JCS 1067, the original occupation directive https://en.m.wikisource.org/wiki/JCS_1067
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The Soviets really did drink their own kool-aid. Their negotiating stance was based on the assumption that America was on the verge of economic collapse due to loss of export markets. Because of course capitalism was destined to collapse any day now as foretold by doctrine.
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Stalin was supposedly the greatest strategic negotiator of his time. Molotov was a master of stalling and other tactics. Yet doctrine compromised them.
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If the US used dollar diplomacy to force a unified economic zone in the west, and suppress bilateral ism, the Soviets used bilateralism in the East to sort of divide and conquer their zone. The description reads like a tyrannical pater familias ruling brood by 1:1 intimidation
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It’s interesting that labor leaders in UK and France reluctantly went along with the US despite communist sympathies. Stalin lost much of the ideological goodwill that Russia had earned from the global communist movement in previous decades.
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The Soviets wanted a unified Germany to milk for reparations (maximizing their share) to build their own empire, and a fragmented Europe. The US wanted a unified Western Europe and a fractured Germany, to force an economic schism, because it had kinda ceded the East already.
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Soviets bluffed thinking the US could be dragged into a long negotiation slide into a compromise that they could dominate. The US called the bluff and triggered the schism the Soviets were using as a threat. This feels familiar. Putin’s geopolitics are also “drag from weakness”
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The US does not come off looking too good here, but there was a core of generosity and goodwill behind the dollar authoritarianism. The Soviets though were fundamentally acting out of self-interest and bad faith and assumed the US was too.
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There’s a sense of “it’s okay to lie and cheat in dealings with evil capitalists” to their whole posture. We’re now at the breakdown point. Stalin has received spy intel that confirms US motives and he orders Molotov to back out of Marshall Plan talks.
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Molotov walks out of talks, accusing the U.K. and France of letting the US but it’s way into interfering in Europe, for its own economic self-interest. Not wrong but a half-truth that revealed the central failure of communist imagination to understand nonzero sum capitalist logic
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“Bevin did a superb job of getting Molotov out of Paris. He had the — by careful maneuvering... [He] had the courage to invite him and the bluntness to get rid of him.” — Truman commerce secretary W. A. Harriman on Ernest Bevin, British foreign minister https://en.m.wikipedia.org/wiki/Ernest_Bevin …
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Looks like Bevin’s tactics relied on Kennan’s insight into how to goad Stalin into causing the schism when they could have stayed and done more damage. Acheson exits government to return to law practice. Robert Lovett takes over as driver of Marshall Plan https://en.m.wikipedia.org/wiki/Robert_A._Lovett …
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Soviets try a last gambit on July 5, 6th, cabling satellites to attend plan launch but vote against it and walk out, to undermine launch. But then reverse course on July 7, not trusting the satellites, especially Czechoslovakia, to run the play. So July 7th is real Cold War start
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Marshall has already committed to the schism mentally on April 15, so Stalin took nearly 3 months to catch on. Crucial slip that led to Soviets being successfully cast as the cause of the schism and interested in chaos over reconstruction. Which was not wrong.
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It’s amazing to think that in 1947 Soviets genuinely believed Western capitalism would collapse under its internal contradictions and prepared Soviet Inion would step into vacuum via the communist parties they were sponsoring ideologically throughout the west.
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The McCarthy era paranoia makes more sense now even if no more justifiable. The Soviets really were a grim specter of an alternative history/future looming over the imagination of the West.
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“The idea of European integration as a Trojan horse for German hegemony would become a staple of communist diplomatic doctrine.” “German rehabilitation wrongly given priority over assistance to its victims” Again not wrong... it’s what did happen...but failure of imagination.
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Understood in the light of their best ideals rather than their worst hypocrisies, this was a contest of nonzerosum imagination+wealth motives vs zero-sum geopolitical justice motives. Soviets lost because they backed the worse idea, not by being geopolitically outmaneuvered.
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Czechoslovakia makes a weak bid to join Marshall Plan, but is firmly reined in by Stalin. “I went to Moscow as the foreign minister of an independent sovereign state. I returned as a lackey of the Soviet government” — Jan Masaryk. https://en.m.wikipedia.org/wiki/Jan_Masaryk …
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Soviet bloc out. 16 nations meet to hash out the coordinated aid request to the US. Now France is the main bottleneck, wanting to keep Germany weak. The West had the same suspicions of US intentions as the Soviets. They were just even more suspicious of Soviets.
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Bunch of committees to pull the proposal together in 6 weeks. This description reads like a major NSF or DARPA grant proposal coming together across a bunch of universities. The trick is to pitch what the US government wants you to pitch. Figure it out via backchannels.
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This bit is a headache-inducing account of the intricate maneuvering to get France face-saving concessions while protecting German recovery. Ruhr kinda internationalized to give France some control over European steel, in return for stopping obstruction elsewhere.
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The sausage making is ugly and I can’t keep all the names and positions straight. Basically some economic efficiency in recovery was sacrificed to assuage French demands. Some reasonable, others not. There are no saints here but degrees of original sin in rebirth of Europe.
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Interesting tricky problem was rationalizing trade payments. All the countries lacked gold and dollars. Wild inflation everywhere. Belgium had a big trade surplus due to being liberated first, and getting production back on, and wants to keep that. Others say screw you,
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Basically the precondition of American aid was continent-wide recovery coordination. Which required stable currencies and convertibility. Which required a completed recovery. Chicken-egg. Solved via payments union and trade quotas. Command economy it till you get to free market.
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European currencies remained inconvertible till 1958
So it took 13 years for WW2 destabilization effects to be surgically stabilized with a command economy before free-float trade was possible again.
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Scheme required each country to fill out very detailed questionnaires on economic production. They mostly just made it up. The US thought they’d police each other’s accuracy. Instead they colluded in don’t-ask-don’t-tell mutual obfuscation. Including Americans running Germany.
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Weird how we think of Cold Watmr as capitalist west vs command economy East. But there was no real capitalism for much of the period. Soviets had 5-year plans, Western Europe had Marshall Plan. The US had military-industrial complex. Real capitalism was in eclipse 1929-1989.
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Still the plan was clearly to get off planning models. Will Clayton played Europe-whisperer nudging the discussions and proposal into the right shape via backchannel pressure and slight strong-arming of expressions of autonomy. Not Stalin-grade though.
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Clayton’s 3 requirements for a successful funding proposal: 1. Explain why finding to date hadn’t fueled recovery 2. A 3-4 year plan to fix this by production program 3. A blueprint for a European economic federation
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Plus yay/nay to features. Bilateral deals/tariffs under ITO logic bad. Customs union/free trade zones a la Benelux good. This was an early version of the IMF/WB economic liberalization playbook of the 80s/90s clearly. Much less sophisticated and tied to Bretton-Woods spookiness.
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