Lets Discuss History

Early Warning Signs LECTURE

The End of the American Era:

A Nation in Decline?

I Introduction

Last week’s lecture notes discussed some of the reasons behind America’s economic success. The economic growth and sense of optimism of the post-war decades were very real and very impressive.

Economy is always cyclical. Naturally, U.S. experienced economic slowdowns during this time period as well, most notably the immediate economic shocks associated with the return to the peacetime economy, 1945-1948.

This time we are looking at the first signs of trouble, structural issues that hurt or affected some segments of American economy and mindset. Additionally, we will look at the cultural problems and the slowly eroding sense of invincibility that grew with the defeats in Vietnam.

II The Textile Crisis of the Mid-1950s

In July 1955, using economic carrots to solidify Japan’s commitment to the Western bloc in the Cold War, the Eisenhower administration allowed the Japanese to export their cotton textiles to the United States. In the textile producing regions, the incoming foreign competition produced the first economic shocks and the signs of things to come.

The Japanese had rebuilt their war-torn textile industries with the latest technology and cheap labor, producing textiles efficiently and very cheaply. While the White House viewed the Japanese imports as politically necessary and economically acceptable, they triggered loud and outraged demonstrations from the textile states and regions, especially in the Southern Piedmont textile belt, stretching from Virginia through the Carolinas and Georgia.

Previously, American textile people, especially in the South, had always considered American markets as “theirs.” They were convinced of their ability to produce cheaply and efficiently, and they expected that Washington, D.C. would keep foreign competition away.

The Eisenhower Administration believed in increasing international production and competition. Opening American markets to Japanese textiles would force Americans to produce more efficiently, give cheaper textiles to American consumers, and help struggling Japan to recover and remain loyal to the West, the Eisenhower administration reasoned.

Textile regions reacted with outrage. In South Carolina, for example, the state legislature in 1956 pushed through, without a debate, the Hart-Arthur Act, which required all establishments selling Japanese fabrics in the state to hang up a large sign stating: “Foreign Textiles Sold Here!”

The textile interests fought the decision, but the Eisenhower administration did not give in. In the end, it was the Japanese who gave in. Worried about its long-term relations with the U.S., Japanese textile producers agreed to voluntary import quotas to ease Americans’ economic concerns.

The fight weakened the bond between southern textile workers and Washington. It was a warning sign that American industries were not immune to imports anymore. The incident also showed that Washington was committed to free (or at least more free than before) trade. This marked a disturbing trend for industrial workers as well as industrialists. American industrial sector had historically enjoyed high protective tariffs and, during the first post-WWII decade, artificial situation, where most of their international competition was destroyed by the war. Now this protection and artificial advantage seemed to be eroding.

III The Balance of Payments –problems, late-1950s

By the late 1950s, the currency flows between the United States and the rest of the world changed direction. Until then, U.S. had received more currency and gold than what it had shipped abroad. Now more currency was flowing out of the country than into it. What caused this change?

U.S. Military Installations Abroad

Since the end of World War II, U.S. had maintained substantial military operations around the world. To ensure the pacification of Germany, Japan, and Italy necessitated maintaining massive American military presence in these countries. After Korean War, U.S. needed to secure South Korea with substantial military presence as well. Cold War only escalated these military operations and their costs.

The cost of operating the bases amounted to billions. U.S. military budgets in the 1950s were hovering around $35-40 billion ($200-250 billion in current dollars). A sizable chunk of the money went to Americans stationed abroad, who used the money to buy goods and services from their host country businesses.

Ford factory at Dagenham in the 1960

Ford factory in Dagenham, England, 1960s.

American Investments Abroad

The Eisenhower Administration sought to help the world to fully recover from the lingering effects of World War II, as well as ease the problems afflicting poorer countries with its “Trade, not aid” –policy. Starting in 1955, Department of Commerce systematically encouraged American corporations to open offices and operations in other countries.

Companies such as Ford, Coca-Cola, and almost any other major American corporation of the day moved many of their supporting operations overseas. Much of the profits returned to the United States, but some remained in the host country.

Imports

Americans learned to consume foreign goods. By 1950s, European industrial production had largely recovered. U.S. could not export as many cars and clothesand other products to Europe as it had done before. Additionally, Americans were slowly developing a taste for European goods, from wine to whisky, clothes to fancy cars.

Foreign Aid

Between 1946 and 1953, U.S. had transferred, in loans and direct aid, $33 billion (roughly $240 billion in today’s dollars) to foreign countries. Some of the money consisted of loans that were largely paid back, but part of the money were direct gifts, intended for improving the recipients’ infrastructure and economy.

Tourism

Jet age increased international tourism. Affluent Americans were now eager to explore Europe, Asia, Latin America, and Caribbean. International tourism explodes with the jet age. The numbers are difficult to estimate, but starting in the 1960s, American vacationers began to leave hundreds of millions of dollarsin current dollars abroad every year.

Between 1951 and 1957 U.S. balance of payments –deficits averaged roughly one billion dollars/year. In the late 1950s, they reached $4.2 billion. Simultaneously, U.S. export industries, which had previously provided balance and put the American account books in black, were slowing down, as Europeans and Asians were now consuming more domestic products. Their industries had finally fully recovered from the war.

U.S. gold reserves kept shrinking, falling from a height of $24.4 billion in 1950 to $17.4 billion in 1960 (approximately $110 billion in current dollars).

IV The British (and European) Invasion, 1964-

The Beatles, Pink Floyd, Carnaby Street –outfits, Porches, Mercedes Benzes, French movies, Japanese and German electronics… foreign stuff started to becool in the 1960s.

Increasingly, American consumers associated quality and coolness with foreign-made products. German Porches, Swedish Volvos, English Jaguars, and Italian Ferraris often replaced American-made cars as symbols of middle-class affluence.

American goods could not often compete in quality. Detroit in the 1960s-1970s was approaching a creative funk, continuing to rely on rear wheel –drive(remember that clumsy console running through the middle of your grandfather’s Oldsmobile’s floor?), heavy vehicles, which were lacking in stylistic and technical innovations.

Japanese electronics started their march to the United States as well. Initially, American consumers discovered Japanese cameras in the 1950s, as U.S. photographers assigned to Korea found out that locally sold Japanese lenses were actually cheaper and better than American ones. Within a decade, Japanese Nikons and Canons started to take larger parts of American markets, while Swedish Hasselblad and a variety of German cameras took big slices of the professional high-end markets.

GATT-negotiations (GATT = General Agreements on Tariffs and Trade. Predecessor to current World Trade Organization, or WTO) of the early 1960s lowered the global tariffs on a wide range of goods on average from 36 to 39 percent, continuing to open up American markets for more foreign-made goods.Meanwhile, some countries, such as Japan, continued to keep their domestic markets heavily protected. U.S. had tolerated that in order to support Japanese economic recovery and using this growing affluence to keep it in the western Cold War camp.

Mercedes-Benz 190 SL (W 121, 1955 bis 1963). Werbeanzeige von 1955 für die USA.

American Mercedes Benz ad from 1963.

V Failures of the Great Society and the Effects of 1968

1968 was in many ways the Crazy Year of the World – perhaps the most impactful single year since 1945.

Some events of this year:

Tet-offensive in Vietnam (Vietnamese communists launch a massive attack during the Vietnamese New Year (Tet) –celebrations. Although the attack failed, it convinced millions of Americans, LBJ included, that U.S. cannot win the war).

The assassination of Martin Luther King, Jr.

The assassination of Robert F. Kennedy

My Lai –massacre (see Part B below)

Police attacking protesters during the 1968 Democratic convention.

In the spring, the world witnessed riots and almost a revolution in France, where students and workers took to the streets. Riots and chaos lasting for weeks made many fear a leftist revolution in the heart of Western Europe.

Prague Spring and the Soviet occupation of Czechoslovakia. A liberalization movement led by Alexander Dubcek was crushed by the Soviet tanks that occupied Prague and made sure that Czechoslovakia remained a firmly communist, Eastern Bloc country.

Democratic convention in Chicago erupted into occasional chaos in the convention hall and street clashes between demonstrators and Chicago police.

In Mexico City, military crushes student protests right before the 1968 Mexico City summer Olympics. Estimates of the deaths vary between 44 and several hundred.

All in all, the year 1968 led some to believe that the Western “system” was ripe for collapse. The involved, idealistic activists of the Civil Rights movement, Students for the Democratic Society, and other, politically active movements aiming for peaceful reform became often disillusioned.

With their heroes (MLK, Bobby Kennedy) dead, many left-leaning idealists felt that the reform was useless. The end result was either gradual disengagement from the reform movements and political activism and move toward more individualistic and hedonistic worldview (remember, many of the 1980s yuppies were ex-hippies).

Other groups of 1960s activists turned toward angry radicalism. Student Non-Violent Coordinating Committee (SNCC) dropped “Non-Violent” from its name.The most visible African American organization of the late 1960s was no longer SCLC, SNCC or any other proponent of peaceful change and racial equality, but Black Panthers. Some white activists also drifted toward violent and nihilistic movements, such as the leftist terrorist organization Weather Underground and the Yippies, an occasionally violent direct action –protest group.

In the right, John Birch Society, a paranoid and racist right wing organization established in 1958, argued that the civil rights movement was a communist plot to destroy the United States. They also argued that war in Vietnam was another subversive conspiracy to weaken the U.S. in preparation of a communist takeover, and that fluoridation of American drinking water was also another communist plot to poison Americans.

Also, during the civil rights movement, the Ku Klux Klan had been reactivated. Some whites in the South, vehemently against African American equality,resorted to violent resistance against African American civil rights activists. A larger number of white southerners supported racist and segregationist politicians such as Alabama governor George Wallace, who ran for the president as a third party candidate in 1968, winning the states of GA, AL, MS, LA, and AR.

For some selected images from 1968, please see this link: HYPERLINK "http://www.kingsacademy.com/mhodges/03_The-World-since-1900/11_The-Bewildering-60s/11f_1968_A-Year-of-Shock.htm" http://www.kingsacademy.com/mhodges/03_The-World-since-1900/11_The-Bewildering-60s/11f_1968_A-Year-of-Shock.htm

Part B: Vietnam

U.S. soldier resuscitating a fallen comrade in Vietnam.

I Introduction

During the 1960s, the image of United States in Europe and rest of the world started to deteriorate. New political radicalism, Europe’s internal political changes, and military conflicts in various parts of the world started to create new frictions within the Western world.

The joy over economic growth of the 1950s, Cold War consensus, and immediate scars of the Second World War had by now begun to erode. External pressures did not keep the Western Bloc as homogenous and consensus-driven as it had been earlier.

New type of anti-Americanism starts to rise in Western Europe, and American trust in their European allies began to deteriorate as well.

II Early Cracks in the Western Camp

Anti-Americanism is, and has not ever been, a static, unchanging force in European thought and politics.

For most of the 1950s, West Europeans, with the exception of relatively small groups of communists and some old-school nationalist chauvinists in Charles du Gaulle (French military leader, president, and ardent believer in French exceptionalism) –school of thought largely viewed U.S. with acceptance and even admiration, especially during the trying years of the early Cold War.

In Eastern Europe, America remained very popular among the public. The biggest lament that most non-communist East Europeans had was that U.S. was not even more militant in confronting communists and Soviet dominance of their countries.

West European attitudes toward the United States started to change during the Suez Crisis of 1956. During the crisis, France, Great Britain, and Israel invaded Egypt, after Egypt nationalized the Suez Canal, a crucial shipping route between Asia and Europe.

Rather than understanding or supporting West European actions, U.S. loudly and publicly criticized the invading powers. Additionally, U.S. started putting economic pressure on Great Britain, threatening it with severe sanctions unless the British soldiers leave the region.

France and Great Britain realized that the U.S. clearly treats them as junior partners in their alliance, causing anger and disillusionment among the political leadership and people of both countries.

Another problem emerged during the Civil Rights –battle.

Europeans viewed the racial turmoil affecting the American South and some northern cities with growing moral condemnation and questioning. U.S. did not fully look like the bastion of the freedom and democracy that it was claiming to be.

Anti-Stalinist European New Left, often highly critical towards both the totalitarian Soviet communism and American political and cultural shortcomings, started carving an independent European third way between bipolar Cold War system.

European powerful labor movements, already in the middle of some heated battles between communists (supported by the Soviet Union) and social democrats (supported by the United States), started to shift toward growing anti-Americanism.

The Soviets started to gain small propaganda victories in the public realm during the 1960s, especially as War in Vietnam started to dominate TV news around the world.

The real deterioration of American image abroad starts with the coming escalation of the war in Vietnam.

III War in Vietnam

War in Vietnam is too long to fully cover in here. Additionally, we should keep in mind that the conflict was originally between French colonial armies and Vietnamese nationalists.

After World War II, the French were initially interested in maintaining their empire. However, the country was too weakened by the war to hold on to its colonial possessions. In 1950-1954, Vietnamese nationalists/communists, led by Ho Chi Minh, sought to unify the country by throwing out the westerners and brining both the south and north under the communist rule.

U.S. followed the teachings of George Kennan’s containment-theory: ‘Do not invade communist countries, but prevent, as if with a chain of steel, the spread of communism any further. Like cancer, it dies unless it gets to conquer more territory to exploit.’ The United States decided to prevent the spread of communism to South Vietnam, much like it had done in South Korea in 1950-1953.

Over the years, U.S. political and financial support for the French and South Vietnam turned into material and military assistance, and, eventually, into a full-scale U.S. participation in the war. The open, full-blown U.S. participation in the war started with the Gulf of Tonkin Resolution (Fall 1964).

During its participation in the war, U.S. would ship hundreds of thousands of soldiers to the region, fighting both against North Vietnam and South Vietnamese nationalists and communists (Viet Cong).

Vietnam developed into an enormously expensive military attempt/adventure for the United States, in terms of money, moral capital, and human lives.

Gradually, U.S. found itself pulled deeper and deeper into the conflict. U.S., and the Lyndon B. Johnson –administration, were determined to stop the spread of communism. Although the war’s goals were somewhat vague and the mission open-ended, U.S. failed to pull out from the hopeless conflict, due to LBJ’s refusal to be the “first president who would lose a war.”

War’s costs:

Money

It is difficult to estimate the final (direct and indirect) cost of a war, but most estimates put the cost of Vietnam between $500 and $686 billion.

The war derailed LBJ’s plans for the Great Society, a program intending to turn the U.S. to Northern European –type welfare state. Later in the war, LBJ expressed his frustration with Vietnam by referring to the Great Society and Vietnam as two women in his life: one was his true love; the other was a prostitute that took him away from his love.

Lives

Vietnam cost the lives of more than 58,000 Americans, overwhelmingly servicemen. Many more returned home suffering from the Post-Traumatic Stress Disorder, drug problems, and other difficulties to get accustomed to normal life. For the Vietnamese, the war was even more costly. At least three million Vietnamese died in the war, two thirds of whom were civilians.

American image and reputation abroad.

Vietnam was a costly operation for American international reputation. Since World War II, even European social democrats and other moderate leftists had largely a positive view of the United States. Only an increasingly fragmented and powerless West European communist movement represented knee-jerk anti-American attitudes during the 1950s.

Vietnam increased global anti-American sentiment substantially. The idea of America suppressing a democratic election (U.S. did not support Vietnam-wide elections, since everybody knew that communists would win it) and fighting against a poor peasant-nation pushed many in the moderate left to reactionary anti-American camp.

The hangover of Vietnam was not only economic, but also emotional and moral. It would take years, if not decades, to erode its effects on global opinion. In Europe, Vietnam started to become a serious PR-disaster for the United States.

Also, the atrocities of this war, such as massacre of roughly 350-500 civilians, mostly women and children, in the village of My Lai in March 16, 1968, severely damaged the U.S. image as the global defender of the weak people against the forces of totalitarianism.

Some of the victims of My Lai massacre.

Anti-Americanism grew substantially during Vietnam, turning millions of young Europeans and American liberals alike against U.S., fueling further the leftward tilt during the 1960s and early 1970s.

IV American Sense of Disillusionment

The war in Vietnam, naturally, affected the United States even more than it did the rest of the world (save, of course, Vietnam itself).

On this side of the Atlantic, New Left emerged as a campus movement, fueled and dominated by the Civil Rights Movement, Free Speech –Movement, and opposition to Vietnam War. The movement grew on especially on the campuses of big, coastal universities: University of California at Berkeley in the West Coast, and Columbia and Harvard Universities in the East Coast. Eventually the movement also influenced some liberal Midwestern universities, such as University of Michigan and University of Wisconsin.

In U.S., the New Left was very much a cultural and social movement, promoting “identity politics”, i.e., causes of women’s rights, African American issues, Native American and Hispanic and other cultural/identity-issues. New Left was not as gung-ho “left” as its counterparts in Europe, but it nevertheless was highly critical toward the alleged shortcomings in American democracy.

New Left had its origins in the Civil Rights –movement of the 1950s and 1960s, later growing into a larger protest movement that began to question some of the foundations of American ideals: are we truly democratic? Are we all enjoying the promise of the American dream? Is our government always right and can we really influence it?

V Wide-Reaching Effects of Vietnam

As the 1960s matured, the decade brought political conflict and increased radicalization to both sides of the Atlantic.

A big crack in the European-American relationships evolved over War in Vietnam, contributing to the rising anti-American sentiments in Europe but also in theUnited States itself.

Remember, even many Americans were highly upset over Vietnam war, leading to some students protesting outside military recruitment stations, burning U.S. flags, and openly rooting for North Vietnam during the war (remember “Hanoi Jane” Fonda’s trip to North Vietnam?)

What were the costs and effects of Vietnam in the United States?

58,000+ dead and missing Americans. Hundreds of thousands more in wounded and/or emotionally severely scarred by their experiences.

Even conservative estimates put the financial tag of the war above $500 billion.

Division of America. The unforeseen unity of the American people during World War II and, to a degree, even during the Cold War 1950s (The Age of Consensus, as it is often called in history) began to break down first during the Civil Rights –movement. War in Vietnam completed this division, often shredding the political and cultural bonds between the Baby Boomers and their parents’ generation.

Disillusionment and distrust toward the government and the “system.” Especially young Americans’ trust in their government started to deteriorate, leading to cynical detachment. The conviction that their government systematically lied to them got only worse with the Watergate, when the president really turned out to be a “crook.” (For examples, hear the popular poem “ HYPERLINK "http://www.youtube.com/watch?v=FmMCObgu_jc" To Whom It May Concern” by Adrian Mitchell. Also, ever wondered why so many 1970s movies are filled with paranoia, with government agents, cops, and other representative of the establishment power often as bad guys?)

Economic difficulties. Lyndon B. Johnson’s decision to fight the war and simultaneously expand his Great Society –plan, all while refusing to raise taxes to pay for his war and social problems, lead to obvious economic problems that would fully peak during the early 1970s.

The disappointment of loss. U.S. lost the war. The idea of American invincibility was gone. If a bunch of peasants beat the U.S., how could we fight against the Soviets?

Let it be said that the problems rooted in Vietnam did not affect only some chronically dissatisfied leftist radicals. Many of the same issues, such as the distrust of the government and economic malaise, also affected the political right.

VII Conclusion

The seeds of the malaise of the 1970s were planted in the 1960s, especially the last two-three years of the decade. Additionally, economic problems, rooting from American mixture of complacency (“Japanese cars? Hah! We have nothing to learn from them! We’re number one!”) and generosity (failure to aggressively defend its self-interests in international economic forums) would brew under the surface, leading to the economic and cultural problems of the 1970s-1980s.

Vietnam’s eroding impact on American morale, slowly emerging economic problems, and substantial cultural and political changes would lead to an era of growing uncertainty and insecurity.