Conclusion

The American efforts to promote reconstruction in Siberia between 1917 and 1922 confronted insurmountable obstacles, ranging from widespread social and economic instability to irreconcilable conflicts with the Allies. These factors reinforced each other. Russian instability encouraged the Allies to advance their spheres of influence in Russia, as Wilson had warned in his aide-mémoire of July 17, 1918. The British and French desire to use Siberia as a base of military operations, first through their efforts to restore an eastern front in 1918, and then through their support of Kolchak’s military campaigns against the Bolsheviks in 1919, only bolstered reactionary political elements in the region. Meanwhile, the tight grip Japan’s military forces maintained over the eastern segments of the Trans-Siberian system prevented the huge interior from receiving any substantial assistance. These policies intensified social instability in the region. The Trans-Siberian system could not fulfill the developmental role American policymakers envisioned for it, because the line itself had become a focal point of the international rivalries in Eurasia.

Had it not been for the hardening of Soviet-American relations, American statesmen might have derived important lessons regarding foreign assistance from the United States’s involvement in Siberia during these pivotal years. Wilson’s own position on the question of foreign assistance evolved considerably in the space of a year and a half, from January 1918 through June 1919. In response to the risks involved in Russia after the Bolshevik Revolution, International Harvester Company, the principal American corporation with interests in Russia, limited any further Russian business to existing operations at its branch plant at Lubertzy and to exports financed on a strictly dollar basis. This demonstrated that “Dollar Diplomacy,” the prevailing American view of the legitimate role of the government in promoting American economic expansion abroad, would be completely inadequate for the extraordinary tasks involved in providing economic assistance in Russia. The Taft administration coined the term “Dollar Diplomacy” to describe the more active diplomatic role the U.S. government had begun to take in promoting American economic interests abroad. Yet this intervention, it must be emphasized, entailed strictly diplomatic support, not financial assistance.

As the crisis in Russia deepened in 1918 and as the Brest-Litovsk Treaty raised the stakes involved, Wilson recognized that an assistance program financed under private auspices would be insufficient to the task, but political realities mandated a strictly supervisory role for the government in any program of assistance. In a compromise engineered by State Department proponents of a more active governmental role near the end of September 1918, the administration appropriated the modest sum of $5 million for emergency situations in Siberia. Administration planners clearly considered this initial War Trade Board program to be an exploratory, yet open-ended, operation. By the spring of 1919, Siberian developments had become so crucial for American statesmen that Wilson and his advisers at Paris decided to undertake a large governmentally financed reconstruction program in the region. But Wilson had to expend his political capital in the battle over the treaty and the League of Nations. In the meantime, the Bolsheviks easily triumphed in Siberia.

Wilson’s Siberian policy embodied principles that qualitatively distinguished this era of American foreign relations from the post—World War II period when the United States finally established itself as the dominant world power. By endeavoring to assist the reconstruction of Siberia’s civil society, Wilsonian policy played an historically progressive role, in sharp contrast to the policies of the rival powers who essentially sought to undermine Russian sovereignty in favor of their spheres of influence. Had this incipient experiment in social policy been allowed to proceed, it is interesting to speculate whether it might have helped to foster the evolution of a uniquely Russian form of “self-government,” something between bolshevism and free market capitalism.

One intriguing opportunity for Soviet-American cooperation arose during 1922 when Benjamin Johnson and John Stevens explored the possibility of providing technical assistance for the Chita Railway with the heterodox Siberian Bolsheviks of the Far Eastern republic. These promising beginnings ended abruptly when the parent Moscow regime reabsorbed the republic in November 1922. While American and Soviet cooperation over the railroad question was motivated chiefly by their common desire to wring concessions from Japan, this brief interlude deserves attention, because the American participants considered their initiative with the Far Eastern officials to be the most favorable opportunity they had had to implement some lasting improvements in the operation of the Trans-Siberian system after almost five years of frustrating relations with Russian, Allied, and Chinese authorities.

In this last decade of the twentieth century, U.S. statesmen must again tackle the enormous problems accompanying the process of reconstruction in Russia. In important respects, the challenges confronting reconstruction in Russia today will be even more imposing than they were seventy years ago, because market mechanisms themselves must be reintroduced in place of the existing command economy.

Today, one fact is increasingly becoming clear, American policymakers must find an alternative developmental model to the current short-sighted, and potentially disastrous, International Monetary Fund (IMF) stabilization policies the West is imposing on the former Russian republics. Recently, Martin Walker, former bureau chief for the Guardian, has predicted that the IMF will fail to promote economic development in the Russian republic by prescribing severe restrictions on monetary and credit expansion. These draconian measures will only result in massive layoffs and reductions in social expenditures that will be politically unsustainable. Instead, Walker suggests that a stable market economy can be more effectively developed through a series of practical foreign assistance measures.

First, he urges the West to stop committing the bulk of its financial assistance to the dubious goal of establishing currency convertibility. Western financial aid could be used more effectively in financing interrepublic trade and in developing the transportation infrastructure between the separate republics. Second, he adopts an IMF proposal that recommends that the West redirect its financial assistance toward establishing an interrepublic payments union, similar to the European Payments Union that operated between 1950 and 1958—one of the Marshall Planners’ most successful innovations. A payments union, consisting of the Commonwealth of Independent Republics, would encourage expanded interrepublic trade by allowing countries to automatically apply trade surpluses with one country to the purchase of goods from third countries. IMF funds would underwrite this system, since deficit countries would be required to settle their balances partly in hard currency. In principle, a payments union’s clearing mechanisms would enable the republics to largely offset deficits with credits, allowing these new states to conserve their hard currency reserves.¹

Perhaps most importantly, if the United States is committed to assisting Russia through this difficult transition period, American policymakers must make concessions on fundamental issues that were not resolved between 1917 and 1922 and that have subsequently been submerged under the weight of Stalinism and fifty years of Cold War. Specifically, the United States must reduce its relentless pressure to base economic development almost exclusively on privatization and free-market forces. Back in the mid-1950s, none other than Dean Acheson, the principal architect of post-World War II American foreign policy, warned that free trade and private foreign investment alone could not build a stable social and economic foundation in the former European colonies that had recently achieved independence. Echoing Wilson’s pragmatic approach to state intervention, Acheson cautioned that

theory must yield to the exigencies of our own interest. We have a deep interest in the stability and independence of many young governments brought into existence by the newly won independence of their people. Often memory of the past makes them suspicious and wary of foreign help and, so we think, blind to real dangers before them. Of one thing they are acutely aware, the need for economic improvement, increased production, higher standards of life. Private advice and investment can be of great help. But it cannot bring the minimum assistance which, in our own interest, is required. So theory must yield again to the conception, already mentioned, of our government as the whole people organized to do what has to be done. This was the conception behind the Point Four program and the foreign aid programs. Our government carried on these programs, not because it was theoretically desirable for the government to do so rather than private business or private philanthropy, but because they would not be carried on at all unless government did so—and it was, and it still is, essential that this help be given.²

Acheson’s views from the 1950s are just as relevant to the current challenges American foreign policy faces in Russia. But today, American policymakers assume that the system of multinational corporations, which has appropriated many critical powers of sovereignty from the nation-states, will take the lead in promoting reconstruction in Eastern Europe and the former Soviet republics. And it is increasingly evident that the International Monetary Fund’s prescriptions for quickly creating a stable investment environment in Russia, at the expense of the population’s living standards, will be overwhelmed by the magnitude of the problems confronting stabilization in this huge country. These instruments of the international financial system do not take into account the necessity of promoting a stable social order in the new republics, in which economic development is harmonized with the general welfare and functioning democratic institutions. The West must exhibit more flexibility regarding the question of economic reform in Russia if only to prevent a retreat into Stalinism, a renewal of the Cold War, or the threat of atavistic nationalism.

Walker’s proposals for assisting economic reform in Russia deserve attention in this study not only for their obvious contemporary relevance, but also because they bear a striking resemblance to principal features of the Marshall Plan and Wilson’s assistance program in Siberia. Indeed, these comparisons between distinct periods can help us reach some broader conclusions about American foreign policy in the twentieth century, for perhaps the evolution of American foreign assistance policy from Wilson’s period through the Cold War holds the key to understanding both the accomplishments and tragic consequences of American world leadership in the twentieth century. Although the Marshall Plan is associated with the Cold War era, it exhibits more continuity with Wilson’s stillborn program in Siberia than with the militarization of American foreign assistance that occurred after 1950.³ Unfortunately, almost a half century of Cold War has obscured the basic parallels between Wilson’s reconstruction program in Siberia and the Marshall Plan. In both cases American statesmen initially focused their efforts on achieving two practical goals: relieving human misery—which they recognized to be the cause of social revolution—and facilitating regional economic recovery, as a stepping-stone to full multilateral integration.

The Inter-Allied Railway Committee in 1919 and the Marshall Planners of the late 1940s both recognized that currency convertibility and full multilateral trade would have to be delayed until functioning regional markets had been reestablished. Indeed, Charles Maier summarized the Marshall Plan by concluding that “the ERP [European Recovery Program] worked primarily by alleviating strategic bottlenecks and foreign-exchange constraints, not by vast infusions of capital”—virtually the same analysis can be made of the program the Inter-Allied Railway Committee wanted to implement in 1919.⁴ However, these similarities are not apparent because the realities of American domestic politics forced the Truman administration to justify the Marshall Plan on the grounds that it was needed to counter Soviet aggression. Like Wilson in 1919, the Truman administration could not successfully advocate a large foreign assistance program on its own merits in the face of resurgent isolationism and opposition to any extensive new spending programs. In order to build a domestic political consensus in favor of a large foreign assistance program, the Truman administration had to prepare an ideological climate that greatly exaggerated the dangers of Soviet aggression and subversion.⁵ Despite the Marshall Plan’s impressive short-term accomplishments, Truman administration officials quickly recognized that the United States must assume extensive global commitments to ensure full multilateral integration and, equally important, a favorable climate for American investment in developing areas. This realization marked a crucial turning point in American postwar policy and in the United States’s relationship with the rest of the world. Before World War II, the United States’s struggle to promote the Open Door pitted it against rival imperialist systems, as well as radical social revolutionary movements. Following World War II, when the United States no longer faced a challenge from the rival imperialist camps, it began to exercise prerogatives that placed it on a collision course with the emerging national liberation movements in the third world.

The United States’s conflict with the third world in the postwar period has had its origins in the specific dynamism and expectations of the American capitalist system. As heir to the British Empire, the United States faced the enormous responsibility of rebuilding the world economy. For the American policymaking establishment this task took on particular urgency in the wake of a fifteen-year crisis period that had shaken the world capitalist order to its foundations. A relapse into economic depression would undermine the legitimacy of America’s nonstatist capitalist system. Paradoxically, the United States’s productive power and capital resources, which had been greatly augmented by the war boom, made the American economy more vulnerable than ever to depression. This anxiety for the stability of the American socioeconomic order, not hypothetical dangers of Soviet aggression, motivated the Truman administration to undertake vast international commitments by 1950. Indeed, prior to the North Korean attack, the American policymaking establishment, led by Secretary of State Dean Acheson, had already concluded that the United States must assume strategic responsibilities commensurate to its unprecedented industrial and financial power. To sustain its economic growth the United States had to become sponsor and guardian of the global investment system.

Placing western Europe under the American strategic umbrella succeeded in undercutting communist political influence on the continent and it bolstered confidence in long-term foreign investment. However, in much of the third world the task would be much more difficult in view of the popularity of alternative developmental models. During their long struggle against colonial exploitation, many independence movements had evolved strong social-revolutionary, as well as nationalist, tendencies. Ten years of systemic economic crisis in the capitalist world and the ensuing devastation of an imperialist world war reinforced this dual characteristic of many nationalist movements. Not only had Western colonialism been dealt a fatal blow, but free-market capitalism had also forfeited much of its appeal and legitimacy for nationalists in the developing world. For these reasons, national liberation movements became a potentially serious threat to the expansion of a global investment system based on multilateral principles and capitalist enterprise. A third world that placed restrictions or controls on American foreign investment would seriously inhibit the dynamism of American capitalism, forcing the United States itself to adopt statist planning and redistributive policies that would radically transform American society.

The Chinese Communist victory of 1949, and the subsequent North Korean attack in 1950, appeared to confirm the Truman administration’s worst fears concerning the Soviet Union and the international Communist movement. From this point forward the United States began to engage in “nation-building” efforts around the world; as a corollary to these openended commitments, the United States inevitably placed a growing emphasis on furnishing military assistance to unrepresentative anti-Communist governments, without adequate regard for its effects on individual nations’ social order.

Had the American reconstruction program in Siberia been given a chance to develop after 1917, a dialectical tension would inevitably have arisen between the strong ethical inclinations of Wilsonianism, which viewed the developing Siberian frontier as the nucleus for Russian “self-government,” and the imperatives of the corporate capitalist order. For this reason, perhaps it has been a misfortune for American political culture and for the United States’s foreign relations that an imminent debate over Wilson’s reconstruction program for Siberia never occurred in 1919. Nevertheless, the Wilsonian features of the United States’s Russian policy may embody important lessons for contemporary American policymakers at a time when the Russian question again calls for far-sighted and principled action.