By Matthew Ehret
Some limited moves have been made in the direction of geopolitical cooperation in our troubled age. President Trump has had favorable meetings with the Presidents of Russia and China, followed by a historic visit to North Korea to meet “his friend Kim”. Yet in other respects tensions have never been higher between the US and Eastern powers, as the US-China trade war and Russian interference in American elections leads to further decoupling of West and East. In these times, it is worth revisiting a bygone time in which a leading American political figure embraced a US-Russia-China alliance: Henry A. Wallace, Agricultural Secretary from 1933-1941, and US Vice-President from 1941-1944.
After his government service, Wallace passionately upheld a new vision of the post-war world that included the East. As he wrote in his 1944 book Our Job in the Pacific:
“Today the peoples of the East are on the march. We can date the beginning of that march from 1911 when the revolutionary movement among the Chinese people, inspired by the teachings of Sun Yat-sen, overthrew the Manchu dynasty and established a republic. This was the first time in the vast and culturally rich history of Asia that an Asiatic people turned its back on the whole principle of monarchy and hereditary rule and, in spite of the difficulties and obstacles that still remained, set out courageously toward the attainment of democracy – government of the people, by the people and for the people.”
Having played a leading role in the initiation of thousands of American water, energy, agriculture and transportation projects as part of Franklin D. Roosevelt’s “New Deal”, Wallace believed that the foundation for any durable international order would be centered on large-scale national development projects that eradicated poverty and elevated minds. Wallace worked closely with FDR and other New Deal Democrats to shape the 1942 Atlantic Charter – enshrining principles of global peace and cooperation into a sort of constitution – and the Bretton Woods System in order to internationalize the success of the New Deal in the post-war world.
While many Wall Street monetarists complained that committing vast spending on poor colonial countries would be an inflationary waste, Wallace explained that if those investments were directed to large scale agro-industrial endeavours, and if the repayment time frame were long term enough, then there would be no risk. He wrote:
“To form a balanced opinion we need to look forward to the kind of world we shall be living in twenty years from now, for it is the conditions then which will have a bearing on the ability of the borrowing countries to repay on their borrowings, and the ability of this country to receive payment in goods and services.”
What type of political-economic system would best facilitate this post-war growth in Asia? Again citing Sun Yatsen, Wallace believed that it couldn’t be done through communism or capitalism alone, but by a higher synthesis that had yet to be created. He continued:
“Undoubtedly more than one mechanism will be worked out to serve as a gear between the capitalism of America and Britain, the socialism of Russia, and the mixed state and private enterprise which we can expect to see develop in countries like China. One such mechanism might be an international government bank with appropriate guarantees for both government and private funds.”
The foundation for the stability needed for this post-war plan to work, in Wallace’s opinion, included a core alliance of Russia, China and America working in cooperation. On this point Wallace wrote:
“It is vital to the United States, it is vital to China and it is vital to Russia that there be peaceful and friendly relations between China and Russia, China and America and Russia and America. China and Russia complement and supplement each other on the continent of Asia, and the two together complement and supplement America’s position in the Pacific.”
Belying the zero-sum game thinking that the post-war world would devolve into, Wallace maintained that each nation’s welfare is locked up in the well being of its neighbour: “We cannot have prosperity for ourselves alone. We cannot sell unless others can buy. We cannot maintain a high standard of living if it is to be undermined by the low standards of others.” He ends his pamphlet by describing the guiding principles for this ideal post-war order, writing that fostering communal interests by working together is “the kind of policy in the Pacific that would be welcomed and supported by Americans.” He adds that such a policy should “be willing to associate with others in minding the world community’s common business; but would fight shy of minding other people’s private business, just as it would resent having our business minded by others.”
Clearly Wallace would have liked the IMF and World Bank to act as instruments to grow this new age, but with the early death of FDR in April 1945, that plan would not unfold. Instead, Wallace and other New Deal Democrats loyal to FDR’s vision were labelled as communist sympathizers for their resistance to the emerging accepted wisdom of the Col War. The IMF’s founder and first president, Dexter White, was brought in front of the House of Un-American Activities, losing his position to Wall Street lawyer John J. McCloy and dying of a heart attack in 1948 while campaigning for Wallace as a 3rd Party candidate. Wallace himself was demoted upon Truman’s rise to the Presidency, then summarily fired in 1946 after he tried to promote peace between Russia and America.
Forecasting the tensions of the coming decades, Wallace wrote in 1944 that were his program for an international New Deal to be rejected,
“Fascism in the postwar inevitably will push steadily for Anglo-Saxon imperialism and eventually for war with Russia. Already American fascists are talking and writing about this conflict and using it as an excuse for their internal hatreds and intolerances toward certain races, creeds and classes.”
FDR and Wallace had intended for Chiang Kaishek’s National Party to lead China into this post-war age. Yet China ended up in the hands of the Communists under Mao Zedong, while America got the Truman doctrine, containment and proxy wars between the US and Russia, which also involved China. Time will tell whether the new dynamics between the US, Russia and China today will bring back some version of Wallace’s vision of cooperation from 1944, or whether competition and a zero-sum game mindset will prevail again.