attack against the participation of the "popular classes" in some significant range of decision-making. Focusing on Europe, Melvyn Leffler comments that the approach to European recovery led American officials to act
to safeguard markets, raw materials, and investment earnings in the Third World. Revolutionary nationalism had to be thwarted outside Europe, just as the fight against indigenous communism had to be sustained inside Europe. In this interconnected attempt to grapple with the forces of the left and the potential power of the Kremlin resides much of the international history, strategy, and geopolitics of the Cold War era. 30
These are critical undercurrents through the modern era, and remain so.
Throughout the reconstruction of the industrial societies, the prime concern was to establish a state capitalist order under the traditional conservative elites, within the global framework of U.S. power, which would guarantee the ability to exploit the various regions that were to fulfill their functions as markets and sources of raw materials. If these goals could be achieved, then the system would be stable and resistant to feared social change, which would naturally be disruptive once the system is operating in a relatively orderly fashion. In the wealthy industrial centers, large segments of the population would be accommodated, and would be led to abandon any more radical vision under a rational cost-benefit analysis.
Once its institutional structure is in place, capitalist democracy will function only if all subordinate their interests to the needs of those who control investment decisions, from the country club to the soup kitchen. It is only a matter of time before an independent working class culture erodes, along with the institutions and organizations that sustain it, given the distribution of resources and power. And with popular organizations weakened or eliminated, isolated individuals are unable to participate in the political system in a meaningful way. It will, over time, become largely a symbolic pageant or, at most, a device whereby the public can select among competing elite groups, and ratify their decisions, playing the role assigned them by progressive democratic theorists of the Walter Lippmann variety. 31 That was a plausible assumption in the early postwar period and has proven largely accurate so far, despite many rifts, tensions and conflicts.
European elites have a stake in the preservation of this system, and fear their domestic populations no less than the U.S. authorities did. Hence their commitment to Cold War confrontation, which came to serve as an effective technique of domestic social management, and their willingness, with occasional mutterings of discontent, to line up in U.S. global crusades. The system is oppressive, and often brutal, but that is no problem as long as others are the victims. It also raises constant threats of large-scale catastrophe, but these too do not enter into planning decisions shaped by the goal of maximization of short-term advantage, which remains the operative principle.
1 Chapter 8, section 7.
2 John Pilger, A Secret Country (Jonathan Cape, 1989); see also his documentary series "The Last Dream," 1988, produced for the Australian Bicentenary with the cooperation of the Australian Broadcasting Company. Jonathan Kwitny, The Crimes of Patriots (Norton, 1987). CIA: the Pike Report (Spokesman Books, Nottingham, 1977); the report was leaked to the Village Voice (Feb. 16, 23, 1976). Garthoff, Détente and Confrontation, 487f.
3 Brenneke, TG 1 (Italian TV), July 2; il Manifesto, July 3, 1990. AP, Boston Globe, July 23, 1990. On U.S.-Italian covert relations in the 1970s and the P2-security services plans, see Edward S. Herman and Frank Brodhead, The Rise and Fall of the Bulgarian Connection (Sheridan Square, 1986), chapter 4. As they observe, extensive right-wing terrorism in Europe has been largely ignored in the general literature of terrorology, much of it a transparent propaganda exercise. Also William Blum, The CIA (Zed, 1986). On the early postwar years, see also John Ranelagh, The Agency: the Rise and Decline of the CIA (Simon and Schuster, 1986). On the U.S. and Mussolini, and the quick return by the Allies to a pro-Fascist stance during the War, see
chapter 1, section 4, above. Brenneke had achieved some notoriety out of the mainstream when he claimed that while working for the CIA, he had taken part in an October 1980 meeting in Paris in which representatives of the Reagan-Bush campaign, including later CIA chief William Casey, Bush aide Donald Gregg, and possibly Bush himself, had bribed Iran to hold the U.S. hostages until after the election, to ensure Reagan's victory. The government brought him to court (directly from a cardiac intensive care ward) to try him on charges of having falsely made these claims. He was acquitted in Federal Court of these and other charges by a jury "that made no secret of its disbelief in the truthfulness of government witnesses, particularly Gregg," ex-CIA agent David MacMichael observes -- noting also that the whole matter was virtually suppressed in the national media; Lies of Our Times, August 1990. In the independent press, the story was covered (Houston Post, Nation, In These Times, and others).
4 Smuts cited by Basil Davidson, Scenes from the Anti-Nazi War (Monthly Review, 1980), 17.
5 On these cases, see
chapter 12, pp. 395f.
6 Halliday and Cumings, Korea: the Unknown War (Viking, Pantheon, 1988).
7 The first major scholarly effort to lay out this pattern is Gabriel Kolko's Politics of War (Random House, 1968), which remains extremely valuable, and unique in its scope and depth, despite the flood of new documents and scholarship since.
8 See Covert Action Information Bulletin, Winter 1986. Richard Gott, "A Greek tragedy to haunt the old guard," Guardian (London), July 5, 1986.
9 Alfred Grosser, The Western Alliance (Continuum, 1980), 178.
10 Yanaga, Big Business in Japanese Politics (Yale, 1968), 265f. See my At War with Asia, introduction, and For Reasons of State, chapter 1 (published in England as The Backroom Boys (Fontana)), sec. V; Chomsky and Howard Zinn, eds., Critical Essays, vol. 5 of the Pentagon Papers. Also a good deal of recent scholarship, including Michael Schaller, "Securing the Great Crescent," J. of American History, Sept. 1982, and his American Occupation of Japan; Andrew J. Rotter, The Path to Vietnam (Cornell, 1987). Acheson, cited by Schaller, American Occupation, 97.
11 Ibid., 222. See
chapter 1, p. 46f.
12 John Roberts, "The `Japan Crowd' and the Zaibatsu Restoration," The Japan Interpreter, 12, Summer 1979. MacArthur, Howard B. Schonberger, Aftermath of War (Kent State, 1989), 52-3. Japanese attitudes, Akio Morita and Shintaro Ishihara, The Japan That Can Say No. On the racist attitudes on both sides during the War, which reached shocking proportions, see John Dower, War without Mercy: Race and Power in the Pacific War (Pantheon, 1986).
chapter 1, p. 53.
14 For background on what follows, see Joe Moore, Japanese Workers and the Struggle for Power, 1945-1947 (U. of Wisconsin, 1983); Schaller, American Occupation; William Borden, Pacific Alliance; Howard Schonberger, "The Japan Lobby in American Diplomacy, 1947-1952," Pacific Historical Review, Aug. 1977, and his Aftermath of War; Roberts, "The `Japan Crowd'"; Cumings, "Power and Plenty in Northeast Asia," World Policy Journal, Winter 1987-88.
15 Kennan, cited by Schonberger, Aftermath, 77.
16 Schaller, American Occupation, 296.
17 Rostow, Kennan, cited by John H. Backer, The Decision to Divide Germany (Duke, 1978), 155-6; Schaller, American Occupation. See Anne Deighton, International Affairs, Summer 1987, on British initiatives in violation of the Potsdam Agreements.
18 Carolyn Eisenberg, "Working-Class Politics and the Cold War: American Intervention in the German Labor Movement, 1945-49," Diplomatic History, 7.4, Fall 1983; Deighton, op. cit.; Sargent, quoted from minutes in Anne Deighton, The Impossible Peace: Britain, the Division of Germany, and the Origins of the Cold War (Oxford, 1990), 73. See also Backer, op. cit., 171; Melvyn Leffler, "The United States and the Strategic Dimensions of the Marshall Plan," Diplomatic History, Summer 1988.
19 For more on these matters, see Turning the Tide, 197ff., and sources cited; Christopher Simpson, Blowback (Weidenfeld and Nicolson, 1988). On the recruitment of Nazi scientists, see Tom Bower, The Paperclip Conspiracy (Michael Joseph, 1987), 310; John Gimbel, Science, Technology, and Reparations (Stanford, 1990). A review of the latter in Science notes that Gimbel's research "demonstrates the dubiousness of subsequent U.S. claims of commercial disinterestedness in the occupation of Germany; just like the Russians, and to a lesser degree the British and the French, the Americans seized enormous quantities of reparations from the defeated country," giving "some credence to the Russian claim that Anglo-American seizures amounted to about $10 billion," the amount demanded (but not received) by the Russians as reparations for the Nazi devastation of the USSR. Raymond Stokes, Science, June 8, 1990.
20 Eisenberg, op. cit. Bower, The Paperclip Conspiracy.
21 See Roy Godson, American Labor and European Politics (Crane, Russak, 1976).
22 See McCoy, Politics of Heroin, and other references of note 21, chapter 4.
chapter 1, section 4. Pasquino, "The Demise of the First Fascist Regime and Italy's Transition to Democracy: 1943-1948," in Guillermo O'Donnell, Philippe C. Schmitter and Laurence Whitehead, Transitions from Authoritarian Rule: Prospects for Democracy (Johns Hopkins, 1986). On what follows, see John L. Harper, America and the Reconstruction of Italy, 1945-1948 (Cambridge, 1986); James E. Miller, "Taking Off the Gloves: The United States and the Italian Elections of 1948," Diplomatic History 7.1, Winter, 1983 and his The United States and Italy, 1940-1950 (U. of North Carolina, 1986); Ronald Filippelli, American Labor and Postwar Italy (see chapter 1, section 4).
24 Vatican, Craig Kelly, The Anti-Fascist Resistance and the Shift in Political-Cultural Strategy of the Italian Communist Party 1936-1948, Phd Dissertation, UCLA, 1984, 10.
25 Harper, op. cit.; Kennan to Secretary of State, FRUS 1948, III, 848-9; NSC 1/3, March 8, 1948, FRUS, 1948, III, 775f.
26 Miller, United States and Italy, 247; Harper, America and the Reconstruction of Italy, 155, noting the NSC recommendation that "In the case of communist victory, there should be military and economic assistance to the pro-Western forces."
27 Harper, op. cit., 164-5.
28 Jeffreys-Jones, The CIA and American Democracy (Yale, 1989), 50-1.
29 Miller, United States and Italy, 274.
30 Roberts, Leffler, op. cit..
next chapter, pp. 367f.