Lessons of the Cold War: Cracks in the Empire

Editor’s note: This is part of a series of articles examining the history, activity, secrets and identity of the 1% in the US and globally. For previous articles, click here

Part I: Lessons of the Cold War: The Corporate War on Labor, at Home and Abroad

Part II

In Part I of this article I looked at how 82% of Americans – America’s working families – after enduring the deprecations of the Great Depression of the 1930s and World War II, were confronted by a strong reactionary political trend. Corporate power went through resurgence after President Roosevelt’s death, and responded to organized labor’s postwar strikes to recover lost earnings by launching a political attack that culminated in the election of a Republican majority in Congress and the passage, over President Truman’s veto, of the Taft-Hartley Act, a move that restricted workers’ rights.

Truman tried to preempt the Republicans’ campaign against the Democratic administration for allegedly being infiltrated by a weak Communist party. He instituted the Loyalty Program, subjecting over a million government employees to interrogations and created subversive organization lists, moves which were in violation of the Constitution. This only emboldened the Republican Right, who launched witch-hunts in unions, Hollywood, schools and the government. When it was over, a purged Congress of Industrial Organizations (CIO) meekly merged with the more conservative American Federal of Labor (AFL) under the leadership of a New York plumbers’ union business manager, George Meany, a friend of Nelson Rockefeller since the building of Rockefeller Center.

A pall of social and political conformity to the 1%’s corporate power, now enhanced by cheap energy from the Middle East’s oil wells and domination of Western trade, settled over newly built suburbs. Workers were redefined; from producers of America’s (and the 1%’s) wealth, they became branded as “consumers” by Madison Avenue’s advertising tricksters, whose corporate clients soon dominated not only entertainment selections but even the news received by Americans, including international news. Meany provided cooperation from AFL-CIO’s international division to assist the CIA in coups against elected governments resisting American corporate dominance (Iran in 1953, Guatemala in 1954, Brazil in 1945 and 1964, Chile in 1973, etc) and to help stabilize regimes willing to be allies. All of this took place under the rubric of the Cold War against the Soviet Union and international communism.

But when the 1%’s “containment” strategy of an expensive arms race and proxy wars in the developing countries finally succeeded in stalling Soviet economic advances and eventually bankrupted the Soviet regime and weakened its armed forces, the USSR’s own dictatorial allied regimes collapsed, leading to the fall of the Soviet Union itself in 1991.

It was at this point that many naïve American politicians and commentators began to ask: now that the Cold War is won and the USSR no longer exists, is it not time to give the American people a “peace dividend” of reduced military expenditures, lower taxes, and perhaps even a national health care system like those enjoyed in almost every other advanced industrial country?

Why the “Peace Dividend” Never Happened

The War Department, renamed the Defense Department after World War II, re-channeled taxpayers’ money into ever-larger military contracts, increasing the Pentagon’s political clout, and arousing popular support for war expenditures and ever more conservative foreign policies. These war contracts also channeled public money into technological research that would otherwise have had to have been corporate-funded. With these contracts came important ancillary technological advances into the non-defense production sector, exemplified by computers and the Internet, innovations that would lead to serious technological unemployment by the year 2000.

The collapse of the Soviet Union in 1991, meanwhile, called into question the rationale for the bloated Pentagon budget. Some naïve politicians happily predicted that a scaled-down war machine would allow a “peace dividend” for the American taxpayer that could rebuild the nation’s infrastructure and allow the U.S. to join most of the rest of the advanced industrial world in providing free university education and universal health care for its citizens.

But it never happened. Why? Because most of the Pentagon’s budget had little to do with the Soviet Union’s existence, and more to do with the 1%‘s need to maintain a large military force before the Soviet Union even existed. We need only remember:

  • The conquest of one third of Mexico, the U.S. Navy’s forcing open the ports of Japan and firing on the Kingdom of Annam (today’s Vietnam) before the Civil War and the genocide of the Native Americans during the U.S. economy’s westward expansion.
  • The building of the Great White Fleet used for the Spanish-American War and the seizure of Puerto Rico and Cuba’s Guantanimo Bay as coal stations for the new Caribbean Naval Squadron.
  • The bloody postwar conquest of the Philippines as the great stepping stone” to the markets of China.
  • The constant military interventions of “Gunboat Diplomacy” in the Caribbean and Central America that followed President Teddy Roosevelt’s “Speak softly, and carry a big stick”
  • Wall Street’s sponsored “Preparedness Movement” for coming to the aid of its indebted British allies in the mass murder called World War I.

Those are just a few examples of the 1%’s use of the U.S. military before the USSR even came into existence.

With the end of World War II came the Cold War and the Pentagon’s constant readiness to wage global war, even to the point that some believed the American economy could not avoid another Depression without war contracts.

While the long Vietnam War dampened much popular enthusiasm for more military adventures, the Pentagon’s budget kept growing, especially under “It’s Morning Again, America!” Hollywood president, Ronald Reagan.

Expansion Redux: More markets needed, and more pretexts for conquering them

When the Soviet Union was gone by 1992, Wall Street advanced into the former Soviet republics and the realms of their client regimes in Eastern Europe and Islamic Central and Southern Asia. Wall Street made loans to these countries’ new agents of American corporations, backing eager American corporate investments in their resources and markets. Wall Street floated more U.S. Treasury bonds to finance military support for these advances through ever increasing Pentagon budgets and arms sales to the new comprador regimes.

In the Islamic world of the Middle East and Southern Asia, local armed resistance struck back. Islamic militants launched attacks against U.S. embassies and the warship U.S.S. Hood, against American and European tourists, and against the tangible symbol of Wall Street’s global dominance, New York’s World Trade Center in 1993 and 2001.

Most Americans, kept ignorant about what American military, intelligence and corporate interests had been doing abroad, were stunned and angered by the attacks and the appalling loss of civilian lives. Whatever chance the decade-delayed peace dividend had was quickly buried under the media’s war frenzy. The Soviet Union was replaced as a tangible object of mass fear by a less targetable “global terrorism.” But Pentagon budgets continued to grow.

Today, the “War on Terrorism” has expanded throughout the Middle East, Asia and North Africa. At home, American citizens’ time-honored Constitutional liberties have been violated as never before by new security restrictions to “protect the homeland.” Sanctioned assassinations, kidnappings (‘renditions”), imprisonment without due process and torture of suspects abroad have been extended under the Patriot Act to American citizens abroad. Hired mercenaries like those of Blackwater Corporation have become commonplace, and have even been deployed in the troubled homeland, as in hurricane-devastated New Orleans.

Parallels to the Tragedy of the Roman Republic

As with all previous empires, the 1%’s overextended empire may be destined to fall on its own sword, with much bloodshed for all unless the American citizenry stops them. As has recently been demonstrated in Congress and the Supreme Court’s granting citizenship to corporations in its Citizens United decision, many of the 1% will increasingly move to the political right. They will take desperate measures to defeat all revolts, whether abroad or in the Republic, including possible opposition from the elected Congress and President.

Nevertheless, the second flaw of corporate America and the unfettered capitalism it championed has also emerged: the war machine required by the new global empire is devastating the Republic’s treasury. The Empire’s crucial post-World War II banking system of rotating American petrodollars from oil producing countries back to American shores to pay for American goods, military hardware and safe investments has survived threats by Saddam Hussein’s and Mohamar Kaddafi’s dalliance with selling Iraq and Libya’s oil for Euros instead of U.S. dollars. Those threats, like the Taliban’s inability to provide security for the projected pipeline from the Caspian Sea through Afghanistan to Pakistan and India, was resolved by their overthrow by the military force of the U.S. and its NATO allies in Europe.

Despite these dubious victories, however, it has become abundantly clear that the military has become too expensive and its human resources, short of a renewed draft, are too stretched. Hence, the Joint Chiefs of Staff’s reluctance to go into another war against Iran and their acceptance of President Obama’s decision to cease the global strategy since WWII of being capable of fighting two major wars at the same time. From now on, the strategy supposes that no major power can yet challenge U.S. might, and the focus is instead on counterinsurgency wars against rebellions in countries where U.S.-allied regimes are threatened or where destabilization is preferred against governments hostile to U.S. strategic interests or corporate investments.

There is another lesson from Rome that would be very dangerous for Americans to choose to ignore: the corruption of the Republic’s economy that contributed to the demise of its proud army. Ancient Rome, too, grew from a Republic into a commercial and military Empire. As overseas plantations based on slave labor increasingly flooded the Italian markets with cheap foodstuffs and artisan wares, Italian farmers and artisans found it increasingly difficult to compete. They began migrating in ever larger numbers to the big capital city, Rome, in search of work and a brighter future. To stifle growing civil unrest by the unemployed, Rome’s elite politicians relied on doled bread and circuses. They were also forced to replace the ever diminishing number of reliable yeoman Italian farmers who had been the strongly motivated patriotic backbone of the Roman Army with professional soldiers more loyal to their military commanders and money than the Republic.

Today, just like in ancient Rome, many, but not all, of the 1%’s major corporate leaders are more loyal to their growing overseas economic empire than to the American economy and its working population. And just as ominous, Washington under the 1% is relying increasingly on professional soldiers, private armies and mercenaries, and foreign armed forces to fight its wars. As the American Republic’s treasury weakens along with its democracy, its governments are becoming corrupted from within by corporate greed.

Today, when we watch the House of Representatives’ sessions on television, notice the symbols engraved on the wall behind the Speaker’s rostrum. These are Roman fasci, the bundle of wood wrapped by a cord around an ax. They are supposed to represent the rule of law, but the fasci were carried by Rome’s marching armies as a symbol of Rome’s power. Rome’s rule of law followed Rome’s armies. They enforced those laws to the commercial and political advantage of Rome’s 1%, and gave the Italian people over 400 years of ruinous wars that bequeathed Europe not glory, but a dark age of cruel warlords and abysmal ignorance.

Shall American citizens, by passively bequeathing their legal powers to the 1%, allow themselves to suffer a similar fate? Such a tragedy through willful blindness would be a terrible loss of America’s promise not only to Americans, but also to the world.


Gerard Colby is the author of Du Pont: Behind The Nylon Curtain (Prentice Hall, 1974), Du Pont Dynasty (Lyle Stuart, 1984), and with Charlotte Dennett of THY WILL BE DONE, The Conquest of the Amazon: Nelson Rockefeller and Evangelism in the Age of Oil (HarperCollins, 2005). He was the lead contributor to Into the Buzzsaw: Leading Journalists Expose the Myth of a Free Press (ed. Kristina Borjesson), winner of the National Press Club’s first Arthur Kruse Award for Press Criticism. He has taught international economics, political science and the history of Latin American political economy at various colleges, has lectured throughout the U.S. and Brazil, and has done investigative journalism for national and local news services for over 30 years. From 2004 to 2009 he served as President of the National Writers Union, Local 1981 of the Technical, Office and Professional Division of the United Auto Workers.