Sovereign Soldiers: How the U.S. Military Transformed the Global Economy after World War II by Grant Madsen (review)

This ambitious book effectively blends military, diplomatic, political, and economic history in its account of the U.S. revival of the international economy after World War II. The dust jacket features Generals Dwight D. Eisenhower and Douglas MacArthur, who provided essential support for the project. The activists who developed and carried the task through were led by General Lucius D. Clay and industrialist Joseph Dodge. Grant Madsen, identifying himself with the “American Political Development” interpretive school, persuasively argues that the development of a relatively open and prosperous international trading system was less the outcome of a grand imperial design than the pragmatic response of U.S. occupation authorities coping with the challenges of poverty and hunger in defeated and ravaged countries.

MacArthur was himself a child of the U.S. empire, which originated with the Spanish-American war. His father, General Arthur MacArthur, commanded U.S. occupation forces in the Philippines in a somewhat uneasy association with Governor (and later President) William Howard Taft and Taft’s successors. Douglas MacArthur, following in his father’s career path, was an outstanding West Point cadet and an acclaimed division commander in World War I. After the war, he was assigned to command U.S. forces in the Philippines, which had been promised independence. Building a Philippine army, he worked with local leaders, became acutely aware of Japanese designs on the islands, and established himself as an influential outsider. Recalled to the United States in 1930, he was appointed chief of staff of the Army.

Eisenhower spent the First World War stateside. Assigned to training schools in tank warfare, he acquired expertise in a weapon that transformed ground fighting. After the war, he and his close friend George Patton were among the Army’s most avid enthusiasts of armored mobility. More broadly, Eisenhower had arrived at the understanding that “military success depended upon economic might and technological innovation” (p. 34). Assigned to the Panama Canal Zone, he found a mentor in General Fox Conner, who introduced him to the classics of Western military literature.

In Washington after the war, Eisenhower worked on industrial planning for future wars in association with Bernard Baruch, who convinced him that strong government could manage the economy in wartime by mobilizing existing management and imposing price controls. He was generally supportive of the early New Deal because its effort to organize the economy seemed in the spirit of Baruch’s War Industries Board.

MacArthur as Army chief of staff, however, had to endure steep military cuts and found himself at odds with President Franklin Roosevelt. He was assigned to the Philippines, which was scheduled for independence in 1944, with the mission of developing a defense force for the new country. Both Eisenhower and Clay also had stints in the Philippines. Eisenhower’s relationship with MacArthur was especially unsatisfactory. Clay supervised some public works, and he and Eisenhower were back in the United States for the beginning of World War II in Europe.

With U.S. involvement in the war, Eisenhower became the supreme commander in the European theater, with Clay as a trusted subordinate. The ideas of postwar planners in Washington like Henry Morgenthau, who thought in terms of deindus-trializing postwar Germany, were rejected by Clay. Advised by Joseph Dodge, Clay maintained that deindustrialization would be disastrous for both Germany and the larger European economy. The United States, he argued, must restart a demilitarized western German economy.

MacArthur, given control of postwar Japan partly to keep him away from Washington, presided over a remarkable economic and political transformation in which Dodge also had an important role. Despite high taxes and a balanced budget, the Japanese economy prospered and received a boost from the outbreak of the Korean War.

Korea also brought MacArthur back to prominence as the apparent mastermind of a military effort that had turned an apparent defeat into a...