Red White

Wednesday, March 27th, 2013

As the chief architect of the Bretton Woods monetary system, Harry Dexter White, then a little-known U.S. Treasury official, outmaneuvered his brilliant British counterpart, John Maynard Keynes, to produce a New Deal for a new world that protected American interests — and Soviet interests:

Over the course of 11 years, beginning in the mid-1930s, White acted as a Soviet mole, giving the Soviets secret information and advice on how to negotiate with the Roosevelt administration and advocating for them during internal policy debates. White was arguably more important to Soviet intelligence than Alger Hiss, the U.S. State Department official who was the most famous spy of the early Cold War.

The truth about White’s actions has been clear for at least 15 years now, yet historians remain deeply divided over his intentions and his legacy, puzzled by the chasm between White’s public views on political economy, which were mainstream progressive and Keynesian, and his clandestine behavior on behalf of the Soviets. Until recently, the White case has resembled a murder mystery with witnesses and a weapon but no clear motive.

Now we have one. The closest thing to a missing link between the official White and the secret White is an unpublished handwritten essay on yellow-lined notepaper that I found buried in a large folder of miscellaneous scribblings in White’s archives at Princeton University. Apparently missed by his previous chroniclers, it provides a fascinating window onto the aspirations and mindset of this intellectually ambitious overachiever at the height of his power, in 1944.

In the essay, hazily titled “Political-Economic Int. of Future,” White describes a postwar world in which the Soviet socialist model of economic organization, although not supplanting the American liberal capitalist one, would be ascendant. “In every case,” he argues, “the change will be in the direction of increased [government] control over industry, and increased restrictions on the operations of competition and free enterprise.” Whereas White believed in democracy and human rights, he consistently downplayed both the lack of individual liberty in the Soviet Union (“The trend in Russia seems to be toward greater freedom of religion. . . . The constitution of [the] USSR guarantees that right”) and the Soviets’ foreign political and military adventurism (“The policy pursued by present day Russia [is one] of not actively supporting [revolutionary socialist] movements in other countries”).

In the essay, White argues that the West is hypocritical in its demonization of the Soviet Union. He urges the United States to draw the Soviets into a tight military alliance in order to deter renewed German and Japanese aggression. But such an alliance, White lamented, faced formidable obstacles: “rampant imperialism” in the United States, hiding under “a variety of patriotic cloaks”; the country’s “very powerful Catholic hierarchy,” which might “well find an alliance with Russia repugnant”; and groups “fearful that any alliance with a socialist country cannot but strengthen socialism and thereby weaken capitalism.”

After sweeping away internal politics, religion, and foreign policy as honest sources of Western opposition to the Soviet Union, White concludes that the true foundation of the conflict must be economic ideology. “It is basically [the] opposition of capitalism to socialism,” he writes. “Those who believe seriously in the superiority of capitalism over socialism” — a group from which White apparently excluded himself — “fear Russia as the source of socialist ideology.” He then ends his essay with what, coming from the U.S. government’s most important economic strategist, can only be described as an astounding conclusion: “Russia is the first instance of a socialist economy in action. And it works!”

It turns out that the chief designer of the postwar global capitalist financial architecture saw Soviet behavior through rose-colored glasses not simply because he believed that the Soviet Union was a vital U.S. ally but because he also believed passionately in the success of the bold Soviet experiment with socialism.

I am shocked — shocked! — to find that a mainstream progressive supported Soviet Communism.

(Hat tip to Foseti, who notes that none of this was unknown at the time, but only crazy people believed it.)


  1. Ben says:

    Ah, another “conspiracy theory” elevated to “history”. It generally takes about 40-60 years, it seems (long enough to bury the detractors while research continues).

    Maybe in another two or three decades, it’ll show up in the progressive K-12 school textbooks?

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