The Rise and Fall of the Great Powers (66 page)

With much of its air force obsolescent and its armored units disbanded, with the services cowed into blind obedience by the purges, Russia was much weaker at the end of the 1930s than it had been five or ten years earlier—and in the meantime both Germany and Japan had greatly increased their arms output and were becoming more aggressive. The post-1937 Five-Year Plan clearly involved an enormous arms buildup, equal to and in many areas—e.g., aircraft production—larger than Germany’s own. But until that investment had translated itself into far larger and better-equipped armed forces, Stalin felt Russia to be passing through a “danger zone” at least as threatening as the years 1919–1922. These external circumstances help explain the various changes in Soviet diplomacy during the 1930s. Worried by the
Japanese aggression in Manchuria and perhaps even more by Hitler’s Germany, Stalin faced the prospect of a potential two-front war in theaters thousands of miles apart (exactly the strategical dilemma which paralyzed British decision-makers). Yet his diplomatic tacking toward the West, which included Russia’s 1934 entry into the League of Nations and the 1935 treaties with France and Czechoslovakia, did not bring the desired increase in collective security. Without a Polish agreement, there was really little Russia could do to aid France or Czechoslovakia—and vice versa. And the British frowned at these efforts to create a diplomatic “popular front” against Germany, which in part explains Stalin’s caution during the Spanish Civil War; a triumphant socialist republic in Spain, Moscow feared, might drive Britain and France to the right, as well as embroil Russia in open conflict with Franco’s supporters, Italy and Germany.

By 1938–1939, the external situation must have appeared more threatening than ever in Stalin’s eyes (which makes his purges even more foolish and inexplicable). The Munich settlement not only seemed to confirm Hitler’s ambitions in east-central Europe but—more worryingly—revealed that the West was not prepared to oppose them and might indeed prefer to divert German energies farther eastward. Since these two years also saw substantial border clashes between Soviet and Japanese armies in the Far East (necessitating the heavy reinforcement of the Russian divisions in Siberia), it was not surprising that Stalin, too, decided to follow an “appeasement” policy toward Berlin even if that meant sitting down with his ideological foe. Given the USSR’s own political ambitions in eastern Europe, Moscow had far fewer reservations about a carving up of the independent states in that region, provided that its own share was substantial. The surprise Nazi-Soviet pact of August 1939 at least provided Russia with a buffer zone on its western border and more time for rearmament while the West fought Germany in consequence of Hitler’s attack upon Poland. Feeding morsels to the crocodile (to use Churchill’s phrase) seemed much better than being devoured by it.
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All this makes it inordinately difficult to measure Soviet power by the end of the 1930s, especially since statistics on “relative war potentials”
¹³⁸
reflect neither internal morale nor quality of armed forces nor geographical position. Clearly, the Red Army no longer resembled that “formidable modern force of great weight with advanced equipment and exceptionally tough fighting men” (except in the latter respect) which Mackintosh described the 1936 army as being;
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but how far it had lost ground was not clear. The 1939–1940 “Winter War” against Finland appeared to confirm its precipitous decline, yet the less-well-known 1939 clashes with Japan at Nomonhan showed a cleverly led, modern force in action.
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It is also evident that Stalin was aghast at the devastating Blitzkrieg-style victories of the German army in 1940,
and more than ever anxious not to provoke Hitler into a war. His other great and obvious worry was where Tokyo would decide to strike in the East—not that Japan was so mortal a foe, but the defense of Siberia was logistically very exhausting and would further weaken Russia’s capacity against the German threat. The swift recall of Zhukov’s armor, to join in the invasion of eastern Poland in September 1939, once a border truce in the east had been arranged with Japan, was illustrative of this precarious strategical juggling act.
¹⁴¹
On the other hand, by that time the damage inflicted upon the Red Army was being hastily repaired and its numbers increased (to 4,320,000 men by 1941), the entire Soviet economy was being deployed toward war production, massive new factories were being built in central Russia, and improved aircraft and tanks (including the formidable T-34) were being tested. The 16.5 percent of the budget allocated to defense spending in 1937 had jumped to 32.6 percent in 1940.
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Like most of the other Great Powers in this period, therefore, the USSR was racing against time. More even than in 1931, Stalin needed to urge his fellow countrymen to close the productive gap with the West. “To slacken the tempo would mean falling behind. And those who fall behind get beaten” The Russia of the czars had suffered “continual beatings” because it had fallen behind in industrial productivity and military strength.
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Under its even more autocratic and ruthless leader, the Soviet regime was determined to catch up fast. Whether Hitler would let it do so was impossible to say.

The relative power of the United States in world affairs during the interwar years was, curiously, in inverse ratio to that of both the USSR and Germany. That is to say, it was inordinately strong in the 1920s, but then declined more than any other of the Great Powers during the depressed 1930s, recovering only (and partially) at the very end of this period. The reason for its preeminence in the first of these decades has been made clear above. The United States was the only major country, apart from Japan, to benefit from the Great War. It became the world’s greatest financial and creditor nation, in addition to its already being the largest producer of manufactures and foodstuffs. It had by far the largest stocks of gold. It had a domestic market so extensive that massive economies of scale could be practiced by giant firms and distributors, especially in the booming automobile industry. Its high standard of living and its ready availability of investment capital interacted in a mutually beneficial fashion to spur on further heavy investments in manufacturing industry, since consumer demand could absorb virtually all of the goods which increased productivity offered. In 1929, for example, the United States produced over 4.5 million motor vehicles, compared with France’s 211,000, Britain’s 182,000, and Germany’s 117,000.
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It was hardly surprising that there were fantastic leaps in the import of rubber, tin, petroleum, and other raw materials to feed
this manufacturing boom; but exports, especially of cars, agricultural machinery, office equipment, and similar wares, also expanded throughout the 1920s, the entire process being aided by the swift growth of American overseas investments.
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Yet even if this is well known, it still remains staggering to note that the United States in those years was producing “a larger output than that of the other six Great Powers
taken together”
and that “her overwhelming productive strength was further underlined by the fact that the gross value of manufactures produced per head of population in the United States was nearly twice as high as in Great Britain or Germany, and more than ten to eleven times as high as in the USSR or Italy.”
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While it is also true, as the author of the above lines immediately notes, “that the United States’ political influence in the world was in no respect commensurate with her extraordinary industrial strength,”
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that may not have been so important in the 1920s. In the first place, the American people decidedly rejected a leading role in world politics, with all the diplomatic and military entanglements which such a posture would inevitably produce; provided American commercial interests were not deleteriously affected by the actions of other states, there was little cause to get involved in foreign events—especially those arising in eastern Europe or the Horn of Africa. Secondly, for all the
absolute
increases in American exports and imports, their place in its national economy was not large, simply because the country was so self-sufficient; in fact, “the proportion of manufactured goods exported in relation to their total production decreased from a little less than 10 percent in 1914 to a little under 8 percent in 1929,” and the book value of foreign direct investments as a share of GNP remained unaltered
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—which helps to explain why, despite a widespread acceptance of world-market ideas
in principle
, American economic policy was much more responsive to domestic needs. Except in respect to certain raw materials, the world outside was not that important to American prosperity. Finally, international affairs in the decade after 1919 did not suggest the existence of a major threat to American interests: the Europeans were still quarreling but much less so than in the early 1920s, Russia was isolated, Japan quiescent. Naval rivalry had been contained by the Washington treaties. In such circumstances, the United States could reduce its army to a very small size (about 140,000 regulars), although it did allow the creation of a reasonably large and modern air force, and the navy was permitted to develop its aircraft-carrier and heavy-cruiser programs.
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While the generals and admirals predictably complained about receiving insufficient resources from Congress, and certain damaging measures were done to national security (like Stimson’s 1929 decision to wind up the code-breaking service on the grounds that “gentlemen do not read each others mail”),
¹⁵⁰
the fact was that this was a decade in which the United
States still could remain an economic giant but a military middleweight. It was perhaps symptomatic of this period of tranquillity that the United States still did not possess a superior civil-military body for considering strategic issues, like the Committee of Imperial Defence in Britain or its own later National Security Council. What need was there for one when the American people had decisively rejected the ideas of war?

The leading role of the United States in bringing about the financial collapse of 1929 has been described above.
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What is even more significant, for the purposes of measuring comparative national power, was that the subsequent depression and tariff wars hurt it much more than any other advanced economy. If this was partly due to the relatively uncontrolled and volatile nature of American capitalism, it was also affected by the fatal decision to opt for protectionism by the Smoot-Hawley tariffs of 1930. Despite the complaints by U.S. farmers and some industrial lobbies about unfair foreign competition, the country’s industrial and agricultural productivity was such—as the surplus of exports over imports clearly showed—that a breakup of the open world trading order would hurt its exporters more than any others. “The nation’s GNP had plummeted from $98.4 billion in 1929 to barely half that three years later. The value of manufactured goods in 1933 was less than one-quarter what it had been in 1929. Nearly fifteen million workers had lost their jobs and were without any means of support During this same period the value of American exports had decreased from $5.24 billion to $1.61 billion, a fall of 69 percent.”
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With other nations scuttling hastily into protective trading blocs, those American industries which did rely heavily upon exports were devastated. “Wheat exports, which had totaled $200 million ten years earlier, slumped to $5 million in 1932. Auto exports fell from $541 million in 1929 to $76 million in 1932.”
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World trade collapsed generally, but the U.S. share of foreign commerce contracted even faster, from 13.8 percent in 1929 to less than 10 percent in 1932. What was more, while certain other major powers steadily recovered output by the middle to late 1930s, the United States suffered a further severe economic convulsion in 1937 which lost much of the ground gained over the preceding five years. But because of what has been termed the “disarticulated world economy”
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—that is, the drift toward trading blocs which were much more self-contained than in the 1920s—this second American slump did not hurt other countries so severely. The overall consequence was that in the year of the Munich crisis, the U.S. share of world manufacturing output was lower than at any time since around 1910 (see
Table 30
).

Because of the severity of this slump, and because of the declining share of foreign trade in the GNP, American policy under Hoover and especially under Roosevelt became even more introspective. In view of
the strength of isolationist opinion and Roosevelt’s pressing set of problems at home, it could hardly be expected that he would give to international affairs the concentrated attention which both Cordell Hull and the State Department wished from him. Nevertheless, because of the crucial position which the United States continued to occupy in the world economy, there remains some substance in the criticism of “the occupation with domestic recovery” and the “desire for the appearance of immediate action and results [and] a national habit of policy formation that gave little sustained thought to the impact American programs might have on other nations.”
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The 1934 ban upon loans to any foreign government which had defaulted on its war debts, the 1935 arms embargo in the event of war, and the slightly later prohibition of loans to any belligerent power simply made the British and French more cautious than ever about standing up to the fascist states. The 1935 denunciations of Italy were accompanied by enormous increases in American petroleum supplies to Mussolini’s regime, to the consternation of the British Admiralty. The various commercial restrictions upon Germany and Japan, in partial response to their aggression, “served to antagonize [both] without providing meaningful aid to the opponents of these nations. FDR’s economic diplomacy created enemies without winning friends or supporting prospective allies.”
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Perhaps the most serious consequence—although the responsibility needs to be shared—was the mutual suspicions which arose between Whitehall and Washington precisely at a time when the dictator states were making their challenge.
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