Eleanore Douglas
The interwar period in American history provides an unparalleled opportunity to examine the dynamics of retrenchment and renewal. Herbert Hoover, as one of the main architects of the 1920s Republican strategy of retrenchment, is indelibly associated with the strat-egy and with its subsequent crisis and failure during his presidency. Less well examined are Hoover’s own differences with the traditional Republican heritage of laissez-faire and his subsequent attempts to change the strategy of retrenchment in the face of the De-pression crisis, establishing the initial policy founda-tions for what would subsequently become—under Roosevelt—a vigorous strategy of domestic renewal.
Despite these efforts at adaptation, Hoover’s strong adherence to his own political philosophy and his cau-tious, methodical approach not only limited his free-dom of action in formulating a successful response to the Great Depression, but also fatally undermined the potency of those steps he did take.
INTRODUCTION
As discussions over a series of “fiscal cliffs” ex-tend into another year in Washington, so too does the heated debate over strategies of retrenchment and re-newal. On the one side are those who see America’s military and economy perilously overstretched by the foreign policy commitments and actions of the past
decade. They see the rise of new powers, the rise of the developing world, and argue that a redefinition of our interests is required to accept with grace our declining relative position. They call for a broad-reaching strat-egy of retrenchment, namely, one that:
. . . decreas[es] the overall costs of foreign policy by redistributing resources away from peripheral com-mitments and toward core comcom-mitments. Concretely, declining great powers select from a wide menu of policy options . . . economizing expenditures, reduc-ing risks, and shiftreduc-ing burdens.1
Retrenchment can also be understood from a do-mestic policy perspective as a shifting and redistribu-tion of state resources vis-á-vis society. A strategy of domestic retrenchment thus implies a dramatic de-crease in the scope and scale of domestic government activities and expenditures.2
On the other side are those who see a fundamental misperception at the root of America’s current eco-nomic woes. They argue the primary cause of our fis-cal problems is not defense spending, which takes up only a small percentage of our gross domestic product (GDP). Instead, they point to ballooning entitlement expenditures reinforced by America’s gently aging population. Observing the same rise of new forces in the international environment, they emphasize the dangers of premature retrenchment. They foresee it opening strategic vulnerabilities to our national se-curity, reducing opportunities for influence, and with these trends, the probability of real decline. These advocates for a strategy of renewal call for the main-tenance of critical defense expenditures and a reaffir-mation of foreign policy commitments to address the shifting constellations of international power.3
Critical to both discussions is retrenchment’s in-delible link with decline: either as a rational response to decline, or as a key precipitate of decline. Retrench-ment, however, is not always historically linked to decline. One of the most significant periods of re-trenchment in U.S. history followed hard upon the heels of World War I and was subsequently followed by an even more dramatic period of renewal and the rise of the United States to global preeminence during World War II. The interwar period also contains the major example of retrenchment taken too far, provid-ing the elbow room required for the rise of Germany and Japan during the 1930s. Even so, some argue that the partial American retrenchment of the 1920s, with its peculiar balance of economic engagement and political-military withdrawal, helped to lay important foundations for America’s later reemergence in a posi-tion of global preeminence.
Central to understanding the dynamics of this American interwar period of retrenchment, its strengths, and its limitations is the figure of Herbert Hoover. Hoover and his political philosophy in many ways exemplified the best aspects of the Republican retrenchment strategy of the 1920s. His approach seemed successful during an extended period of American economic growth and relative international quiescence. Unlike more traditional proponents of laissez-faire government, Hoover adopted a strategy of retrenchment explicitly offered a positive vision for action in response to modern problems and even cri-ses. Hoover faithfully adhered to his approach as the austerity crisis of the Great Depression unfolded. In response to the failure of retrenchment policies either to prevent or to mitigate the conditions of the Depres-sion crisis, Hoover slowly adapted, building the first
innovative elements of what might be termed a pro-gram of domestic economic renewal. He also tried and failed to prevent the collapse of the international liber-al economic system and, with it, America’s remaining ties to international engagement. He also continued to scale back U.S. security commitments in the face of events to focus on the economic crises at home and abroad, despite evidence of dramatic changes to key elements of the post-war international security archi-tecture. In so doing, some have argued that Hoover sig-naled too strongly America’s lack of interest in main-taining the stability of the international system and opened the door to the rise of new threats from Japan and Germany.
THE REPUBLICAN RETRENCHMENT LEGACY