Sovereign Soldiers: How the U.S. Military Transformed the Global Economy After World War II, by Grant Madsen, presents a convincing case for the ambitious proposition announced in its title. By following a cohort of a half-dozen American military leaders involved in foreign occupations, Madsen shows how these men forged a distinctive concept of political economy that they promoted around the world and, later, in their home country. U.S. Army generals Dwight D. Eisenhower, Lucius Clay, Douglas MacArthur, William Draper, and William Marquat, as well as Detroit banker Joseph Dodge—who was recruited to assist occupation governments—forged a signature set of policies based on a vision of economic health predicated on sound money. By prioritizing low inflation and balanced budgets, they hoped to fulfill the vision of “free trade and international capital flows as imagined at Bretton Woods” (5).

Madsen reconstructs vivid accounts of the decisions that American military occupation leaders faced in Germany and Japan as they tested alternative models of political and economic futures for their defeated enemies. U.S. Army generals found themselves facing problems of coordinating currency with other occupying powers, food and labor shortages, stalled production, high inflation, and upended banking, public finance, and government institutions. While Washington and wartime allies pushed them to economically punish their enemies, military occupation leaders informed by experiences in the Philippines, Panama, and interwar Europe tended to converge on a “soft peace” model that saw domestic economic stability in defeated countries as the most important prerequisite for long-term political stability. The resulting consensus of austerity across occupied economies in the late 1940s sat uneasily with critics who pointed out that the U.S. was pursuing an apparently contradictory Keynesian deficit spending program at home. However, when Eisenhower became president he brought with him to his administration military occupation officials from Germany and Japan, giving them a platform to remake macroeconomic policy in the United States on the model of their occupation experiences.

Sovereign Soldiers makes an important intervention in the history of foreign relations by showing how the army functioned as an “external state” (a concept Madsen adopts from political scientist Robert Latham), emphasizing the relative autonomy that military officials in the field had in creating policy and governing non-Americans in foreign territories (7). Madsen also centers the military in the history of economic thought, adding new context that should be integrated into standard histories of both international development economics and domestic macroeconomic policy regimes. While political leaders and economists tend to take center stage in accounts of economic development policy, it was in fact military officers and business leaders recruited to service in military organizations who developed key components of American economic policy abroad and at home.

To the book’s self-description as both an “institutional history of military government” and an “intellectual history of the political economy that military government created” could be added a third designation as a collective biography of the top leadership of U.S. military occupation (2–3). This people-driven approach succeeds in convincingly arguing that military leaders had a great deal of direct influence on occupied economies, that international economic development policy was forged in occupation, and that this in turn influenced later domestic economic policy. The leader-focused analysis may also be a factor in the author’s apparent endorsement of his subjects’ anti-Keynesian conclusions, especially his attribution of the long-term success of postwar German and Japanese economies to “the governing abilities of these soldier sovereigns” who imposed balanced budget policies (9). In the same vein, Madsen suggests that, had Eisenhower’s successors as president followed his commitment to price stability, the U.S. economy might have avoided its economic woes of the 1970s (256–257).

Of interest to scholars of occupation will be the absence of the concept of empire or racial ideology in Madsen’s narrative. This is in stark contrast to recent research on U.S. military occupations, including the analysis of the lengthy U.S. Marine Corps occupations of Nicaragua, Haiti, and the Dominican Republic offered in Peter James Hudson’s Bankers and Empire: How Wall Street Colonized the Caribbean (2017). Nevertheless, Sovereign Soldiers is an important contribution to the history of both military government and economic thought that will hopefully inspire further research into the military’s historical importance as a force of economic transformation.