Standing Tall on the Backs of Others

by Holly Sklar

excerpted from the book

Reagan, Trilateralism and the Neoliberals:
Containment and intervention in the 1980s

South End Press, 1980



Pax Americana to Realpolitik

U.S. policy planners carried out their most successful effort to "redefine our world" with the construction of a Pax Americana amid the World War II ruins of German, British and Japanese imperialism. The Council on Foreign Relation's War and Peace Studies provided the basic blueprint for political, military and economic hegemony. The postwar international monetary system, known as the Bretton Woods System, revolved around the U.S. dollar and the "Free World" flourished in the strong embrace of Washington's global military supremacy.

Business approved. As the president of Business International put it, "this was one of the periods of freedom: freedom to invest, freedom to trade, freedom to have economic intercourse. Stability and freedom."'

Within the United States, the postwar order was legitimated by the ideology of Cold War liberalism and enforced with wholesale McCarthyite repression. Cold War liberalism promised guns and butter: a strong national security state to contain the "red menace" and a strong welfare state to ward off economic depression, co-opt organized labor and keep people dreaming the American Dream.

By the late sixties, however, Cold War liberalism was in crisis at home and abroad. In March 1968 the unofficial group of political, military and business leaders advising President Johnson-the "Wise Men"-acknowledged the crisis in Cold War liberalism with their realization, following the Tet Offensive, that there was no light at the end of the tunnel in Vietnam.. Faced with a request for over 200,000 additional troops, most of the Wise Men told Johnson to de-escalate and press for negotiations: with public opposition rising, the war could not be won at a politically acceptable cost.

( In the words of Roger Morris, a former aide to Dean Acheson, McGeorge Bundy and Henry Kissinger, the Wise Men were "the most senior members of the foreign policy establishment-the 100 or so officials and ex-officials, patrons and proteges, who had dominated American foreign policy for the last quarter-century. The Wise Men included McGeorge Bundy, national security adviser to Presidents Kennedy and Johnson; George Ball, former undersecretary of state; Cyrus Vance, former deputy secretary of defense and later secretary of state; John J. McCloy, former assistant secretary of war [the more honest precursor to "defense"]; Dean Acheson, former secretary of state; Henry Cabot Lodge, former ambassador to the United Nations and to South Vietnam; General Maxwell Taylor, former chairman of the Joint Chiefs. )

The Problems of Empire

Historical parallels can be overdrawn. But in historical terms, the U.S. emerged from World War II an imperial power and has had to live with the problems of empire ever since. For great powers "to survive-and perhaps even to flourish," in the words of former Secretary of State Dean Acheson, their leaders must understand the connections between the military, political, and economic aspects of power...

1956- 1965: When empires cannot produce a commodity vital to their survival within their borders, they become vulnerable to decline unless they secure their source of supply by effective military or political means.

For the Roman Empire it was grain from the then-fertile fields of Egypt and North Africa. For the U.S., beginning with the mid-50s, it has been the relatively cheap oil from the Middle East...

Cuba was to show another of the recurring problems of maintaining the American "empire"-an inability to combine and channel the process of radical economic and social change in the Third World...

1965- 1970: Having taken on too large a share of the costs of collective [Western] security, the U.S. discovered in Vietnam another of the ancient problems of empire: the high coat in resources of defending its perimeters.

With the Gulf of Tonkin resolution in 1965, the Senate almost blindly followed President Lyndon B. Johnson in committing an unsuspecting U.S. public to a land war in Asia. The costs of this war for a society that was beginning to commit more and more resources to meeting the ambitious social goals began to produce the economic strains-inflation and a weakened dollar-that have haunted the U.S. for nearly 15 years.

1971-1979: The failure to protect oil supplies that began with Suez, combined with the economic and political strains caused by Vietnam produced a long series of reversals for the U.S. in the 1970s...The decade began with the collapse of the Bretton Woods monetary agreement...[in 1971]. That year also produced the first U.S. trade deficit of the 20th century which fed protectionist sentiments in the U.S., including a domestic political assault on U.S. multinational corporations...The most serious blow of the decade, though, was the loss of control over oil supplies represented by OPEC s successful power grab in 1973...

Richard Nixon and Henry Kissinger took over from Lyndon Johnson and produced another redefinition of U.S. policy. They seized the long-neglected opportunity to exploit the Chinese-Soviet split, strategically and economically, and re-opened the door to the People's Republic of China. Detente replaced the Cold War as the guiding strategy for U.S.-Soviet relations. Foreign policy was rooted in realpolitik, a less ideological, more pragmatic calculus of strategic, economic and political interests. Under the Nixon Doctrine, the U.S. attempted to delegate some of its responsibility as "global policeman" to regional deputies: Vietnamization under Thieu, Iran as gendarme of the Persian Gulf under the Shah.

It was economic policy, not foreign policy, that was Nixon's undoing among the Establishment. Inter-capitalist rivalry had heightened in the sixties as the West European and Japanese economies recovered while the U.S. economy weakened under the weight of guns and butter. In 1971 the U.S. ran a then-unaccustomed trade deficit, paying more for imports than it earned from exports. Monetary stability was threatened by a by-product of worldwide military and economic endeavors-a growing buildup of dollars outside the U.S.

Rather than negotiate necessary reforms in the international economic system, Nixon attempted to reassert U.S. primacy with a series of protectionist measures remembered as the "Nixon shocks" (e.g. import restrictions on Japanese textiles). International bankers and corporate executives were outraged when Nixon suspended the convertability of dollars into gold, breaking the Bretton Woods agreements.

As the seventies unfolded, the Pax Americana was challenged further by national liberation struggles in the colonies and neocolonies, OPEC oil "commodity power," Third World calls for a New International Economic Order and a deepening "crisis of democracy" at home. It was time for a third redefinition of world order under the aegis of bilateralism.



In the wake of the Nixon shocks, a group of multinational corporate executives, bankers, academics and politicians from North America (the U.S. and Canada), Western Europe and Japan founded the Trilateral Commission. David Rockefeller became the North American chairman and Zbigniew Brzezinski the executive director. The key to bilateralism would be the "collective management" of global "interdependence" by the trilateral powers. Trilateralism advanced under the Ford-Kissinger Administration with the first Western economic summit.

With the election of Commission member Jimmy Carter in 1976, trilateralism had an unprecedented chance to move from theory to practice. As former National Security Adviser Zbigniew Brzezinski notes in his autobiography, "all the key foreign policy decision makers of the Carter Administration had previously served in the Trilateral Commission." These included, among others, Vice President Walter Mondale, Secretary of State Cyrus Vance, Defense Secretary Harold Brown, Treasury Secretary W. Michael Blumenthal, Arms Control and Disarmament Agency Director Paul Warnke and United Nations Ambassador Andrew Young.


Crisis of Democracy

Unfortunately for Carter, the president could no longer "govern the country with the cooperation of a relatively small number of Wall Street lawyers and bankers," as a Trilateral Commission report described an earlier era. In the U.S. section of that report, The Crisis of Democracy Samuel Huntington (coordinator of national security on the National Security Council, 1977-78, and a "regular consultant" to the CIA during the 1960s) laments the erosion of traditional forms of public and private authority and the widespread questioning of "the legitimacy of hierarchy, coercion, discipline, secrecy, and deception-all of which are in some measure, inescapable attributes of the process of government. " The crisis of democracy was that too many people participated too much, or attempted to do so -- Congress, the media, "value-oriented intellectuals" and, most importantly, the public:

" Previously passive or unorganized groups in the population, blacks, Indians, Chicanos, white ethnic groups, students, and women now embarked on concerted efforts to establish their claims to opportunities, positions, rewards, and privileges which they had not considered themselves entitled to before. "

The "minorities" and "special interests," representing most of the population, were challenging the Establishment which ruled in the holy name of the National Interest. The Crisis of Democracy was unusually blunt about the distinction between egalitarian, participatory democracy and the anemic democracy beloved by the Establishment: "The effective operation of a democratic political system usually requires some measure of apathy and noninvolvement on the part of some [i.e. most] individuals and groups." The greatest threat to democracy is democracy itself:

"The vulnerability of democratic government in the United States thus comes not primarily from external threats, though such threats are real, nor from internal subversion from the left or the right, although both possibilities could exist, but rather from the internal dynamics of democracy itself in a highly educated, mobilized, and participant society."

If peoples' expectations of government were getting out of hand and democracy was running amuck, it was time for apathy and the "politics of less" enforced through recession, austerity and a blame-the-victim campaign against the "special interests." As usual, Corporate America's counterattack would be cloaked in the mantle of the National Interest.

Jimmy Carter was the first neoliberal president. He made fiscal conservatism the bipartisan alternative to the Welfare State. Business Week asserted in 1979: "If the decline in U.S. power is to be arrested, the trend toward spending a smaller share of the federal budget on defense must be reversed, and economic policy must change in a way that encourages investment at the expense of consumption." Trilateralist Federal Reserve Chairman Paul Volcker put it even more bluntly: "The standard [of living] of the average American has to decline."


Reagan, Trilateralism and the Neoliberals