1990’s : US rapes Russia (The Nation)

The Harvard Boys Do Russia After seven years of economic “reform” financed by billions of dollars in U.S. By Janine R. Wedel MAY 14, 1998 Anatoly Chubais holds a press-conference in Moscow, June 1996. (Andres Hernandez / Getty Images) Subscribe To The Nation Subscribe now for as little as $2 a month!

After seven years of economic “reform” financed by billions of dollars in U.S. and other Western aid, subsidized loans and rescheduled debt, the majority of Russian people find themselves worse off economically. The privatization drive that was supposed to reap the fruits of the free market instead helped to create a system of tycoon capitalism run for the benefit of a corrupt political oligarchy that has appropriated hundreds of millions of dollars of Western aid and plundered Russia’s wealth.

The architect of privatization was former First Deputy Prime Minister Anatoly Chubais, a darling of the U.S. and Western financial establishments. Chubais’s drastic and corrupt stewardship made him extremely unpopular. According to The New York Times, he “may be the most despised man in Russia.”

Essential to the implementation of Chubais’s policies was the enthusiastic support of the Clinton Administration and its key representative for economic assistance in Moscow, the Harvard Institute for International Development. Using the prestige of Harvard’s name and connections in the Administration, H.I.I.D. officials acquired virtual carte blanche over the U.S. economic aid program to Russia, with minimal oversight by the government agencies involved. With this access and their close alliance with Chubais and his circle, they allegedly profited on the side. Yet few Americans are aware of H.I.I.D.’s role in Russian privatization, and its suspected misuse of taxpayers’ funds.

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At the recent U.S.-Russian Investment Symposium at Harvard’s John F. Kennedy School of Government, Yuri Luzhkov, the Mayor of Moscow, made what might have seemed to many an impolite reference to his hosts. After castigating Chubais and his monetarist policies, Luzhkov, according to a report of the event, “singled out Harvard for the harm inflicted on the Russian economy by its advisers, who encouraged Chubais’s misguided approach to privatization and monetarism.” Luzhkov was referring to H.I.I.D. Chubais, who was delegated vast powers over the economy by Boris Yeltsin, was ousted in Yeltsin’s March purge, but in May he was given an immensely lucrative post as head of Unified Energy System, the country’s electricity monopoly. Some of the main actors with Harvard’s Russia project have yet to face a reckoning, but this may change if a current investigation by the U.S. government results in prosecutions.

The activities of H.I.I.D. in Russia provide some cautionary lessons on abuse of trust by supposedly disinterested foreign advisers, on U.S. arrogance and on the entire policy of support for a single Russian group of so-called reformers. The H.I.I.D. story is a familiar one in the ongoing saga of U.S. foreign policy disasters created by those said to be our “best and brightest.”

Through the late summer and fall of 1991, as the Soviet state fell apart, Harvard Professor Jeffrey Sachs and other Western economists participated in meetings at a dacha outside Moscow where young, pro-Yeltsin reformers planned Russia’s economic and political future. Sachs teamed up with Yegor Gaidar, Yeltsin’s first architect of economic reform, to promote a plan of “shock therapy” to swiftly eliminate most of the price controls and subsidies that had underpinned life for Soviet citizens for decades. Shock therapy produced more shock—not least, hyperinflation that hit 2,500 percent—than therapy. One result was the evaporation of much potential investment capital: the substantial savings of Russians. By November 1992, Gaidar was under attack for his failed policies and was soon pushed aside. When Gaidar came under seige, Sachs wrote a memo to one of Gaidar’s principal opponents, Ruslan Khasbulatov, Speaker of the Supreme Soviet, then the Russian parliament, offering advice and to help arrange Western aid and contacts in the U.S. Congress.

Enter Anatoly Chubais, a smooth, 42-year-old English-speaking would-be capitalist who became Yeltsin’s economic czar. Chubais, committed to “radical reform,” vowed to construct a market economy and sweep away the vestiges of Communism. The U.S. Agency for International Development (U.S.A.I.D.), without experience in the former Soviet Union, was readily persuaded to hand over the responsibility for reshaping the Russian economy to H.I.I.D., which was founded in 1974 to assist countries with social and economic reform.

H.I.I.D. had supporters high in the Administration. One was Lawrence Summers, himself a former Harvard economics professor, whom Clinton named Under Secretary of the Treasury for International Affairs in 1993. Summers, now Deputy Treasury Secretary, had longstanding ties to the principals of Harvard’s project in Russia and its later project in Ukraine.

Summers hired a Harvard Ph.D., David Lipton (who had been vice president of Jeffrey D. Sachs and Associates, a consulting firm), to be Deputy Assistant Treasury Secretary for Eastern Europe and the Former Soviet Union. After Summers was promoted to Deputy Secretary, Lipton moved into Summers’s old job, assuming “broad responsibility” for all aspects of international economic policy development. Lipton co-wrote numerous papers with Sachs and served with him on consulting missions in Poland and Russia. “Jeff and David always came [to Russia] together,” said a Russian representative at the International Monetary Fund. “They were like an inseparable couple.” Sachs, who was named director of H.I.I.D. in 1995, lobbied for and received U.S.A.I.D. grants for the institute to work in Ukraine in 1996 and 1997.

Andrei Shleifer, a Russian-born émigré and already a tenured professor of economics at Harvard in his early 30s, became director of H.I.I.D.’s Russia project. Shleifer was also a protégé of Summers, with whom he received at least one foundation grant. Summers wrote a promotional blurb for Privatizing Russia (a 1995 book co-written by Shleifer and subsidized by H.I.I.D.) declaring that “the authors did remarkable things in Russia, and now they have written a remarkable book.”

Another Harvard player was a former World Bank consultant named Jonathan Hay, a Rhodes scholar who had attended Moscow’s Pushkin Institute for Russian Language. In 1991, while still at Harvard Law School, he had become a senior legal adviser to the G.K.I., the Russian state’s new privatization committee; the following year he was made H.I.I.D.’s general director in Moscow. The youthful Hay assumed vast powers over contractors, policies and program specifics; he not only controlled access to the Chubais circle but served as its mouthpiece.

H.I.I.D.’s first awards from U.S.A.I.D. for work in Russia came in 1992, during the Bush Administration. Over the next four years, with the endorsement of the Clinton Administration, the institute would be awarded $57.7 million—all but $17.4 million without competitive bidding. For example, in June 1994 Administration officials signed a waiver that enabled H.I.I.D. to receive $20 million for its Russian legal reform program. Approving such a large sum as a noncompetitive “amendment” to a much smaller award (the institute’s original 1992 award was $2.1 million) was highly unusual, as was the citation of “foreign policy” considerations as the reason for the waiver. Nonetheless, the waiver was endorsed by five U.S. government agencies, including the Treasury Department and the National Security Council, two of the leading agencies formulating U.S. aid policy toward Russia. In addition to the millions it received directly, H.I.I.D. helped steer and coordinate some $300 million in U.S.A.I.D. grants to other contractors, such as the Big Six accounting firms and the giant Burson-Marsteller P.R. firm.

A s Yeltsin’s Russian government took over Soviet assets in late 1991 and early 1992, several privatization schemes were floated. The one the Supreme Soviet passed in 1992 was structured to prevent corruption, but the program Chubais eventually carried out instead encouraged the accumulation of property in a few hands and opened the door to widespread corruption. It was so controversial that Chubais ultimately had to rely largely on Yeltsin’s presidential decrees, not parliamentary approval, for implementation. Many U.S. officials embraced this dictatorial modus operandi, and Jonathan Hay and his associates drafted many of the decrees. As U.S.A.I.D.’s Walter Coles, an early supporter of Chubais’s privatization program, put it, “If we needed a decree, Chubais didn’t have to go through the bureaucracy.”

With help from his H.I.I.D. advisers and other Westerners, Chubais and his cronies set up a network of aid-funded “private” organizations that enabled them to bypass legitimate government agencies and circumvent the new parliament of the Russian Federation, the Duma. Through this network, two of Chubais’s associates, Maxim Boycko (who co-wrote Privatizing Russia with Shleifer) and Dmitry Vasiliev, oversaw almost a third of a billion dollars in aid money and millions more in loans from international financial institutions.

Much of this largesse flowed through the Moscow-based Russian Privatization Center (R.P.C.). Founded in 1992 under the direction of Chubais, who was chairman of its board even while head of the G.K.I., and Boycko, who was C.E.O. for most of its existence, the R.P.C. was legally a private, nonprofit, nongovernmental organization. In fact, it was established by another Yeltsin decree and helped carry out government policy on inflation and other macroeconomic issues and also negotiated loans with international financial institutions. H.I.I.D. was a founder of the R.P.C., and Andrei Shleifer served on the board of directors. Its other members were recruited by Chubais, according to Ira Lieberman, a senior manager in the private-sector development department of the World Bank who helped design the R.P.C. With H.I.I.D.’s help, the R.P.C. received some $45 million from U.S.A.I.D. and millions from the European Union, individual European governments, Japan and other countries, as well as loans from the World Bank ($59 million) and the European Bank for Reconstruction and Development ($43 million), which must be repaid by the Russian people. One result of this funding was the enrichment, political and financial, of Chubais and his allies.

H.I.I.D. helped create several more aid-funded institutions. One was the Federal Commission on Securities, a rough equivalent of the U.S. Securities and Exchange Commission (S.E.C.). It too was established by presidential decree, and it was run by Chubais protégé Dmitry Vasiliev. The commission had very limited enforcement powers and funding, but U.S.A.I.D. supplied the cash through two Harvard-created institutions run by Hay, Vasiliev and other members of the Harvard-Chubais coterie.

One of these was the Institute for Law-Based Economy, funded by both the World Bank and U.S.A.I.D. This institute, set up to help develop a legal and regulatory framework for markets, evolved to encompass drafting decrees for the Russian government; it got nearly $20 million from U.S.A.I.D. Last August, the Russian directors of I.L.B.E. were caught removing $500,000 worth of U.S. office equipment from the organization’s Moscow office; the equipment was returned only after weeks of U.S. pressure. When auditors from U.S.A.I.D.’s inspector general’s office sought records and documents regarding I.L.B.E. operations, the organization refused to turn them over.

The device of setting up private organizations backed by the power of the Yeltsin government and maintaining close ties to H.I.I.D. was a way of insuring deniability. Shleifer, Hay and other Harvard principals, all U.S. citizens, were “Russian” when convenient. Hay, for example, served alternately and sometimes simultaneously as aid contractor, manager of other contractors and representative of the Russian government. If Western donors were attacked for funding controversial privatization practices of the state, the donors could claim they were funding “private” organizations, even if these organizations were controlled or strongly influenced by key state officials. If the Chubais circle came under fire for misuse of funds, they could claim that Americans made the decisions. Foreign donors could insist that the Russians acted on their own.

Against the backdrop of Russia’s Klondike capitalism, which they were helping create and Chubais and his team were supposedly regulating, the H.I.I.D. advisers exploited their intimate ties with Chubais and the government and were allegedly able to conduct business activities for their own enrichment. According to sources close to the U.S. government’s investigation, Hay used his influence, as well as U.S.A.I.D.-financed resources, to help his girlfriend, Elizabeth Hebert, set up a mutual fund, Pallada Asset Management, in Russia. Pallada became the first mutual fund to be licensed by Vasiliev’s Federal Commission on Securities. Vasiliev approved Pallada ahead of Credit Suisse First Boston and Pioneer First Voucher, much larger and more established financial institutions.

After Pallada was set up, Hebert, Hay, Shleifer and Vasiliev looked for ways to continue their activities as aid funds dwindled. Using I.L.B.E. resources and funding, they established a private consulting firm with taxpayer money. One of the firm’s first clients was Shleifer’s wife, Nancy Zimmerman, who operated a Boston-based hedge fund that traded heavily in Russian bonds. According to Russian registration documents, Zimmerman’s company set up a Russian firm with Sergei Shishkin, the I.L.B.E. chief, as general director. Corporate documents on file in Moscow showed that the address and phone number of the company and the I.L.B.E. were the same.

Then there is the First Russian Specialized Depository, which holds the records and assets of mutual fund investors. This institution, funded by a World Bank loan, also worked to the benefit of Hay, Vasiliev, Hebert and another associate, Julia Zagachin. According to sources close to the U.S. government’s investigation, Zagachin, an American married to a Russian, was selected to run the depository even though she lacked the required capital. Ostensibly, there was to be total separation between the depository and any mutual fund using its services. But the selection of Zagachin defied this tenet of open markets: Pallada and the depository were run by people with ties to each other through H.I.I.D. Thus the very people who were supposed to be the trustees of the system not only undercut the aid program’s stated goal of building independent institutions but replicated the Soviet practice of skimming assets to benefit the nomenklatura.

Anne Williamson, a journalist who specializes in Soviet and Russian affairs, details these and other conflicts of interest between H.I.I.D.’s advisers and their supposed clients—the Russian people—in her forthcoming book, How America Built the New Russian Oligarchy. For example, in 1995, in Chubais-organized insider auctions of prime national properties, known as loans-for-shares, the Harvard Management Company (H.M.C.), which invests the university’s endowment, and billionaire speculator George Soros were the only foreign entities allowed to participate. H.M.C. and Soros became significant shareholders in Novolipetsk, Russia’s second-largest steel mill, and Sidanko Oil, whose reserves exceed those of Mobil. H.M.C. and Soros also invested in Russia’s high-yielding, I.M.F.-subsidized domestic bond market.

Even more dubious, according to Williamson, was Soros’s July 1997 purchase of 24 percent of Sviazinvest, the telecommunications giant, in partnership with Uneximbank’s Vladimir Potanin. It was later learned that shortly before this purchase Soros had tided over Yeltsin’s government with a backdoor loan of hundreds of millions of dollars while the government was awaiting proceeds of a Eurobond issue; the loan now appears to have been used by Uneximbank to purchase Norilsk Nickel in August 1997. According to Williamson, the U.S. assistance program in Russia was rife with such conflicts of interest involving H.I.I.D. advisers and their U.S.A.I.D.-funded Chubais allies, H.M.C. managers, favored Russian bankers, Soros and insider expatriates working in Russia’s nascent markets.

Despite exposure of this corruption in the Russian media (and, far more hesitantly, in the U.S. media), the H.I.I.D.-Chubais clique remained until recently the major instrument of U.S. economic aid policy to Russia. It even used the high-level Gore-Chernomyrdin Commission, which helped orchestrate the cooperation of U.S.-Russian oil deals and the Mir space station. The commission’s now-defunct Capital Markets Forum was chaired on the Russian side by Chubais and Vasiliev, and on the U.S. side by S.E.C. chairman Arthur Levitt Jr. and Treasury Secretary Robert Rubin. Andrei Shleifer was named special coordinator to all four of the Capital Markets Forum’s working subgroups. Hebert, Hay’s girlfriend, served on two of the subgroups, as did the C.E.O.s of Salomon Brothers, Merrill Lynch and other powerful Wall Street investment houses. When The Nation contacted the S.E.C. for information about Capital Markets, we were told to call Shleifer for comment. Shleifer, who is under investigation by U.S.A.I.D.’s inspector general for misuse of funds, declined to be interviewed for this article. A U.S. Treasury spokesman said Shleifer and Hebert were appointed to Capital Markets by the Chubais group—specifically, according to other sources, by Dmitry Vasiliev.

In fact, H.I.I.D. projects were never adequately monitored by U.S.A.I.D. In 1996, a General Accounting Office report described U.S.A.I.D.’s management and oversight of H.I.I.D. as “lax.” In early 1997, U.S.A.I.D.’s inspector general received incriminating documents about H.I.I.D.’s activities in Russia and began investigating. In May Shleifer and Hay lost their projects when the agency canceled most of the $14 million still earmarked for H.I.I.D., citing evidence that the two managers were engaged in activities for “private gain.” The men had allegedly used their positions to profit from investments in the Russian securities markets and other private enterprises. According to sources close to the U.S. investigation, while advising the Russian government on capital markets, for example, Hay and his father allegedly used inside information to invest in Russian government bonds. Hay and Shleifer may ultimately face criminal and/or civil prosecution. Shleifer remains a tenured professor at Harvard, and Hay continues to work with members of the Chubais clique in Russia. Sachs, who has stated he never invests in countries where he advises and who is not implicated in the current U.S. government investigation, remains head of H.I.I.D. After Yeltsin’s Cabinet shakeup in March, Chubais was moved to a new position of prominence. His role in Russia’s political-economic affairs had been tarnished by reports of personal enrichment. Two examples:

In February 1996, Chubais’s Foundation for the Protection of Private Property received a five-year, $2.9 million unsecured interest-free loan. According to the pro-Yeltsin, pro-reform Izvestia, Stolichny Bank, an institution that enjoys lines of credit from the European Bank for Reconstruction and Development and the World Bank, made the loan in return for a small percentage of the Sibneft oil company when it was sold at auction, and for later control of one of the state’s largest banks. Chubais defended himself by saying such practices were common in the West, but failed to provide any reasonable explanation for some $300,000 in 1996 income not accounted for by his government salary.

During Yeltsin’s 1996 presidential campaign, security officials apprehended two close associates of Chubais as they were walking out of a main government building with a box containing more than $500,000 in cash for Yeltsin’s campaign. According to tapes of a later meeting recorded by a member of one of Russia’s security services, Chubais and his cronies strategized about burying evidence of any illegal transaction, while publicly claiming that any allegations of chicanery were the work of political enemies. A protracted, lackadaisical investigation began but was eventually dropped—more evidence of Chubais’s remarkable resilience. He remained valuable to Yeltsin largely because of his perceived ability to deal with the West, where many still regard him as a symbol of Russian reform.

During the five years that the Chubais clique presided over Western economic aid and policy in Russia, they did enormous harm. By unconditionally backing Chubais and his associates, the Harvard operatives, their U.S. government patrons and Western donors may have reinforced the new post-Soviet oligarchical system. Shleifer acknowledged as much in Privatizing Russia, the book he wrote with Chubais crony Maxim Boycko, who with his patron would later be caught in another financial indiscretion involving taking a “veiled bribe” in the form of advances on a book on the history of Russian privatization. “Aid can change the political equilibrium,” they said, “by explicitly helping free-market reformers to defeat their opponents.”

Richard Morningstar, U.S. aid coordinator for the former Soviet Union, stands by this approach: “If we hadn’t been there to provide funding to Chubais, could we have won the battle to carry out privatization? Probably not. When you’re talking about a few hundred million dollars, you’re not going to change the country, but you can provide targeted assistance to help Chubais.” In early 1996, after he was temporarily removed from high office by Yeltsin because he represented unpopular economic policies, H.I.I.D. came to his rescue by placing him on its U.S.A.I.D.-funded payroll, a show of loyalty that former U.S.A.I.D. assistant administrator Thomas Dine says he supported. Western policy-makers like Morningstar and Dine have depicted Chubais as a selfless visionary battling reactionary forces. In the spring of 1997, Summers called him and his associates a “dream team.” With few exceptions, the U.S. mainstream media have promulgated this view.

United States policy toward Russia requires a full-scale Congressional investigation. The General Accounting Office did investigate H.I.I.D.’s Russian and Ukrainian projects in 1996, but the findings were largely suppressed by the agency’s timid management. The audit team concluded, for example, that the U.S. government exercised “favoritism” toward Harvard, but this conclusion and the supporting documentation were removed from the final report. Last fall Congress asked the G.A.O. to look into Eastern European aid programs and Shleifer’s role in the Gore-Chernomyrdin Commission. Such questions need to be answered, but any serious inquiry must go beyond individual corruption and examine how U.S. policy, using tens of millions in taxpayer dollars, helped deform democracy and economic reform in Russia and helped create a fat-cat oligarchy run amok.

Janine R. WedelJanine R. Wedel is an anthropologist and associate research professor and research fellow at the Institute for European, Russian and Eurasian Studies at The George Washington University, and the author of Collision and Collusion: The Strange Case of Western Aid to Eastern Europe 1989-1998 (St. Martin's).

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We Don’t Need to Go Back to Cold War Spending—We’re Already There

Before Washington embarks on a new Cold War, it’s time to remind ourselves of the global consequences of the last one. By William D. Hartung, Nick Cleveland-Stout and Taylor Giorno MARCH 25, 2022


An aerial view of the Pentagon (Ivan Cholakov / Shutterstock) EDITOR’S NOTE: This article originally appeared at TomDispatch.com. To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com.

A growing chorus of pundits and policy-makers has suggested that Russia’s invasion of Ukraine marks the beginning of a new Cold War. If so, that means trillions of additional dollars for the Pentagon in the years to come coupled with a more aggressive military posture in every corner of the world.

Before this country succumbs to calls for a return to Cold War–style Pentagon spending, it’s important to note that the United States is already spending substantially more than it did at the height of the Korean and Vietnam Wars or, in fact, any other moment in that first Cold War. Even before the invasion of Ukraine began, the Biden administration’s proposed Pentagon budget (as well as related work like nuclear-warhead development at the Department of Energy) was already guaranteed to soar even higher than that, perhaps to $800 billion or more for 2023.

Here’s the irony: Going back to Cold War levels of Pentagon funding would mean reducing, not increasing spending. Of course, that’s anything but what the advocates of such military outlays had in mind, even before the present crisis.

Some supporters of higher Pentagon spending have, in fact, been promoting figures as awe inspiring as they are absurd. Rich Lowry, the editor of the conservative National Review, is advocating a trillion-dollar military budget, while Matthew Kroenig of the Atlantic Council called for the United States to prepare to win simultaneous wars against Russia and China. He even suggested that Congress “could go so far as to double its defense spending” without straining our resources. That would translate into a proposed annual defense budget of perhaps $1.6 trillion. Neither of those astronomical figures is likely to be implemented soon, but that they’re being talked about at all is indicative of where the Washington debate on Pentagon spending is heading in the wake of the Ukraine disaster.

Former government officials are pressing for similarly staggering military budgets. As Reagan-era State Department official and Iran/Contra operative Elliott Abrams argued in a recent Foreign Affairs piece titled “The New Cold War”: “It should be crystal clear now that a larger percentage of GDP [gross domestic product] will need to be spent on defense.” Similarly, in a Washington Post op-ed, former defense secretary Robert Gates insisted that “we need a larger, more advanced military in every branch, taking full advantage of new technologies to fight in new ways.” No matter that the United States already outspends China by a three-to-one margin and Russia by 10-to-one.

Truth be told, current levels of Pentagon spending could easily accommodate even a robust program of arming Ukraine as well as a shift of yet more US troops to Eastern Europe. However, as hawkish voices exploit the Russian invasion to justify higher military budgets, don’t expect that sort of information to get much traction. At least for now, cries for more are going to drown out realistic views on the subject.

Beyond the danger of breaking the budget and siphoning off resources urgently needed to address pressing challenges like pandemics, climate change, and racial and economic injustice, a new Cold War could have devastating consequences. Under such a rubric, the United States would undoubtedly launch yet more military initiatives, while embracing unsavory allies in the name of fending off Russian and Chinese influence.

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The first Cold War, of course, reached far beyond Europe, as Washington promoted right-wing authoritarian regimes and insurgencies globally at the cost of millions of lives. Such brutal military misadventures included Washington’s role in coups in Iran, Guatemala, and Chile; the war in Vietnam; and support for repressive governments and proxy forces in Afghanistan, Angola, Central America, and Indonesia. All of those were justified by exaggerated —even at times fabricated—charges of Soviet involvement in such countries and the supposed need to defend “the free world,” a Cold War term President Biden all-too-ominously revived in his recent State of the Union address (assumedly, yet another sign of things to come).

Indeed, his framing of the current global struggle as one between “democracies and autocracies” has a distinctly Cold War ring to it and, like the term “free world,” it’s riddled with contradictions. After all, from Egypt to Saudi Arabia, the United Arab Emirates to the Philippines, all too many autocracies and repressive regimes already receive ample amounts of US weaponry and military training—no matter that they continue to pursue reckless wars or systematically violate the human rights of their own people. Washington’s support is always premised on the role such regimes supposedly play in fighting against or containing the threats of the moment, whether Iran, China, Russia, or some other country.

Count on one thing: The heightened rhetoric about Russia and China seeking to undermine American influence will only reinforce Washington’s support for repressive regimes. The consequences of that could, in turn, prove to be potentially disastrous.

Before Washington embarks on a new Cold War, it’s time to remind ourselves of the global consequences of the last one.

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COLD WAR I: THE COUPS Dwight D. Eisenhower is often praised as the president who ended the Korean War and spoke out against the military-industrial complex. However, he also sowed the seeds of instability and repression globally by overseeing the launching of coups against nations allegedly moving towards communism or even simply building closer relations with the Soviet Union.

In 1953, with Eisenhower’s approval, the CIA instigated a coup that led to the overthrow of Prime Minister Mohammed Mosaddeqh. In a now-declassified document, the CIA cited the Cold War and the risks of leaving Iran “open to Soviet aggression” as rationales for their actions. The coup installed Reza Pahlavi as the shah of Iran, initiating 26 years of repressive rule that set the stage for the 1979 Iranian revolution that would bring Ayatollah Ruhollah Khomeini to power.

In 1954, the Eisenhower administration launched a coup that overthrew the Guatemalan government of President Jacobo Arbenz. His “crime”: attempting to redistribute to poor peasants some of the lands owned by major landlords, including the US-based United Fruit Company. Arbenz’s internal reforms were falsely labeled communism-in-the-making and a case of Soviet influence creeping into the Western Hemisphere. Of course, no one in the Eisenhower administration made mention of the close ties between the United Fruit Company and both CIA Director Allen Dulles and his brother, Secretary of State John Foster Dulles. Such US intervention in Guatemala would prove devastating with the four decades that followed consumed by a brutal civil war in which up to 200,000 people died.

In 1973, Richard Nixon and Henry Kissinger followed Eisenhower’s playbook by fomenting a coup that overthrew the democratically elected socialist government of Chilean President Salvador Allende, installing the vicious dictatorship of Gen. Augusto Pinochet. That coup was accomplished in part through economic warfare —“making the economy scream,” as Secretary of State Henry Kissinger put it—and partly thanks to CIA-backed bribes and assassinations meant to bolster right-wing factions there. Kissinger would justify the coup, which led to the torture, imprisonment, and death of tens of thousands of Chileans, this way: “I don’t see why we need to stand by and watch a country go Communist due to the irresponsibility of its own people.”

VIETNAM AND ITS LEGACY The most devastating Cold War example of a war justified on anti-communist grounds was certainly the disastrous US intervention in Vietnam. It would lead to the deployment there of more than half a million American troops, the dropping of a greater tonnage of bombs than the United States used in World War II, the defoliation of large parts of the Vietnamese countryside, the massacre of villagers in My Lai and numerous other villages, the deaths of 58,000 US troops and up to 2 million Vietnamese civilians—all while Washington systematically lied to the American public about the war’s “progress.”

US involvement in Vietnam began in earnest during the administrations of Presidents Harry Truman and Eisenhower, when Washington bankrolled the French colonial effort there to subdue an independence movement. After a catastrophic French defeat at Dien Bien Phu in 1954, the United States took over the fight, first with covert operations and then counterinsurgency efforts championed by the administration of John F. Kennedy. Finally, under President Lyndon Johnson Washington launched an all-out invasion and bombing campaign.

In addition to being an international crime writ large, in what became a Cold War tradition for Washington, the conflict in Vietnam would prove to be profoundly anti-democratic. There’s no question that independence leader Ho Chi Minh would have won the nationwide election called for by the 1954 Geneva Accords that followed the French defeat. Instead, the Eisenhower administration, gripped by what was then called the “domino theory”—the idea that the victory of communism anywhere would lead other countries to fall like so many dominos to the influence of the Soviet Union—sustained an undemocratic right-wing regime in South Vietnam.

That distant war would, in fact, spark a growing antiwar movement in this country and lead to what became known as the “Vietnam Syndrome,” a public resistance to military intervention globally. While that meant an ever greater reliance on the CIA, it also helped keep the United States out of full-scale boots-on-the-ground conflicts until the 1991 Persian Gulf War. Instead, the post-Vietnam “way of war” would be marked by a series of US-backed proxy conflicts abroad and the widespread arming of repressive regimes.

The defeat in Vietnam helped spawn what was called the Nixon Doctrine, which eschewed large-scale intervention in favor of the arming of American surrogates like the Shah of Iran and the Suharto regime in Indonesia. Those two autocrats typically repressed their own citizens, while trying to extinguish people’s movements in their regions. In the case of Indonesia, Suharto oversaw a brutal war in East Timor, given the green light and supported financially and with weaponry by the Nixon administration.

SUPPORT OUR WORK WITH A DIGITAL SUBSCRIPTION. Get unlimited access: $9.50 for six months. “FREEDOM FIGHTERS” Once Ronald Reagan was elected president in 1981, his administration began to push support for groups he infamously called “freedom fighters.” Those ranged from extremist mujahideen fighters against the Soviets in Afghanistan to Jonas Savimbi’s forces in Angola to the Nicaraguan Contras. The US funding and arming of such groups would have devastating consequences in those countries, setting the stage for the rise of a new generation of corrupt regimes, while arming and training individuals who would become members of Al Qaeda.

The Contras were an armed right-wing rebel movement cobbled together, funded, and supplied by the CIA. Americas Watch accused them of rape, torture, and the execution of civilians. In 1984, Congress prohibited the Reagan administration from funding them, thanks to the Boland amendment (named for Massachusetts Democratic Representative Edward Boland). In response, administration officials sought a work-around. In the end, Lieutenant Colonel Oliver North, a Marine and member of the National Security Council, would devise a scheme to supply arms to Iran, while funneling excess profits from the sales of that weaponry to the Contras. The episode became known as the Iran/Contra scandal and demonstrated the lengths to which zealous Cold Warriors would go to support even the worst actors as long as they were on the “right side” (in every sense) of the Cold War struggle.

Chief among this country’s blunders of that previous Cold War era was its response to the Soviet invasion of Afghanistan, a policy that still haunts America today. Concerns about that invasion led the administration of President Jimmy Carter to step up weapons transfers through a covert arms pipeline to a loose network of oppositional fighters known as the mujahideen. President Reagan doubled down on such support, even meeting with the leaders of mujahideen groups in the Oval Office in 1983. That relationship would, of course, backfire disastrously as Afghanistan descended into a civil war after the Soviet Union withdrew. Some of those Reagan had praised as “freedom fighters” helped form Al Qaeda and later the Taliban. The United States by no means created the mujahideen in Afghanistan, but it does bear genuine responsibility for everything that followed in that country.

As the Biden administration moves to operationalize its policy of democracy versus autocracy, it should take a close look at the Cold War policy of attempting to expand the boundaries of the “free world.” A study by political scientists Alexander Downes and Jonathon Monten found that, of 28 cases of American regime change, only three would prove successful in building a lasting democracy. Instead, most of the Cold War policies outlined above, even though carried out under the rubric of promoting “freedom” in “the free world,” would undermine democracy in a disastrous fashion.

A NEW COLD WAR? Cold War II, if it comes to pass, is unlikely to simply follow the pattern of Cold War I either in Europe or other parts of the world. Still, the damage done by the “good versus evil” worldview that animated Washington’s policies during the Cold War years should be a cautionary tale. The risk is high that the emerging era could be marked by persistent US intervention or interference in Africa, Asia, and Latin America in the name of staving off Russian and Chinese influence in a world where Washington’s disastrous war on terrorism has never quite ended.

The United States already has more than 200,000 troops stationed abroad, 750 military bases scattered on every continent except Antarctica, and continuing counterterrorism operations in 85 countries. The end of US military involvement in Afghanistan and the dramatic scaling back of American operations in Iraq and Syria should have marked the beginning of a sharp reduction in the US military presence in the Middle East and elsewhere. Washington’s reaction to the Russian invasion of Ukraine may now stand in the way of just such a much-needed military retrenchment.

The “us versus them” rhetoric and global military maneuvering likely to play out in the years to come threaten to divert attention and resources from the biggest risks to humanity, including the existential threat posed by climate change. It also may divert attention from a country—ours—that is threatening to come apart at the seams. To choose this moment to launch a new Cold War should be considered folly of the first order, not to speak of an inability to learn from history.

William D. HartungTWITTERWilliam D. Hartung is the director of the Arms and Security Program at the Center for International Policy. Nick Cleveland-StoutNick Cleveland-Stout is a researcher at the Quincy Institute. Taylor GiornoTaylor Giorno is a researcher at the Quincy Institute. To submit a correction for our consideration, click here. For Reprints and Permissions, click here. COMMENTS (3)