By David Stockman, Antiwar.com, 1/27/25

This is the third part of a four-part article.   Read part one here. Read part two here.

The evidence from the Soviet archives shows that Stalin’s policy during the 1947 pivot to Cold War was largely defensive and reactive. But even that departure from the cooperative modus operandi of the wartime alliance arose from what might well be described as an unforced error in Washington.

We are referring to the latter’s badly misplaced fears that deteriorating economic conditions in Western Europe could lead to communists coming to power in France, Italy and elsewhere. The truth of the matter, however, is that even the worst case – a communist France (or Italy or Belgium) – was not a serious military threat to America’s homeland security.

As we pointed out in Part 2, the post-war Soviet economy was a shambles. Its military had been bled and exhausted by its death struggle with the Wehrmacht and its Navy, which embodied but a tiny fraction of the US Navy’s fire-power, had no ability whatsoever to successfully transport an invasionary force across the Atlantic. Even had it allied with a “communist” France, for example, the military threat to the American homeland just wasn’t there.

To be sure, communist governments in Western Europe would have been a misfortune for electorates who might have stupidly put them in power. But that would have been their domestic governance problem, not a mortal threat to liberty and security on America’s side of the Atlantic moat.

Nevertheless, Washington’s gratuitous antidote for what was essentially an internal political problem in western Europe was a sweeping course of economic and military interventions in European affairs. These initiatives—aid to Greece and Turkey, the Marshall Plan and then NATO—were clinically described as “containment”  measures by their authors, who averred that they were designed only to keep the Soviet Union in its lane, and were not a prelude to intervention in eastern Europe or to an attack on Moscow itself.

But if you examine a thousand random documents from the archives of the Soviet foreign ministry, top communist party echelons and correspondence to and from Stalin himself it is readily apparent that these initiatives were viewed in Moscow as anything but a polite message to stay in lane. To the contrary, they were seen on the Soviet side as a definitely unfriendly scheme of encirclement and an incipient assault on the Soviet sphere of influence in eastern Europe, or the cordon sanitaire, that Stalin believed he had won at Yalta.

To be sure, writing off this string of what came to be called “captive nations” from Stettin (Poland) on the Baltic to Trieste on the Adriatic amounted to an embrace of realpolitik that would have made moralists and anti-communist ideologues uneasy in the extreme. But as it happened, abandonment of Eastern Europe per the Yalta zones of influence scheme was exactly what became Washington’s de facto policy until the very end of the Cold War in 1991, anyway.

That is to say, the uprisings against the Soviet hegemon in Hungary in 1956, Czechoslovakia in 1968 and Poland in 1981 generated no response from the West beyond empty speeches and hortatory resolutions from western parliaments. The whole policy of “containment”, therefore, was actually just a large-scale and sustained effort by Washington to steer European politics away from the communist Left. Likewise, NATO was essentially an instrument of political control on the European side of the Atlantic, not a military shield that added any incremental security for the citizens domiciled on the North American side of the pond.

So the question recurs as to exactly why was America’s fully warranted post-war demobilization reversed. Why did Washington plunge instead into deeply entangling alliances in western Europe and unnecessary confrontation and overt conflict with Soviet Russia for no good reason of homeland military security?

Part of the answer is embedded in the prevalent Keynesian theorem at the time which held that post-war demobilization would result in a collapse of so-called “aggregate demand” and a resulting spiral into depression. So unless countered with aggressive counter-cyclical fiscal stabilization measures, it would be the 1930s all over again.

However, most of Europe was fiscally incapacitated owing to the impacts of the war. The economic aid proffered by Washington through the Marshall plan, therefore, amounted to a substitute form of fiscal stabilization and safeguard against a relapse into 1930s-style depression.

Needless to say, the hive mind on the Potomac had it all wrong, and the evidence was right in its own backyard. During the very first year of demobilization (1946), in fact, the US private sector economy came bounding out of the starting gates after being freed from wartime controls. Real private GDP grew by nearly 27% from 1945 and never looked back.

What in 1945 had been a private sector GDP of $1.55 trillion in today’s dollars had jumped to nearly $2.0 trillion by 1947 and to more than $2.3 trillion by 1950. Thus, even as the US was making the turn from a war economy to the booming prosperity of the 1950s, the private GDP growth rate clocked in at 7.6% per annum over the five-year period. So the American economy never came close to tumbling into the Keynesian abyss.

To be sure, the overall GDP accounts said otherwise because they simply weren’t designed for a full-on war economy. That is to say, by the reckoning of the Keynesian-designed NIPA accounts government sector GDP in 1945 had clocked in at $2.3 trillion in today’s dollars and accounted for 75% of total GDP. Thereafter, of course, the government sector GDP numbers tumbled rapidly downhill as demobilization proceeded apace, dropping by nearly 70% to $750 billion by 1948 and about 26% of GDP.

Of course, the bloated 1945 government sector GDP figures were mostly for items which got accounted in the NIPA tables as “investment” in ships, plans, tanks, artillery and machine guns – none of which had a market price or much peacetime consumer utility. Accordingly, the overall GDP numbers were a case of wholly incompatible cats and dogs, which did not even fully normalize until after 1950.

Still, when you peeled back the Keynesian accounting chimera the American economy in the late 1940s was actually blooming with good health. And there was no reason to believe that the European economies would not have similarly turned the corner to civilian prosperity in due course.

Indeed, that the prevailing Keynesian theorem was just plain wrong was well illustrated by the contemporaneous economic rebound in the western zone of Germany. The latter’s economy took off well before the Marshall Plan aid made any substantial impact owing to Ludwig Erhard’s famous turn to currency reform and free market policies.

In short, Washington’s “containment” policies were unnecessary as a matter of America’s homeland security – the only valid basis for the foreign policy of peaceful Republic. Yet based on fuzzy thinking about economics and the taste for international power politics that had been acquired by Washington’s ruling class and military contractors during WWII the US stumbled into the very entangling alliances that Washington and Jefferson had forsworn. These European foundations, in turn, surely and inexorably formed the gateway to Empire and the fiscally crushing Warfare State that now plagues the nation.

The Soviet archives also make clear that the Soviet Union never had a plan to militarily conquer western Europe. In effect, the absolute absence of such offensive military plans amounts to the Cold War Dog which didn’t bark.

To the contrary, the Soviet leadership viewed themselves as relatively vulnerable and were well aware that their country was much weaker in industrial and military capability than the United States. Accordingly, their prime concern was consolidating the territory and security gains in Eastern Europe which the USSR had won in with blood and treasure in the war against Hitler.

In fact, during the early post-war period Stalin himself had constantly changed his mind even about the politics of western Europe, tacking inconsistently to and fro about the role communist parties should play in their respective countries. Even then, he had still pursued a variant of detente with the Western Powers, hoping to reach a negotiated settlement on most areas of difference, especially on the question of Germany’s future.

Indeed, for several weeks after Secretary Marshall’s June 5, 1947 speech at Harvard, the archives show that Soviet leaders hoped it might prove to be a source of capital for the reconstruction of the war-damaged USSR. As the details of the American plan unfolded, however, the Soviet leadership slowly came to view it as an attempt to use economic aid not only to consolidate a Western European bloc, but also to undermine recently-won, and still somewhat tenuous, Soviet gains in Eastern Europe.

They feared that the U.S. economic aid program might attempt to target Stalin’s new chain of Soviet-oriented buffer states for reintegration into the capitalist economic system of the West. Thus the Marshall Plan, conceived by U.S. policy-makers primarily as a defensive measure to stave off economic collapse in Western Europe, proved indistinguishable to the Kremlin leadership from an offensive attempt to subvert Soviet security interests.

At length, therefore, Stalin ordered Poland and Czechoslovakia to withdraw from planning meetings in late July that involved discussions with the west about joining the Marshall Plan—discussions he had initially blessed. Thereafter, all Soviet bloc participation in the Marshall Plan ceased and Stalin’s calculus shifted sharply from accommodation and towards a strategy of confrontational unilateral action to secure Soviet interests.

Yet even then, the archival documentation shows that in making this shift, the Soviet leadership was moved primarily by fear of its own vulnerability to American economic power, not by a plan of world conquest which became the ultimate justification for the post-war American Empire.

Nor were the Kremlin’s fears entirely an exercise in Stalin-style paranoia. As Scott D. Parrish, a leading scholar of the Soviet archives, concluded,

The Marshall Plan does appear to have been largely a defensive move on the part of the United States, as the orthodox scholars would have us believe. But the story hardly ends there. The plan had its “offensive” side as well, in that its authors did indeed hope to lure some of the Eastern European states out of the Soviet orbit and integrate them into the Western European economy.

In this sense, the revisionists were correct to focus on the economic motivations behind behind the plan, which was more than just a geostrategic move to counter Soviet expansionism. As for the Soviet response, as the new documentation suggests, it was indeed largely defensive and reactive, even if it often relied upon crude offensive tactics. What the new documentation helps us see more clearly, then, is that the real difficulty and source of conflict in 1947 was neither Soviet nor American “aggression.” Rather, it lay in the unstable international economic and political conditions in key European countries which led both sides to believe that the current status quo was unstable, and that assertive action was required to defend that status quo.

It was in this environment that the Western powers felt compelled to design the details of the Marshall Plan in such a way that it would stabilize Western Europe, but only at the cost of provoking a confrontation with the USSR. And it was this same environment that compelled Stalin to respond to the plan with a series of tactically offensive maneuvers which fanned the flames of confrontation even higher. This decisive moment in the emergence of the Cold War was thus more a story of tragedy than evil. Neither the West nor the Soviet Union deliberately strove to provoke a confrontation with the other. Instead, the fluid political and economic conditions in postwar Europe compelled each side to design policies which were largely defensive, but had the unfortunate consequence of provoking conflict with the other.

The Soviet Union’s acquisition of the A-bomb one year later in 1949 did not change the equation or gainsay the case that the entanglements of the Marshall Plan and NATO were a mistake. Crucially, it did not create a requirement for US air bases in Europe – just as the Soviets were never to have such bases in the Western Hemisphere, as ultimately confirmed by the Cuban Missile crisis of 1962.

To the contrary, once both sides had the A-bomb the age of nuclear deterrence or MAD (mutual assured destruction) commenced. Notwithstanding a fringe of Dr. Strangelove types like Herman Khan, nuclear war was soon deemed to be unwinnable and the focus shifted to the ability to reliably deliver a devastating second strike in response to a potential nuclear provocation.

This “assured” destruction was itself the defense against nuclear attack. But to be an effective deterrent the opposing side had to believe that its opponent’s ability to deliver was operationally plausible and very highly certain.

In this respect during the strategic bomber age of the 1950s the US had this deterrence capacity early on – with long-range strategic bombers capable of reaching the Soviet Union and returning with mid-air refueling. These strategic bombers included the B-50 Superfortress and the B-36 Peacemaker, both of which had impressive range capabilities, with the B-36 having a range of up to 10,000 miles without refueling.

However, it was the introduction of the Boeing B-52 Stratofortress in 1955 that removed any doubt. The B-52 could carry a heavy bomb load and had a range of approximately 8,800 miles without aerial refueling.

By contrast, the Soviets were late to the strategic bomber game, even after they detonated a serviceable nuke in August 1949. At the time and for several years to follow the Soviets relied upon the Tupolev Tu-4 to deliver their nukes, which was a reverse-engineered copy of the U.S. B-29 Superfortress. However, these bombers faced significant challenges, including limited range and payload capacity, which made it difficult to deliver a meaningful number of A-bombs to the U.S. without risking detection and interception.

When the Intercontinental Ballistic Missile Age (ICBM) materialized in the second half of the 1950s, the Soviets were the first to demonstrate a successful ICBM, the R-7 Semyorka. Yet not withstanding the vaunted “missile gap” charge by JFK during the 1960 campaign, the Soviet Union had only deployed 4 of these ICBMs by 196o.

The United States conducted its own first ICBM tests at Vandenberg Air Force Base in California in October 1959. By the end of 1960, the United States had deployed approximately 20 Atlas ICBMs, which figure grew to about 129 ICBMs by the peak of the liquid fueled rocket era in 1962.

As the decade unfolded, both sides developed far larger numbers of more powerful, reliable and  securely-protected, solid fueled ICBMs, but neither the logic nor logistics of nuclear deterrence ever changed. To wit, the core national security policy of both sides remained based on the certainty of a devastating second strike retaliation delivered by ICBMs securely based in hardened underground silos in their home territories.

As technology evolved the same logic was extended to submarine based missiles, which were not only hidden even more securely in the deep ocean bottoms, but also required no allied partners to operate.

In short, by the time the Cold War reached it peak in the mid-1960s, two thing had been established. First, strategic nuclear deterrence was the heart of national security for both sides and was operated unilaterally from the home country of each.

Secondly, there was no risk of conventional military attacks on the US on the far side of the great ocean moats. So NATO was not any kind of useful military defense asset for the US.

As we will elaborate further in Part 4, NATO was actually about international politics. As such, it had actually and materially added to the cost of US military security. That’s because the nearly 300,000 US servicemen remaining in Europe and the scores of bases and facilities which supported them were stationed there for the purpose of defending European nations from a largely non-existent Soviet threat – but one which in any case should have been addressed by their own military capabilities from their own fiscal resources.

Ironically, in fact, Washington’s plunge into “entangling alliances” has had the effect of sharply lessening Europe’s Warfare State costs by effectively shifting them to American taxpayers per Donald Trump’s patented complaint.

But America didn’t get any extra homeland security in the bargain. What it did get was the privilege of indirectly footing the bill for Europe’s generous Welfare States and enslavement to the myth that global alliances, allies, bases, interventions and regime change adventures have kept the world stable and America safe.

But none of that is true. Not by a long shot.

David Stockman was a two-term Congressman from Michigan. He was also the Director of the Office of Management and Budget under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street. He’s the author of three books, The Triumph of Politics: Why the Reagan Revolution Failed, The Great Deformation: The Corruption of Capitalism in America,TRUMPED! A Nation on the Brink of Ruin… And How to Bring It Back, and the recently released Great Money Bubble: Protect Yourself From The Coming Inflation Storm. He also is founder of David Stockman’s Contra Corner and David Stockman’s Bubble Finance Trader.