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CHAPTER 1 The Domestic Political Economy and U.S. National Security Policy The significance of events was shrouded in ambiguity. We groped after interpretations ofthem, sometimes reversed lines ofaction based on earlier views, and hesitated long before grasping what now seems obvious. ~Dean Acheson (1969, 3-4) The period between the summer of 1949 and the winter of 1951 was a crucial one in the history of American domestic and foreign policy. During this time, the annual military budget roughly tripled, rising from $l3.5 billion to nearly $45 billion, only a fraction of which was earmarked for the war in Korea. Military budgets have not since returned to the relatively low levels prevailing between 1946 and 1950. At the same time, domestic social welfare programs, such as President Truman's plan for a national health care system, disappeared from the agenda in the United States. These programs had played a central role in Truman's successful 1948 reelection campaign and remained very important in other developed democracies. In 1950, the hunt for communist influence in American life, on the rise since the end of World War II, reached remarkable new heights with the passage of a law calling for the registration of all communistaffiliated individuals and organizations and providing for their imprisonment in times of national emergency. The Federal Bureau oflnvestigation and other government agencies greatly expanded their efforts to identify radicals and remove them from the American labor force. How can we explain these important historical developments? The starting point for this book is the idea that domestic and foreign policy outcomes are related. The Truman administration's efforts to fund its ambitious and expensive foreign policy required it to sacrifice much of its domestic agenda and acquiesce to conservative demands for a campaign against radicals in the labor movement and elsewhere. The president and others in his administration regretted the demise of their domestic initiatives and remained skeptical of the crusade against domestic communism, but they were unwilling to accept the potential damage that blocking these 2 Building the Cold War Consensus developments might have done to their foreign policy agenda. Similarly, the administration's opponents, particularly conservative Republicans, were uneasy with the administration's foreign policy, but they were unwilling to endanger their domestic policy gains in order to stop it. The durability of Cold War assumptions makes it easy to see the dominant world role of the United States since World War II, and the linkage between the international confrontation with the Soviet Union and domestic anticommunism , as logical and inevitable. In fact, advocates of Cold War foreign policy tended to oppose the domestic policies that came to be associated with it, and advocates of the Cold War domestic agenda tended to oppose the foreign policy. As the Acheson quote above implies, policies that seem obvious now were not obvious in 1950. Other outcomes were possible. Both the individual policies and the association between them are best understood as the results of a struggle between domestic political factions rooted in the American political economy, rather than as natural or obvious products of some clear set of policy imperatives in the postwar international environment. This is not the way the development of U.S. national security policy during the early Cold War era is usually understood. Most historical accounts of it do not devote much attention to domestic political conflict, and they rarely link foreign and domestic policy outcomes. In international relations theory, this case is usually considered a strong one for accounts of policy-making that focus on exogenous international threats and treat foreign-policy makers as if they were insulated from the pressures of political coalition building. A better explanation of foreign policy locates its origins in conflicting interests within the domestic political economy and focuses on bargaining among political actors representing different coalitions of these interests. This approach explains features of the policy-making process that are problematic in other accounts and offers insights about a range of questions they do not address. A Domestic Political EconomyTheory of National Security Policy In recent years, it has become routine to acknowledge the importance of domestic politics. Indeed, even many analysts who had adhered to realist assumptions in their previous work, such as Snyder (1991) and Bueno de Mesquita and Lalman (1992), have added domestic political variables in their most recent work. Since there is widespread agreement that domestic politics "matter," why devote more attention to the subject? Although discussion ofdomestic political influences on foreign...

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