Who controls American foreign policy? The answer, according to Shoup and Minter, is a concentrated subsection of American society, associated with the government, the capitalist upper-class, the mainstream media, and a certain private think-tank named the Council on Foreign Relations.
Since its founding in 1921, the Council has consistently exerted a powerful influence on US foreign policy, undertaking activities such as conducting research projects, submitting recommendations to government officials, and convening prominent individuals such as business leaders and foreign heads of state to sound out their opinions on the state of the world and what should be done about it. The Council regularly publishes books, in addition to a bi-monthly magazine titled Foreign Affairs (now with an online presence). The avowed purpose of these activities is to inform American elites about the "international aspects of America's political, economic and financial problems" so as to develop a "reasoned American foreign policy" (p.4).
Despite the Council's extensive connections with people involved in government and American business, its activities receive comparatively scant mention in the press, though its occasional references do convey a sense of its importance: it is the "foreign-policy establishment of the U.S." according to Newsweek, with the New York Times chipping in that the Council "includes some of the most influential men in government, business, education and the press", making "substantial contributions to the basic concepts of American foreign policy" (p.4). Since the publication of this book in 1977, these realities have not significantly changed.
The main thrust of the book consists of two points: that the Council on Foreign Relations is of, by and for the upper-class of American society, and that the Council's view has influenced many important foreign policy decisions of the United States government since the Second World War. As such, they conclude that much of this foreign policy was focused on benefitting this upper-class.
The book's findings are fascinating and far-ranging, accounting for the vast expansion of US power across the globe after the Second World War, and locating its origins in the interests of influential figures in the United States in preserving the structure and prosperity of the American economy. What emerges is an account of US foreign policy that is both strikingly novel and yet very familiar, as I will explain later.
This review is split into four sections: the first describes the ties that connect the Council on Foreign Relations to prominent sectors of American society; the second describes the foreign policy outlook of the Council; the third provides some of my reflections, and the four is a listing of some prominent members of the Council, past and present.
This review is rather extensive, so if you would like to skip the details, feel free to simply refer to Section III: Reflections for an overview.
CONTENTS:
I: Who are the Council on Foreign Relations?
II: The Council on Foreign Relations and US Foreign Policy
III: Reflections
IV: Prominent Council Members
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I: Who are the Council on Foreign Relations?
I.I: The Origins of the Council
The "imperial brain trust" of the United States finds it origins, perhaps fittingly, in the latter days of the British Empire. At the Versailles conference in the aftermath of the First World War, a group of American and British participants began discussing the need for an organisation that could "engage in the continuous study of international relations", presumably as a way of preparing for such significant world events as the one they just experienced. Thus, on May 30th, 1919, this Anglo-American group agreed to form an organisation named the "Institute of International Affairs", which was to have branches in the United Kingdom and the United States.
The chief architect of the scheme appears to have been British historian Lionel Curtis, who, since 1909, had been busy organising an association of organisations around the British Empire and called the Round Table Groups. These Groups were intended to promote close ties and co-operation between Britain and its self-governing colonies - hence, they were formed in Canada, Australia, New Zealand and the Union of South Africa, where Curtis himself had been a colonial official (this vision of an "imperial federation" was eventually moderated to one of a "commonwealth of nations", the framework that exists today). In 1910, the Round Table movement also founded a journal, titled The Round Table: The Commonwealth Journal of International Affairs (also now with an online presence). Round Table leaders were instrumental in the formation of British war aims during the First World War, and as such, many were present in Paris in 1919 as part of the British delegation. The movement was funded in large part by Cecil Rhodes, whose intended aim was to combine "the Anglo-Saxon race into one empire" (p.13).
Across the Atlantic, there were similar efforts at long-range planning. Shortly after American entry into the war in 1917, President Woodrow Wilson and his close advisor, Colonel Edward House, established a special planning body to develop US war aims and determine its negotiating position at the eventual peace conference. This organisation - dubbed "the Inquiry" - was composed chiefly of academic intellectuals, representing the "first attempt to use teams of scholars to plan long-term foreign policy" (p.13). Among Wilson's advisors during this period were such prominent individuals as Thomas Lamont - a partner at J.P. Morgan - as well as others with connections to the Round Table movement, such as historian George Louis Beer and former Rhodes scholar Whitney Shepardson, who both wrote for the Round Table journal.
Clearly, then, the Great War had spurred the interest of both the British and the Americans to form organisations of long-range planning and research in international affairs, as well as the desire that they may work together in this effort. Hence, Beer met with Curtis in Paris and they "discussed the need for an additional joint Anglo-American organisation to plan foreign policy and international relations". On June 17th, a meeting was held between the British and American participants to vote this new organisation into existence, dubbed the "Institute of International Affairs", with its purpose to "keep in members in touch with the international situation and enable them to study the relation between national policies and the interests of society as a whole" (p.14). Lionel Curtis and Whitney Shepardson became the secretaries of the British and American branches respectively.
The British branch swiftly moved to establish itself, becoming the "Royal Institute of International Affairs" - alternatively named "Chatham House". However, the American branch languished due to inactivity and lack of initiative. At the same time, there was another American organisation mired in inactivity - a private club named the "Council on Foreign Relations". Founded in 1918, the Council was "a dinner club which gave those residents of New York City who were interested in international affairs - and who could afford expensive meals - an opportunity to hear speeches by distinguished foreign visitors".
A Council document outlines the group's origins as such:
In the late spring of 1918 a few gentlemen came together at a conference at the Metropolitan Club, New York [an extremely exclusive gentlemen's club in Manhattan's Upper East Side], to discuss the most interesting and vital subjects concerned with the United States and its relations with the rest of the world.
...
The object of the Council on Foreign Relations is to afford a continuous conference on foreign affairs, bringing together at each meeting international thinkers so that in the course of a year several hundred expert minds in finance, industry, education, statecraft and science will have been brought to bear on international problems.
...
It plans to cooperate with the Government and all existing international agencies and to bring all of them into constructive accord. (p.15).
With its place amongst New York's elite, the Council was composed almost entirely of "high-ranking officers of banking, manufacturing, trading and finance companies, together with many lawyers ... concerned primarily with the effect that the war and the treaty of peace might have on post-war business" (p.15). Thus from its inception, this private social club was geared toward finding international solutions that would protect and expand the business interests of America's upper-class.
By 1920, with the Council having fallen into inactivity, some of its officers suggested a merger with the American Institute of International Affairs. Hence, a committee was organised to orchestrate this merger, with Whitney Shepardson as executive secretary and George Wickersham as chairman (a Wall Street lawyer who had been attorney general to President William Taft). The newly merged organisation, officially established in August 1921, adopted the name of the Council on Foreign Relations.
Emblematic of the Council's role in the years to come was its first honorary president, Elihu Root. A successful New York lawyer, Root moved between private practice and high-level government positions in Washington. As Secretary of War (1899-1904) and Secretary of State (1905-1909), he was an "early leader in America's imperial expansion", organising the administration of territories won by the US in the Spanish-American war (in particular, the Philippines and Cuba). At home, he was a fierce opponent of women's suffrage, consistently speaking against women's right to vote and becoming president of an anti-suffrage league in 1917. Among his prominent legal clientele were such wealthy individuals as Jason Gould, a railroad magnate and infamous "robber baron", and Thomas Fortune Ryan, an insurance and tobacco magnate. With his connections to government, the capitalist upper-class and the legal community, Root was perhaps the ultimate figurehead for the Council on Foreign Relations.
The Council's first major program, spearheaded by economic historian Edwin Gay, was a magazine designed to be the "authoritative" source on international affairs. To assist him in founding the journal was staff member Cass Canfield, who would later become president and chairman of the Harper & Row publishing house (now HarperCollins). With $125,000 ($1,760,000 in 2022 dollars) as an initial fund-raising target, Canfield "found little difficulty in getting half that sum from members of the board and their friends". The rest was sourced with a letter of solicitation from the Council to the "thousand richest Americans"; this second half came in within ten days (p.17). The first issue of Foreign Affairs was published in September 1922, and it has remained a widely-read establishment journal ever since.
In the Council's own words, by 1937:
Foreign Affairs [had] won wide recognition because of the authoritative character of its contributed articles and the judicious temper of its editorial direction. Leading statesmen, economists, publicists and scholars of all nationalities representing a great variety of points of view are numbered among its contributors, and it is now regarded as the most authoritative publication of its character in any country (p.18).
I.II: The Council Network
According to Shoup and Minter, the Council exercises influence not only through its own "official" activities, but also through the collection of individuals in powerful places that constitute the Council's informal "network". These individuals tend to operate in several distinct sectors: the US government, the mainstream media, foreign policy organisations (such as think-tanks), elite universities and America's "capitalist class". The Council is also financed to a large extent by foundations representing the capitalist upper-class, such as the Ford and Rockefeller foundations.
Government: Since the Second World War, the Council's members have been "very well represented among those directly involved in making foreign policy on a day-to-day basis" (p.58). Indeed, among those classed by the authors as "top foreign policy" officials who served from 1945-1972, no less than 45 percent were also members of the Council on Foreign Relations.
This figure increases when one focuses on those officials who, contrary to being permanent government officials, are "men with other private establishment and corporate careers, recruited into government on a temporary basis"; these account for a full 60 percent of top foreign policy officials between 1945-1972. For this time period, more than half of these "in-and-outers" were Council members, as opposed to only about one-third of career officials and one-fifth of professional politicians. The authors add that the Council is "particularly useful" to these "in-and-outers", helping them to maintain contacts between the government, elite universities and the financial sector. Conversely, they also benefit the Council by maintaining these contacts (p.60).
The Council has also maintained very close ties with the CIA. Since its founding in 1947, the directorship of the CIA had (by 1977) been "in the hands of a Council leader or member more often than not". These include CIA director Allen Dulles (1953-1961), who was also a Council director, as well as directors John McCone (1961-1965), Richard Helms (1966-1973), William Colby (1973-1976) and George H. W. Bush (1976-1977), who were all Council members (p.61).
The Media: The Council have had consistently strong contacts with organisations and outlets that comprise the United States' "mainstream media". Perhaps the most important of these is the New York Times, the newspaper "most read by America's leaders". In 1972, three of the ten directors of the New York Times Company and five out of nine editorial executives were Council members. This connection extended to many of the Times' leading journalists, including James Reston, Max Frankel, and Hanson Baldwin, who was both military correspondent for the Times and a leader of the Council's important War and Peace Studies project (to be described in more detail later).
Council involvement was also strong, though not to the same extent, in the Washington Post and Newsweek, both of which were, until very recently, owned by the the Washington Post Company (the Washington Post was sold to Jeff Bezos' Nash Holdings in 2013, while Newsweek was sold to Sidney Harman in 2010, before being merged with the Daily Beast; the Washington Post Company has since changed its name to the Graham Holdings company, referring to the name of its owning family).
In 1972, one of the five editorial executives of the Washington Post and four of its nine directors were Council members, including chairman Frederick Beebe, president Katherine Graham, and vice-president Osborn Elliott (who was also editor-in-chief of Newsweek). One of the co-founders of Newsweek was W. Averell Harriman, a Council director and top government official during the Truman and Kennedy administrations (p.67).
The Council also has strong ties with Newsweek's rival, Time. Its founder, Henry Luce, was a longtime Council member; seven of sixteen directors (as of 1975) were Council members. Overall, of the directors of Time and Newsweek, almost half were members of the Council in 1972. The third major news weekly, U.S. News and World Report, had much fewer ties, though its founder and longtime editor, David Lawrence, was a Council member for over twenty years (p.67).
Also connected strongly to the Council were two of the three major radio and television networks: CBS and NBC (the one left out is ABC). In 1972, seven of its directors were Council members, with W.A.M Burden also serving as a Council director. Council members also accounted for two of the directors of NBC's parent organisation at the time (NBC was owned since 1926 by the RCA - the Radio Corporation of America; in 1986, RCA was acquired by General Electric, which had previously owned RCA alongside Westinghouse, AT&T and the United Fruit Company until an antitrust suit forced RCA's independence in 1932; in 2011, a controlling stake was acquired by Comcast, which went on to purchase the remaining stake in 2013) (p.68).
Though the Council's contacts in the mainstream media were solid, this still paled in comparison to its control of the widely-read foreign policy magazines, in which it had "virtually a monopoly". As of the mid-1970s, the main magazines in this field were Foreign Affairs and Foreign Policy. The case of Foreign Affairs needs no elaboration since it is published by the Council itself. Foreign Policy is described as a "brighter, more readable" and "less stuffy" journal than Foreign Affairs, hence it appeals to a slightly different audience. However, by the mid-1970s, all of Foreign Policy's editors and its advisory board had been Council members, including two Council directors (p.68).
Think-Tanks and Foreign Policy Organisations: The Council also shares significant ties with organisations - like itself - that form the "foreign policy community" external to the government. One of the most important is the Washington-based Brookings Institution, which, according to its website, produces "the highest quality research, policy recommendations, and analysis on a full range of public policy issues", including issues in foreign policy. Up to the 1970s, at least eight Council directors had served on Brookings' board of trustees (in 1966, this board consisted of 7 Council members, including 2 directors, out of a total of 22) (p.70).
Also of significance is the RAND Corporation, a longtime source of research and analysis for the US armed forces (particularly the air force). In 1970, its 20 trustees included 9 Council members (2 of them directors). As for the Institute of Defense Analyses, which "organizes the work of several universities for the defense department", out of 22 trustees, 9 were Council members in 1969 (including 4 directors). The case is similar for the Hudson Institute, itself an offshoot of the RAND Corporation. In 1970, its 14-strong board of trustees counted no Council directors, but did include 8 Council members (accounting for more than 50 percent) (p.70).
The presence of Council members is perhaps even more striking in the case of the main regionally-oriented foreign policy institutes: the Center for Inter-American Relations, the Atlantic Council, the Middle East Institute, Free Europe Committee, the Council for Latin America, the National Committee on U.S.-Russia Relations and the African-American Institute. A listing of trustee boards at various dates in the 1960s-early '70s reveals that on average, Council members accounted for 52.3 percent of these organisations' trustees. Exceptional are the cases of the Center for Inter-American Relations, in which 74 percent of trustees were Council members, and the Atlantic Council, where the board's 91 trustees included 10 Council directors (p.74).
The result of all this is "the establishment of a solid network of contacts between the Council and a whole set of other organizations making up the external foreign policy community" (p.75).
Elite Universities: The ties between the Council and the United States' elite universities manifest themselves both in Council representation on governing boards and in the education of Council members at these institutions. Most prominent are the Ivy League schools, especially Harvard, Yale, Princeton and Columbia. This phenomenon becomes far less significant as one ventures out of this "elite" circle to the rest of the nation's universities.
As of 1977, out of those Council members with undergraduate degrees, 17 percent attended Harvard University (15 percent of directors). Another 13 percent of members - and 16 percent of directors - attended Yale. Adding Princeton and Columbia, the figure for all four universities is 48 percent of Council members (by 1969) and 42 percent of Council directors (from 1922-1972). Among those with graduate degrees, a full 70 percent of members and 58 percent of directors attended one of these four (p.75).
The Council also had significant representation in these universities' governing boards. As of 1973, Council members accounted for 12 out of 30 board members at Harvard, 10 out of 21 at Yale, 10 out of 58 at Princeton and 7 out of 18 at Columbia. It gradually goes down from there; representation was smaller in universities such as MIT (8 out of 71), NYU (5 out of 38) and Johns Hopkins (7 out of 50). All in all, it is clear that the Council had a strong connection with the United States' exclusive private universities (the "elite" universities), which all happen to be based on the East Coast (p.76).
Foundations: The Council enjoys representation on the boards of trustees of some of the United States' wealthiest foundations. As of 1971, Council members accounted for 14 out of 19 of the trustees of the Rockefeller Foundation, 10 out of 17 at the Carnegie Corporation, 7/16 for the Ford Foundation, 6/11 at the Rockefeller Brothers Fund, 5/17 at the A.P. Sloan Foundation, 4/9 at the Commonwealth Fund and 3/13 at the C.F. Kettering Foundation (p.79).
At the end of 2016, the assets of the Rockefeller Foundation were worth $4.1 billion. For the Carnegie Corporation, this figure is $3.5 billion as of 2018. Both of which are dwarfed by the Ford Foundation, with an endowment of $16 billion as of 2021. The seven aforementioned foundations hold collective assets of around $28 billion.
The "Capitalist Class": The authors also highlight the Council's links with the "capitalist class" of the United States: that stratum of individuals who possess control over major corporations. A 1969 random sample reveals that 7 percent of Council members fall into the category of "prominent propertied rich", including the Rockefeller brothers, Clarence and Douglas Dillon, the Watson brothers of IBM, and more. An additional 33 percent are top executives or directors of major corporations (as indicated by their inclusion in Fortune lists). A further six percent can be classed as "capitalists" on the basis of evidence such as estate records. All in all, 46 percent of Council members are members of what the authors call the "capitalist class" - those with a significant degree of corporate power.
These economic criteria can be combined with social criteria to form a more complete picture, and here, the authors rely on the Social Register, a semi-annual publication that describes itself as the "definitive book listing the nation's foremost families" and "the most trusted, arbiter of Society in America". No less than 33 percent of Council members feature on the Social Register, with a full 24 percent from New York. Combining both economic and social criteria, the authors find that at least 55 percent of Council members hail from the United States' capitalist class.
As for those Council members not in this class, they are "uniformly of high status, suitable for assimilation into the class, and possessors of the occupational skills needed for the Council's work" (p.88). This can be demonstrated by an occupational breakdown of the Council's membership. 40 percent of members are involved in business; 22 percent are business executives, 10 percent are financiers, and 8 percent are corporate lawyers. Out of the rest, 28 percent work in academia, 8 percent work as media executives, 2 percent work as reporters, 6 percent are organisational executives (foundations, labour etc.) and 16 percent are government officials (including those in the military).
Capitalist-class representation in the Council in fact increases as one considers progressively higher levels of power within the organisation. Above the general membership are the directors, who have the power to select new members and terminate membership, as well as set the direction of the Council's programs. A smaller subset are the "officers" of the Council - occupying high executive positions such as the president, treasurer, the editor of Foreign Affairs etc. According to the criteria mentioned before, up to 1972, 84 percent of directors had belonged to the upper-class (67 percent economic elite, 57 percent social elite), with this figure rising to 93 percent for officers (83 percent economic elite, 63 percent social elite). Hence, executive decision-making authority within the Council had always lay almost completely in the hands of the American economic and social elite.
The authors also elucidate the significant degree of Council representation in America's major multinational corporations - those corporations with the heaviest foreign involvement (and thus the largest interest in US foreign policy). As of 1970, firms with four or more Council members as directors or partners included a healthy number of top industrial firms, banks and law firms. The industrials included U.S. Steel (8 members), Mobil Oil (7 members), Exxon (6), IBM (6), ITT (5), DuPont (4), and General Electric (5). Banks included Chase Manhattan Bank (8), J.P. Morgan & Co. (8), First National City Bank (7), Morgan Stanley (6) and Lehman Brothers (4). Law firms included Sullivan & Cromwell (8), as well as three others in the top-ten, according to 1957 rankings (p.98).
Many of these firms could certainly be counted as "multinational". Mobil, IBM and the First National City Bank earned more than 50 percent of profits overseas. Chase Manhattan Bank had subsidiaries in over 100 countries and acquires almost 35 percent of earnings from foreign operations. Exxon and ITT made 39 and 38 percent of sales, respectively, overseas. In 1974, DuPont made 28 percent of total sales overseas, with over 100 plants in 29 countries and territories outside the United States. General Electric made 18 percent of sales overseas, and had manufacturing facilities in 24 countries. J.P. Morgan was doing business in 32 foreign countries as of 1977. U.S. Steel makes only 5 percent of its sales overseas, but it relies heavily on foreign assets, owning a near majority of stock in a manganese mine in Gabon, a copper mine in South Africa, a nickel mine in Indonesia, iron mines in Canada, and manufacturing or steel-making facilities in Spain, Nicaragua, Italy, France, Brazil, India and Germany.
This map from 1940 depicts the worldwide reach of Standard Oil of New Jersey, the precursor of Exxon (which would eventually merge with Mobil to become ExxonMobil). The map details the ways in which Standard NJ's worldwide operations were affected by the war, e.g. Britain rationing cuts consumption, Mediterranean sea lanes threatened etc.
The other financial and law firms mentioned, while not strictly-speaking "multinational", are "intimately involved in the same world economic system as investors in and advisors to the industrial firms and commercial banks". It is therefore clear that "these corporations and their leaders, dominant in the Council on Foreign Relations, are most concerned with establishing and maintaining a foreign policy and world environment favorable to their very large economic interests overseas" (pp.99,100).
The authors also point that the privileged position enjoyed particularly by the financial oligarchy of New York. The financial community had always played a powerful role in the Council; financiers and Wall Street lawyers accounted for 35 of directors up to 1977, as well as roughly half of officers and every single one of the Council's top leaders. Moreover, a look at the firms closely aligned with the Council (listed before) reveals that they are controlled to a large extent by the financial community of New York. The firms can be grouped into different "financial interest groups", held together by "interlocking directorates, holding of stock, loans, and a wide variety of other links" (p.100). The majority of these belong to either the Rockefeller group (Chase Manhattan Bank, Mobil Oil, Exxon, etc) or the Morgan Group (J.P. Morgan & Co., Morgan Stanley, U.S. Steel, General Electric, etc.). The only group that does not belong to the financial community of New York is the DuPont Group.
This section has revealed two primary points: the Council is well-connected with a variety of different sectors across American life, including the government, the mainstream media, and the elite private universities; furthermore, it largely represents the interests of America's major multinational corporations, many of them controlled by financial interests in New York City. One could then reasonably conclude that U.S. foreign policy has long been steered by the Council in a direction favourable to these financial interests. The next section will explore just how the Council has done this.
II. The Council on Foreign Relations and US Foreign Policy
The essential thrust of Council thinking has consistently been that the US must take an activist and expansionist foreign policy. It must be involved in every corner of the globe, and it must tolerate no opposition to its interests in these corners (today the US has more than a thousand overseas military bases). Isaiah Bowman, a prominent Council board member (who headed the Research Committee during much of the 1920s and '30s) once asserted that America's interests must envelop "a region whose extent is beyond the Arctic Circle in Alaska, southward to Samoa and east and west from China to the Philippines to Liberia to Tangier" - essentially the whole world. He added that "if our territorial holdings are not so widely distributed as those of Great Britain, our total economic power and commercial relations are no less extensive" - in other words, even if the United States does directly control wide swathes of the world in the manner achieved by the British, it would exercise its influence through more indirect means (p.22).
Why must American foreign policy be so expansionist? According to the authors, a corporate-dominated Council "saw expansion of American trade, investment and population as the solution to domestic problems". In order to preserve the status quo at home, what was needed was overseas expansion. As Bowman put it, foreign raw materials, imports and exports were necessary "if we are to avoid crises in our constantly expanding industries". By the mid-1800s, after decades of westward expansion, the continental United States had acquired the territorial form it takes today. The era of cheap land was over and the population was increasing. Thus, in Bowman's words, "eastern social and industrial problems cannot be solved in the historical manner by a flow of population to another region". Thus, the United States had to increase its exports, it had to "sell something abroad in greater degree - if not wheat or maize, then steel or copper" (p.23).
In this reading, the Council's expansionist foreign policy stance is meant merely as the extension of an old solution; whereas before, "social and industrial problems" could be solved by pushing the population into "empty" land westwards (of course, not so empty), now, with the whole of the continental United States as settled land, this economic expansion had to be projected overseas. The authors don't elaborate further on what these "social and industrial problems" actually were - though they may be a reference to the restrictions placed on industrial expansion by limitations of land, raw materials and markets.
In Bowman's framing, the expansion of US economic interests overseas is perhaps the logical consequence of a "constantly expanding" US economy, one which had grown too large for its territorial means. Moreover, this expansion was not the logical consequence of any kind of US economy, but more specifically, the economy as it was presently constituted, with corporate power and wealth centred in the hands of a privileged stratum of society. This explains Bowman's emphasis on exports; a concentration of wealth in American society prevents the population from holding the purchasing power necessary to serve as a sufficient market for the output of American industry; hence, foreign markets must be found. The only alternative was to re-constitute the American economy itself.
During the 1920s and '30s, the attitude of the United States public toward foreign affairs was largely isolationist. The majority of Americans wanted some sort of political and/or economic withdrawal from the rest of the world, a determination bolstered by the Great Depression (this culminated in the restrictive Smoot-Hawley Tariff Act of 1930). The question, then, was: could the United States "isolate itself economically and politically from the rest of the world [and] build a largely self-sufficient empire in the Western hemisphere" (the traditional sphere of influence)? Or, was it necessary to "have totally free trade with the world, and therefore to be intimately involved in the political affairs of the world"? The first school of thought found a representative in historian Charles Beard, who argued that foreign policy since the 1890s had "been based on the mistaken assumption that United States agriculture and industry produced more than could be consumed at home and that the "surplus" had to be exported" (recall that from 1898-1900 alone, the US annexed the Republic of Hawaii, occupied Wake Island, and acquired Guam, Puerto Rico and the Philippines from Spain after the Spanish-American war) (p.24).
Beard challenged this assumption by arguing that these surpluses could be consumed at home if a "proper domestic policy" were followed. What was this "proper" policy? As it turns out, nothing other than "an engineered, rational, planned economy at home with an efficient distribution of wealth and income [that] could assure a high standard of living for all Americans [where] economic decisions would be made collectively to assure full employment and prosperity". The government would "control foreign trade and investment to prevent American dependence on and overinvolvement in unstable areas of the world" thus assuring a "large degree of self-sufficiency and economic independence for the United States". However, the huge red flag was that this program would "put an end to the monopoly of economic decisions by corporate and financial capitalists". For this reason, the Council on Foreign Relations was fully opposed to it (pp.24,25).
The Council's own solution was to sustain the prosperity of the United States - and the wealth of its capitalist class in particular - by integrating the American economy with that of the rest of the world. The land/population ratio of US territory would become progressively less favourable as time goes by, and therefore, only the expansion of US economic interests overseas could sustain this prosperity. This view was put forth clearly by Council secretary-treasurer Edwin Gay in a Foreign Affairs article from 1932: the United States "will realize that a policy of self-sufficiency is not only impossible, but that a policy which presupposes it to be possible is stultifying and impoverishing ... The whole network of domestic prices and domestic credit in the United States is bound indissolubly with the system of world prices and with the stream of world credit. A dislocation anywhere in the fabric is now felt everywhere. The [First] World War affirmed the international political responsibilities of the United States; the World Depression demonstrates the economic interdependence of the United States with other states. It cannot be a hermit nation" (p.25).
Sustaining the prosperity of the United States through overseas intervention serves the American capitalist class in the additional sense that it wards off the spectre of political pressure for change. As the authors note, the American economy had been geared for some time "to the need for large export markets, the loss of which - barring a transition to a form of socialism [as Beard suggested] - would cause a lowering of the national income and greatly increased unemployment". This would raise the "haunting specter of depression and its political consequences" (p.164).
Thus, the foreign policy stance of the Council on Foreign Relations has long been geared toward the interest of the capitalist class in "preventing basic changes in society" and "maintain[ing] the socioeconomic system from which it greatly benefits". The trick is to solve domestic problems through foreign expansion, without alteration of "the existing domestic system through which the corporate upper class obtains its power and privilege" (p.173).
In order to achieve this fundamental goal, the Council on Foreign Relations requires an imperialistic foreign policy on the part of the United States government. For this reason, it has long focused its energies on exercising influence over this foreign policy. The authors give a number of examples of this, but I will focus on the two that interested me the most: the Council's influence on US war aims during the Second World War, and the Council's rationale for a very keen US interest in Southeast Asia, which would eventually culminate in the full-scale involvement of America's armed forces in Vietnam.
II.I: The Second World War
Though the Council was officially formed in 1921, it never exercised much influence on US foreign policy until the beginning of the Second World War (a reality exacerbated by the nationalist, isolationist response to the Great Depression). However, this conflict transformed the US into a full-blown imperialist power, with the Council as its "imperial brain trust". How did this happen?
The catalyst appears to have been the outbreak of war in September 1939, which would, by the summer of 1940, result in German domination of large swathes of continental Europe. These events shocked American policymakers and brought to the fore certain questions which had been bothering them for the previous ten years, mostly concerning with self-sufficiency. Was the (US-dominated) Western hemisphere self-sufficient, or did it require trade with other world areas to maintain its prosperity? How much of the world's resources and territory did the United States require to maintain power and prosperity? As we have seen, the Council believed that the United States needed to maintain and expand its access to the resources and markets of the world to achieve this objective.
Yet now, Germany dominated continental Europe, and it also looked poised to capture Great Britain, and with it, its sprawling empire. The consequences for American influence and power in the world looked dire. The Council had noticed this potential threat as soon as war broke out, and it sprung them into action.
The onset of war in September 1st, 1939 impressed on the Council the need for "advanced planning to deal with the difficulties which the United States would face during the war and the eventual peace". On September 12th, less than two weeks after the outbreak of war, Hamilton Fish Armstrong, editor of Foreign Affairs, and Walter Mallory, Council executive director, travelled to Washington D.C. to meet with assistant secretary of state George Messersmith, who also happened to be a Council member. They outlined a "long-range planning project which would assure close Council-Department of State collaboration in the critical period which had just begun" (p.119).
The result was a Council initiative named the "War and Peace Studies Project", a research drive consisting of the work of six groups - Economic and Financial, Political, Armaments, Territorial and Peace Aims groups - collectively involving almost 100 individuals from 1940-1945. These individuals were economists, historians, military leaders, State Department officials, other government policymakers, and members of the business community; a group representing the entire Council network.
This project achieved several points of influence during the war and played a large part in determining US war aims. For instance, after the German army overran Denmark in early April 1940, the Council helped determine what the Americans should do about the German colony of Greenland - namely, that they should establish a military presence on Greenland to forestall the possibility of a German invasion of Denmark (similarly to how the British invaded Iceland in May 1940). A Council memorandum to President Roosevelt influenced his assertion in an April 18th press conference that he was satisfied "Greenland belonged to the American continent" (p.123).
A second point of influence concerned US support for Great Britain. In July 1940, Council members provided recommendations for what the American government could do to aid the British, even though at this point the United States was technically neutral. They suggested that they transfer fifty of their destroyer ships to Britain in exchange for bases on British territorial possessions in the Western Hemisphere and a "pledge never to surrender its fleet to Germany". This would culminate in the US-UK "Destroyers-for-Bases" agreement of September 2nd, 1940, which effectively ended any pretence of American neutrality (pp.123,124).
However, the most significant import of Council research concerns those questions we encountered earlier: was the Western Hemisphere self-sufficient? If not, how much territory would the United States need to control to maintain power and prosperity? In the summer of 1940, the Economic and Financial Group of the War and Peace Studies project began a large-scale study to answer these questions.
They divided the world into blocs and compiled statistics for each area concerning their location, production, and trade of all important commodities and manufactured goods. The self-sufficiency of each major region - the Western hemisphere, the British Empire, Continental Europe and the Pacific area (what we might today call the "Asia-Pacific" or "Indo-Pacific" area) - was then calculated, using net export and import trade figures, and following certain assumptions (e.g. internal trade within a region is maximised). Using this type of analysis, the self-sufficiency of German-dominated Continental Europe was found to be much higher than that of the Western Hemisphere. To match this economic strength, the Western Hemisphere "had to be united" with another bloc (p.126).
The Group then explored what would happen if this were the case. First, the Pacific area was considered. Joining the Pacific area with the Western Hemisphere would induce a great deal of complimentary trade: the Pacific area "required the machinery, vehicles, cotton, petroleum products, chemicals, iron, and steel which the Western Hemisphere desired to export", while the Western Hemisphere wanted to import the "rubber, jute, tin, cotton, textiles, silk and sugar that Pacific area had to sell". However, there would also be significant amount of competitive trade - both areas had grains, lead, zinc, coffee, oilseeds and hides as surplus export commodities. Thus, compared to the Western Hemisphere alone, the joint Pacific-Western Hemisphere combination would have a lowered export dependence of $1,800 million due to complimentary trade, but an increased export surplus of $700 million due to competitive trade. In short, this would "aid, but not solve, the problem of self-sufficiency" (pp.126,127).
The planners noted that the United States stood to benefit the most from a union with the Pacific area, as it was a significant market for American manufactured products and the "foremost source of many of the most important raw material imports of the United States". However, the southernmost countries of South America would not profit much due to this union, since they would engage in large export competition with Australia and New Zealand (p.127).
However, this problem could be solved by the addition of Great Britain, a large importer of agricultural product that could absorb much of the export surplus of the union. When the self-sufficiency of a hypothetical "Western hemisphere, British Empire and Far East bloc" was calculated, it was found to be "substantially greater than that of any other feasible union". This "tripartite" bloc would channel 79 percent of total imports of 86 percent of total exports within its own boundaries. In comparison, Continental Europe could also carry 69 percent of total imports and 79 percent of total exports as intra-area trade. The Council planners therefore concluded that "as a minimum, the American "national interest" involved free access to markets and raw materials in the British Empire, the Far East, and the entire Western hemisphere". They would now aim to transform their conception of the "national interest" into government policy (pp.127,128).
Out of this research came a memorandum - addressed to President Roosevelt - drafted by the Economic and Financial Group in mid-October 1940 (named Memorandum E-B19). The purpose of this memorandum was to "set forth the political, military, territorial and economic requirements of the United States in its potential leadership of the non-German world area including the United Kingdom itself as well as the Western Hemisphere and the Far East". This conception of the the present situation was based on two realities: German domination of Continental Europe and Britain's continued resistance, which was now "protecting most of the world from German penetration". This left a "great residual area" in which the United States would be able to conduct foreign trade. Furthermore, protecting this domain, which entailed an enlargement of US economic interests, would require an "attendant increase of necessary military commitments and costs" (pp.128,129).
E-B19 ended by mentioning a couple of conditions required for the main goal of achieving "military and economic supremacy for the United States within the non-German world". The first requirement was the continued resistance of Britain, which would shield the American-led world from further German penetration. The second condition was the "coordination and cooperation of the United States with other countries to secure the limitation of any exercise of sovereignty by foreign nations that constitutes a threat to the minimum world area essential for the security and economic prosperity of the United States and the Western Hemisphere"; in other words, American imperial control of the non-German world. When this memorandum was reviewed by Leo Pasvolsky, the State Department's chief postwar planner, he concurred, stating that "if you take the Western Hemisphere as the complete bloc you are assuming preparations for war"; an unusually blunt admission that the United States was willing to go to war for the acquisition of controlled territory - or, as Shoup and Minter put it, "living space".
The Grand Area: This imperial ambition was aimed, ultimately, at creating "one world economy dominated by the United States". However, in 1940/1941, it seemed unrealistic to plan for Anglo-American victory against Nazi Germany given the apparent firmness of German dominance in Continental Europe. Therefore, the Council had to make do with a lesser substitute: a non-German bloc consisting of the Western Hemisphere, the British Empire and the Pacific - a unit referred to during 1941 as the "Grand Area". The hope was that, should an Anglo-American victory eventually occur, the Grand Area could then serve as "an organized nucleus for building an integrated world economy" (p.135).
The need to integrate the American economy with the rest of the Grand Area was spelled out in the Council's Memorandum E-B34 (transmitted to the President and State Department on July 24th, 1941). It began by emphasising that the "economy of the United States is geared to the export of certain manufactured and agricultural products, and the import of numerous raw materials and foodstuffs". Given these realities, and following the research of the Economic and Financial Group, the Council had found that "a self-contained United States-Western hemisphere economy [was] impossible without great changes in the American economic system". In order to prevent these alterations, the Council had, in the words of member Winfield Riefler, "gone on to discover what 'elbow room' the American economy needed in order to survive without major readjustments". This added "living space" (Shoup and Minter's term) needed to suffer the "fewest possible stresses making for its own disintegration, such as unwieldy export surpluses or severe shortages of consumer goods". Council research had determined that the Grand Area would be required for "elbow room", consisting of most of the non-German world. In its final form, this would include the Western Hemisphere, the British Empire (including Great Britain itself), the Dutch East Indies (now Indonesia), China and Japan (p.136).
E-B34 stressed that the failure to militarily defend and economically integrate this area would "seriously strain the American economy by cutting off vital imports like rubber, tin, jute, and vegetable oils and by restricting the normal export of surpluses". Surplus production was a significant threat because, as Riefler put it, it is "difficult for a fairly liberal area to cope with the surpluses by transferring factors of production" ("fairly liberal", i.e. in the absence of central planning?). This could then lead to increased unemployment, with its attendant political consequences (p.136).
The primary military threats to the Grand Area were Germany and Japan. The foremost threat was Germany, due to the "high degree of self-sufficiency" of its European empire, which could "not be reduced by blockade". Hence, E-B34 advised that Germany be prevented from gaining control of North Africa, the Near East (the Middle East), and the Soviet Union and "hindered from consolidating its economic gains in Europe". Interestingly, the Economic and Financial Group stressed the danger to American interests that would be presented by a unified Europe, with or without Nazi domination; perhaps this is because Europe, organised as a single entity, could summon the military and economic wherewithal to challenge US domination of the Grand Area. Japan also presented difficulties due to its efforts to dominate East and Southeast Asia, which shall be covered shortly (p.137).
The economic integration of the Grand Area was to occur along two lines. The countries within the Grand Area could largely be split into two groups; those which were "economically competitive" with the United States - climatically temperate countries such as Canada, Argentina, Australia and British Isles - and those which were "complementary" - tropical areas such as the Dutch East Indies, British Malaya, India, and much of the rest of Southeast Asia and the Western Hemisphere. In fact, the "tropical part of Asia" (Southeast Asia) was described as "probably more complementary to the United States economy than any other important area of the entire globe", a fact of great future implications (pp.138,139).
Each of these groups was to be integrated differently. Among competitive countries, a customs union (a form of horizontal integration) would be formed, with a lowering or elimination of trade barriers. With complementary countries, an imperial arrangement was advocated, along the lines of the British Empire. In this case, access to markets would be achieved by "preferential tariffs, investment, colonization and outright political control". Should this access be threatened in any way, "control of the resources of these territories through investment and political-military dominance might be used". Intriguingly, E-B34 also advocated the creation of international financial institutions that could aid in the economic integration of the Grand Area by stabilising currencies and providing investment to accelerate the development of backward areas. Thus we find early visions that would eventually culminate in the International Monetary Fund and the World Bank (pp.138,139).
As was mentioned before, the second great military challenge to the Grand Area was Japan, mostly due to its own imperial efforts in the Pacific (beginning in September 1931 with the invasion of Manchuria in Northeast China). This threat was especially serious because, whereas Germany was being held at bay by Great Britain, there was little to stop Japan from expanding its aggression to the entirety of the Asia-Pacific region.
The Problem of Japan: The Council held a number of sessions in late 1940 to discuss how best to prevent Japanese domination of the Pacific, and they submitted their conclusions to the State Department in the form of Memorandum E-B26 (given to Secretary of State Cordell Hull on January 28th, 1941). The main interests of the United States in Southeast Asia were two-fold. The economic interest concerned "the Philippine Islands, the Dutch East Indies, and British Malaya [which were] prime source of raw materials very important to the United States in peace and war". The strategic interest concerned Great Britain; a Japanese occupation of Southeast Asia would weaken "the whole British position in Asia" and thus impair the British war effort against Hitler - one key component of the defence of the Grand Area (p.134). Southeast Asia was also of strategic importance because it was situated at the convergence of vital air and sea routes (p.141).
The recommendations of E-B26 were three-fold. The first was to "give all possible aid to China, especially war materials, in order to pin down Japanese troops in that country" (Japan had launched a full-scale invasion of China in July 1937). The second was to strengthen the defences of Southeast Asia by "sending naval and air forces and by making an agreement with the British and Dutch for defense of the area". The third was to weaken Japan by cutting off its supplies of war material - in essence, imposing an economic embargo. The Economic and Financial Group had found that since the Japanese home islands were poor in raw materials, they depended heavily on the United States, the British Empire and the Dutch East Indies for imports of "iron, petroleum, copper, aluminium, ferroalloys, many iron and steel products, machine tools, autos, tin, rubber, zinc, nickel, lead, mica, asbestos, and manganese" (p.134). Thus, a previous memorandum, E-B19, had concluded that Japan was "peculiarly vulnerable to blockade" (this would probably come to influence the US Army's bluntly named "Operation Starvation" in April 1945, an effort to strangle the Japanese home islands by dropping mines in its surrounding waters) (p.132).
President Roosevelt agreed with the recommendations of E-B26; in the second half of 1941 he stated that a Japanese attack on British and Dutch possessions in the Far East would threaten the United States' vital interests and "should result in war with Japan". In July 1941, he remarked that the United States "had to get a lot of things - rubber, tin, and so forth and so on down in the Dutch Indies, the Straits Settlements [i.e., Singapore and Malaysia] and Indo-China [i.e., Vietnam, Laos and Cambodia]". Prime Minister Churchill also stated that should a Japanese movement south cut the lifelines connecting Britain and its Dominions, the consequences for the British war effort "might be almost decisive" (p.143).
The trouble was that this trans-Atlantic consensus flew in the face of Japan's own imperial ambition in Southeast Asia. Japan had its own equivalent of the Grand Area, called the "Greater East Asia Co-Prosperity Sphere", which would include China, Indochina, Thailand, Burma, Malaya, the Philippines, certain Pacific islands, and the Dutch East Indies (the "finest pearl" in its prospective empire). Japan desired control of this region in order to attain economic self-sufficiency, especially in raw materials. They therefore wanted to "create a self-contained empire from Manchuria on the north to the Dutch East Indies on the south, for the same economic reasons the United States and Britain wanted to dominate the region" (p.143).
By 1941, two of Southeast Asia's rulers, the Netherlands and France, had been occupied, and the third, Great Britain, was much weakened by its continued resistance. Therefore, Japanese leaders smelled an opportunity to realise their vision; in July of that year, they decided to move into southern Indochina as a launching point to conquer the rest of Southeast Asia. The Americans reacted forcefully, freezing Japanese assets in the United States and imposing a total economic embargo - including oil. The potential implications of this action, which had been recommended by the Council in January 1941, were well known; since an embargo would cut off many imports that the country needed to survive as a great power - especially oil - it had a good chance of provoking Japan into war. Thus Japanese leaders had two options: to compromise with the United States, or to go to war to obtain the raw materials available in Southeast Asia (pp.143,144).
After the imposition of the embargo, there were in fact negotiations between the United States and Japan. However, the Americans demanded something that the Japanese would not accept: the withdrawal of Japanese troops from China. The insistence of the Americans on this point was driven by the fact that "American's minimum living space, the Grand Area, included China"; in the American (i.e. Council) conception, China's economic development would "lay the basis for a peaceful Far East ... since its industrialization would create a large demand for Japanese and American production, giving great aid to both countries in solving surplus and unemployment problems". It was therefore necessary for Japan to "restore the territorial integrity" of China, something that was at odds with Japanese imperial aims (p.144). The breakdown of negotiations eventually lead to war on December 7th, 1941.
Source: Wikimedia Commons
The United States unleashes its military power across the Pacific. This is one of a set of illustrations created for Time Magazine by R.M. Chapin, Time's "Chief Cartographer". The United States had already been a Pacific power - primarily with its control of the Philippines - however, after the Second World War, it expand its hold to Japan, South Korea, and much of Southeast Asia.
The IMF, the World Bank, and the United Nations: As mentioned previously, Council planners had stressed the importance of integrating the Grand Area through institutions as early as July 1941 (in Memorandum E-B19). In Recommendation P-B23, also communicated in July 1941, they stated that worldwide financial institutions were necessary for the purpose of "stabilizing currencies and facilitating programs of capital investment for constructive undertakings in backward and underdeveloped regions" (p.166).
In late 1941 and early 1942, these ideas were further fleshed out. In October 1941, economist Winfield Riefler of the Economic and Financial Group presented a design for an "International Development Authority to stimulate private investment in underdeveloped areas", which would "raise living standards in poorer regions and at the same time increase overseas purchasing power and, thus, the demand for United States exports". This authority would be run by nine directors - three American, three British and three representing "international bodies" (thus a global hierarchy is explicitly established from the start). In addition, a new "world judicial organization" would be established to settle disputes (pp.166,167).
In November 1941, an updated proposal was developed by economist Alvin Hansen, co-lead of the Economic and Financial Group. He envisioned an "international Reconstruction Finance Corporation", jointly established by many governments, which would "promote investment" in both backward and developed areas by "float[ing] bonds guaranteed by the government to tap private money now withheld from foreign investment because of the risk". To guide investment, an "international resources survey would be undertaken to discover where development might most usefully be initiated" (p.167).
The Council submitted these proposals to Roosevelt and the State Department on November 28th, 1941 under a memorandum titled "International Collaboration to Secure the Coordination of Stabilization Policies and to Stimulate Investment". The memorandum suggested a joint US-UK board which would devise plans for an "international investment agency which would stimulate world trade and prosperity by facilitating investment in developmental programs the world over"; the export-demand generated by overseas development would act as an "effective anti-depression measure" back home. This was vital because depressions have political effects; the Council men argued that the Great Depression had been one of the "chief factors" in Hitler's rise to power in Germany. The emphasis on economic stability was thus geared toward preventing a similar political revolution back home (p.167).
In February 1942, these plans became more specific. Hansen and Jacob Viner of the Economic and Financial Group now suggested separate, specialised institutions for different functions. In Viner's words: "It might be wise to set up two financial institutions: one an international exchange stabilization board [which would regulate exchange rates] and one an international bank to handle short-term transactions not directly concerned with stabilization". These recommendations were made in Memorandum E-B49, dated April 1st, 1942 and addressed to the President and State Department (p.168).
Of course, the final design of the IMF and World Bank could not be attributed solely to these memoranda, but they were in all probability strong influential in their recommendations. Hansen was active in many federal agencies, and so had extensive government contacts, whilst Viner was an advisor to the Treasury Department. The March 1942 final plan that was submitted to Roosevelt by Secretary of the Treasury Henry Morgenthau was drafted by Harry Dexter White, also of the Treasury Department. Following discussions with Secretary of State Cordell Hull, two committees were set up to iron out the final details; Council representation was guaranteed by the presence of Council members Herbert Feis, Leo Pasvolsky and Benjamin Cohen on the committees, as well as Hansen, who attended many of the meetings of the Technical Committee. These committees set the stage for the conference at Bretton Woods, New Hampshire in 1944, aimed at creating institutions which would integrate and expand the Grand Area into a US-dominated world economy (p.169) (after the German failure at Stalingrad in late 1942/early 1943, the Council realised the defeat of Nazi Germany was possible, expanding the potential extent of American living space from the non-German bloc to the whole world).
The United Nations followed a similar trajectory. Council leaders recognised that in an age of rising nationalism around the world, the blunt instrument of "big-power imperialism" would not carry the necessary legitimacy (they were doubtless observing the fierce independence movements railing against British, French and Dutch imperialism). Hence, at a Council meeting in May 1942, Territorial Group leader Isaiah Bowman raised the need for maintaining US control over the world while "avoid[ing] conventional forms of imperialism" by making the exercise of that power "international in character" through some kind of United Nations body (pp.169,170).
Early planning for the UN began in January 1943 with the creation of a "secret steering committee" by Secretary of State Hull, which included Norman Davis, Myron Taylor, Isaiah Bowman, Leo Pasvolsky and - until August 1943 - Sumner Welles (they were all Council members except for Hull himself). From December 1943 - July 1944, this group would draft the American proposal that was eventually put forward at the Dumbarton Oaks conference (a gathering of the US, Great Britain, the Soviet Union and the Republic of China to agree on a United Nations organisation in August-October 1944). To rule on its constitutionality, Hull asked for the help of three distinguished lawyers, Myron Taylor (a Council member who would eventually become a director), Charles Evan Hughes (retired chief justice of the Supreme Court and also a Council member) and John Davis (who was Council president from 1921-1933) (p.171).
Hence, the Council on Foreign Relations had significant input into the design of the eventual United Nations organisation. Though the Charter of the United Nations would undergo modification in negotiations with other nations, according to one historian, the "substance of the provisions finally written into the Charter in many cases reflected conclusions reached at much earlier stages by the United States Government", which in turn reflected the view of the Department of State, with which the Council was very closely involved (p.172).
II.II The Council and Southeast Asia
The Second World War turned out to be a godsend for American foreign policy. The destruction of much of the industrialised world left the United States in a position of economic and military predominance unparalleled in world history. In 1945, it accounted for around half of the world's gross domestic product, more than half of the world's manufacturing capacity, two-thirds of the world's gold reserves and more than a third of total global exports. In addition, it was in firm control of Western Europe and much of the Pacific, with military forces on the opposite shores of both oceans surrounding the United States (and control of the oceans themselves). Finally, the United States had demonstrated the awful power of the atomic bomb, a weapon that was, until 1949, its sole preserve.
This predominance would be eroded in the years to come, mostly by the economic development of Europe and Japan (and now China), as well as the rise of power centres such as OPEC. However, the post-war period undoubtedly gave the United States the ability to construct the world order envisioned by the Council on Foreign Relations.
One vital piece of this order was Southeast Asia, which the Economic and Financial Group had characterised as the region most complementary to the American economy. The reasons for US interest in Southeast Asia were re-expressed numerous times in the following years.
As we have seen, the Council's War and Peace Studies project singled out Southeast Asia due to its possession of important raw materials as well as its position at the convergence of strategic air and sea routes. In September 1943, a Council memorandum to President Roosevelt and the State Department reiterated that since the area constituted a "cheap source of vital raw materials", American interests demanded "placing political and economic control [there] in hands likely to be friendly to the United States". The goal was to see "non-discriminatory trade policies" established that would "enable both the United States and other countries ... to secure access to the trade and raw materials of the region, and to invest and do business in the area" (p.225).
In a November 1943 memorandum, the Council also stressed the particular importance of the Indochina area, which had served the Japanese as a "base of outstanding strategic and economic importance". The conquest of Malaya, Burma and the Netherlands Indies was "immeasurably eased by the ability to utilize Indo-China as a jumping off point". This conception of the "strategic interdependence" of Southeast Asia forms the basis for the "domino theory" that links the fate of Vietnam to that of Southeast Asia as a whole, and which would be used to justify US intervention during the Vietnam War (p.225).
In 1951, the Council formed a joint study group on Anglo-American relations with its sister organisation, Britain's Royal Institute of International Affairs (Chatham House). The group eventually produced a book in January 1953, which defined the American national interest in Southeast Asia in almost identical terms: "Southeast Asia contributes some of the most critical raw materials needed by Western Europe and the United States. It also makes an essential contribution to the food supply of India". Strategically, the "loss of any further portion" of the Far East could "well have decisive effects on the balance of world power in the years ahead" (at this point, the United States had already "lost" China to the Communist revolution and was in the process of losing Indochina through Vietnamese resistance to the French re-imposition of control) (p.226).
Then, in October 1953, the Council organised a discussion group on Southeast Asia chaired by Chester Bowles, former American ambassador to India. Its views can perhaps be found in a letter by Council executive director George Franklin to Phillip Jessup (former Council director and State Department official at the time) inviting him to participate in the group's work. He stated:
As you know, the strategic position and material resources of Southeast Asia have made it a factor of vital significance in world politics ... The possibilities of Communist conquest or subversion are considerable. Since what happens in Southeast Asia has such significance for the United States, we believe it important for as many Americans as possible to increase their knowledge and understanding of this quarter of the globe, and to consider how we may bring about a political evolution favorable to our national interest. It is the Council's hope that the group's discussions may contribute to these ends.
The group's thinking can also be ascertained from an article written by its research director, William Henderson, in March 1955 for the Foreign Policy Association. The article, which was based on work done by Henderson for the Council group during 1953-54, outlined how Southeast Asia was "vitally significant" to the United States as an "economic and strategic prize":
As one of the earth's great storehouses of natural resources Southeast Asia is a prize worth fighting for. Five-sixths of the world's natural rubber and more than half of its tin are produced here. The region is also the main supplier of quinine and kapok and accounts for two-thirds of the world output of coconut products, one-third of the palm oil, and significant proportions of tungsten and chromium. It is a principal source of oil for the Far East, even though its oil production is less than 3 percent of the world's total.
But probably the most important export item is rice. Southeast Asia - particularly Burma, Thailand and (in normal times) Indochina [he probably meant, not in wartime] - produces this vital staple in abundance. At present the region supplies 60 percent of all rice entering international trade. In a continent where rice is the principal item of the diet and where it has been chronically in short supply, the significance of Southeast Asia's rice supply need hardly be emphasized.
No less important than its natural wealth is Southeast Asia's key strategic position astride the main lines of communication between Europe and the Far East. If the Communists could gain control of this area they would literally cut the world in two. (pp.227,228)
(Tin can be used for plating, coating and polishing, as well as the soldering of steel and the manufacture of other alloys such as bronze or copper. Bronze can be used in the construction of military vehicles such as ships, thanks and submarines. Rubber is used in a large variety of contexts to make tubes, padding, tyres, and other products that could be of significant military use).
Many of the Council men involved in this group were invited to join another full-scale study group which met in 1945-55, focused on "United States Policy and Southeast Asia". This group was chaired by Edwin Stanton, former American ambassador to Thailand. Professor John King of the University of Virginia, who worked in this group, published a book in 1956 (the fact that Stanton wrote the foreword probably indicates its conclusions are similar to that reached by the group as a whole). King argued that American interests in Southeast Asia had become "extremely significant, perhaps even decisive" because of economic and strategic considerations - a rationale which is by now very familiar. He wrote that "in geopolitical terms Southeast Asia occupies a position of global strategic importance roughly comparable to Panama and Suez" (incidentally, in the same year, the British and French would reaffirm the strategic importance of the Suez Canal by launching an aggressive war against Egypt to reclaim it) (p.229).
Economically, the American interest in Southeast Asia must "be reckoned in strategic terms rather than in terms of volume or dollar value":
In the case of two important strategic materials, tin and natural rubber, the United States depends wholly upon foreign imports for all its requirements. Of these materials, Southeast Asia supplies about 90 percent of the world's natural rubber, 55 percent of the world's tin. (p.229)
Hence, Southeast Asian resources were vital for the maintenance of US military power.
King also mentioned that the United States was a "resource-deficient" nation which was "heavily dependant on material imported from abroad, especially from the so-called underdeveloped areas, to maintain an expanding and dynamic economy". Since American needs would increase in years to come due to economic growth, "an increase in the importance of Southeast Asia's raw material resources, as well as those of Latin America, Africa, and South Asia, certainly may be anticipated" (pp.229,230).
He continued:
As long as Southeast Asia is important to the economic viability of western Europe and Japan, American interest in the area is compounded automatically. As keystones in its security and trade patterns, the United States has banked heavily on western Europe and Japan. In turn, dependence of these countries on trade with Southeast Asia enhances the American interest in Southeast Asian trade generally (p.230).
In 1959, the Council established another study group on US policy in Southeast Asia. Its study director, Professor Russell Fifield of the University of Michigan, eventually wrote a book - published by the Council - in 1963. Again, Fifield stressed the economic and strategic importance of the region: it was an "area of great strategic, economic and demographic significance"; its water passageways, an artery of global trade, made it of "special significance in the world balance", whilst its exports - in particular, rice, rubber, tin and petroleum - may be "singled out as having particular significance in international politics" (p.231).
Source: Port Economics Management
A recent map of Southeast Asia and its surrounding shipping routes and ports, demonstrating the importance of Southeast Asia as a transit route. The region possess a number of important maritime chokepoints, with the Strait of Malacca being of highest significance (a factor in the breakneck economic development of Singapore in recent decades). Apart from having busy ports of its own, the region also connects Europe and the Middle East with the bustling ports of China and Japan (shown here in terms of Twenty-Foot Equivalent Units, or TEU).
The problem was, though the region was "rich in resources and potentialities", it was poor in defence, and therefore the Communist challenge to American interests there was "acute and unrelenting". China wanted to control the area for the same reasons the United States did, and its growing industrialisation would be "complemented by raw materials and markets of a dependent Southeast Asia". Therefore, in Fifield's words, "Military defence against direct and indirect aggression [what constitutes indirect aggression?] must be a fundamental U.S. objective in Southeast Asia, for without security all other goals collapse like a row of dominoes when the first is pushed over" (pp.231,232).
The Council's consensus view, established and re-iterated over five study groups during the 1950s, was basically identical to that held by the US government in this period. This can be seen in a number of statements and memoranda. For example, in January 1952, W. Averell Harriman, who at the time was director of the Mutual Security Agency (and also a Council director), sent a memorandum to President Truman that re-iterated the importance Southeast Asia given "[its position along the] Pacific lines of communication, it's importance as a producer of rice, which is required as a basic food resource from India to Japan, its vast resources of tin, rubber, and numerous other strategic materials, and likewise, its manpower resources, [thus] the loss of this area to the free world would have the most serious consequences for the security of the United States" (p.234).
This was followed six months later by the National Security Council's Memorandum 124/1, titled "United Staes Objectives and Courses of Action with Respect to Southeast Asia" (dated June 25th, 1952). It stated that Communist domination of the area would "seriously endanger in the short term, and critically endanger in the longer term, United States security interests" for several reasons. First, due to the strategic interdependence of the area, "the loss of any single country would probably lead to relatively swift submission to or an alignment with Communism by the remaining countries of this group" (this had been a Council idea as early as November 1943). Intriguingly, the memorandum stressed that the fall of Southeast Asia would "in all probability" lead to the "loss" of the Middle East, thereby threatening Europe; it would also "make precarious the United States positions in the Pacific offshore island chain and thereby threaten fundamental American security interests in the Far East". This was an extensive formulation of the "domino theory" that saw the fate of single Southeast Asian countries as linked to that of the Middle East and East Asia - including, importantly, Japan - and perhaps even Europe (pp.234,235).
To add to that, the memorandum expressed the traditional economic rationale:
Southeast Asia, especially Malaya and Indonesia, is the principal world source of natural rubber and tin, and a producer of petroleum and other strategically important commodities. The rice exports of Burma and Thailand are critically important to Malaya, Ceylon [Sri Lanka] and Hong Kong and are of considerable significance to Japan and India, all important areas of free Asia (p.235).
Finally, the loss of Southeast Asia, especially Malaya and Indonesia, could "result in such economic and political pressures in Japan as to make it extremely difficult to prevent Japan's eventual accommodation to Communism", a reference to the mechanisms that may underpin the "domino" effect (p.235) (incidentally, the American occupation forces in Japan went to great lengths to suppress its domestic Communist Party during American rule from 1945-52).
Source: PBS
The domino theory. This was a vital argument underpinning United States involvement in Vietnam. Should Vietnam fall, much of Southeast Asia would go down with it, and as a consequence, so would India, potentially Japan, and maybe even then the United States.
It was clear, then, that the Council's views on Southeast Asia were shared by the Truman administration. They were also shared by the Eisenhower Administration; a National Security Council document (NSC 5405, dated January 16th, 1954) - approved by Eisenhower - used literally the same language as 124/1, copying verbatim its economic rationale for US interest in the area. In April 1954, Eisenhower gave a press conference where he stated that the "possible consequences" of the "loss" of Indochina "are just incalculable to the free world", because of the "falling domino" principle, and the importance of the region's raw materials, population, markets and geographical position (p.237).
Nor was the consensus changed during the Kennedy Administration. In fact, he filled his top positions with men who were members or close collaborators of the Council, such as Secretary of State Dean Rusk, National Security Advisor McGeorge Bundy and CIA director John McCone. According to historian Arthur Schlesinger, the correctness or otherwise of the existing commitment of the Saigon government had "ceased by 1961 to be of interest to policymakers" - it was simply taken from granted (p.237).
This economic and strategic rationale - expressed again and again over the course of decades - makes explicable America's massive and enduring commitment in the region. This involved giving billions of dollars of aid to support the French war effort to reimpose control over Vietnam during 1950-54. This involved lending support to the military coup in Indonesia and the following extermination of half a million suspected Communists by the Suharto regime in 1965-66 (see here for my review of Vincent Bevins' excellent book on the topic). And of course, this involved committing 500,000 American troops and $150 billion to a conflict in Indochina that would eventually cost 56,000 American lives.
III: Reflections
The primary strength of this book is that it provides an explanation for much of US foreign policy, both during and after the Second World War, in terms of a clearly articulated rationale. This rationale has a political and ideological basis; after all, the requirement for the expansion of US interests around the world was built on the rejection of an alternative economic system at home. This rejection finds its basis in the composition of the Council on Foreign Relations - specifically, its grounding in the capitalist class of the United States, which seeks to defend its power and wealth. However, once this assumption is taken, all the conclusions of the Council fall out more or less logically. The book reduces much of the sprawling complex of US foreign policy to cold economics - to calculations of self-sufficiency and resource requirements.
Then again, should we surprised? Resources - land, tin, rubber, food or people - are the backbone of any functioning society, and this will be the case in the twentieth century, the twenty-first century or the twenty-second. It is a constant of human nature, and so perhaps we shouldn't be surprised when imperial aggression takes place in our modern era: there will always be those who want more.
In reading this book, I could not help but draw links with The Wages of Destruction, a book written by Adam Tooze on the economic history of Nazi Germany (you can find my review of it here). In that book, the rationale of Hitler's aggression is articulated in terms of the requirements of the German war economy. Yet of course, this cold, calculated economic rationale also has, at its core, an ideological basis, one founded upon Hitler's racial world-view. The key steps taken by Hitler during the Second World War, such as his launch of the war in the first place, as well as his invasion of the Soviet Union, are explained in terms of this economic rationale; Hitler's conquests are a short-term source of raw materials for the war effort and a long-term source of "living space" (Lebensraum) for the German race.
Whether consciously or not (probably consciously), the authors of Imperial Brain Trust couch the war aims of the United States in very similar terms - in fact, they use the phrase "living space" to refer to the extent of US territorial control in a number of different places. Indeed, in this reading, there were three such gambits during the Second World War - Germany's quest for the "Greater German Reich", America's quest for the "Grand Area" and Japan's quest for the "Greater East Asia Co-Prosperity Sphere", all calculated to bring economic might and prosperity to their respective imperial masters.
What's curious is how planners in the United States and the Third Reich seem to have been motivated by the same basic impulse - and the same insecurity. According to Imperial Brain Trust, the Council's Economic and Financial Group concluded that America's living space in the Western Hemisphere was less self-sufficient than Germany's European empire, necessitating America's acquisition of more territory (p.126). However, Tooze's analysis reveals that - far from being a self-sufficient space - Continental Europe under Nazi occupation was "starved of food, coal and oil", whereas the territory of the Allies was "energy rich" (p.411, Wages of Destruction). Perhaps the Council's planners underestimated Nazi Germany's problems - after all, Tooze tells that us that the Americans and the Soviets "agreed in overestimating Germany's oil stocks by at least 100 per cent" (p.412, Wages). Hitler, on the other hand, appears to have been quite justified in his fear of America's economic strength.
In ascribing a class/ideological basis to this rationale for US foreign policy, Shoup and Minter also imply that it could be overturned by a shift in domestic policy, perhaps along the lines advocated by Charles Beard back in the 1920s. US foreign policy is thus a direct consequence of US domestic policy, and its attendant economic consequences. It is interesting in this regard that on the main tenets of foreign policy, there appears to be very little daylight between Democratic and Republican administrations over time. Certainly, on Southeast Asia, US involvement was a bipartisan affair, starting with (Republican) Eisenhower's support of the French, then (Democrat) Kennedy's escalating support for the Diem government, and then (Democrat) Johnson's final commitment of ground forces in 1965, not to mention Johnson's support for the Indonesian military coup in 1965, and (Republican) Gerald Fold's support for incredible Indonesian atrocities in East Timor starting in late 1975. Today, on the essential issues of US foreign policy - such as Russia, Iran and China - there is practically a consensus between both parties, albeit some differences in tactics.
Following Shoup and Minter's analysis, one might then conclude that the essential bipartisan consensus in foreign policy is indicative of a consensus in domestic policy. This is almost certainly true; whereas on many issues (perhaps involving immigration, medicare, and so on) there are differences in posture, on the essentials, there does not seem to be much difference between the establishments of both main parties (excepting, potentially, outliers such as Bernie Sanders or Donald Trump). For example, nobody seems to be keen on the sort of planned economy that Beard proposed, or on an enhanced ability for trade unions to challenge the executive power of the corporate leadership.
One key takeaway from the book is a look at the manner in which one limited subset of a country's population could exert such strong influence on its foreign policy, even in a democratic society. Certainly, this has long been achieved by the Council on Foreign Relations by its financial wherewithal (in terms of the wealth of its members) - which allows it to influence the political process - and by its control of the main media institutions that shape public opinion. This is doubtless the same today, even though technologies such as the internet provide a façade of increased diversity of information. Although the information is there, the information we consume on an everyday basis depends on the prevailing trends of public opinion present in society.
Perhaps one notable example is that of "globalisation", a trend which (at least in my own circles) is usually talk about with unqualified approval. Coming from a background which would have been impossible but for "globalisation", I of course treasure greatly the connection of the world through media, economic and personal links. However, we always have to remember on whose terms globalisation takes place. Economic globalisation will always benefit the most powerful economy, whilst media globalisation will always benefit whoever possesses the most effective and sophisticated media. In our time, the United States happens to have both, and, as we've seen through the discussions concerning the IMF, World Bank and United Nations, it has long leveraged its advantages.
Certainly, the influence of the Council on Foreign Relations waxes and wanes, and certainly, the analysis presented in this book could not explain everything to do with American foreign policy. Yet, it does provide a sound basis to do so.
IV: Prominent Council Members
This list is necessarily non-exhaustive.
IV.I: Past
Harold Agnew (physicist, director of the Los Alamos National Laboratory)
Les Aspin (Secretary of Defence under Bill Clinton)
Howard Baker (White House Chief of Staff under Ronald Reagan)
George W. Ball (American diplomat)
Sandy Berger (National Security Advisor under Clinton)
Joe Biden (current President of the United States)
Shirley Temple Black (US Ambassador to Czechoslovakia, 1989-1992)
Sir Richard Branson (Virgin Group head)
Zbigniew Brzezinski (National Security Advisor under Jimmy Carter)
William F. Buckley Jr. (founder of the conservative National Review magazine)
McGeorge Bundy (National Security Advisor under Kennedy and Johnson)
William Bundy (CIA officer and historian)
George H.W. Bush (41st President, Director of the CIA)
Dick Cheney (Vice President under George W. Bush)
Warren Christopher (Secretary of State under Clinton)
Hillary Clinton (Secretary of State under Obama)
Thomas Dewey (Governor of New York)
C. Douglas Dillon (Treasury Secretary under Kennedy and Johnson)
Allen Dulles (Director of the CIA under Eisenhower and Kennedy)
John Foster Dulles (Secretary of State under Eisenhower)
Jeffrey E. Epstein (disgraced financier)
Gerald Fold (38th President)
Leslie H. Gelb (New York Times columnist)
Richard L. Gelb (New York Federal Reserve board, New York Times Company board)
Murray Gell-Mann (particle physicist, founder of the Santa Fe Institute)
Newt Gingrich (58th Speaker of the House)
Ruth Bader Ginsburg (US Supreme Court Justice)
Mikhail Gorbachev (former President of the Soviet Union)
Alexander Haig (Secretary of State under Reagan)
Sidney Harman (owner of Newsweek)
W. Averell Harriman (Secretary of Commerce under Truman)
Richard Holbrooke (diplomat, UN Ambassador under Clinton)
Herbert Hoover (31st President)
Robert Kagan (Washington Post columnist)
Charles Krauthammer (Washington Post columnist, Fox News commentator)
Ivy Lee ("father of public relations", known for his work with the Rockefeller family and the Nazi regime)
Robert Lovett (Secretary of Defence under Truman)
John McCain (US Senator from Arizona)
John McCloy (World Bank President)
Robert McNamara (Secretary of Defence under Kennedy and Johnson, World Bank President)
Richard Nixon (37th President)
Paul Nitze (Secretary of the Navy under Johnson)
Colin Powell (Secretary of State under Bush II, National Security Advisor under Reagan, Joint Chiefs Chairman under Bush I).
David Rockefeller (CEO of Chase Manhattan Bank)
Nelson Rockefeller (Vice President under Ford, Governor of New York)
John D. Rockefeller III (founder of Population Council)
Walt Rostow (National Security Advisor under Johnson)
Dean Rusk (Secretary of State under Kennedy and Johnson)
Carl Sagan (American scientist and cosmologist)
Arthur Schlesinger (historian)
Brent Scowcroft (National Security Advisor under Ford and Bush I)
George Schultz (Secretary of State under Reagan, Treasury Secretary and Labour Secretary under Nixon)
Cyrus Vance (Secretary of State under Carter)
Paul Volcker (Chairman of the Federal Reserve)
Barbara Walters (TV journalist)
Paul Warburg (banker, co-founder of the Federal Reserve)
Steven Weinberg (American physicist)
Caspar Weinberger (Secretary of Defence under Reagan)
IV.II: Present
Elliot Abrams (lawyer, former State Department official)
Madeleine Albright (Secretary of State under Clinton, UN Ambassador)
David Altshuler (Vertex Pharmaceuticals CEO)
James Baker (Secretary of State under Bush I, Secretary of the Treasury under Reagan)
Robert Blackwill (US Ambassador to India under Bush II, Henry A. Kissinger Senior Fellow for US Foreign Policy)
Antony Blinken (current Secretary of State)
Michael Bloomberg (founder of Bloomberg, former Mayor of New York City)
Max Boot (military historian, Washington Post journalist)
L. Paul Bremer (diplomat, head of the post-invasion Coalition Provisional Authority in Iraq)
James Breyer (boards of Blackstone Group, Harvard Corporation, Walmart, Facebook and the World Economic Forum)
Erin Burnett (CNN anchor, journalist)
William Burns (former CIA director, former Ambassador to Russia)
Jimmy Carter (39th President)
Elaine Chao (Secretary of Transportation and of Labour under Trump)
Bill Clinton (42nd President)
George Clooney (actor, director, producer, screenwriter)
Katie Couric (former CBS and NBC journalist)
John Deutch (former CIA director)
Martin Feldstein (Professor of Economics, Harvard University)
Dianne Feinstein (US Senator from California)
Thomas Friedman (New York Times columnist)
Mikhail Fridman (Russian oligarch)
Francis Fukuyama (political scientist, former State Department official)
James K. Galbraith (economist)
Henry Gates (PBS host, Harvard professor)
Robert Gates (former US Secretary of Defence under Obama, CIA director under Bush I)
Timothy Geithner (former president of New York Fed, Secretary of the Treasury under Obama)
Alan Greenspan (former Chairman of the Federal Reserve)
David Ignatius (Washington Post journalist)
Martin Indyk (US Ambassador to Israel under Clinton)
Angelina Jolie (actor, producer, director)
John Kerry (Secretary of State under Obama, current "Climate Czar" under Biden)
Zalmay Khalilzad (former ambassador to the UN, Iraq and Afghanistan under Bush I, special representative to Afghanistan under Trump and Biden)
Henry Kissinger (National Security Advisor under Nixon, Secretary of State under Nixon and Ford)
Joe Klein (Time magazine columnist)
Paul Krugman (New York Times columnist, economist)
Stanley McChrystal (retired US Army General, former commander of US forces in Afghanistan)
Rupert Murdoch (founder, chairman and CEO of News Corp and Fox News)
John Negroponte (Deputy Secretary of State and Director of National Intelligence under Bush II)
Joseph Nye Jr (Harvard Kennedy School academic)
David Petraeus (retired US Army General, former commander of US forces in Iraq)
Norman Podhoretz (senior fellow at the Hudson Institute)
Jerome Powell (current Chair of the Federal Reserve)
Charles Prince (former CEO of Citigroup)
Dan Rather (journalist, former CBS anchor)
Condoleezza Rice (Secretary of State under Bush II)
David Rockefeller, Jr (son of former Council chairman David Rockefeller)
Charlie Rose (former CBS and PBS journalist, host of The Charlie Rose Show)
Robert Rubin (Treasury Secretary under Clinton)
Jeffrey Sachs (American economist)
Sheryl Sandberg (Facebook Chief Operating Officer)
David Sanger (New York Times White House and National Security correspondent)
Diane Sawyer (ABC News journalist)
Anthony Scaramucci (SkyBridge Capital founder, former White House Director of Communications under Trump)
Eric Schmidt (ex-CEO of Google)
Eric Schmitt (Pulitzer prize-winning New York Times reporter)
Eduard Shevardnadze (former President of Georgia)
Amity Shlaes (historian, Bloomberg News columnist)
George Soros (investor, currency speculator, former Council board)
Lesley Stahl (CBS News journalist)
James Stavridis (retired US Navy admiral)
Larry Summers (Secretary of the Treasury under Clinton)
George Tenet (CIA Director under Clinton and Bush II)
Frank Wisner (businessman and former diplomat)
Paul Wolfowitz (former President of the World Bank, Deputy Secretary of Defence under Bush II)
R. James Woolsey (CIA Director under Clinton)
Janet Yellen (current Treasury Secretary under Biden, former Chair of the Federal Reserve)
Fareed Zakaria (CNN and Washington Post journalist)
Robert Zoellick (former President of the World Bank)