Subtitle: Essays on New Deal Foreign Policy

“Watershed of Empire. Essays on New Deal foreign policy” provides exactly what the title suggests, a series of essays on New Deal / WW2 foreign policy all from a revisionist point of view. Or should I say revisionist “points” of view..plural. For as the volume illustrates there is not just one revisionist interpretation or approach.

The book is edited by Leonard Liggio and James Martin and provides seven essays from seven distinctive authors. Disappointingly there are no chapters from editor James Martin, who is an excellent and entertaining historical essayist.

This book has been pigeonholed as a compendium of “New Left revisionist history”. The label is partly fair as certainly insofar as most of the authors were identified with the New Left at one time or another. However, judging the content I don’t think you could fairly characterise the book as particularly leftist or otherwise.

New Left revisionist history of WW2 has also sometimes been misrepresented as ‘economic determinist’, for example, explaining the war as a drive by US capitalism to create a global “Open Door” for American exports and foreign investment capital. Sometimes adding in a non-historical foray into economic theory or two by positing an underlying contradiction of capitalism or two, and it’s usually underconsumption. To an extent the economic determinist label is a reflection of the downplaying of economic drivers in mainstream interpretations which can border on the pneumatic with the flow and resistance to “aggression” being the great explanation. In these essays only really Murray Rothbard and Lloyd Gardiner focus on economics but in neither case could their position be considered ‘determinist’.

Rothbard in particular provides an excellent overview to the crisis in international monetary policy that more or less began with the Great War and unravelled through to the depression decade. He charts the US position covering Hoover, the ‘monetary nationalism’ of the early New Deal and the ‘monetary imperialism’ of the late New Deal. Rothbard manages to make this field, obscure to most of us, understandable to the intelligent layman. Rothbard argues, in short, that a viable international monetary system existed before WW1, the international gold standard (which was never a ‘pure’ gold standard in any case). The demands of wartime finance saw most european states off the system as it obstructed their plans for deficit spending and inflation as a source of war revenue. Post-war various attempts to revive the gold standard, if only in a watered down ‘gold exchange standard’ floundered. In the beginning the fault lay heavily with the UK which, with a friendly US Federal Reserve director in place, hoped to tie the US into a tiered system of payments which the US would ultimately subsidise. This system could not last and London’s return to gold set at an unrealistic ‘pre-war equivalent’ exchange rate led to the collapse of the system. In the next phase most nations scrambled to various forms of monetary nationalism and many hoped that the US would oppose this dangerous trend. Instead the US, under the newly elected FDR presidency, “dropped a bombshell” and scrambled itself. FDR wanted as free a hand as possible to deal with the depression at home, international economics was not high on his agenda. Later as the monetary nationalism hardened and Germany developed a web of bilateral barter trading agreements, the US increasingly saw these as a threat. Into and through the war Washington pushed for a new international monetary order, this time based on the US dollar, rather than gold, which was ultimately establish at Bretton Woods after WW2. To some commentators, for good or ill, it was this desire to rebuild an open multilateral order of this type that really drove the US into the war.

Rothbard’s essay plus William Neumann’s more biographic treatment of Roosevelt are the ‘stand out’ essays of the volume. Neumann’s essay is easy and quick to read like all good writing and his focus on the personality and psychology of FDR. This personality approach would seem to me to be the polar opposite of ‘economic determinism’. Neumann paints a portrait of FDR that is somewhat sympathetic and human, in contrast to the hagiographies and hero worship that is more common. Neumann sees a man of charm, wit and supreme self confidence. Impatient with advisors, and advice; indeed as the years wore on there were fewer and fewer people who could either say “no” to FDR , or who he would even listen to anyway. FDR was not interested in detailed intellectual debate or argument, flexibility was the one thing he was inflexible about.

Neumann doesn’t delve into the monetary issues like Rothbard but this ‘quest for flexibility’ suggests a link between these superficially quite different approaches. In the early days of the New Deal FDR rejected the gold standard (or indeed any multilateral international monetary system) to give him the flexibility he believed he needed to deal with the crisis at home. Gold, indeed any kind of monetary internationalism didn’t suit his plans. Then as the second depression hit, the late 1930s spike in unemployment, he saw the need to turn to more internationally focused solutions, just as he was bringing more members of the business establishment into his administration. The apparently autarkic plans of Germany and, to a lesser extent, Japan, were increasingly seen as rivals. So economic conflict poisoned a well already muddy with diplomatic and ideological conflict, compromise became increasingly unlikely.

Justus Doenecke in his essay surveying the isolationist response to FDR finds them to be a diverse bunch and indeed the ‘usual’ isolationist / interventionist split is somewhat false. For a while there even FDR could have been labelled as isolationist. What is interesting is that in general the isolationists were generally less worried about international economics as a source of existential threat to the US or it’s democratic institutions. As James Patterson points out in his essay discussing the career of Congress’s lead ‘isolationist’ Robert A Taft, only about 5% of US national income in that less globalised era was derived from foreign trade. Japan too was one of America’s major trading partners and America was definitely Japan’s biggest foreign market. Taft who was always focused primarily on domestic economic matters saw war scares and war as an alarmist distraction and a diversion.

Taft and many fellow isolationists were more inclined to see existential threats to America’s institutions from war generated centralisation. Certainly some of their fears were realised but hyperbole, then as now, was often the language of debate. As it turned out domestic totalitarianism wasn’t the ‘inevitable’ result of America’s wars, but civil liberties certainly suffered. They had no monopoly on hysteria. Many interventionists apparently imagined that German victory in Europe would undermine American liberty by remote economic strangulation. Or worse. Unable to breach the English channel the Nazis were expected to make a jump across the Atlantic from West Africa to Brazil and turn right towards Chicago. (Neumann also says FDR harboured a genuine personal belief in a long term Japanese plan for world conquest as told to him by a Japanese fellow student at Harvard in 1902!)

Lloyd Gardiner’s essay provides the most detailed analysis of the diplomatic history including a valuable outline of the rise and fall of the Washington Naval Convention which regulated the fleets of the US, Britain and Japan. Gardiner doesn’t mention it but the Washington treaty’s focus on battleships encouraged the Japanese to develop aircraft carriers, a class of ship low in the Treaty’s priorities. So an unpredicted consequence of the Treaty’s battleship production restrictions was to foster their technical demise. Gardiner’s essay is a valuable resource but not exactly the easiest reading experience.

Robert Smith, another diplomatic historian provides a second look at FDR’s “Good Neighbor” policy towards Latin America. He contrasts it to Wilson’s Gunboat Diplomacy. This is one area where FDR certainly did not follow his mentor and, often, model. However not all the credit for the reform belongs to FDR. Smith shows that Hoover was the real pioneer bringing home the marine garrisons. Murray Rothbard has written elsewhere that much of the New Deal economic program was derived from Hoover. Maybe here is another example of Hoover being unfairly overshadowed by his more popular successor.

Last but not least is Robert Bresler’s essay which is actually the first in the book. He deals with “(t)he ideology of the executive state: (the) legacy of liberal internationalism.” In a sense this is the most modern of the essays. Published in 1976 when controversy and social division over the Vietnam war ran hot, the “New Left revisionists” were seeking to find the roots of the then current crisis. The precedent of FDR and the rise of the executive state was thus highlighted, as it is again today as US foreign policy generates a renewed public crisis. As Patterson’s essay on Taft indicates there were certainly options proposed in the handling of WW2 crisis and of post-war international institutions that would have reduced the risk of Presidential centralism. For example, Taft advocated that the US ambassador to the UN should be a congressional not an executive appointment. It remains for another generation to now attempt reform, if indeed it is not too late.

“Watershed of Empire” provides informative essays on WW2 from distinctive and in some ways competing revisionist perspectives. All the essays are high quality with a scholarly standard of referencing and indexing. A useful aid for for further study. Recommended.