Alright. To bed. We continue tomorrow.
Homework: design your own Covid Marshall plan. Use arduinos and 3d printers if possible. Link it to a China scare so we can sell it better.
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Getting started early today since there's a heat wave on in LA and don't feel like doing much else.
Now at four-power meeting on Germany, in London, November 1947. Writing on the wall, the talks are dead on arrival. Everyone knows the West has already forked away from Potsdam.
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Talks fail as expected. Stage set for partition of Germany and unique problem of Berlin 120 miles east of border. As expected Soviets make moves to nullify the four-party control of the city following failure of the talks. This would be exciting if I didn't already know ending.
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Dizzying cast of characters moving across the stage and I'm not bothering to keep track.
Every big historical story has a unique set-piece short story within that's strategic and critical but doesn't rhyme with anything in other stories. Berlin is that for this story.
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Lots of speechifying. Everybody realizing that the Marshall Plan is not an alternative to re-armament or vice-versa, any more than Lend-Lease was an alternative to US militarization before WW2.
Will the Cold War be economic or military?
Why not both dot gif.
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WaPo, Nov 9, 1947: "If, as Bismarck says, history occurs when things happen, the last five months have teemed with history."
August 1947 looms so large in the Indian imagination (Aug 15 was independence from Britain) that it's a blindspot for me for world history elsewhere.
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'The House of Reps, Reston observed, was now not just divided into parties, "but into whose who went [to Europe for visits] and those who stayed home."'
Cf: 2020, Congress reps who made earnest attempts to determine ground reality re: Covid, vs those who stayed Trumpie.
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Lol, Henry Wallace, FDR's last veep, leads charge from the Left, arguing against the plan and suggesting a 3x bigger $50B European New Deal to be administered by the UN. So the farcicalization of the New Deal happened within a decade of the original. GND is just the latest.
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From the Right, Robert Taft trots out the same tired creating-dependency arguments and advocates cutting the plan budget. Free marketer Henry Hazlitt wants to halve the amount.
The derps of today go back to 1947 😬
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'Today, a foreign "dollar shortage" and domestic inflation would be considered matters for monetary policy...They would not be subjects of presidential speeches...Inappropriate monetary policies in both the US and Europe were... making the problems worse.'
Hmm... really?
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I mean MMT, Chinese currency policies, petrodollars... Trump trying to trash talk the Fed. Have we really evolved significantly past Bretton-Woods? Terms differ, but I think very similar monetary/fiscal policies ARE subjects of presidential speeches.
Replying to
522 million ($5.6B today) interim aid bill passes. Now fight over real bill amount and who will run it. Republican Congress does not want the State Dept. running it, so it's going to be split between State and a special Council.
European conference wanted 29.2B over 4 years...
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...State talked them down to 19.3. Truman asks Congress for 17. Vandeberg wants to tranche it across the 4 years, which State hates since it means billion dollar appropriation bills every year. Finally, down to $6.8 for 15 months, and then down to 5.1B for 12 months.
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In today's money we're talking about $311B being negotiated down to $53B, though I don't like inflation adjusted comparisons across very different economic regimes.
But just as a comparison, the Family First coronavirus bill had a price tag of $192B.
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Interesting sidebar on European public perceptions at the time. About 25% of Britain and France viewed the Marshall Plan as humanitarian (rest some mix of self-interest/communism containment... book doesn't have details on the poll). Italy the rate was ~33% and for the Dutch, 10%
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Soviets alarmed at enthusiasm for Marshall Plan. Agitprop ramps up. DC worried about Soviet misinformation campaigns. Proposals arise for funding for VOA broadcasts, translations of American newspapers and ad space in European media. Bill passed in January for info war ops.
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Communist walkover coup in Czechoslovakia, via takeover of police and threats of direct action. Jan Masaryk gets pushed to his death. Is any European history possible without somebody getting thrown out of a window in Prague? US regrets Patton stopping short of Prague in 1945.
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Brits produce a secret Cominform doccalled "Protocol M" planning worker strikes in West Germany to undermine Marshall Plan. Marshall uses it in Congress as proof of threat. Soviets denounce it as a forgery. After the bill passes, Brits admit they faked it.
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Well, finally at the passage of the bill chapter, after a detour through Czechoslovakia toppling. RIP unspellable country that lasted 1918-93. At least from a spelling perspective, Czech republic and Slovakia is an improvement.
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Bill passes Senate finally in March. Now growing tension as Soviet posture grows more aggressive. Opinion forming that the Marshall Plan by itself would be futile without military build-up. France cajoled into joining bizonia, so now stage set for West Germany to form.
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Stalin starts spiral that will turn into the Berlin siege, using various excuses of terror threats etc. Fatefully they leave air travel due to an air collision incident between a Russian fighter and a British civilian aircraft over Berlin, and perhaps not wanting more such.
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House passes bill on March 31, incl. extra 900m for military aid to Greece and Turkey, and aid to China.
April 2, 1948, Economic Cooperation Act/Foreign Assistance Act passes both houses. April 3, Truman signs into law.
Part of rush was commie threat in April 18 Italy elections
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Italian communists get booed in election, support for US is high. Communists+socialists drop from 40% to 31% of seats. Pro-US coalition gets absolute majority. West gets Italy.
Wonder how world would be if Patton had detoured to Prague, but bill had been delayed, losing Italy.
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Interesting. The US shared the plates for “occupation marks” with Soviets who promptly printed 8x as many as the US did, creating mini-inflation crisis. Luckily they were distinguishable by a dash in the serial number so the West could monetarily separate the two layer.
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The siege of Berlin was as much about the Soviets trying to gain control of monetary system by killing free commerce as about anything else. They printed as much money as the Nazis did, but did not allow convertibility to roubles for their soldiers.
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Economic integration was never There was underground arbitrage: US soldiers would sell things like $4 watches to Rysdysn soldiers for 10,000 marks, then redeem at official rate of 10:1 and clear a$996 profit. The mess cost US 6.75B in today’s money. Or 675m then? Much Catch-22
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West forks off the Deutschmark which Soviets ban in Berlin. Siege on by May 18. I had no idea this currency fork was such a big part of the story.
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The Berlin Magistrat votes to restrict Soviet marks to East Berlin. Soviets bring in communist mobs to beat up those who voted for the West. Both sides introduce their own notes. Train turned back at border. This feels like a real version of the CHAZ/CHOP Seattle nonsense.
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Aside: this kind of shit could easily happen in the US now. It would just be more sophisticated and involve muni bonds or something if feds and states/cities have breakdown.
Currency shenanigans are a big marker of systemic breakdown. See also Indian demonetization.
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Russian commander Sokolovsky begins siege proper, moving divisions into position, cutting off electricity, putting up barrage balloons. On the American side, Lucius Clay begins the famous airlift. 480 flights a day landing by June, one every 3 minutes.
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Everyone ready for bedtime story? Alright so Clay Rabbit and Sokolovsky Rabbit are fighting over Berlin and have banned each other’s currency.
Deutschmarks are trading 1:4 against East marks. It’s a mess even without Softbank around to play games.
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A lot of this story revolves around US-UK physical control of Ruhr. Everybody wanted a piece of that to feature in their story. France wanted it internationalized to use it to reindustrialize. Soviets wanted Germany intact so they’d have a claim on it. Reparations golden goose.
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The occupation of the Ruhr by France and Belgium after WW1 for reparations defaults was part of what led to WW2. No matter how seemingly justified reparations are dumb. Eye for an eye logic. In WW2, the western allies fought a late battle to capture it.
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Airlift continues as western parties fail to craft alt strategy.
Soviets continue to insist on Potsdam framework, quadripartite decision on Berlin and rejection of currency schism. City needs 1400 tons of food, 2000 tons of coal a day. West also blockades industrial exports.
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A general feature of hostile geopolitics and international relations is rejecting all agreements except the most recent one that favors you. Since all treaties are made with imperfect info, if trust to perfect it breaks down you revert to last imperfect checkpoint.
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Potsdam was obviously a mess of an agreement made in fog of war conditions. But it suited Soviets to entrench there. For US new equilibrium that allowed Marshall reconstruction over Morganthau pastoralization was better and control of Ruhr allowed them to unilaterally go there.
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The treaties of international relations are like a series of really bad patches to a non-existent OS. They reflect the power balance and imperfect information of the last time the parties were temporarily not in conflict. Very Hobbesian.
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Clay is hawkish. Soviets can’t afford to lose Berlin because Tito’s Yugoslavia has just defected from eastern bloc. West positions B-29s in UK as a nuclear bluff but don’t know Stalin knows it’s a bluff because they are not nuclear capable and his spy MacLean has told him.
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Sidebar: I wanted to read this book since I thought it would be salient to post-Covid reconstruction. It is and isn’t. Marshall Plan was less reconstruction, more a retcon of WW2 endgame into Cold War opening and a NATO bootstrap.
But maybe Covid too is an inter-war thing too.
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If so, what was the World War leading up to Covid and what is the Cold War we’re segueing into?
“Europe reconstruction” = “climate”
The rest of the mapping is murky af.
Anyway back to the story.
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Failed attempt to resolve impasse as western ambassadors meet Stalin. Both sides misread other. West Germany is starting to recovery and heading towards forming a government in Bonn. Stalin is desperate to stop it. West is desperate because ground situation in Berlin is explosive
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