An affirmative
decision
to summon up the potential within ourselves would evoke the potential strength within others and add it to our own.
NSC-68
Unless the military strength of the Western European nations is increased on a much larger scale than under current programs and at an accelerated rate, it is more than likely that those nations will not be able to oppose even by 1960 the Soviet armed forces in war with any degree of effectiveness.
Considering the Soviet Union military capability, the long-range allied military objective in Western Europe must envisage an increased military strength in that area sufficient possibly to deter the Soviet Union from a major war or, in any event, to delay materially the overrunning of Western Europe and, if feasible, to hold a bridgehead on the continent against Soviet Union offensives.
We do not know accurately what the Soviet atomic capability is but the Central Intelligence Agency intelligence estimates, concurred in by State, Army, Navy, Air Force, and Atomic Energy Commission, assign to the Soviet Union a production capability giving it a fission bomb stockpile within the following ranges:
This estimate is admittedly based on incomplete coverage of Soviet activities and represents the production capabilities of known or deducible Soviet plants. If others exist, as is possible, this estimate could lead us into a feeling of superiority in our atomic stockpile that might be dangerously misleading, particularly with regard to the timing of a possible Soviet offensive. On the other hand, if the Soviet Union experiences operating difficulties, this estimate would be reduced. There is some evidence that the Soviet Union is acquiring certain materials essential to research on and development of thermonuclear weapons.
The Soviet Union now has aircraft able to deliver the atomic bomb. Our Intelligence estimates assign to the Soviet Union an atomic bomber capability already in excess of that needed to deliver available bombs. We have at present no evaluated estimate regarding the Soviet accuracy of delivery on target. It is believed that the Soviets cannot deliver their bombs on target with a
? ? ? ? ? ? ? ? ? By mid-1950
? ? ? ? ? ? 10-20
? ? ? ? ? ? ? ? ? ? ? ? ? By mid-1951
? ? ? ? ? ? ? 25-45
? ? ? ? ? ? ? ? ? ? ? ? ? By mid-1952
? ? ? ? ? ? ? 45-90
? ? ? ? ? ? ? ? ? ? ? ? ? By mid-1953
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 70-135
? ? ? ? ? ? ? ? ? By mid-1954
? ? ? ? ? ? ? ? ? 200
? ? ? ? ? degree of accuracy comparable to ours, but a planning estimate might well place it at 40-60 percent of bombs sorted. For planning purposes, therefore, the date the Soviets possess an atomic stockpile of 200 bombs would be a critical date for the United States, for the delivery of 100 atomic bombs on targets in the United States would seriously damage this country.
At the time the Soviet Union has a substantial atomic stockpile and if it is assumed that it will strike a strong surprise blow and if it is assumed further that its atomic attacks will be met with no more effective defense opposition than the United States and its allies have programmed, results of those attacks could include:
a. Laying waste to the British Isles and thus depriving the Western Powers of their use as a base;
b. Destruction of the vital centers and of the communications of Western Europe, thus precluding effective defense by the Western Powers; and
c. Delivering devastating attacks on certain vital centers of the United States and Canada.
The possession by the Soviet Union of a thermonuclear capability in addition to this substantial atomic stockpile would result in tremendously increased damage.
During this decade, the defensive capabilities of the Soviet Union will probably be strengthened, particularly by the development and use of modem aircraft, aircraft warning and communications devices, and defensive guided missiles.
VI. U. S. Intentions and Capabilities - Actual and Potential
A. Political and Psychological
Our overall policy at the present time may be described as one designed to foster a world environment in which the American system can survive and flourish. It therefore rejects the concept of isolation and affirms the necessity of our positive participation in the world community.
This broad intention embraces two subsidiary policies. One is a policy which we would probably pursue even if there were no Soviet threat. It is a policy of attempting to develop a healthy international community. The other is the policy of "containing" the Soviet system. These two policies are closely interrelated and interact on one another. Nevertheless, the distinction between them is basically valid and contributes to a clearer understanding of what we are trying to do.
The policy of striving to develop a healthy international community is the long-term constructive effort which we are engaged in. It was this policy which gave rise to our vigorous sponsorship of the United Nations. It is of course the principal reason for our long continuing endeavors to create and now develop the Inter-American system. It, as much as containment, underlay our efforts to rehabilitate Western Europe. Most of our international economic activities can likewise be explained in terms of this policy.
In a world of polarized power, the policies designed to develop a healthy international community are more than ever necessary to our own strength.
As for the policy of "containment," it is one which seeks by all means short of war to (1) block further expansion of Soviet power, (2) expose the falsities of Soviet pretensions, (3) induce a retraction of the Kremlin's control and influence, and (4) in general,so foster the seeds of destruction within the Soviet system that the Kremlin is brought at least to the point of modifying its behavior to conform to generally accepted international standards.
It was and continues to be cardinal in this policy that we possess superior overall power in ourselves or in dependable combination with other likeminded nations. One of the most important ingredients of power is military strength. In the concept of "containment," the maintenance of a strong military posture is deemed to be essential for two reasons: (1) as an ultimate guarantee of our national security and (2) as an indispensable backdrop to the conduct of the policy of "containment. " Without superior aggregate military strength, in being and readily mobilizable, a policy of "containment" - which is in effect a policy of calculated and gradual coercion - is no more than a policy of bluff.
At the same time, it is essential to the successful conduct of a policy of "containment" that we always leave open the possibility of negotiation with the USSR. A diplomatic freeze - and we are in one now - tends to defeat the very purposes of "containment" because it raises tensions at the same time that it makes Soviet retractions and adjustments in the direction of moderated behavior more difficult. It also tends to inhibit our initiative and deprives us of opportunities for maintaining a moral ascendancy in our struggle with the Soviet system.
In "containment" it is desirable to exert pressure in a fashion which will avoid so far as possible directly challenging Soviet prestige, to keep open the possibility for the USSR to retreat before pressure with a minimum loss of face and to secure political advantage from the failure of the Kremlin to yield or take advantage of the openings we leave it.
We have failed to implement adequately these two fundamental aspects of "containment. " In the face of obviously mounting Soviet military strength ours has declined relatively. Partly as a byproduct of this, but also for other reasons, we now find ourselves at a diplomatic impasse with the Soviet Union, with the Kremlin growing bolder, with both of us holding on grimly to what we have, and with ourselves facing difficult decisions.
In examining our capabilities it is relevant to ask at the outset - capabilities for what? The answer cannot be stated solely in the negative terms of resisting the Kremlin design. It includes also our capabilities to attain the fundamental purpose of the United States, and to foster a world environment in which our free society can survive and flourish.
Potentially we have these capabilities. We know we have them in the economic and military fields. Potentially we also have them in the political and psychological fields. The vast majority of Americans are confident that the system of values which animates our society - the principles of freedom, tolerance, the importance of the individual, and the supremacy of reason over will - are valid and more vital than the ideology which is the fuel of Soviet dynamism. Translated into terms relevant to the lives of other peoples - our system of values can become perhaps a powerful appeal to millions who now seek or find in authoritarianism a refuge from anxieties, bafflement, and insecurity.
Essentially, our democracy also possesses a unique degree of unity. Our society is fundamentally more cohesive than the Soviet system, the solidarity of which is artificially created through force, fear, and favor. This means that expressions of national consensus in our society are soundly and solidly based. It means that the possibility of revolution in this country is fundamentally less than that in the Soviet system.
These capabilities within us constitute a great potential force in our international relations. The potential within us of bearing witness to the values by which we live holds promise for a dynamic manifestation to the rest of the world of the vitality of our system. The essential tolerance of our world outlook, our generous and constructive impulses, and the absence of covetousness in our international relations are assets of potentially enormous influence.
These then are our potential capabilities. Between them and our capabilities currently being utilized is a wide gap of unactualized power. In sharp contrast is the situation of the Soviet world. Its capabilities are inferior to those of our allies and to our own. But they are mobilized close to the maximum possible extent.
The full power which resides within the American people will be evoked only through the traditional democratic process: This process requires, firstly, that sufficient information regarding the basic political, economic, and military elements of the present situation be made publicly available so that an intelligent popular opinion may be formed. Having achieved a comprehension of the issues now confronting this Republic, it will then be possible for the American people and the American Government to arrive at a consensus. Out of this common view will develop a determination of the national will and a solid resolute expression of that will. The initiative in this process lies with the Government.
The democratic way is harder than the authoritarian way because, in seeking to protect and fulfill the individual, it demands of him understanding, judgment, and positive participation in the increasingly complex and exacting problems of the modern world. It demands that he exercise discrimination: that while pursuing through free inquiry the search for truth he knows when he should commit an act of faith; that he distinguish between the necessity for tolerance and the necessity for just suppression. A free society is vulnerable in that it is easy for people to lapse into excesses - the excesses of a permanently open mind wishfully waiting for evidence that evil design may become noble purpose, the excess of faith becoming prejudice, the excess of tolerance degenerating into indulgence of conspiracy and the excess of resorting to suppression when more moderate measures are not only more appropriate but more effective.
In coping with dictatorial governments acting in secrecy and with speed, we are also vulnerable in that the democratic process necessarily operates in the open and at a deliberate tempo. Weaknesses in our situation are readily apparent and subject to immediate exploitation. This Government therefore cannot afford in the face of the totalitarian challenge to operate on a narrow margin of strength. A democracy can compensate for its natural vulnerability only if it maintains clearly superior overall power in its most inclusive sense.
The very virtues of our system likewise handicap us in certain respects in our relations with our allies. While it is a general source of strength to us that our relations with our allies are conducted on a basis of persuasion and consent rather than compulsion and capitulation, it is also evident that dissent among us can become a vulnerability. Sometimes the dissent has its principal roots abroad in situations about which we can do nothing. Sometimes it arises largely out of
certain weaknesses within ourselves, about which we can do something - our native impetuosity and a tendency to expect too much from people widely divergent from us.
The full capabilities of the rest of the free world are a potential increment to our own capabilities. It may even be said that the capabilities of the Soviet world, specifically the capabilities of the masses who have nothing to lose but their Soviet chains, are a potential which can be enlisted on our side.
Like our own capabilities, those of the rest of the free world exceed the capabilities of the Soviet system. Like our own they are far from being effectively mobilized and employed in the struggle against the Kremlin design. This is so because the rest of the free world lacks a sense of unity, confidence, and common purpose. This is true in even the most homogeneous and advanced segment of the free world - Western Europe.
As we ourselves demonstrate power, confidence, and a sense of moral and political direction, so those same qualities will be evoked in Western Europe. In such a situation, we may also anticipate a general improvement in the political tone in Latin America, Asia, and Africa and the real beginnings of awakening among the Soviet totalitariat.
In the absence of affirmative decision on our part, the rest of the free world is almost certain to become demoralized. Our friends will become more than a liability to us; they can eventually become a positive increment to Soviet power.
In sum, the capabilities of our allies are, in an important sense, a function of our own.
An affirmative decision to summon up the potential within ourselves would evoke the potential strength within others and add it to our own.
B. Economic
1. Capabilities. In contrast to the war economy of the Soviet world (cf. Ch. V-B), the American economy (and the economy of the free world as a whole) is at present directed to the provision of rising standards of living. The military budget of the United States represents 6 to 7 percent of its gross national product (as against 13. 8 percent for the Soviet Union). Our North Atlantic Treaty [NAT] allies devoted 4. 8 percent of their national product to military purposes in 1949.
This difference in emphasis between the two economies means that the readiness of the free world to support a war effort is tending to decline relative to that of the Soviet Union. There is little direct investment in production facilities for military end-products and in dispersal. There are relatively few men receiving military training and a relatively low rate of production of weapons. However, given time to convert to a war effort, the capabilities of the United States economy and also of the Western European economy would be tremendous. In the light of Soviet military capabilities, a question which may be of decisive importance in the event of war is the question whether there will be time to mobilize our superior human and material resources for a war effort (cf. Chs. VIII and IX).
The capability of the American economy to support a build-up of economic and military strength at home and to assist a build-up abroad is limited not, as in the case of the Soviet Union, so much by the ability to produce as by the decision on the proper allocation of resources to this and other purposes. Even Western Europe could afford to assign a substantially larger proportion of its
resources to defense, if the necessary foundation in public understanding and will could be laid, and if the assistance needed to meet its dollar deficit were provided.
A few statistics will help to clarify this point [Table 1].
The Soviet Union is now allocating nearly 40 percent of its gross available resources to military purposes and investment, much of which is in war-supporting industries. It is estimated that even in an emergency the Soviet Union could not increase this proportion to much more than 50 percent, or by one-fourth. The United States, on the other hand, is allocating only about 20 percent of its resources to defense and investment (or 22 percent including foreign assistance), and little of its investment outlays are directed to war-supporting industries. In an emergency the United States could allocate more than 50 percent of its resources to military purposes and foreign assistance, or five to six times as much as at present.
The same point can be brought out by statistics on the use of important products. The Soviet Union is using 14 percent of its ingot steel, 47 percent of its primary aluminum, and 18. 5 percent of its crude oil for military purposes, while the corresponding percentages for the United States are 1. 7, 8. 6, and 5. 6. Despite the tremendously larger production of these goods in the United States than the Soviet Union, the latter is actually using, for military purposes, nearly twice as much steel as the United States and 8 to 26 percent more aluminum.
Table 1. Percentage of Gross Available Resources Allocated to Investment, National Defense, and Consumption in East and West, 1949 (in percent of total)
(a) crude estimate. [Footnote in the source text. ]
(b) Includes Soviet Zone of Germany; otherwise 5 percent. [Footnote in the source text. ]
Perhaps the most impressive indication of the economic superiority of the free world over the Soviet world which can be made on the basis of available data is provided in comparisons (based mainly on the Economic Survey of Europe, 1948) [Table 2].
? ? ? ? ? ? ? ? ? ? ? ? ? ? COUNTRY
? ? ? ? ? ? ? ? ? ? ? ? ? GROSS INVESTMENT
? ? DEFENSE
? ? ? ? ? ? ? ? ? ? CONSUMPTION
? ? ? ? ? ? ? USSR
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 25. 4
? ? 13. 8
? ? ? ? ? ? ? ? ? ? ? ? 60. 8
? ? ? ? ? ? ? Soviet Orbit
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 22. 0 (a)
? ? ? ? ? ? ? ? ? ? ? ? 4. 0 (b)
? ? ? ? ? ? ? ? ? ? ? ? ? ? 74. 0 (a)
? ? ? ? ? ? ? ? ? ? ? U. S.
? ? ? ? ? ? ? ? ? ? 13. 6
? ? ? ? ?
We do not know accurately what the Soviet atomic capability is but the Central Intelligence Agency intelligence estimates, concurred in by State, Army, Navy, Air Force, and Atomic Energy Commission, assign to the Soviet Union a production capability giving it a fission bomb stockpile within the following ranges:
This estimate is admittedly based on incomplete coverage of Soviet activities and represents the production capabilities of known or deducible Soviet plants. If others exist, as is possible, this estimate could lead us into a feeling of superiority in our atomic stockpile that might be dangerously misleading, particularly with regard to the timing of a possible Soviet offensive. On the other hand, if the Soviet Union experiences operating difficulties, this estimate would be reduced. There is some evidence that the Soviet Union is acquiring certain materials essential to research on and development of thermonuclear weapons.
The Soviet Union now has aircraft able to deliver the atomic bomb. Our Intelligence estimates assign to the Soviet Union an atomic bomber capability already in excess of that needed to deliver available bombs. We have at present no evaluated estimate regarding the Soviet accuracy of delivery on target. It is believed that the Soviets cannot deliver their bombs on target with a
? ? ? ? ? ? ? ? ? By mid-1950
? ? ? ? ? ? 10-20
? ? ? ? ? ? ? ? ? ? ? ? ? By mid-1951
? ? ? ? ? ? ? 25-45
? ? ? ? ? ? ? ? ? ? ? ? ? By mid-1952
? ? ? ? ? ? ? 45-90
? ? ? ? ? ? ? ? ? ? ? ? ? By mid-1953
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 70-135
? ? ? ? ? ? ? ? ? By mid-1954
? ? ? ? ? ? ? ? ? 200
? ? ? ? ? degree of accuracy comparable to ours, but a planning estimate might well place it at 40-60 percent of bombs sorted. For planning purposes, therefore, the date the Soviets possess an atomic stockpile of 200 bombs would be a critical date for the United States, for the delivery of 100 atomic bombs on targets in the United States would seriously damage this country.
At the time the Soviet Union has a substantial atomic stockpile and if it is assumed that it will strike a strong surprise blow and if it is assumed further that its atomic attacks will be met with no more effective defense opposition than the United States and its allies have programmed, results of those attacks could include:
a. Laying waste to the British Isles and thus depriving the Western Powers of their use as a base;
b. Destruction of the vital centers and of the communications of Western Europe, thus precluding effective defense by the Western Powers; and
c. Delivering devastating attacks on certain vital centers of the United States and Canada.
The possession by the Soviet Union of a thermonuclear capability in addition to this substantial atomic stockpile would result in tremendously increased damage.
During this decade, the defensive capabilities of the Soviet Union will probably be strengthened, particularly by the development and use of modem aircraft, aircraft warning and communications devices, and defensive guided missiles.
VI. U. S. Intentions and Capabilities - Actual and Potential
A. Political and Psychological
Our overall policy at the present time may be described as one designed to foster a world environment in which the American system can survive and flourish. It therefore rejects the concept of isolation and affirms the necessity of our positive participation in the world community.
This broad intention embraces two subsidiary policies. One is a policy which we would probably pursue even if there were no Soviet threat. It is a policy of attempting to develop a healthy international community. The other is the policy of "containing" the Soviet system. These two policies are closely interrelated and interact on one another. Nevertheless, the distinction between them is basically valid and contributes to a clearer understanding of what we are trying to do.
The policy of striving to develop a healthy international community is the long-term constructive effort which we are engaged in. It was this policy which gave rise to our vigorous sponsorship of the United Nations. It is of course the principal reason for our long continuing endeavors to create and now develop the Inter-American system. It, as much as containment, underlay our efforts to rehabilitate Western Europe. Most of our international economic activities can likewise be explained in terms of this policy.
In a world of polarized power, the policies designed to develop a healthy international community are more than ever necessary to our own strength.
As for the policy of "containment," it is one which seeks by all means short of war to (1) block further expansion of Soviet power, (2) expose the falsities of Soviet pretensions, (3) induce a retraction of the Kremlin's control and influence, and (4) in general,so foster the seeds of destruction within the Soviet system that the Kremlin is brought at least to the point of modifying its behavior to conform to generally accepted international standards.
It was and continues to be cardinal in this policy that we possess superior overall power in ourselves or in dependable combination with other likeminded nations. One of the most important ingredients of power is military strength. In the concept of "containment," the maintenance of a strong military posture is deemed to be essential for two reasons: (1) as an ultimate guarantee of our national security and (2) as an indispensable backdrop to the conduct of the policy of "containment. " Without superior aggregate military strength, in being and readily mobilizable, a policy of "containment" - which is in effect a policy of calculated and gradual coercion - is no more than a policy of bluff.
At the same time, it is essential to the successful conduct of a policy of "containment" that we always leave open the possibility of negotiation with the USSR. A diplomatic freeze - and we are in one now - tends to defeat the very purposes of "containment" because it raises tensions at the same time that it makes Soviet retractions and adjustments in the direction of moderated behavior more difficult. It also tends to inhibit our initiative and deprives us of opportunities for maintaining a moral ascendancy in our struggle with the Soviet system.
In "containment" it is desirable to exert pressure in a fashion which will avoid so far as possible directly challenging Soviet prestige, to keep open the possibility for the USSR to retreat before pressure with a minimum loss of face and to secure political advantage from the failure of the Kremlin to yield or take advantage of the openings we leave it.
We have failed to implement adequately these two fundamental aspects of "containment. " In the face of obviously mounting Soviet military strength ours has declined relatively. Partly as a byproduct of this, but also for other reasons, we now find ourselves at a diplomatic impasse with the Soviet Union, with the Kremlin growing bolder, with both of us holding on grimly to what we have, and with ourselves facing difficult decisions.
In examining our capabilities it is relevant to ask at the outset - capabilities for what? The answer cannot be stated solely in the negative terms of resisting the Kremlin design. It includes also our capabilities to attain the fundamental purpose of the United States, and to foster a world environment in which our free society can survive and flourish.
Potentially we have these capabilities. We know we have them in the economic and military fields. Potentially we also have them in the political and psychological fields. The vast majority of Americans are confident that the system of values which animates our society - the principles of freedom, tolerance, the importance of the individual, and the supremacy of reason over will - are valid and more vital than the ideology which is the fuel of Soviet dynamism. Translated into terms relevant to the lives of other peoples - our system of values can become perhaps a powerful appeal to millions who now seek or find in authoritarianism a refuge from anxieties, bafflement, and insecurity.
Essentially, our democracy also possesses a unique degree of unity. Our society is fundamentally more cohesive than the Soviet system, the solidarity of which is artificially created through force, fear, and favor. This means that expressions of national consensus in our society are soundly and solidly based. It means that the possibility of revolution in this country is fundamentally less than that in the Soviet system.
These capabilities within us constitute a great potential force in our international relations. The potential within us of bearing witness to the values by which we live holds promise for a dynamic manifestation to the rest of the world of the vitality of our system. The essential tolerance of our world outlook, our generous and constructive impulses, and the absence of covetousness in our international relations are assets of potentially enormous influence.
These then are our potential capabilities. Between them and our capabilities currently being utilized is a wide gap of unactualized power. In sharp contrast is the situation of the Soviet world. Its capabilities are inferior to those of our allies and to our own. But they are mobilized close to the maximum possible extent.
The full power which resides within the American people will be evoked only through the traditional democratic process: This process requires, firstly, that sufficient information regarding the basic political, economic, and military elements of the present situation be made publicly available so that an intelligent popular opinion may be formed. Having achieved a comprehension of the issues now confronting this Republic, it will then be possible for the American people and the American Government to arrive at a consensus. Out of this common view will develop a determination of the national will and a solid resolute expression of that will. The initiative in this process lies with the Government.
The democratic way is harder than the authoritarian way because, in seeking to protect and fulfill the individual, it demands of him understanding, judgment, and positive participation in the increasingly complex and exacting problems of the modern world. It demands that he exercise discrimination: that while pursuing through free inquiry the search for truth he knows when he should commit an act of faith; that he distinguish between the necessity for tolerance and the necessity for just suppression. A free society is vulnerable in that it is easy for people to lapse into excesses - the excesses of a permanently open mind wishfully waiting for evidence that evil design may become noble purpose, the excess of faith becoming prejudice, the excess of tolerance degenerating into indulgence of conspiracy and the excess of resorting to suppression when more moderate measures are not only more appropriate but more effective.
In coping with dictatorial governments acting in secrecy and with speed, we are also vulnerable in that the democratic process necessarily operates in the open and at a deliberate tempo. Weaknesses in our situation are readily apparent and subject to immediate exploitation. This Government therefore cannot afford in the face of the totalitarian challenge to operate on a narrow margin of strength. A democracy can compensate for its natural vulnerability only if it maintains clearly superior overall power in its most inclusive sense.
The very virtues of our system likewise handicap us in certain respects in our relations with our allies. While it is a general source of strength to us that our relations with our allies are conducted on a basis of persuasion and consent rather than compulsion and capitulation, it is also evident that dissent among us can become a vulnerability. Sometimes the dissent has its principal roots abroad in situations about which we can do nothing. Sometimes it arises largely out of
certain weaknesses within ourselves, about which we can do something - our native impetuosity and a tendency to expect too much from people widely divergent from us.
The full capabilities of the rest of the free world are a potential increment to our own capabilities. It may even be said that the capabilities of the Soviet world, specifically the capabilities of the masses who have nothing to lose but their Soviet chains, are a potential which can be enlisted on our side.
Like our own capabilities, those of the rest of the free world exceed the capabilities of the Soviet system. Like our own they are far from being effectively mobilized and employed in the struggle against the Kremlin design. This is so because the rest of the free world lacks a sense of unity, confidence, and common purpose. This is true in even the most homogeneous and advanced segment of the free world - Western Europe.
As we ourselves demonstrate power, confidence, and a sense of moral and political direction, so those same qualities will be evoked in Western Europe. In such a situation, we may also anticipate a general improvement in the political tone in Latin America, Asia, and Africa and the real beginnings of awakening among the Soviet totalitariat.
In the absence of affirmative decision on our part, the rest of the free world is almost certain to become demoralized. Our friends will become more than a liability to us; they can eventually become a positive increment to Soviet power.
In sum, the capabilities of our allies are, in an important sense, a function of our own.
An affirmative decision to summon up the potential within ourselves would evoke the potential strength within others and add it to our own.
B. Economic
1. Capabilities. In contrast to the war economy of the Soviet world (cf. Ch. V-B), the American economy (and the economy of the free world as a whole) is at present directed to the provision of rising standards of living. The military budget of the United States represents 6 to 7 percent of its gross national product (as against 13. 8 percent for the Soviet Union). Our North Atlantic Treaty [NAT] allies devoted 4. 8 percent of their national product to military purposes in 1949.
This difference in emphasis between the two economies means that the readiness of the free world to support a war effort is tending to decline relative to that of the Soviet Union. There is little direct investment in production facilities for military end-products and in dispersal. There are relatively few men receiving military training and a relatively low rate of production of weapons. However, given time to convert to a war effort, the capabilities of the United States economy and also of the Western European economy would be tremendous. In the light of Soviet military capabilities, a question which may be of decisive importance in the event of war is the question whether there will be time to mobilize our superior human and material resources for a war effort (cf. Chs. VIII and IX).
The capability of the American economy to support a build-up of economic and military strength at home and to assist a build-up abroad is limited not, as in the case of the Soviet Union, so much by the ability to produce as by the decision on the proper allocation of resources to this and other purposes. Even Western Europe could afford to assign a substantially larger proportion of its
resources to defense, if the necessary foundation in public understanding and will could be laid, and if the assistance needed to meet its dollar deficit were provided.
A few statistics will help to clarify this point [Table 1].
The Soviet Union is now allocating nearly 40 percent of its gross available resources to military purposes and investment, much of which is in war-supporting industries. It is estimated that even in an emergency the Soviet Union could not increase this proportion to much more than 50 percent, or by one-fourth. The United States, on the other hand, is allocating only about 20 percent of its resources to defense and investment (or 22 percent including foreign assistance), and little of its investment outlays are directed to war-supporting industries. In an emergency the United States could allocate more than 50 percent of its resources to military purposes and foreign assistance, or five to six times as much as at present.
The same point can be brought out by statistics on the use of important products. The Soviet Union is using 14 percent of its ingot steel, 47 percent of its primary aluminum, and 18. 5 percent of its crude oil for military purposes, while the corresponding percentages for the United States are 1. 7, 8. 6, and 5. 6. Despite the tremendously larger production of these goods in the United States than the Soviet Union, the latter is actually using, for military purposes, nearly twice as much steel as the United States and 8 to 26 percent more aluminum.
Table 1. Percentage of Gross Available Resources Allocated to Investment, National Defense, and Consumption in East and West, 1949 (in percent of total)
(a) crude estimate. [Footnote in the source text. ]
(b) Includes Soviet Zone of Germany; otherwise 5 percent. [Footnote in the source text. ]
Perhaps the most impressive indication of the economic superiority of the free world over the Soviet world which can be made on the basis of available data is provided in comparisons (based mainly on the Economic Survey of Europe, 1948) [Table 2].
? ? ? ? ? ? ? ? ? ? ? ? ? ? COUNTRY
? ? ? ? ? ? ? ? ? ? ? ? ? GROSS INVESTMENT
? ? DEFENSE
? ? ? ? ? ? ? ? ? ? CONSUMPTION
? ? ? ? ? ? ? USSR
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 25. 4
? ? 13. 8
? ? ? ? ? ? ? ? ? ? ? ? 60. 8
? ? ? ? ? ? ? Soviet Orbit
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 22. 0 (a)
? ? ? ? ? ? ? ? ? ? ? ? 4. 0 (b)
? ? ? ? ? ? ? ? ? ? ? ? ? ? 74. 0 (a)
? ? ? ? ? ? ? ? ? ? ? U. S.
? ? ? ? ? ? ? ? ? ? 13. 6
? ? ? ? ?
