The War State: The Cold War Origins of the Military-Industrial Complex and the Power Elite, 1945–1963
by Michael Swanson (CreateSpace 2013), 430 pages.
In the October 1958 issue of The New Yorker, near the high-water mark of McCarthyism, the novelist and literary critic Mary McCarthy famously wrote, “Bureaucracy, the rule of no one, has become the modern form of despotism.” Michael Swanson’s book, The War State, provides an account of the almost two-decade period that followed the end of World War II, a period that the author argues saw the emergence of a new political and economic system in the United States. This new system of “a permanent big-government war state,” promoted by a small circle of elites, entailed “new bureaucracies created as a result of the Cold War” and “a permanent armaments industry of vast proportions.” At the nucleus of the war state from the start was a kind of internationalist and corporatist northeasterner typified by the 1940 Republican presidential candidate, New York lawyer Wendell Willkie, whose thesis in his book, One World, Swanson writes, “advocated for world government.”
Throughout The War State, Swanson investigates the postwar period’s militaristic variant of internationalism and the economic significances of empire, looking for the “deep power that can go beyond the power of the president and Congress.” Swanson finds an important clue in one famous farewell address. Significant changes in the character of the domestic economy necessarily attended the postwar transformation of American foreign policy. In his parting speech of January 1961, Dwight Eisenhower addressed the “sweeping changes in our industrial-military posture,” famously warning “against the acquisition of unwarranted influence … by the military-industrial complex.” Early in his book, Swanson observes the peculiarity of a well-known, moderate political figure, certainly no ideologue or libertarian, offering words of such deep foreboding. And the balance of The War State confirms the feelings of fear and worry that Swanson’s opening induces, showing a United States refashioned as a full-fledged empire, its influence covering the world.
The War State demonstrates that, in policing the world, the United States is not merely a scolding invigilator, its imperial arm reaching out only to correct wayward states veering off the tracks of what is acceptable under the global system of American hegemony. Though that would be bad enough, U.S. interventions in geopolitics are far more direful than all that, actively imposing a specific economic and political model that finds an American power elite at its center as its chief beneficiaries. Swanson’s book offers a piercing narrative that, while running against the cheery historical fiction that passes for incontrovertible fact in this country, will not easily be drowned out. Swanson shows us a world of powerful bureaucrats, ensconced mostly in the national-security and intelligence communities, wielding tremendous power, their new system supplanting what Swanson sees as the United States’s traditional one in the years immediately following the end of the Second World War.
As the principal pretext for this sweeping restructuring of the federal government, the Cold War — which, of course, was not really “cold” at all — sits at the center of this alarming plot. World War II had placed the United States on a new footing, a precarious posture in which private enterprise was forcibly commandeered in order to supply American fighting men with the necessary supplies. Convinced that the United States ought to continue on such footing quite indefinitely, a small cabal of blue-blooded elites, Ivy League-educated and hailing from the Northeast, embarked on an effort to make America an imperial power, a garrison state, and the successor to the European powers whose global importance evanesced after the conclusion of fighting.
Under the new system, the most important decisions about foreign policy would be made largely outside of congressional oversight and the political process generally, in interconnecting executive branch nerve centers wherein the intelligence community in particular enjoys tremendous power and influence. Swanson describes the nascent American intelligence apparatus as constituted not of the highly trained, adroit international spies we may imagine, but of clumsy, largely incompetent frat boys with no real expertise or background in global affairs. Bound to powerful commercial interests such as the United Fruit Company, the fledgling CIA used its new power to prepare the ground for a new, distinctly American brand of corporate imperialism, deposing popularly elected governments in favor of dictators, stretching the meddlesome tendrils of U.S. influence into far-flung corners of the globe. As Swanson writes, “The Central Intelligence Agency became the mechanism for the United States to hold imperial influence over other nations.”
Paving the way
But Swanson perhaps under-estimates the extent to which the American empire’s wheels were already very much set in motion long years before the end of World War II or the onset of the Cold War. Even if the postwar intelligence framework and the permanent war economy as we now know them were decades down the road, certainly by the turn of the century the U.S. quest for the prestige of colonial dominion was already well under way. Moreover, the First World War arguably deserves the place of paramount importance in considerations of the materialization and evolution of the twentieth-century war state. While World War II undoubtedly saw the recrudescence of centralized, domineering control of the economy, it was hardly a new phenomenon.
Indeed, Robert Higgs writes, “In view of the more than 5,000 mobilization agencies of various sorts — boards, committees, corporations, administrations — contemporaries who described the 1918 government as ‘war socialism’ were well justified.” In his book In Restraint of Trade, law professor Butler Shaffer similarly describes “the symbiotic relationship existing between political and economic institutions,” a relationship that, while antedating and informing the founding of the United States, became more firmly established than ever with the wartime mobilizations of World War I. Shaffer describes the process of business happily “being brought under the discipline of rational, politically supervised economic planning.” Similarly, in his Progressive Era history, The Triumph of Conservatism, Gabriel Kolko sets forth the claim that business leaders, swallowing whole “the notion that corporate consolidation leads to industrial efficiency,” actively embraced robust government intervention as a means to expurgate the perceived disarray and inefficiency of laissez faire.
Like so many today, those businessmen of course ignored the implications of the fact that there had never actually been genuine laissez faire in the years before the Progressive Era’s reconstitution of corporate capitalism. Thus did the business community accept the program of wartime controls and federal government plans with alacrity. Bankers in particular had always endorsed the essential features of the military-industrial complex, well before World War II or the Cold War. Throughout American history, leading financial and banking interests have always been quite literally invested in the war state; they have nurtured it and viewed it speculatively, as an opportunity for rent-seeking and corporate profit. Swanson’s book strikes pointedly at a misconception endemic in libertarian circles, that the American business community has some ideological commitment to free markets and instinctive hostility to economic intervention.
Challenging another pervasive myth, Swanson shows that progressives such as Woodrow Wilson and Franklin Roosevelt were never truly enemies of Wall Street, asking his readers to consider “who benefits the most from free-trade internationalism and global currency markets.” What’s more, to his credit, Swanson takes care to ensure that we do not mistake international “free trade” as it has existed in practice for the kind of free trade that libertarians favor. The progressive, central state, rather than reining in big business, has with some consistency served and preserved the monopolistic power of certain favored firms, these being part of a power elite that spans both the public and nominally private sectors.
Swanson’s book demonstrates once again that a thoroughgoing libertarian critique of the political economy of class rulership in America cannot focus only on the formal state, for much of the military-industrial complex exists in the nominally private sector. It is the underlying relationships between coercive, governmental authority and prevailing economic structures and arrangements that we must carefully probe.
Libertarians, by definition, oppose the coercive, authoritarian structures that limit individual liberty, regardless of overformalistic, false dichotomies of “public” and “private.” Only the most willfully oblivious analyses and tortuous abuses of language would allow us to regard American defense and aeronautics firms as examples of true private enterprise at work. In equity jurisprudence, there is a preference for substance over form, a general principle that mere adherence to special legal terminology or documentary structures should not insulate a party from the real, underlying intention of an arrangement or its effects as a practical matter. In deciding which institutions and relationships are to be treated as praiseworthy examples of free enterprise in practice, we libertarians ought to keep this principle in mind. Abandoning facile analyses that rely far too heavily on the public-private distinction, The War State keenly examines the power elite’s “revolving door.” Swanson writes that “at the highest levels of power they [i.e., the power elite] go back and forth between the public and private world.”
The book understands that, as an analytical tool, the frequently employed distinction between the public and private sectors is an unclear and misleading half-truth at best and an outright myth at worst. Authoritarian class rule has always consisted of both political and economic aspects; attempts to neatly separate these aspects are too often superficial and presumptuous, assuming we can distinguish “the economy” from the rest of social and political life. This mistake is, of course, just another instantiation of what Friedrich Hayek’s 1974 Nobel Prize Lecture famously called the “The Pretence of Knowledge.” We must strive to avoid the vain mistake of doing economics without carefully considering the context provided by historical, political, and social phenomena. Consider the system we now call feudalism. It is quite impossible to place the institution of liege homage, to take just one example, in either of the current categories of public sector or private sector. In the contemporary United States, just as in feudal Europe, the concomitants of political power and privilege are everywhere in social life, thoroughly suffusing the aggregate of relationships, decisions, and transactions deceptively called “the economy.” As libertarians, then, we must be vigilant — sensitive to the ways that illegitimate authority has shaped the institutions we take for granted. Michael Swanson’s War State demonstrates this kind of vigilance, unafraid to look deeply at “the processes of power often obscured behind the surface stories of history.” Studying the terrible picture of the bloodstained twentieth century, Swanson has magnified an important detail of that picture, offering new insights on the inner workings of power and the growth of empire at a pivotal moment in American history. The War State closes by emphasizing the importance of knowledge in ending the “seemingly endless and unwinnable wars” of the military-industrial complex. Swanson writes, “We must all do our part,” and he certainly did his part with this book.