This One Decision Stopped Russia From Controlling Everything

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1:23Hello, I'm Anthony Scaramucci, and this is Open Book, where I talk to some of the brightest minds about everything surrounding the written word. That's everything. That's from authors and historians to figures in entertainment, political activists, and of course, Wall Street. Before we dive in, make sure to follow or subscribe wherever you get your podcasts. And don't forget to leave a review. Good or bad, I want to hear from you. I want to hear whether you're enjoying it or where we can improve. And I can take the hits. So let me know. If you don't like something, say it straight. Now let's get into it.

2:07Welcome to Open Book. I'm your host, Anthony Scaramucci. I'm being joined by Ben Steele. He's the Director of International Economics at the Council of Foreign Relations. He's written a number of awesome books. We've interviewed you on the Marshall Plan. We also actually did an interview on the world that wasn't with Henry Wallace a while back, but I think it is super important to bring Henry back into the game, which is why I'm bringing you back on the show. And by the way, the book was phenomenal. I learned so much about American history in this book, The World It Wasn't, and the direction that we went in as Americans.

2:47This is another big theme of the book because if Henry Wallace had become president on that fateful day in April of 1945 instead of Harry Truman, I think the world would have been a very different plays. So let's go there first, Ben. The book is incredibly researched. Why Henry Wallace? And why is he relevant to us today? Well, and a few reasons. First of all, he's just an absolutely fascinating figure for what I'd call counterfactual history. What if a number of you know, seemingly small things at the moment had gone in a different direction. The world could have gone in a different direction.

3:32We would be living in a much different world today than we are. And I think back particularly to the Democratic National Convention in June of 1944, when we had an absolutely wild scene. FDR had been convinced by DNC leaders that he needed to ditch Henry Wallace as his vice president. They didn't tell him quite why, but they knew that FDR was not going to survive a fourth term. So whoever was vice president was going to become president. FDR was convinced that he needed to do that, at the very least for electoral reasons. Wallace was splitting the party. He was popular among the liberals, but they were a smaller and smaller segment of the Democratic coalition.

4:23But FDR could not bring himself to look Wallace in the face and say, you've got to go. And so FDR wound up endorsing four separate candidates in four different ways. As I said, we had a wild open convention. Wallace was leading on the first ballot. Truman pulled ahead as the anti-Wallace forces consolidated on the second ballot and Truman became the nominee. Of course, had Wallace stayed on the ticket, he would have become president in April 1944. He opposed all of Truman's key foreign policy positions from 1945 to 1948 when Wallace himself ran for president. He was against the Truman Doctrine.

5:14He was against the policy of containment. He was against the Marshall Plan, against the creation of NATO, against the creation of West Germany. So, you know, this was a really consequential period in American history. So let's say that Wallace had won. Let's have a few sentences on alternative history. So how do you think the world order would have unfolded if he had won? Well, Wallace himself in semi-retirement after 1948, when he was really wiped out in the election, he had run as an independent progressive. He had written a piece in the New York Times called Where I Was Wrong. And he acknowledged that he had gotten the Soviet Union very, very wrong.

6:04that perhaps he had been done a favor by losing out in 1944 because he would not have won an election in 1948, even if he had become president in 1945. But he did insist that he would have pursued very, very different policies. Now, some of these policies that he wanted to pursue would have been blocked by Congress, for example. Wallace, as I said, was against the Marshall Plan. At least he was against us once Joseph Stalin declared against it. But he favored instead a$50 billion program that would have been run entirely by the United Nations, but funded entirely by the United States. Congress never would have approved this.

6:49But as we know from watching current history play out, presidents have enormous power in government, and it's basically up to the legislative and judicial branches to try to stop the president if they think he's making a mistake. And Wallace would have pursued a very different policy with regard to the Soviet Union. He believed that the United States was provoking the Soviet Union. And if it had taken a more, shall we say, Pacific posture, that Stalin would have had no reason to be aggressive in Central and Eastern Europe and in Asia. So I discuss in the book the actions that Truman took, for example, in 1946, sending a large military flotilla to the Mediterranean in order to deter Stalin, to force him to withdraw troops from northern Iran that had been stationed there under treaty during the war in order to get him to withdraw troops from the Turkish border.

7:58Wallace would have done none of this. So, you know, by 1948, the election in 1948, I would say the Soviets would have controlled the Turkish Straits. It would have controlled Hokkaido, the entire Korean peninsula, probably Greece, and most dangerously, Germany, all of Germany, where Wallace supported Stalin's position that Germany, needed to be unified under a Soviet-friendly government. So you have had great research into these Russian archives, the FBI files. You also mentioned in the book that Wallace was captivated by Russian mystics. He visited Siberia. Talk about all those things. Well, Wallace, as you know from reading the book, had very volatile views on the the Soviet Union and a lot of subjects.

9:01In 1933, when he was Agriculture Secretary for FDR, he was Agriculture Secretary for FDR's first two terms, he backed a rather remarkable initiative. He basically fell in with a religious cult run by a white Russian mystic named Nicholas Rarik. And Wallace, as agriculture secretary, appointed Rarick to head what was nominally a seed foraging expedition in Central Asia to find drought-resistant seeds to revive the Dust Bowl in the Midwest. But that was a cover for Rarick trying to establish a new theocratic state in Central Asia that would take territory from Russian Siberia, from Mongolia, and from Manchuria.

9:57He hid this from Congress. And Rarick at the time was extremely anti-Bolshevik. So Wallace himself argued vociferously with Truman and with FDR in 1933 that the United States should not even provide diplomatic recognition to the Soviet Union, that it was a godless regime. It would undermine religion in the United States. We shouldn't even have economic relations with him. Fast forward to 1934, when this expedition collapses after a number of critical articles coming out speculating as to what Rarick was up to and why Wallace had appointed him. Wallace disowns the entire venture, and his views on the Soviet Union start changing.

10:50He was a supporter of Soviet collectivization of agriculture, even though he knew that it was leading to mass deaths, particularly in the Ukraine. And in the early 1940s, as vice president, he made a number of very controversial speeches praising what he called economic democracy in the Soviet Union and arguing that the United States needed to move in that direction. Anybody in our political zeitgeist right now, any political leaders that remind you of Walsh? There are elements of it, no doubt. He's been called a populist progressive, although he himself, as you know, was not somebody who particularly liked humans.

11:36He didn't have a human touch. I would argue that he almost certainly had some form of Asperger's. But in terms of his populist politics, you might argue that he's similar to Bernie Sanders or AOC. But in terms of his personality and temperament, he does bear some similarities with Donald Trump. These are two people who believe passionately in themselves and the righteousness of their position. who have no trouble changing their views on a dime, but still believing that they were always on the right path. We are living in 2025. 80 years ago in 1945, if Henry Wallace had become the president, are we in a better or worse world today?

12:36I think a much, much worse world. If you stop to think of what we did in the early Truman years, putting together a network of alliances around the world, those alliances are paying dividends today. Thinking first of the 16 Marshall Plan nations, many of whom formed the embryo of NATO. Of course, we transformed not only Germany but Japan into a critical ally in the Asia-Pacific, South Korea, etc. Now, at the time, in the late 1940s, we were at the apex of our economic, political, and military power. We could have pursued a policy of America first during that period and gotten away with it. Of course, we even had sole possession of nuclear weapons until 1949.

13:39But this was a very long-sighted posture. We understood that that dominance wasn't going to persist. Over time, the rest of the world was going to recover. And so then we accounted for half the world's GDP. Today, it's down to a quarter. Those alliances are now central to our ability to project our values and our power around the world. So my big concern is that under the current administration, we're undermining those alliances at a time when we need them more than ever. I mean, I think obviously you and I are in agreement on that. I think it's incredibly well said and just pointing out to people that over 5.7 billion people around the world live under some form of authoritarianism.

14:29And so it's important for us in the free world to stick together. I think that's one of the more resonating messages of all your books, particularly the book about the Marshall Plan. Let's go to Stalin himself. He was editing Wallace's speeches. Yeah, quite remarkable. Can you imagine? Yeah. I just want to bring it up. I mean, when I read it in the book, I had my mouth open as I was reading it. I guess the thing that I want to tie back to Wallace, which as a historian, as somebody as a political analyst, but also an economic analyst, we've had in this country forever. We have isolationism. We have xenophobia.

15:10We have American nativism, which is ironic because the only really American natives are the Native Americans. so none of us are really native how do you reconcile all that in the world that we're in now? Is that the majority of Americans? What we call isolationism today was actually a very broad camp in the 1930s right up to Pearl Harbor it included people who were sympathetic to Germany and the fascists in Europe It included pacifists. It included pro-Soviet, pro-communist elements. So it was a very broad camp that was united under only one broad banner that they did not want the U.S. engaged in foreign battles and foreign conflicts.

16:12And, you know, that's always been part of the American psyche. You remember George Washington's farewell address, which I quote from at the beginning of my Marshall Plan book, you know, warning us to avoid foreign entanglements, particularly with Europe. And in the early 1940s, as we were beginning to build what would become the architecture of the post-war world, there were big debates within the FDR administration about what the meaning of Washington's address should be. all those years later, given how the world had changed, given how technology had shrunk the world, given how we were attacked in a very sensitive military location so far from the American mainland at Pearl Harbor, we had become a global power.

17:18And so this element, This popular thought in the American tradition, which we call isolationism, has never really left us. And, you know, Anthony, there are good reasons why Americans are skeptical about our ability to project power any place in the world unilaterally. It didn't work well in Iraq. It didn't work well in Afghanistan. And so, you know, you can make a strong case that Donald Trump is not just the cause of the new developments in American politics. He's an effect of failures of American interventionism. Interventionism that, you know, I argued in my Marshall Plan book that the creators of the Marshall Plan would never have endorsed.

18:20No question. All right. So I've got to, we're back to our five words, Ben. You're familiar with my format. So I'm going to read you five words, and I want you to give me a sentence or two or a thought that comes to mind. Ready? I say the word Marshall Plan. You say what? Wow. Marshall Plan. So I immediately, what comes to mind is Henry Wallace, who said that the Marshall Plan was a grievous error. It was a form of American imperialism. It was designed to be a boondoggle for American industry, and it was going to be resented by the recipient nations as a method for the United States to impose their domination.

19:13You know, fast forward today, I think we can say that it's very fortunate that the United States went in the direction it did. Yeah. Didn't it not follow Henry Walsh? Okay. FDR. FDR Truman. And the reason I say that is that, as you know, Truman did not intend in any way after he became president to march off down a different path. He tried to follow FDR's one world vision, but became a very reluctant Cold War, Cold Warrior, when he recognized that Joseph Stalin was not going to be a cooperative partner. I would argue that FDR, had he survived, would have become a Cold Warrior himself, but not as effective a Cold Warrior as Truman was.

20:07Truman empowered good people with integrity and the ability to lead, and Truman delegated well to them. As you know, FDR was not nearly as accomplished in that regard. What about Russia? Well, obviously Stalin comes to mind here. And Stalin is just – he's a prototypical Russian leader. In so many ways, Putin and Stalin are extremely similar. When it came to foreign policy, Stalin was not an ideologue. He was a Marxist ideologue when it came to economics. But he was completely pragmatist with regards to foreign policy. He simply wanted to make sure that the countries that bordered the Soviet Union would not challenge his prerogatives.

21:06And that's really been Putin's strategy as well. Putin is a pragmatist. He is a relentless, brutal pragmatist. But he's not an ideologue at all. Last two, and unfortunately, I've got to make these quick. Cold War. Cold War, you know, I would go back to the word that you brought up, isolationism. We could have pursued an America First strategy in the wake of the Second World War. In fact, you know, that was, it was Truman's initial objective to detach from Europe. He was pursuing FDR's open policy, which he announced in Tehran in 1943 to withdraw all American troops from Europe within two years of the end of the fighting.

22:09That's the direction in which we wanted to go. But, you know, world events, Joseph Stalin pulled us in a very, very different direction. Okay, the last word. And Mr. Wallace, thank God he wasn't president, right? Is that basically it? Yes. And, you know, with regard to Wallace, I would point to the eternal debate that historians have about the degree to which history is determined by, quote unquote, great men, or whether we're just flotsam on the seas of historical forces that, you know, people just mold to the moment. And I think the Wallace story really shows how important individuals are. I mean, if you look at our last three elections, we've gone in quite different directions, but really they've been quite close run affairs.

23:09And you could have painted pictures in which each of them could have gone in a different direction. It's been a different trajectory for the country. Very different trajectory for the country and indeed for the world at large. So people do matter. I appreciate it, Ben. And thank you so much for joining us on Open Book. The title of the book, and it's a phenomenal book, The World That Wasn't, Henry Wallace and the Fate of the American Century. It's not only a great book about Wallace, but it's a good rendition of the Cold War and the unfolding intrigue of what happened to America in the last 80 years.

23:42Thank you for joining us. Thanks for having me. I am Anthony Scaramucci, and that was Open Book. Thank you so much for listening. If you like what you hear, tell your friends and make sure you hit follow or subscribe wherever you listen to your podcast. While you're there, please leave us a rating or review. If you want to connect with me or chat more about the discussions, it's at Scaramucci on X or Instagram. I'd love to hear from you. I'll see you back here next week.

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