Butter and Guns: America's Cold War Economic Diplomacy.

• Author: ADAMSON, MICHAEL
• Position: Review

Butter and Guns: America's Cold War Economic Diplomacy By Diane B. Kunz New York: The Free Press, 1997. Pp. x, 422. $30.

Butter and Guns: America's Cold War Economic Diplomacy

Until the early 1970s, post-World War II America experienced a remarkable period of high economic growth rates, rising real incomes, and low inflation. Real gross domestic product (in 1987 dollars) grew from $1,603 billion in 1945 to $2,874 billion in 1970, while real disposable income rose by 55 percent. To what did Americans owe their postwar prosperity? In Butter and Guns: America's Cold War Economic Diplomacy, Yale University professor of history Diane B. Kunz argues: the defense spending policies of the national security state.

At the outset, Kunz tightly states: "Previous histories of the Cold War have stressed open conflict and diplomacy. It is high time for a new history stressing economics" (p. 2). However, what follows is a study concerned more with diplomacy than with economics. Ironically, that focus is the main strength of the book. Considered as a series of essays in diplomatic history, Butter and Guns makes for a solid study. It is on the level of economic history that Kunz invites criticism.

In relating significant episodes of economic diplomacy in the postwar period, Kunz displays fine narrative skills. Some excellent chapters illustrate her point that America's position in the international political economy gave it a decided advantage when it came to working out diplomatic arrangements with European allies and third-world nations. The chapter on President Richard M. Nixon's decision to sacrifice the Bretton Woods international financial regime to save his expansionary domestic economic policies (and help his 1972 reelection bid) is particularly telling. As Kunz demonstrates, the size of America's economy and military, coupled with the fact that the dollar underpinned the world's trading and financial systems, enabled America to secure economic concessions diplomatically that no other nation could.

Moreover, her chapters on the 1956 Suez crisis, the Alliance for Progress, and the oil shocks of the 1970s demonstrate her argument that economic sanctions generally fail as weapons of diplomacy. She also ably shows how the Alliance for Progress itself fell far short of its highly touted development goals. In practice it was no more successful than previous, bilateral aid to Latin America. Aimed at ensuring that Latin American governments remained...