On 7 April 1950, a document known as National Security Memorandum 68 (NSC 68), which had been drafted largely by Secretary of State Dean Acheson and the director of the State Department's Policy Planning Bureau, Paul Nitze, arrived on President Harry Truman's desk. NSC 68 warned darkly that if drastic remedial measures were not taken soon, the “free world” was in grave danger of being overwhelmed by the superior military might of the Soviet Union. The outbreak of the Korean War two months later enabled Truman to win public and Congressional approval for the ambitious and expensive program of defense spending that had been proposed by the memorandum. The result was the transformation of the essentially reactive policy of “containment” into a massive increase in the defense budget and the deployment of hundreds of thousands of American soldiers to defend Western Europe. Historians ever since have labored to identify the motivations of the authors of the memorandum, which laid the groundwork for this phenomenal military buildup at a time when the evidence of a Soviet security threat to Western Europe was minimal.

The historical literature on the origins of NSC 68 focusses on two crucial events in the year 1949. The first was the discovery in September that the Soviet Union had broken the American nuclear monopoly with a successful test of an atomic bomb. The second was the establishment the following month of the People's Republic of China. Curt Cardwell has waged a frontal assault on that conventional interpretation. He marshals documentary evidence to argue that neither Acheson, Nitze, nor Truman had been terribly upset about the Soviet atomic test and the Communist victory in the Chinese Civil War. Their principal concern, he contends, was economic rather than military. They worried that the anticipated termination in 1952 of Marshall Plan aid to the noncommunist countries of Western Europe would cut short the postwar economic recovery of America's transatlantic partners by saddling them with crushing balance-of-payments deficits. Unable to produce sufficient goods for export to the American market, the Europeans would lack the dollars required to pay for imports from the United States. The resulting decline in transatlantic trade caused by this “dollar gap” would be catastrophic for both shores of the ocean. Worse, it threatened to severely disrupt and possibly destroy the fledgling capitalist global economic order that the United States had forged at the end of the Second World War.

A parsimonious US Congress appeared disinclined to appropriate additional funds to promote European reconstruction after the exhaustion of the Marshall Plan appropriations. So the legislators had to be frightened into supporting a sharp increase in military spending to offset the end of foreign economic aid. The dollars that flowed into Western Europe during the 1950s financed the construction of bases and airfields and supported the GIs and their dependents during the 1950s. The funds spent in Western Europe bridged the dollar gap after the Marshall Plan funds ran out, enabling America's NATO allies to purchase American products. The ultimate result was a multilateral, capitalist international economy linking the United States to the noncommunist half of Europe, marked by a spectacular increase in productivity and prosperity in the Euro-Atlantic region during the 1950s and 1960s. But, according to Cardwell, the price that was paid for those economic gains was “a long, drawn out Cold War.” Following the argument advanced by Geoffrey Roberts, he contends that that Cold War was unnecessary, since Stalin was exclusively concerned about ensuring the security of his country and had no master plan for world or even European domination (270).Footnote ¹

Cardwell dismisses previous historical interpretations of the origins of NSC 68, most of which focus on the security aspect of American foreign policy in the Truman years and ignore its economic underpinnings. He is particularly harsh on Melvyn Leffler, who dismisses the dollar gap as a major consideration.Footnote ² Cardwell's evidence for this radical revisionist interpretation is rather sparse. It is largely based on occasional comments made by Acheson and Nitze as well as discussions in two study groups formed by the Council on Foreign Relations about the threat to the world economy posed by Western Europe's balance-of-payments deficits. The fact that there is no mention of the dollar gap in Acheson's and Nitze's memoirs, nor in NSC 68 itself, suggests that there must have been a clandestine conspiracy conducted by the memorandum's architects to conceal their true motives for launching what would later be called the “National Security State.” One cannot rule out that possibility. But until more credible “smoking guns” in the paper trail are identified, the revisionist argument of this lucid book deserves the Scots verdict “not proven.”