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Some Historical Background for an Economic Interpretation of the War in Ukraine

Charles Austin Beard’s “Giddy Minds and Foreign Quarrels,” excerpted in the July 2022 “From the Archive” column of Harper’s, originally appeared in the magazine’s September 1939 issue. The article had caused a sensation at the time of publication just as the Second World War began. Its republication now draws renewed attention to the Beardian legacy as a way of understanding the economics of war then and now.

George R. Leighton, a Harper’s editor from 1932 to 1944, supervised the publication of the September 1939 issue. In a 1954 essay, “Beard and Foreign Policy,” he recounted the history of Beard’s momentous article. The association between Leighton and Beard at Harper’s had begun in 1932. Leighton had sought him out to write for the magazine. At that time, Beard was the most famous and influential historian in the country. Beginning in 1913 with the publication of An Economic Interpretation of the Constitution of the United States, Beard had written about the power of money over politics and foreign policy. The depression of the 1930s intensified his radicalism. He condemned with increasing fierceness the failure of American corporate capitalism to provide a secure and decent life for the people who lived here. A vast audience of admiring readers found in Beard’s writing a cogent explanation for the country’s ills in that terrible decade.

Beard also antagonized people, most of all the guiding lights in the Roosevelt administration. He initially had supported the New Deal, but then came to view it as an evasion of the complete reorganization of American economic life necessary for the country’s transformation from oligarchy to democracy. The President, moreover, had implemented a foreign policy that Beard believed would lead to permanent war for empire, the main subject of “Giddy Minds and Foreign Quarrels.”

Leighton described the frenzy that the article provoked. “The vituperation poured upon Beard was intense,” he wrote. Beard, who detested the Nazis for their diabolical philosophy and murderous violence, nevertheless thought that only as a propaganda feint would the war concern a moral crusade for democracy. As usual, official American declarations about ideals were clouding the real issues in wartime. The defeat of the Nazis, he contended, would be incidental to Washington’s larger purposes. Beard identified the real issue in the war as empire: “America is to be what Rome was to the ancient world.” Beard’s essay is the Cassandra version of “The American Century” argument presented nearly two years later in a Life editorial by Henry Luce and ever afterward the glad tidings text of America’s indispensable role in world affairs as guide and enforcer.

“Giddy Minds and Foreign Quarrels” is worth reading today in its entirety as a prophetic warning about the likely outcome in moral and economic bankruptcy of a foreign policy based on the interventionist creed calling for American military protection of the global capitalist order. It can be found online at

To be understood fully, “Giddy Minds and Foreign quarrels” must be read in the light of his two foundational books on American foreign policy, The Idea of National Interest: An Analytical Study in American Foreign Policy and The Open Door at Home: A Trial Philosophy of National Interest. Both books appeared in 1934.

The Idea of National Interest came first. Beard held that American history in general had proceeded under the firm guidance of a collaboration among its regnant economic groups and the government in Washington. The country’s foreign policy naturally followed from this arrangement. America had remained true to its founding heritage down to the present day. He counted more than a hundred occasions when the national interest called for military interventions in foreign countries. Such operations had an economic motive. His thesis, which he denominated “the formula” for understanding American foreign policy, concerned the all-important economic stake abroad in the American way of war.

In The Open Door at Home, Beard attempted to devise a foreign policy that would further the real national interest in promoting well-being and security for the American people. The country’s current way of engaging with the rest of the world descended in a straight line from the Open-Door policy that had been formulated around the time of the Spanish-American War as a means of exploiting backward countries through American military and economic power without the bother and dangers of old-fashioned colonialism. That policy worked wonders as an enrichment scheme for the nation’s economic elites, but it also had made the American people vulnerable to the twin scourges of militarism and imperialism.

Beard’s estimate of the costs resulting from business-as-usual in foreign affairs came under two headings. The first cost concerned increased taxation for the military enforcement arm of the Open-Door policy. Second, Washington’s priorities abroad would culminate in the demise of the American working class. He wrote, “there would be a movement of manufacturing industries from the regions in which wages are high, social legislation is strict, and trade unions are powerful to the backward regions where wages are low, social legislation is negligible if not absent, and labor unorganized.” To prevent the societal disintegration likely to ensue from plans calling ultimately for an outsourcing of the country’s manufacturing base, Beard thought it essential for American capital to be invested at home where millions of people continued to suffer from the afflictions of poverty, malnutrition, disease, homelessness, and illiteracy. He deserves a place in the front rank of pioneering critics of economic globalization.

The two foreign policy books of the mid-1930s contain the economic foundation of the anti-war argument in “Giddy Minds and Foreign Quarrels.” Beard portrayed Roosevelt as a charismatic leader unique in the history of the presidency for his capacity to stir the emotions of the American people. By 1938, however, he realized that his New Deal policies had failed to end the depression. Beard thought that they had failed because the corporate capitalist system required not Roosevelt reform but replacement with real economic democracy. Unwilling to go to the root of the depression’s causes, Roosevelt had turned to foreign affairs as a distraction from the persistently grim conditions at home, refurbishing Woodrow Wilson’s campaign to make the world safe for democracy. Beard, however, foresaw an American-dominated world order coming in which democracy meant freedom for the corporations, banks, and financial houses to operate as they wished with results for the underlying masses prophesied five years earlier in The Open Door at Home.

Subsequent research has confirmed Beard’s argument about the economic character of the Second World War. The names of five scholars are especially pertinent for understanding this confirmation process in the scholarly literature, beginning with Alan S. Milward. In War, Economy, and Society, 1939-1945 (1977), he interprets this conflict as an economic event determining, at its deepest level of historical significance, the way the productive forces of the world would be organized under American supervision. More recently, the details of Washington’s wartime planning for its worldwide economic supremacy have come into sharp focus, thanks to Patrick J. Hearden’s Architects of Globalism: Building a New World Order During World War II (2002), Christopher Layne’s The Peace of Illusions: American Grand Strategy from 1940 to the Present (2006), Benn Steil’s The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (2013), and Stephen Wertheim’s Tomorrow the World: The Birth of U.S. Global Supremacy (2020). In creating the economic substructure for the American Century, government officials and business executives set to work well before Pearl Harbor and assiduously continued to do so throughout the war.

Beard did not need to know about the details of these high-level meetings to recognize the broad outlines of the war’s economic endgame. It was enough for him to read in the newspapers about the Bretton Woods financial conference of July 1944 when 730 delegates from 44 Allied nations met for three weeks to regulate the international monetary and financial systems. His most reliable source of information about the conference came from The Progressive magazine, which he praised as the only publication in America then reporting honestly about the war. He scorned the rest of the media as propaganda outlets for Washington.

The Progressive asked University of Wisconsin economics professor Walter A. Morton, an expert on international banking, to analyze the results of the Bretton Woods conference. He focused his analysis on the International Monetary Fund and on an entity soon to be named the World Bank. Though Morton thought the stated aims of the conference laudable in theory, he worried about how these two institutions would be managed. It looked to him as if the United States, the chief funder of the Bretton Woods program, would take charge of its operations, with the other countries functioning as vassals in varying gradations. American self-interest, merchandized as the good of the international community, would then rule the day. Such a prospect filled Morton with dread. Under undemocratic management, he wrote, the Bretton Woods system “might be an instrument of oppression, used to exploit weaker peoples, to promote inflation by wild credit expansion, and in the end breed international hatred and ill will.”

Beard shared Morton’s concerns and grew increasingly alarmed about the imperial role that America would assume in the postwar world. He surmised that the Bretton Woods program would bring into existence a new and improved system of economic imperialism over the economically backward peoples of the earth through the machinery of control employed by the International Monetary Fund and the World Bank. Its military and economic power vastly increased during the war, the United States would dominate the world, as he had written in “Giddy Minds and Foreign Quarrels.” Euphemistic language about the cooperation about America and its allies would continue in solemn usage, but Beard had learned from his study of history that empires did not permit genuine equality. The empire that America had won would conform to the laws of hegemony and proceed through the same phases of decline and fall as its predecessors.

If anyone writing about economics today gives voice to the essential concerns of Beard about the Bretton Woods system, as well as its latter-day globalization-inspired updates, it is Michael Hudson. Super Imperialism: The Economic Strategy of the American Empire appeared in 1972 as an indictment of the World Bank and the International Monetary Fund for imposing destructive policies on the world’s debtor economies. The book also provides background information essential for understanding the origins of the postwar economic order and the significance in its creation of the wartime fusion of business and government planning for military ends. America’s foreign policy and its wars ever since cannot be understood outside the context of a corporate capitalist ideology and ultimate concern, to use Beard’s term, for the country’s economic stake abroad. Subsequent editions of the book appeared in 2003 and 2021. His latest book is The Destiny of Civilization: Finance Capitalism, Industrial Capitalism or Socialism (2022).

In a Counterpunch Radio interview with Eric Draitser on July 15, 2022, Hudson summarized the record of economic desolation that the American-dominated IMF has compiled since its creation nearly eighty years ago. The further affliction of neoliberal refinements to the economic power structure in the contemporary era of globalization has brought the world to new depths of misery with worse to come. About the specific American case, there is in Hudson’s account an echo of Beard’s castigations in The Open Door at Home of economic globalization as a battering ram for the deindustrialization that has destroyed job security and a living wage for working-class people. Moreover, it can be deduced from Hudson’s larger argument about the worldwide impact of economic globalization that the growing disparity between the rich and the poor creates the environment conducive to the war and terrorism of our time.

The war that Hudson discussed in his recent Counterpunch Radio interview is the one in Ukraine. He spoke about economic sanctions imposed on Russia and the catastrophic collateral effects they would have on Europe, Africa, Asia, and Latin America as the prices of energy and food climbed out of reach for consumers. Money could always be saved in the preferred neoliberal way by devaluing the cost of labor, though only at high risk of instability for many societies. Whatever the risk for other peoples, some Americans stood to prosper from their own oil and grain sales. Such American profits comprised only the short money to be accrued. As always since Bretton Woods, the long-term returns would come from the continued maintenance of the American empire, the only one permitted by Washington to exist in our vaunted rules-based order. The far-famed Wolfowitz Doctrine of 1992 put this point in italics with its discouraging words for any country contemplating a challenge to America’s world leadership. It follows from Wolfowitz-Doctrine logic that Putin is not the only one with an agenda in Ukraine. We have an agenda there, too. It is the one Beard described in the “Giddy Minds and Foreign Quarrels” passage where he envisages America embracing the imperial responsibilities of a new Rome.

This article was originally published in Counterpunch, September 23, 2022

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