Let’s talk about the new Lend-Lease Act passed by the US Congress last week. 🧵
A lot of talk, since the bill first passed the Senate unanimously a month ago, sees it as “reviving” the #WW2-era Lend-Lease programme of military aid, launched March 1941. But does it really? reuters.com/world/us-congr…
This revival talk has got some, notably @adam_tooze, worrying about whether this locks the USA into the same escalation spiral as in 1941. Others see it as confirmation that 🇺🇦 is a proxy war.
Good intuitions both, but if we take the case of the original Lend-Lease seriously, we see that neither it nor framing it as a proxy war quite captures what its 2022 namesake does.
As is well known, the original 1941 Lend-Lease Act authorized @POTUS to sell, transfer, exchange, lease/loan any “defense article” to any country deemed “vital to the defense of the United States”.
“Defense articles” of course meant weapons, but also repairs or upgrades, as well as bases, industrial plant & other infrastructure required for making & maintaining these things. Repairs actually were more important than arms early on. See academic.oup.com/dh/article/39/…
Less well known is that LL also allocated federal funds to *manufacture* such items, as well as to repair, refit, upgrade etc friendly powers’ military equipment, & to receive things in return (‘reverse Lend-Lease’). Latter is how USA acquired its global base network.
The manufacturing bit was absolutely fundamental: it is what made USA the “arsenal of democracy” – the famous phrase used by FDR to present Lend-Lease in a radio broadcast (fireside chat) on 29 Dec 1940. I will return to this later.
Lend-Lease was the biggest foreign aid programme ever. From its launch in March 41 to its termination in September 45, some $32.5bn worth of stuff was exported. To compare, Marshall aid amounted to $13.2bn (1947-52) – & the US economy by then had grown much bigger!
Nonetheless it took years for Lend-Lease to gather steam: it wasn’t until late 1942 that Lend-Lease overtook exports-for-cash in trade with Britain, the #1 destination. So we should be thinking about this in terms of years, not months.
LL was also, as @adam_tooze rightly insists, more than a proxy war. It was an escalatory move in an ongoing war. As FDR put it in his 1939 State of the Union, there were “many methods short of war” to respond to aggression.
Lend-Lease was one of these. David Reynolds has shown that Roosevelt had been thinking of how to fight a war without fighting since 1937, something he called a “modern way” of war & compared to the undeclared wars fought by Japan & Italy.
So how does the new Ukraine Democracy Defense Lend-Lease Act compare? Does it revive the old Lend-Lease? And does it mean the US is now in an undeclared war with Russia?
Like the original, it authorizes @POTUS to “lend or lease defense articles” to Ukraine and E. European countries “impacted” by Russia’s invasion. So far it’s largely the same. congress.gov/bill/117th-con…
The act also waives provisions of the 1961 Foreign Assistance Act & 1976 Arms Export Control Act that limited the loan/lease period to 5 years & imposed various limits on leasing, such as demanding repayment from recipients. Again, very similar.
The big difference is that Ukraine Lend-Lease has no manufacturing component. None of its provisions point to a renewed US role as the arsenal of democracy. Indeed all aid sent so far has been off-the-shelf.
This is no quibble: the original Lend-Lease was about mobilizing the US economy behind the Allies’ war. As Churchill put it in 1941: “give us the tools and we will finish the job”. That required closely coordinated econ planning w/ British & other Allies. winstonchurchill.org/resources/spee…
So Lend-Lease wasn’t just an intervention in the sense of sending arms. It also forced USA to align its strategic and production planning with the Allies. It was an aggressive move in the war of production. None of this applies to the current aid to Ukraine so far.
There is of course the big $33.2bn extra appropriations bill Biden asked Congress for, which earmarks a lot of $$$ for arms procurement to replace the stuff sent to Ukraine. The prev $13.6bn one did too. This will of course create production. lemonde.fr/en/internation…
But arms builders are already struggling with the commodity crisis. Steel is already up 40-60% in prices; so is titanium (Russia is a major exporter). These are the same sort of inflation/scarcity-driven production bottlenecks seen in #WW2. defensenews.com/pentagon/2022/…
Back then the government stepped in to control prices, ration resources (source of the famous meme below!) & plan their allocation, as well as to fund expansion of production capacity. Recall: Lend-Lease 1941 included manufacturing. None of this has so far been on the table now.
So, to wrap up🎁Despite the name, Ukraine Lend-Lease is not the original LL. It is an intervention & escalation, certainly, far beyond a proxy war. But it is not the same intervention as in 1941. The New Deal era is long gone & w/ it the era of state-funded mass arms production.
W/o combined strategic planning, Ukraine Lend-Lease is unlikely to lead to war the way the original did. But w/o planning, price controls etc, it is possible that, when off-the-shelf supplies for Ukraine run out, industry will struggle to step into the breach.
That’s something we should be worried about. Rationing & planning in the current political-economic moment? Can elites imagine it? Will electorates accept it? US is ahead of EU in this debate. (But see below.) Where does that leave strategic autonomy? legrandcontinent.eu/fr/2022/04/28/…

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