A Perfect (Free-Market) World?
Economics, the Eisenhower Administration, and the Soviet Economic Offensive in Latin America*

On January 16 1956, the Soviet Premier Nikolai Bulganin, "offered to expand diplomatic, economic, and cultural relations, extend technical assistance, and conclude training arrangements with Latin American nations." This announcement was part of an ongoing shift in Soviet policy toward the developing areas of the world. In late-January, President Dwight D. Eisenhower chided Bulganin for Moscow's new approach, telling him that recent deteriorations in East-West relations were, "because to us it has seemed that your Government had, in various areas of the world, embarked upon a course which increases tensions by intensifying hatreds and animosities implicit in historical international disputes." 4 Soviet actions were being driven by several factors: an ongoing internal dispute within the Kremlin over who should become the de facto leader of the Soviet Union; the continuing challenge that was being posed to Soviet supremacy in the communist bloc by Mao's China; and, the changing nature of east-west tensions in the Cold War. 5 This final point is especially instructive. With the situation in Europe more stable than at any time since 1945, the focus of American and Soviet officials had increasingly shifted toward the Third World. In fact, by 1955, both Moscow and Washington were beginning to see the emerging nations in the Third World as being crucial elements in the next phase of the Cold War. As Nikita Khrushchev's rise to prominence in Moscow coincided with a more bellicose Soviet foreign policy, 7 the U.S. was forced to reconsider its approach toward the Third World not just from an economic perspective, but from a strategic perspective, too. 8 Given this wider global trend, we might expect historians analyzing U.S. policy toward Latin America to have highlighted the Soviet Economic Offensive (SEO) as being a critical moment; the time when the evolving pattern of events in the bilateral relationship between Washington and Moscow emerged in the Western Hemisphere. And yet, this has not been the case, with scholars continually playing down the importance of the SEO on U.S.-Latin American relations. 9 Indeed, scholars from opposite ends of the historiographical spectrumlike Stephen Rabe and James Siekmeierhave generally found common ground in downplaying the importance of the Soviet offer of economic and technical assistance. 10 Typically, there are two reasons why this instance of overt Soviet intervention in Latin America has not been accorded more importance by existing studies. Firstly, the initial Soviet offer dissipated quite quickly, as the poor quality of Soviet industrial products and the fallout in Eastern Europe following Khrushchev's secret speech in February 1956 made the Soviet offer seem less attractive. 11 And secondly, U.S. policy is not perceived to have altered that significantly in the aftermath of the Soviet offer. Although there were some modifications made, they were not considered sweeping or wide-ranging enough to merit an in-depth investigation. 12 This was not, however, a universal trend; more significant consequences were apparent in other areas of the world. In Indonesia, as Robert McMahon has recently noted, the Soviet Economic Offensive was one of the catalysts behind the Eisenhower administration's ill-fated