and landlords who dominated almost all facets of Bolivian society, the Monje, Hertzog, Urriolagoitia, and Ballivián regimes faced almost impossible challenges. Not the least of these was their own disunity, incompetence, and inability to understand just how precarious their control over the nation truly was. Still, the role of the Truman administration must not be underestimated. For six years, President Truman permitted the Reconstruction Finance Corporation to exploit a monopolistic position to punish not only the tin barons, but also the Bolivian governments that parasitically survived off the taxes they paid. If a middle course between stagnation and revolution had even been possible, then the RFC eliminated that small chance.
Postwar U.S. Policy in South America
The Truman administration, dominated by the final stages of World War II, reconversion to a peacetime economy, the onset of the Cold War in Europe and Asia, and the battle to create a new global economic order based on liberal capitalism, had few resources to dedicate to Latin America. Although the Western Hemisphere had once been the central preoccupation of U.S. diplomats, the emergence of the United States as a superpower stretched U.S. economic, military, and diplomatic assets to their limit at a moment when revolutionary nationalism was being galvanized across South America. Occurring in tandem, these developments created a confusing panorama that has impeded formation of any real historiographical consensus regarding the diplomacy of postwar inter-American relations.
The onset of the Cold War has probably been the foremost contributor to this confusion. As Stephen Rabe has noted, “historians of Inter-American relations frequently lump the years between 1945 and 1960 together as an unhappy, dull, and insignificant interregnum between the Good Neighbor and the Alliance for Progress.”3 Most historians attribute to the Truman presidency an anti-Communist zeal in Latin America that was far more prevalent in later presidencies. The Truman Doctrine may have called for increased anti-Communist interventionism in Europe and Asia, but, if anything, it reduced U.S. interest in Latin America, an area where there was no major Communist threat, without otherwise altering fundamental U.S. goals and tactics there.
Although there can be little doubt that U.S. policy makers at the highest levels had been preoccupied with the Soviet Union and the spread of Communism since at least 1945, there is very little evidence that this extended in any meaningful way into South America during the Truman years. Truman’s diplomats wisely paid little heed to the incessant efforts of J. Edgar Hoover and his Federal Bureau of Investigation to track Communism’s rather feeble spread in South America through the 1940s. Nor did they pay much heed when South American leaders accused their rivals of “Communism,” understanding that such accusations were a routine, almost meaningless feature of many nations’ political discourse or, at most, a transparent ploy to attract U.S. attention and support.4
Instead, the State Department understood quite well that the Soviets had no significant interest in the Western Hemisphere and that a foreign ideology like Soviet-style Communism had little appeal in nations where fierce nationalism, Roman Catholicism, and jealously guarded independence predominated. Truman’s critics may have assailed him for failing to fight global Communism with sufficient zeal, but in South America, his diplomats consistently refused to be duped into a pointless red-baiting campaign against a virtually nonexistent enemy. A meeting of Latin American specialists within the intelligence community in the Panama Canal Zone in January 1947 simply noted: “Communism has not become numerically important (i.e., controlling more than 10 percent or more of the voters) as yet except in a few countries” where “special factors have contributed to its growth.” As late as 1950, the U.S. government could identify just 150 “Stalinists” and 2,000 “fellow travelers” in all of Bolivia and did so only by stretching the definitions of both terms to the limit. Communism was so weak in Bolivia in 1953 that leftists did not even attempt to “set up a united front with the Stalinists because they were not worth the trouble.” Robert Alexander, perhaps the most well-informed student of labor unions in the Western Hemisphere, considered the Bolivian Partido Comunista to be “the most naïve Communist party” in the Americas.5
Still, scholars have perceived a Cold War shift in U.S. policy in 1947 or 1948 as U.S. anti-Communist rhetoric escalated and tensions with the Soviet Union grew. In perhaps the finest example of such scholarship, Leslie Bethell and Ian Roxborough illustrate how most nations in the hemisphere experienced greater democratization at the end of World War II, only to see those gains erased by 1950. They explain the trend by identifying a variety of domestic and international, economic, political, and social factors, but their analysis breaks down when it assumes that the U.S. commitment to democratization, development, and reform was motivated, to any significant degree, by anti-Communism. Indeed, Bethell and Roxborough show how domestic elites throughout Latin America opposed any mass movement that threatened their control, just as the United States did any movement that threatened foreign investment or the cheap raw materials it coveted. U.S. policy makers came to understand that increased democratization would increase the power of nationalist groups whose goals were, in most cases, antithetical to those of the United States.6 Whereas “communism proper has so far had little popular appeal,” what U.S. diplomats called “native socialist or semi-socialist parties” were flourishing. As Alexander has explained: “The Communists do not make headway” in countries where there is another “popular social and political movement which has captured the imagination of the rank-and-file citizen.”7 Truman’s diplomats in South America, despite their ever-vigilant efforts to ferret out Communists, simply could not find all that many. What they did find, however, was a disturbing number of homegrown nationalist movements.
Those movements were characterized by later generations of historians as “revolutionary nationalist” or “populist” and constituted, for Truman’s lieutenants, the true menace. Thus State Department officers found themselves constantly at odds with revolutionary nationalists who were, in most cases, even more committed to anti-Communism than they were. Indeed, nationalist organizations such as the Alianza Popular Revolucionaria Americana in Peru, the Acción Democrática in Venezuela, the MNR in Bolivia, and the Peronists in Argentina were the most effective bulwarks against Communism.8 These often multiclass organizations and movements competed with (and regularly triumphed over) the anemic Stalinist, and more prevalent Trotskyite, Communist parties in the all-important battle for the loyalty of working- and lower-class constituencies. Had President Truman attached any real significance to anti-Communism in South America, any of these nationalist groups would have been natural partners for Cold War Washington, as the MNR later became for President Eisenhower. Instead, the State Department spent five years destabilizing Juan Perón’s regime in Argentina, committed itself to blocking the MNR’s ascension in Bolivia, and formed quite satisfactory partnerships with the military regimes that ousted, outlawed, and violently persecuted both the Alianza Popular Revolucionaria Americana and the Acción Democrática.9
Scholars following in the footsteps of pioneering historian David Green have illustrated well that, for Truman’s State Department, the revolutionary nationalists were far more menacing to U.S. economic interests than the Communists they had so thoroughly supplanted. Michael Grow’s The Good Neighbor Policy and Authoritarianism in Paraguay uses a case study to refine and expand Green’s central thesis that U.S. interests were primarily economic and dedicated to aggressively expanding what later generations would call the “Washington consensus.” James Siekmeier, however, offers the most persuasive and comprehensive illustration of U.S. efforts to derail economic nationalism across the hemisphere through case studies of Bolivia and Guatemala. Although Siekmeier’s The Containment of Latin America focuses primarily on the Eisenhower presidency, his chapter on Truman is perhaps the most cogent and effective analysis of those efforts to date.10 Thus, even though U.S. policy makers rebuilding Europe and Asia may have found their greatest obstacles in local Communist parties, the geostrategic reality of the Soviet Union, or some combination of the two, U.S. plans for South America were impeded primarily by all-too-independent nationalism epitomized by Peronism in Argentina.
The focal point for the U.S. campaign to establish an order of liberal capitalism and multilateral commerce in South America under the aegis of U.S. hegemony was, of course, Peronist Argentina. Perón had swept to power,
