Unclear what the answer to the blood money question is, but it isn’t reparations. That’s just vendetta math with a moral UX overlaid. It can never end.
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This setup to the partition of Germany in 1946 is giving me 4d chess headache. Trying to balance reparations, trade deficits, imports, rebuilding, economic integration but with political weakness, with US aid balancing the equation. That’s even before getting to doctrinal diffs.
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This problem goes back to Napoleonic wars. Keeping Germany economically strong enough to pay reparations but politically weak enough to not be a threat and under the control of competing adversaries. The US was a new boundary condition of aid that kinda eventually solved it.
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It’s a bit painful to read this intricate play-by-play since with 20/20 hindsight, partition of Germany, the wall etc seem inevitable. But it was not a death march. All parties were vying for other outcomes. Stalin was playing for all of Germany. Nobody wanted a 43 year impasse.
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Interesting, 40% of German housing stock was destroyed in the war but 80% of the industrial capacity survived and there were more machine tools after the war than before, most new. Dumb bombing, but lucky for after. That’s why it was a prize worth playing for.
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This whole thing seems bizarre now. They were trying to do hopelessly ill-posed Potsdam math and kinda finesse the cost of the war so nobody had to foot the bill. Still our own era has its own funny math.
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6 futile weeks in Moscow with irreconcilable differences that only became really clear towards the end. Strong or weak Germany?
Stalin proposed a plebiscite. Anyone who ever proposes a plebiscite has a plan to manipulate it. Stalin had done it in Poland already. FDR let him.
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Marshall concludes that Stalin was negotiating in bad faith and intended to let the German situation fester unresolved and recovery stall. Returns to US intending to announce the unilateral plan. Receives the v0.1 Frankenplan, this SWNCC committee report history.state.gov/historicaldocu
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Many Covid reboot plans look like this 😬
Sidebar: a lot of the logic of the Marshall plan was selfish, focus on boosting aggregate European demand for American exports which faced a sharp slump if Europe didn’t recover. The plan was basically a Keynesian fiscal stimulus.
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Goals for the Marshall plan were, in order:
1. Prevent communism spread
2. Prevent humanitarian crisis
3. Stop threat to American economy
These elements were there in frankenplan. Just missing the blueprint for how.
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Marshall appoints Kennan to head up the new Policy Planning Staff. He has to come up with a plan in 2 weeks.
Moral of the story: if you rewrite a Long Telegram heralding a Cold War, you’ll get stuck with the thankless job of planning it.
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Intermission with some history on US economic interventionism around the world starting around turn of the century. Free traders ruled and protectionists were on the retreat through the 20s and 30s. Motives for Marshall plan weren’t that different from banana republic policies.
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It’s easy to forget just how international American businesses became after the civil war. The US might have been politically meek and reluctant until WW2 but not economically. Isolationism in geopolitics and connectionism in economics. Germany policy design was a microcosm.
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‘[Morganthau and White] had, [Acheson] lamented, “envisage[d] a victory [in war] where both enemies and allies were prostrate — enemies by military action, allies by bankruptcy”
A dark view of the US participation in WW2: That the US did bail out Europe but at a price.
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Shades of Chinese belt-and-road initiative. If a rising superpower is both materially supporting you and underwriting your financial capacity to pay for that support, it looks like a free lunch but you’re signing away freedom. Europe wrt US in 1940 = Africa in 2020 wrt China.
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Peeking ahead, post-war European reconstruction and return to prosperity *could* be viewed as a deal with the US devil, with the cost being becoming a US protectorate. Truman doctrine was an imperial boundary as much as a containment boundary.
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Luckily the Marshall Plan was enlightened enough to at least aim at win-win unlike the Morganthau plan which was cartoon villainish. FDR was accused in 1934 of finding “the only Jew in the world who doesn’t know a thing about money” en.m.wikipedia.org/wiki/Henry_Mor.
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Wonder if being Jewish made Morgenthau an extremist in wanting to impose a “hard peace” on Germany. Hitler and the Nazis are curiously missing in this whole discussion. I guess the economists wanted to forget that and move on.
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It’s clear that after Yalta it was already US vs USSR. The last phase of WW2 was about laying out the cold war positions, and cleaning up the Nazis was just a minor loose end. I knew this already but book makes it clear the extreme degree to which that was true.
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The last 3 months after Yalta must have been surreal. Feb- 11 - May 8 1945, the world was still focused on Nazis but powers-that-be were already continuing the infinite game. The mop-up really was a minor detail.
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Something similar might happen with Covid. Post-Covid world configuration will be worked out somewhere when the end is in sight but the war is not yet won.
Big lesson right now is: Trumpism is more Morganthau than Marshall 😬
Bidenism might be too. And Xi = Stalin role?
Crap.
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By the time Kennan turned his long telegram into an article, he’d shifted from a perimeter containment to a strong-point defense model that demanded much lower economic burden. Congress was suspicious Soviets would drain the US economy through entanglements all along perimeter.
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Military shrank from 83B in 1945 to 42.7 in 1947 to 12.8B in 1947. Armed forced went from 12m to 1.6m personnel. Army secretary wanted 20% more budget if economic aid was voted down.
The plan had to be an economic one. Literal butter over guns choice. Arm
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Truman and his Republican senate ally Vandenberg were both born in 1884. Freaks me out how such modern events were shaped by people born just before industrial modernity. Electricity was new in 1884. Airplanes didn’t exist. Humans hunted mammoths.
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Kennan begins drafting PPS/1: Policy Planning Staff paper 1. Stark contrast to messy committee output of SWNCC. Lays out clear framework instead of wishful thinking muddle. russilwvong.com/future/kennan/
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Key doctrinal points:
- No requirement to trade with East
- Grants, not loans (contra Morganthau, lend-lease, IMF)
- Anti-Soviet strings attached
- (W) Germany to be made strong; France would have to deal
- (W) Europe to be integrated; UK would have to deal
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Western Europe was clearly an American creation. Stalin May have created the Iron Curtain but the US created the difference across it very deliberately
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Will Clayton returns from Europe with a sense of urgency over Europe on the brink of economic collapse. He’s aligned with Kennan mostly but wants a more assertive US role, not merely financial and advisory.
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As befits a free trader capitalist, he wants proper reconstruction of corporatized, nationalized economies along more laissez-faire lines. Free market via command actions to dismantle command economies.
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‘In Acheson’s words, Clayton wanted the plan merely to “appear to come” from Europe...The United States, he said, “must run this show.”
Kennan/Clayton = good cop/bad cop.
Acheson = ADA
Marshall = DA
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There was basically bipartisan drive towards a “United States of Europe.”
Besides Clayton, others like Dulles, Truman, Vandenburg (formerly an isolationist) all got behind it.
The EU was the result of the US intentionally reshaping Europe in its own image.
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Ken Anderson final PPS/1 navigates a subtle shift away from communism as cause of problems and focus of plan to core economic/cultural issues, with communism as an opportunistic infection of weakened state.
And thus did Truman doctrine finesse Marshall plan into existence.
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Okay, Kennan has laid out doctrine and strategic logic. Clayton has defined required posture of command.
But who’s going to work out the execution model? 🤔
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Enter new actor who will apparently work out the execution logic of the plan: Lucius Dubignon Clay, guy who has already made an appearance on the Berlin tactical chessboard and will soon mastermind the Berlin airlift.
Now shit’s getting real
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Damn autocorrect “Ken Anderson” 2 tweets up is “Kennan”
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Clay was son of a 3-time senator, but chose to go into the military. Star student but with conduct problems. Liked authoritah. Cartman, but straight-As type. Rose through logistics and engineering hierarchy without seeing combat until he was running Berlin by... my age right now.
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Clay’s orders were to run Berlin by the punitive/vindictive Morganthau Plan, which was both impossible in a devastated economy and something he didn’t want to do. So he used “disease and unrest” appropriations to run the show in more humane ways, thwarting the plan’s intent.
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“There is no choice between becoming a communist at 1500 calories and a believer in democracy at 1000” — Clay in a 1946 cable to Washington.
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JCS 1067, the original occupation directive
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Replaced by JCS 1779 which I can’t find online
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Clay blamed the French more than the Russians for the recovery quagmire, and thought Kennan was a dangerously dogmatic theory guy. Interesting tension there since he himself was on the theory side of the military in a way (didn’t get to see combat despite trying)
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