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  • NSC 68 and the Political Economy of the Early Cold War by Curt Cardwell
  • Richard M. Filipink
NSC 68 and the Political Economy of the Early Cold War. By Curt Cardwell. New York: Cambridge University Press, 2011. 310 pp. $80.00 (cloth).

Curt Cardwell provides an interesting if not entirely convincing take on the creation of NSC 68 and its early application by the Truman administration. Cardwell emphasizes the central role of the global economy in general and the dollar gap in particular as the primary motivating factor for creating the document that some consider the blueprint for American policy during the Cold War. In the end, the narrow focus on economic issues falls short of a complete explanation for this seminal document.

Professor Cardwell makes clear from the opening chapters that this book is designed to provide a radically different explanation for the creation of NSC 68. Chapter 1 is devoted to a very good and quite critical historiography of NSC 68. Cardwell argues the current dominant historical narrative is inadequate to explain why the National Security Council, led by Secretary of State Dean Acheson and head [End Page 491] of the State Department’s policy planning staff Paul Nitze, needed to create the policy document in the first place. Cardwell dismisses the traditional explanation that NSC 68 was created in response to the Soviets acquiring the atomic bomb and the communists winning the civil war in China in the fall of 1949. Chapter 2 combines a standard revisionist explanation for the origin of the Cold War (American need for economic hegemony), with a particular source for this American position. Professor Cardwell describes the majority of American policy makers as “multilateralists” who sought “the establishment of an open, global, capitalist economy” (p. 30). This commitment to multilateralism was the source of the economic origin of NSC 68.

Chapters 3 through 5 form the foundation of Cardwell’s argument that the dollar gap, defined as the inability of other countries to acquire American dollars to pay for needed American exports, was the primary cause for the reassessment of American policy that led to NSC 68. It is also the strongest part of the book, as the author provides a very informative and detailed discussion of the economic problems facing the United States and Western Europe from 1946 to 1952. Cardwell argues that the United States found itself on the horns of a dilemma during this period due to the economic weakness of its European allies. The Marshall Plan, the primary response to this economic imbalance, was not sufficient to solve the problem. Indeed, key members of the Truman administration were certain that some form of additional direct aid to Europe would be needed after the European Recovery Program (the official name of the Marshall Plan) expired in 1952 to overcome the dollar gap and prevent the Europeans from reverting back to 1930s-style attempts to establish autarchy.

Unfortunately for the Truman administration, it was not considered likely that any further direct aid would be forthcoming from Congress, especially since the European Recovery Program had been sold as the solution to Europe’s problems. Indeed, Congress was already shaving the amount sent to Europe in 1950, and there was consideration of shutting the program down early. Chapter 5’s explanation of the sterling-dollar crisis of 1949–1950 emphasizes the potential for the British to reestablish a closed trading sphere within the Commonwealth, which would lock out the United States and collapse the attempt to coordinate cooperation among the European economies.

Thus, in chapters 6 and 7 Cardwell finally discusses the development and implementation of NSC 68 as a response to this fear of autarchy and the dollar gap. The author posits that because Acheson and Nitze were aware of and concerned about the dollar gap, to the point of saying some form of aid would be needed even if the Soviet Union did [End Page 492] not exist, they therefore were primarily guided by this economic necessity in recommending escalating the military aspect of the Cold War. In short, arms sales and military assistance would replace the Marshall Plan’s direct grants as the means of alleviating the...


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