History

[Working backward from the year 2000 toward America’s beginnings.]

So much for the military course of the United States in the twentieth century. Now we need to return to the year 2000, and go over the same years once again, this time looking at economics.

Economic Trends

Militarily, the U.S. moved, in the twentieth century, from regional player to global colossus. Beginning again at the year 2000, looking at economics, we see a picture that (as always when we’re dealing with history) may be read many different ways.

Here is one reading: America’s economic performance in the 20^th century is still impressive, but in some ways it peaked a couple decades after World War II ended, and then began to decline.

Maybe. But here is another reading: Economically, America in the 20^th century reinvented itself successfully at least three times, and is probably in the process of doing so again.

Which way is most correct, only time will tell. Let’s look at the story.

At the end of the 20^th century, several American industries that had been crucial to its earlier success were no longer viable. Take the steel industry. You could find a couple of modern steel mills, but mostly if you wanted steel or products made of steel, like ships, you had to turn to Asian manufacturers such as Korea. Take electronics, a much more modern  industry that America had pioneered. Electronic instruments and gadgets no longer were made in America. Even the iconic Apple computer had parts made  in China and other places overseas. In the 1980s, a fire in one of two factories on Taiwan that made silicon chips caused a crisis in the American computer industry. Even service jobs such as hotlines were being farmed out to lower-cost English-speaking countries such as India. A pessimist might ask, where is the future for an industrial economy that keeps losing its pre-eminence in basic industries?

Yet, at the same time, new industries were springing up that promised to replace those lost. In 1986 the world watched a two-person airplane circle the world in 10 days without landing and without refueling. Not everyone who kept track of the Voyager flight, though, noticed that it was designed to showcase the strength, durability, and light weight of new composite materials as a replacement for the aluminum skins airplanes had depended upon for half a century. And, in those same years, few noticed another development that promised to become a huge new industry: 3D printing. An optimist might ask, with new composite materials and 3D printing, who needs the old steel industry? It’s cheaper and easier to substitute new materials, and fabricate them in a new way, and import whatever steel we need for other uses.

Time will tell which way of seeing things is more correct. Chances are, it will turn out to be a mixture of both.

Energy

The energy-production situation, too, is a half-full or half-empty situation. The oil shocks of the 1970s and the intractable problems of nuclear safety and storage (both of which we will look at below) pose severe challenges to the country’s economic development and even sustainability. Yet alternative sources of energy abound and, at century’s end, are beginning to be successfully deployed overseas, as their manufacturing costs plummet and their efficiency increases. So, at century’s end, the country appears to be in a race between exhaustion of its domestic sources of energy (leading to increased dependence upon undependable foreign sources of oil) and development and deployment of alternative sources that will supplement and/or replace them.

Nuclear: In 1979, the nuclear plant at Three Mile Island, Pennsylvania, suffered an accident. The utility claimed that no radiation escaped. Maybe.  In any case it served as a wake-up call (which, of course, no one in authority responded to) that not only had the nuclear industry not found a way to clean up its waste; it was not as safe as it liked to pretend to be. Or course, seven years later, in the Ukraine area of the then-Soviet Union, the explosion at Chernobyl provided a much louder wake-up call, which of course no one in authority responded to, in this case because the Chernobyl reactor was of a different type than American reactors which were, of course, safe. (The fact that the Chernobyl reactor disaster resulted in the abandonment of a huge area in the middle of the Soviet Union’s most productive agricultural heartland was not seen as relevant by those promoting nuclear power in the United States. After all, the types of reactors were different, and American reactors were safe. The fact that some had been built on earthquake faults made no difference.) Still, despite all the pronouncements of safety, those pushing nuclear power found it harder to push. People balked.

Oil: in 1973 and again in 1979, the oil-producing countries of the Mideast flexed their economic power and were, perhaps, surprised to see just how powerful they were. In 1973 it was in protest against America’s support for Israel in its brief war with Egypt. In 1979, following the fall of the shah, it began as a protest of his being allowed into New York for medical treatment, and escalated. The Organization of Petroleum Exporting Countries (OPEC) included countries outside of the Mideast, of course, but that didn’t make any difference to their economic interests. Once the price of oil went up, it went up, and nobody was going to sell for any less than what they could get. (And, indeed, why should they? Isn’t that what everyone does? Isn’t that the law of supply and demand? But Americans watching gasoline and home-heating-oil prices skyrocket were not inclined to be reasonable about the question.)

And why was it that the country had become dependent on foreign oil? Because, for decades, we have followed a policy that might uncharitably be described as “drain America first.” Efforts at conservation and energy-efficiency were always regarded as somehow defeatist, as if America had a right to as much energy as it wanted, at whatever price it felt reasonable, regardless how much it wasted. You can’t waste forever. Sooner or later, you reap the consequences. In the late 1960s or early 1970s, domestic oil supply was no longer able to meet domestic demand.

If your supply no longer meets demand, you are at a major fork in the road. You either (1)increase your own supply (domestic drilling and production) or (2) decrease your demand (conservation combined with efficiency improvements combined with development of alternative energy sources) or (3) take steps to assure the supply of overseas oil, which of course means meddling with other governments.

No reason why a rational policy would choose only one of these, of course. But successive administrations (other than Jimmy Carter’s) took it for granted that only option number three was viable. The results were predictable and somehow struck people as surprising.

[Working backward from the year 2000 toward America’s beginnings.]

One more glance backward – this time at America as it reinvented itself between the Spanish-American War of 1898 and its entrance into World War I, and we can move on to consider the 20^th century’s impact in terms of economics, and then in terms of culture.

America in the year 1900 found itself fundamentally transformed, in ways only half perceived. In the century to come, the consequences of consequences of consequences would lead to world leadership, perhaps to world domination. But in 1900, we were only at the beginning of things.

The nineteenth century – the 1800s – had seen the United States grow from 15 states, almost all of them on the Atlantic seaboard, to 45 states extending from Atlantic to Pacific. From being a small country located at the fringe of things, trying to stay out of the way of France and England as they fought their 20-year duel which we call the Napoleonic Wars, the United States had become a power in itself, acknowledged by European powers to hold sway over the entire Western Hemisphere. But the war of 1898 changed the nature of the country in fundamental ways.

The war itself, as we shall see in the next chapter, resulted in the end of Spanish rule in Cuba and Puerto Rico and, on the other side of the Pacific Ocean, the Philippine Islands, all of which had been Spanish for nearly 400 years. The U.S. did not attempt to rule Cuba, settling for becoming massively influential with successive governments, and took over governing Puerto Rico without major problems. But in the Philippines, it promptly found itself attempting to suppress a native revolt – which is precisely what Spain had been unsuccessfully attempting to do in Cuba. The parallel made many people uneasy. In fact, the transformation of a continental republic into an ocean-spanning empire spurred the development of the Anti-Imperialist League, of which Samuel Clemens (Mark Twain) was a prominent member. Not that such sentiments helped the Filipinos.

Once having acquired the Philippines, the question of how to hold them against possible foreign challenge led logically to the acquisition of a chain of islands to provide coaling stations for warships of the two-ocean navy that would henceforth be needed. The Hawaiian Islands were acquired by a neat bit of sleight-of-hand in the year 1900. Wake, Midway, Guam, and American Samoa were similarly acquired. That the Japanese might look askance at this projection of American military power nearly to the coast of China was perhaps inadequately appreciated. But here was one of the roots of the war in the Pacific. (Forty years later, Japan would capture Wake and Guam, and its attempt to capture Midway would lead to perhaps the most one-sided upset victory in naval history.)

In September, 1901, Theodore Roosevelt became president of the United States when president William McKinley was assassinated. Roosevelt, an avid imperialist, promptly helped the province of Panama secede from the recalcitrant republic of Columbia, and began construction of the Panama Canal, to facilitate world trade by removing the necessity of rounding Cape Horn, at the distant tip of South America, and, not incidentally, to provide similar passage for American warships, thus greatly multiplying effective American naval power. The new Panamanian government was willing to concede pretty much anything the U.S. demanded, and so there emerged a ten-mile-wide strip from coast to coast, the Panama Canal Zone, essentially U.S. territory cutting the country into northern and southern halves. Digging the canal, which had defeated a French company many years earlier, was a massive job that took many years. The canal opened in 1914. just in time for the beginning of the World War.

(Demonstration of the need for the canal came during the War of 1898, when an American warship left San Francisco for Florida. It left March 19 and arrived in Florida May 24, after a journey of 14,000 miles. Had the Panama Canal been in existence, the journey would have been 10,000 miles shorter.) See http://www.spanamwar.com/orevoyag.htm

Roosevelt also embarked on an ambitious program of naval construction and sent the fleet around the world as a demonstration not only of American military might but of newfound American confidence. The stage was set for U.S. involvement in World War I, with all the consequences which, as we have seen, would follow. The war began in 1914. The Lusitania was sunk in early 1915, but failed to bring the United States into the war. Year after year, news of the ghastly slaughter – especially on Germany’s western front – was accompanied by propaganda from all sides, all attempting to influence American opinion. President Wilson was re-elected in 1916 on the slogan that “he kept us out of war,” but in April, 1917, felt compelled by Germany’s resumption of unrestricted submarine warfare to ask for a declaration of war. Thereafter, the hard-pressed British Navy transferred a massive amount of know-how (and, inadvertently but unavoidably, transferred command of the seas) to the U.S. Navy, its new ally. Within a couple of years came victory, disillusionment, and isolationism, and so onward to another world war, a cold war, and global military supremacy.

So much for the military course of the United States in the twentieth century. Now we need to return to the year 2000, and go over the same years once again, this time looking at economics.

[Working backward from the year 2000 toward America’s beginnings.]

If there was one major event that opened the eyes of the West, it was the Spanish Civil War of 1936-1939. When it began, in July, the big foreign-affairs issue in Franklin Roosevelt’s first re-election campaign was preservation of American neutrality. By the time it ended, six months before the second world war broke out, the scope and nature of the Nazi threat was clear to anyone willing to see.

That war began with what was supposed to be a quick coup by the military, overthrowing the leftist Spanish Republic. It was supposed to be a three days’ wonder, not even a nine days’ wonder. But the workers took over cities, and part of the military remained faithful to the government, and suddenly the coup was in trouble. A coup that doesn’t succeed in a few days could not be presented as the will of the people, even by the boldest lying (which of course was immediately employed). Without massive injections of troops and equipment from somewhere, the uprising was doomed.

Those troops and that equipment came from fascist dictator Benito Mussolini, who thought he was going to get another cheap victory to top the one he had achieved the year before in Ethiopia. It was an opportunity for him to show what his troops could do (which, too bad for him, it did). At the same time, Hitler sent Air Force contingents, rotating them every few months, allowing them to practice in actual wartime conditions. But the Spanish resisted, as they always resist foreign domination, and that put the fascist intervention on the world’s front pages and kept it there. And then Russia came to the aid of the Spanish Republic with arms and equipment and experienced officers — but also with commissars and purges and little Stalins, raising the prospect of Spain as a Soviet republic at the gates of the Mediterranean.

The British and French governments turned a blind eye to the fascist intervention, for fear of a Soviet puppet state. It wouldn’t be very long before their people were paying the price. Conservatives in England and France were not happy to see Germany growing so strong so quickly but they were more afraid of Russia which might be geographically more remote but was actively meddling in politics everywhere and seemed to have, in the poor, a vast fifth column in every country. Liberals were split between their anti-fascism and their pacifism. This rendered them totally ineffective against Hitler the master politician.

Western governments refused to sell arms to the Republic, and the peoples of the West gradually learned outrage. The British left in particular learned that their government was their enemy — and they did not forget it in 1945 when they got the chance to overthrow the government and the social system. The Labour government of 1945 and its various socialist reforms is one direct result of the Spanish resistance in 1936, and should be seen as such (but generally isn’t).

Spain bought time. Time for liberals to decide between anti-fascist and anti-militarism; time for Western statesmen particularly in England to reveal themselves as hopelessly unable to combine with workers against fascists; time for the world’s populations to have their attention fixed on the snake-like advance of fascism. That time was bought with Spanish blood. They didn’t die for that purpose, but that was the result. Also — but it didn’t do as much good — the Civil War showed clearly what Stalinism was, if any in the West on the left were willing to see and didn’t already know.

[Working backward from the year 2000 toward America’s beginnings.]

But when the war was won, within another year and a half, American idealists were shocked and dismayed to watch the British and French vultures descend to feast on the corpses of Austria and, especially, Germany. They watched them seize territories in the Middle East that had successfully revolted from the Turks. They watched as one vindictive measure followed another, and in a very short time they learned a lot about their gallant allies. As soon as Americans recognized that it had been not a crusade to make the world safe for democracy but a war between empires, they concluded that Wilson, and they, had been played for fools.

For a full generations thereafter, it became political suicide for an American politician to advocate any policy that seemed to risk again becoming entangled in European affairs. In the years to come, English and French statesmen would have many reasons to bewail American reluctance to participate in the League of Nations or to engage in “collective security” pacts or, after the war began, to intervene against Hitler until the Japanese attack on Pearl Harbor and the German declaration of war. There were many reasons for that reluctance, but a chief reason was that Americans remembered all too well what had happened the last time they had intervened.

Thus: The U.S. Senate refused to ratify the peace treaty with Germany and Austria, as being too punitive. We eventually signed separate treaties. It refused to ratify the treaty binding the U.S. to join the League of Nations, which was President Wilson’s brainchild and his main hope for the peaceful reconstruction of the world. America watched the Bolsheviks consolidate power in Russia, Mussolini take power in Italy, warlords divide China among themselves, and militarists rise to power in Japan. It watched the systematic and deliberate destruction of the German mark by its own government as its way of evading the crippling economic reparations imposed by the peace treaty. It watched the fearful malice of the French, hopeless desperation of poor Austrians and Germans, gradually subsiding chaos in much of eastern Europe. It watched the French and British land-grab in the middle east and the struggle for oil concessions in what had been the southern outposts of the Russian Empire. After a while it watched the rise of Adolf Hitler and the transformation of Germany into one huge war machine, the same thing that was happening, behind a veil of secrecy, in the newly created Soviet Union. It watched French and British governments lose their nerve as they tried to face up to this strange resurgent Germany. It watched all this, and, in those simpler days, no one took it to be America’s responsibility to do anything about any of it, let alone all of it. For better or for worse, America’s responsibilities were seen as mostly stopping at the water’s edge. The prevailing feeling was that we should let the foreigners sort out their own problems, as we expected them to let us sort out our own.

However, this stance came to be severely strained as it watched the world divide ideologically into right and left, with each side murderously afraid of the other, and each side determined to do whatever was necessary to prevent the other side from succeeding in reorganizing the world. George Gurdjieff said at the time that one would have to be blind indeed not to see that all the troubles in the contemporary world stemmed from the existence in Russia of a communist state, and although few would have agreed at the time, retrospect demonstrates that his judgment was correct. Because there was communism, with its systematic state terror and its professed determination to overthrow every other state in the world, there was the emotional fuel that led first to fascism, and then to Nazism – and both those movements took their tactics directly from what they observed in the Soviet Union. Because Fascists and Nazis were as international in their ambitions as were the communists, this conflict between right and left came to dominate every country’s domestic politics. Statesmen could no longer content themselves with considering their country’s traditional strategic interests. Now they had to weigh the effects of their actions on this on-going international civil war.

America tried to stay out of this conflict, too, but couldn’t. Political conservatives and liberals both came to suspect the motives of their opponents. Would this or that measure lead to the other side’s totalitarianism? Would this or that action aid Communists or Fascists in other countries? It was a form of madness, but it wasn’t very easily avoidable. It was in the air. America was too strong and too isolated geographically to be directly threatened by other countries: Nobody was going to impose either ideology at bayonet point. But before too long, overseas politics came to be seen as a sort of flank attack. Pulling back from world affairs proved to be just as difficult, and just as impossible, finally, as staying out of the war had been.

Hitler used a brilliant combination of threats and promises and guilt-trips to paralyze successive French and British governments while he improved his condition. The threat was actually two threats. The first (which the Western statesmen took very seriously) was the threat that without a militarily strong Germany, the West had no defense against Stalin. In this guise, the threat contained a promise: Germans were the defenders of European culture against the half-Asian barbarism to the East, and could be relied upon by the tired, aging, half bankrupt capitalists to save them. The second threat, which grew more serious year by year, was that if Germany were not given its demands, there would be another war, or rather there would be a resumption of the first war after the interrupted by the armistice.

Guilt-trips reinforced this strategy. Hitler started by demanding revision of the most obviously unjust of the provisions of the Versailles treaty. For instance, he attacked French control over the Rhineland, the German territories West of the Rhine, which had been demilitarized in order to provide security for the French. He took the Rhineland in a sudden movement in March, 1936, and only long after the war was over did the West learn that the German military, terrified of renewed hostilities, had extorted a promise from him that German troops would retreat immediately if even one shot was fired at them. Hitler gambled on French weakness and British indecision, and he won. Step by step, he moved, and met no determined opposition.

The French and the British longed to have the assistance and support of the American government, and President Roosevelt would have been glad to give them at least some of what they asked, but he didn’t dare. The American people’s memory was too fresh, and their understanding of the oncoming peril was too vague and confused. Europe seemed still far enough away for a resolute neutrality to be a viable policy.

[Working backward from the year 2000 toward America’s beginnings.]

World War I was already nearly three years old by the time America entered in 1917. Wilson had been re-elected in 1916 under the slogan “he kept us out of war,” because, arguably, a different president would have asked for a declaration of war against Germany in 1915, after a U-Boat sunk the Lusitania off the Irish coast, incidentally killing more than 100 American passengers. Many decades later, pretty good evidence began to suggest that the British Admiralty, led by a young Winston Churchill, deliberately placed the Lusitania in harm’s way in hope that a U-Boat sinking would bring the United States into the war on the Allied side. Had it not been for Wilson’s determination to preserve his nation from becoming enmeshed in the war, it might have succeeded. His diplomatic notes to Germany, carrying with them the implied threat of American intervention, resulted in a German pledge to abandon unrestricted submarine warfare, which it honored until the beginning of 1917.

This is of unrestricted submarine warfare involved two issues, rarely disentangled and understood today.

The first, sinking commerce without prior warning, was mainly an emotional issue, and it was a logical result of the limitations of the submarine. Prior to the invention of the submarine, there were well understood rules for commerce raiders. One of those rules was that ships’ crews be allowed to put off in lifeboats, which of course involved warning them. But a few months of experience demonstrated that this was too dangerous for the lightly armed submarines, which, surfaced could be heavily outgunned by even freighters. Submarines began to attack with torpedoes while submerged, hence, without warning. Thirty years of warfare accustomed us to this state of affairs, but to a world accustomed to prewar standards of civility, it came as a shock. British propaganda maintained that sinking ships without warning was German barbarism. It wasn’t. It was what the technology dictated. Twenty-five years later, American submarines in the Pacific would do the same thing for the same reason.

The second issue, though, was less technological than political and strategic. That was the designation by the German high command of an extensive area around the British Isles within which any ship of any nation, Allied or neutral, was liable to being sunk. This was the logical counterpart to the British – the Allied – policy of total blockade of the Central Powers, which, in effect, meant Germany and the territory it had occupied. The British Navy ruled the oceans; it was able to restrict neutrals’ access to German territory by forcing all shipping to submit to search and, if ordered, proceed to London. The comparable German response was undersea warfare, which by its nature did not allow for searches or for redirection. The two alliances were trying to starve each other into submission, and Britain, which required vast amounts of imported food and other resources, was particularly vulnerable to being strangled by sinkings.

In 1915, President Wilson used his leverage to bring the Germans to abandon unrestricted submarine warfare rather than add the United States as another, and most formidable, adversary. But by 1917, the German Empire was forced to gamble that unrestricted submarine warfare could starve Britain out of the war before American military might could be developed and brought to bear. So, once again German U-Boats were sinking anything in sight, regardless of neutral status. So President Wilson, against his will and within a month of his second inauguration, asked Congress for a declaration of war. (That night, when he had returned to the White House, talking to someone about the Congressmen’s collective reaction, he said how strange it seemed to him that they should be cheering an action that must result in the death and mutilation of many thousands of young American boys. And then he began to weep.)

But now America was in the war, and rather than try to keep up the people’s morale by economic explanations (that is, what would have happened to the country if our commerce had been swept from the North Atlantic, and if the British and French should lose the war and default on so many debts they had contracted for war materials), Wilson explained that we were now fighting to defeat Prussian militarism. This, he said, was a “war to end war.”

[Working backward from the year 2000 toward America’s beginnings.]

America’s war has been well chronicled. Everyone knows, or can easily learn, how, less than a year after Pearl Harbor, American forces invaded French-occupied North Africa and found their way to Tunisia where they met the victorious British coming west from Egypt and Libya. Together in six months the two armies trapped and captured a third of a million German soldiers – about the same as were captured after the horrific battle of Stalingrad, at about the same time. Then came the invasion of Sicily, and of Italy, and the fall of Mussolini’s government. In June, 1944, Americans and British in about equal numbers successfully invaded Normandy. By August they had liberated Paris (and by now Americans were by far the larger force) and by September (after another invasion, this one on France’s Mediterranean coast) all France had been recaptured. In May, 1945, 11 months after D-Day, it was all over.

The Pacific war took a little longer, but then, only 10% of American armed forces fought there. Nine out of ten soldiers fought in Europe and Africa. In the Pacific, an island-hopping strategy avoided as much as possible armed assaults on heavily defended islands. Instead, successive groups of islands were isolated – their garrisons in effect captured and having to feed themselves – by air power projected from carrier fleets and then from forward island bases as secured. As soon as American fighters controlled the skies over a given area, resupply by sea was virtually impossible, and those troops on that island were useless. Island-hopping to gain successive new forward air bases, America leapfrogged westward until, with the capture of Okinawa, the Japanese home islands were within range of the B-29 bombers that would demonstrate the futility of further Japanese resistance.

And, as I said earlier, with the end of the war and the exhaustion of most of the other participants, two superpowers, or perhaps we should say one and a half, divided the world between them. An additional worry for the west was the Chinese Civil War of 1945-1949, which resulted in Mao tse-tung’s communists overthrowing Chiang Kai-shek’s Kuomintang. At first, the new Communist state was assumed to be another puppet of Stalin’s, comparable to his new European satellite countries. Within a dozen years, it began to become clear that this was not the case. What came to be called “the Sino-?Soviet split” was merely the latest wrinkle of the historic Russian-Chinese rivalry.

Fear of China led the United States (indirectly) into interventions in the Korean and Vietnamese conflicts, each of which the U.S. saw as resistance to aggression, the kind of resistance the West had failed to offer to Hitler. China and other non-Western countries, however, saw in U.S. actions a continuation of historical Western interference in non-Western affairs. All this added to postwar complications, and should be dealt with not in its military but in its diplomatic and cultural context.

So much for the war that transformed the United States into the center of world affairs. Let’s cast ourselves back to the interwar period, after World War I but before Pearl Harbor, and see if we can understand the country when it had fewer ground soldiers than Romania.

Born May 29, 1917