The New Deal, Part 2: Foreign Policy

by | May 1, 2017

The New Deal, Part 2: Foreign Policy

by | May 1, 2017

As noted in part 1, the New Deal was in serious political trouble by 1937. (See Frederic Sanborn, “Collapse of the New Deal,” in W.A. Williams, ed., Shaping of American Diplomacy, II.) Agriculture Secretary Henry Wallace’s book New Frontiers (1934) was an early sign of the administration’s turn toward foreign markets as the most promising escape from the Depression. By 1937-38, the recession-within-the-Depression was pushing many New Dealers toward Open Door Empire. But fascist autarchy, local corporatism, Soviet communism, and new trade restrictions walling off European colonial empires blocked that path. Pursuit of the Open Door would risk war — a choice Herbert Hoover had rejected when faced with a U.S.-Japanese conflict over the China market. Latin America, of course, was meant to be America’s sphere of influence (Closed Door). Recent German and Italian commercial competition there was even less welcome than Japanese competition in Asia. For old-school McKinley Republican imperialists such as Henry L. Stimson and Frank Knox, soon to join the government (1940), and Stanley K. Hornbeck (already at State), military solutions seemed obvious.

John T. Flynn noted that increased military spending was the only remaining economic stimulus the administration could sell to “conservative groups who fear taxation and inflation.” Defense did the trick, and “the Congress and the nation that [were] howling for economy only six months ago [are] now talking about military budgets of monstrous dimensions.…” (Country Squire in the White House). Roosevelt’s 1937 naval budget aimed at economic recovery, overseas commerce, and force with which to secure them.

Roosevelt’s own views (navalism, militarism, Anglophilia, collective security) helped to over-determine events. According to Flynn, New Dealers exaggerated foreign dangers to justify military spending to combat economic stagnation threatening their political survival. For various reasons, then, the administration was taking an alarmed view of world affairs. Congress funded Roosevelt’s spending requests and the administration projected ever larger armed forces, complained of German subversion in Latin America, and launched patrols against supposed German submarines off the Atlantic coast.

New Deal policy analysts restated the Open Door program of the 1890s in new terms serving the needs of the internationally oriented corporations mentioned in part 1 — Thomas Ferguson’s new historical bloc. According to historian Gabriel Kolko, that coalition was especially eager to secure supplies of scarce raw materials essential to modern industrial processes. From mid 1940, regular meetings of business, State Department, and military planners shaped a complete strategy for U.S. global domination. Subgroups developed aeromania and polarmania (my terms) — the geopolitics of air power and intercontinental bombing. If war pulled America out of the Depression, America was never going back in. (See David W. Eakins, “Business Planners and America’s Postwar Expansion,” in David Horowitz, ed., Corporations and the Cold War; and Carlo Maria Santoro, Diffidence and Ambition: Intellectual Sources of U.S. Foreign Policy.)

The gathering war party included Northeastern interventionist conservatives who opposed Roosevelt and worked to nominate Wendell Willkie as his Republican opponent (as did British intelligence). Their corporations ran U.S. war production once war came, and later were the core of the Cold War military-industrial complex. Aubrey Herbert (a pen name of Murray Rothbard) wrote in October 1954 of a decisive moment in 1940: “[Many] elements of big business, particularly ‘Wall Street’ … saw that they could make a good thing out of statism … direct and indirect subsidies galore.”

Some well-placed, unsentimental Anglophiles stood ready to substitute for their beloved British Empire a better American one (David P. Calleo and Benjamin M. Rowland, America and the World Economy). Another war faction was the China Lobby: U.S. missionaries, congressmen, and businessmen lobbying for Chiang Kai-shek. As unilateral imperialists of the McKinley school, they had little in common with genuine noninterventionists.

More important were the prominent Anglophile WASPs in official peace circles, men such as James T. Shotwell and Nicholas Murray Butler at the Carnegie Endowment, where “peace” simply meant preservation of the famously peaceful British Empire.

The battle over intervention

In June 1939, Roosevelt served hotdogs to visiting King George VI and promised firm U.S. support in the next war. By September that war existed. Kansas editor William Allen White formed an interventionist front, the Committee to Defend America by Aiding the Allies, and Yale students influenced by Edwin M. Borchard, defender of American neutrality, formed the America First Committee (AFC) in opposition.

We cannot review here the administration’s moves toward war, which included neutrality-law revision, beginnings of mass conscription, and covert anti-German naval warfare in the North Atlantic. The AFC publicly opposed each move with writing, speeches, and mass rallies, but the interventionists’ victory came from a neglected quarter: East Asia, where U.S. Open Door plans for the China market clashed with Japan’s goal of regional empire.

Already in January 1941, U.S. Ambassador Joseph Grew reported from Tokyo that numerous sources predicted “a surprise mass attack on Pearl Harbor … by the Japanese military forces, in case of ‘trouble’ between Japan and the United States” (Peace and War: U.S. Foreign Policy).

Of the war abroad, we need say little here. We have the History Channel for that.

Read the rest at the Future of Freedom Foundation.

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