Although Acheson's "Defensive Perimeter" speech in Jan 12, 1950 did not include Korea, when the war broke out the US was involved immediately. The aim of this investigation is to find out to what extent did economic reasons influence the USA's decision to go to war in Korea. The main sources will be books that relate to the Korean War. Internet sources will be used if it is necessary for the summary of evidence. In B, the changes of the American economy will be after and before the involvement Korean War, Acheson's "defensive perimeter" speech, and the expansion of communism after WWII. Then I will evaluate the values and limitations of the two Korean books that relate to Korean War with regarding to the extent of economic reason for the USA involvement in Korean War. The possible political and economic reasons why the USA intervened in the Korean War will also be analysed before reaching a conclusion in E.
B Summary of Evidence
The economic situation of the USA from 1940 to 1953.
The USA's economic situation was rapidly growing during the war with Japan because it had put much effort on military spending, and thus decreasing unemployment. However because of the surrender of Japan, the US's economy started to decrease again. The USA saw another chance to have economic growth due to the Korean War. Indeed, the USA's economy started to grow from 1950.
The USA's declaration of war upon Japan in December 8, 1941 led to the growth of its economy. Industrial factories were at first slow to convert to military output, but by 1942, 33% of the economy was devoted to the war effort. Between 1941 and 1945 the US spent approximately $250 million a day in efforts to produce the military products to defeat its enemies. By the end of the war in 1945, farm income had more than doubled. Corporate profits rose by 70 percent over their 1940 level, and real wages of industrial workers increased by 50 percent. Perhaps most notably, the earnings of the bottom fifth of workers climbed 68 percent. Gross Domestic Product (GDP) nearly doubled, from $832 billion in 1940 to $1559 billion, measured in constant 1987 dollars. Living standards improved significantly.1
Here is a statistical graph shows the change of unemployment rates before, after and during the WWII. It shows the war influence on the economy.
EMPLOYMENT AND UNEMPLOYMENT, FISCAL YEARS 1940-1949
(as percent of total [civilian plus military] labor force)
FiscalYear NondefenseEmployment DefenseEmployment CivilianUnemployment(BLS concept)
1940 82.4 1.8 15.7
1941 79.4 8.5 12.0
1942 67.3 25.7 7.0
1943 57.6 39.4 3.0
1944 58.4 40.3 1.3
1945 59.5 39.2 1.3
1946 88.5 8.9 2.6
1947 90.9 5.3 3.8
1948 90.9 5.3 3.9
1949 88.4 5.2 6.4
Notes: Defense employment includes military personnel, civilian employees of the military, and employees of defense-related industries.2
Rapid demobilization dropped the government's share during the period 1946-50 to the range of 11-15 percent, slightly below the prewar level.
The outbreak of the Korean War led to another steep increase of the government's share, from about 13 percent in 1950 to 22.5 percent in 1953. Although some retrenchment followed cessation of the fighting in Korea, government's share has remained at a high level, about one-fifth of GNP, ever since. Notably, this postwar plateau of the past three decades holds government's share of GNP at approximately three times the level sustained before World War I. By this measure, then, the government during the twentieth century has become three times as important in relation to the economy.3
USA's foreign policy regarding Korea (Acheson's speech)
The purpose of Acheson's speech of "defensive perimeter" in JAN 12, 1950, was stopping Stalin and Mao's expansionism. As seen in the diagram,
But Korea and Taiwan was excluded, and it was blamed that it was the reason of start of Korean War.
The growth of communism after the WWII (China, Eastern Europe, Asia)
After WWII, the Soviets started to occupy Eastern Europe in order to prevent the invasion from Germany in future making them communism. Many Eastern Europe countries and Asian countries fell to communism continuously during 1940's such as the buffer states of USSR, Yugoslavia, China, North Korea, and Vietnam.4 And when Communist North Korea, invaded South Korea, the USA started to worry if South Korea would fall to communism, too thus endangering Taiwan and Japan according to the Domino Theory.
C Evaluation of Sources,
Chull Baum, Kim Korean War and USA.
Kim Chull-Baum is a pioneer on the study of the origins of the Cold War in Korea. He is a political science doctor, the professor of National Defense College, and the president of Korean War investigation group. He has written many books about Korean War and is considered an expert on Korean politics and its war. The book itself is based on many secret documents which were newly released in 1970 from American archives and from Western countries, and the footnotes and endnotes are all there in detail.
The book at times emphasizes too much the point that if Korea fell to communism, the whole of Asia would fall too. His main claim is that the USA intervened because of the threat of communism, neglecting other valid reasons such as economic. Additionally, Kim had no personal experience of the Korean War, but depended on outside sources.
Seung Uk, Park's Both the 38th line and Korean War were USA's works.
The Author's life was noteworthy. He was born in 1919 and adopted into a Japanese family serving as a Japanese naval ensign during WWII. He moved to the US and worked for the CIA from 1947 to 1980 in Far East.
This book was based on the author's own experience and the information he got while working in the CIA, so it is both vivid and detailed. As mentioned above, he knew of and actually witnessed much secret information of the Far East, especially about the Korean War, because he worked as high official in CIA. In addition, he includes a number of first-hand dialogues between him and high officials of the US.
Based as it is on his own experiences, it is at times a subjective account. No footnotes or endnotes have been supplied, limiting the value of his information and opens him to accusations of bias and exaggeration because he was born in Korea and he is critical of the US role during the Korean War.
D Analysis
The economic situation of the USA during 1940's recovered from the depreciation and inflation caused by the Great Depression in 1929, mostly as a result of producing military products in WWII. But after the war ended, the USA economy seemed to depress, because the war ended so quickly, so there was a lot of surplus. Thus the USA needed a new war to recover their economy. The USA thought that Korea could offer a good chance to recover their economy by reducing military damage, using Japan as their base and the Korea is their front-lines. What the US wanted was to destroy all Korea's buildings so the USA could provide them surplus. This partially explains why Korea was excluded from the Acheson's speech in 1950. It was all intended, because the US need to lure Soviet and North Korea to attack South Korea, so when South Korea was invaded by them, USA could change there plan to intervene Korea by using UN. Additionally, the Russia was absent in UN conference, so they couldn't veto it. This is the economical reason in the book wrote by Park why USA intervened Korea War.
However, another interpretation of why Korea WAS excluded from the speech exists. In the late 1940's, some European countries such as Czechoslovakia, Poland, Yugoslavia, Hungary and Rumania were conquered by the Soviets. In 1949, China fell to Communism, too. So Truman believed and was worried that if the US did not intervene, then the next countries would be Asian countries such as Korea, Japan, Taiwan and the Philippines. Therefore it issued the "Perimeter of Defense" including many Asian countries. So this is the political reason in the book written by Kim as to why USA intervened the Korea War.
However, the economic reason is more reliable than the political reason, because in the book written by Kim, Syngman Rhee didn't know that North Korea would invade the South, but in the book Park said that Sygngman knew it, Syngman even told Truman that the South will be invaded by North soon. But USA didn't recognized it, even they knew it by the CIA. Because what USA needed is the war. Kim also claims that Truman didn't receive any reports about the imminent North invasion, but Park believes that Truman was warned by the CIA and simply ignored it. Truman denied receiving such warnings, so that the situation can coincide with the Acheson's Speech. So briefly, the US knew the North would invade the South, so the US excluded Korea from the "Perimeter of Defense" in Asia to make Stalin and North Korea think that the US did not care about Korea.
There are a number of shocking thing that the USA did. There were about 8240 intelligence men spread out in Beijing, Manchuria, North Korea, and Moscow. So at that time US knew everything in great detail. First, through information obtained in Hong Kong, there was military goods trade between China and UN from through the way that from Aomen to Indonesia and Sri Lanka.5 It was lead by the USA, as the information said, but denied by the US. At the same time, when the North Korean army was nearly driven back to the Yalu River, MacArthur suggested they should banish the North Korea army from Korea and unify Korea. In order to do this, MacArthur needed to bomb their supply base camp and the Yalu bridge. But the Joint Chiefs of Staff said they should not attack any bridge or supply camps. And when 500-thousand Chinese troops rushed in to Korea, the US ignored MacArthur's proposal of backup. Truman said to MacArthur that they would stop there, and not move north. It was ironic that the USA did not aid MacArthur's army, but sold military goods to China. The purpose was for China and North Korea to destroy all the buildings inside Korea, so if they reached a cease-fire agreement, the USA could use its surplus to rebuild Korea.
Some might argue that it was correct not to aid more armies to fight with Chinese and North Korea troops as it would start WWIII. But at that time, China had just ended a long civil war as well as the war with the Japanese, so their domestic problems were chaotic. Also at that time, the population of China was about 5 hundred million, but their economy was unable to feed up 5hundred million people. And this is the one reason why China helped North Korea, to cut down the huge population.
Secondly, the Soviet did not have the power to start World War III. After the war with the Germans and Japanese, the USSR was too damaged. The amount of damage was about 12billion dollar, the casualties were between 12~15 million. And the people who died while working in labor camps plus the soldiers who were killed were about 23million.6 Thus, from the population of 95million Soviets, 23million men were killed. There should have been a shortage of men to join the army. On Sep, 25th, 1945, the Soviets announced that they had the Atomic-bomb, but they needed 5 to 6 more years to use it in real warfare.7 As the US had a nuclear monopoly, both China and the Soviet Union were unable to start another war.
E Conclusion
As the analysis above shows, the economic reason makes more sense than the reason why USA intervened Korea as shown in the controversial and mysterious events such as the Acheson speech in Jan. 1950, leaking incorrect information, selling weapons to China secretly, and the prohibition in bombing China, matches with the economic reason rather than any real political reason. In conclusion, it was the USA which encouraged North Korea to invade the South while disguising this as a fight for justice and righteousness.
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