Remembering the Good Occupation – New York Sun

It is remembered as the Good Occupation after the Good War.

Even among the crowd that can’t find anything right in Iraq, the American military occupation of Germany and Japan is mistily regarded as an unqualified success. With good reason: Within five years, the conquered countries were largely stabilized and recast as liberal capitalist democracies. Within 15 years they had thriving national economies that would soon compete alongside the United States. In remarkable time, our bloodsworn enemies were among our strongest allies and trading partners, stabilizing forces in their region and responsible citizens of the world.

All this is perhaps too much to expect from the Middle East, but given the widespread – and to cynics, anticlimactic — success of elections in Iraq last week, maybe it’s time to look to the longterm markers of success with a sense of hope and history. A look at the rebuilding of Germany and Japan — detailed in books such as “Embracing Defeat”by John W.Dower and “The Conquerors” by Michael Beschloss — unveils a series of best practices employed by America in winning that peace, which as we’ve seen, can be even more difficult than winning a war.

Economic Stabilization is Essential: When American troops took Tokyo and Berlin, generals were understandably more interested in revenge than rebuilding — but facts on the ground soon forced a change in strategy. “Technically our instructions prevented us from doing anything to help with the Germans financially or economically,” recounted the commanding American general, Lucius Clay. But soon Clay asked the Joint Chiefs in Washington for “sufficient freedom here to bring industries back into production,” adding apologetically, “I hope you won’t think I’m … getting soft.” Clay understood the stakes of an economic recovery quickly translated to Cold War practicalities, saying “There is no choice between becoming a communist on 1500 calories and a believer in democracy on 1000 calories.”

Purge Some, Work With More: General Clay ordered his government to pursue the 4 D’s — demilitarization, decartelization, democratization, and de-Nazification. After two-dozen members of the Nazi high command were tried at Nuremberg, Germans ran the sector level tribunals that convicted 117,000 people out of the 3 million considered chargeable under the Law of Liberation from National Socialism. In Japan, Tojo was executed along with six of his leading generals, but much of the non-military cabinet and the Emperor were spared and instead co-opted to support General Douglas MacArthur. U.S. occupying forces reluctantly realized that stabilizing the country depended on a functioning state apparatus — and that depended upon working with the managers who understood how the apparatus worked.

Resist Reparations: The Truman and Eisenhower generation were determined to break the cycle of violence that had been perpetuated by the failed peace following World War I, where the primary emphasis on gaining reparations destabilized Germany, shrunk the middle class and opened the door to demagogues such as Hitler. Instead, German export earnings were first used to pay for essential imports and only afterwards, for reparations.The Marshall Plan provided the ultimate example of reaching beyond reparations toward the larger goal of rebuilding, with America providing loans and aid totaling over $8 billion in 1946 and 1947. Crucially, private relief organizations such as the Red Cross were brought in to give food, clothing and healthcare to refugees, while organizations such as the UN Relief and Rehabilitation Administration assisted as well. By the early 1960s, Germany and Japan’s economy were self-sufficient enough to pay their wartime reparations.

Encourage an Entrepreneurial Culture: Both Germany and Japan had well-developed economies before World War II, but their manufacturing efforts had been redirected toward the war effort and dominated by a closed cartel of conglomerates. Breaking up the largest cartels created opportunities for new firms like Nikon, Sony,and Honda to compete in peace-time industries. Detroit banker Joseph Dodge, who served as Japan’s post-war economic tsar, established a fixed exchange rate that undervalued the yen to stimulate exports. In another attempt to jumpstart the Japanese economy, the American market was opened to Japanese exports while the Japanese were allowed to keep their own markets closed to foreign imports in order to protect their infant industries.

Have Another Enemy: Healing the wounds of war between nations is a painful process, but the presence of a new common enemy amid increasing economic prosperity heals those wounds faster. Consider this the geopolitical equivalent of “the enemy of my enemy is my friend” dynamic. In both Japan and Germany, fear of notoriously harsh Soviet reprisals made occupation by the Americans seem comparatively desirable. The presence of wars against communism in the immediate post-World War II years had galvanizing effects on the loyalties and economies of the occupied nations. This was most dramatically seen in the U.S. Army’s $2 billion of Korean War-era procurements from Japan, which some Japanese leaders referred to as a “gift from the gods.”

There are, of course, many differences between the rebuilding challenges facing Iraq and post-war Germany and Japan. Then the larger struggle was over,while today’s reconstruction occurs amid an ongoing global conflict against terrorism in which Iraq has emerged as a primary front. But the lessons of the rebuilding indicate that making Iraq not only an oasis of democracy but also of actively American-supported industry will be key to that nation’s stabilization and success. When General Eisenhower left his post as American commander in 1945, he told his staff, “The success of this occupation can only be judged 50 years from now.If the Germans have at that time a stable prosperous democracy,then we shall have succeeded.” More than a half century later, we know how that story ended, and history can provide some comfort and guidance as we determine to meet the challenges of our own time.