Steil devotes a good part of his book to rehashing old charges that White spied for the Soviets by conveying documents and general information to them, and he suggests that the Bretton Woods agreements were skewed to favor the Soviet economy. In other words, the IMF was a Communist plot! Steil presents no new evidence for the charge, and his argument is dangerously misleading. Yet it’s worth a closer look. White was not a Communist and had no obvious motive, so why do some people think he was a spy? Three reasons have been suggested, and each is suspect and weak.
First, White had several friends and associates who were involved with the US Communist Party. He certainly knew they were sympathetic to communism and the Soviet Union, and he seems to have been indifferent to their political views and activities. Those relationships fed accusations of guilt by association during the McCarthy era. More seriously, they exposed him to charges of complicity in specific crimes committed by people around him. At least one of his subordinates at the Treasury supplied documents, some drafted by White, to a cell of American spies known as the Silvermaster group. (Nathan Gregory Silvermaster, the alleged head of this group, was a longstanding friend of White’s.) Whether White knew what they were doing is purely a matter of speculation. How much credibility does one grant secondhand accounts claiming that these spies said that a document came “from Harry,” when one of their number had personal access to a copy of the document in the normal course of Treasury business?
Second, after the end of the war, when White had become famous as the author of the Bretton Woods agreements, two notorious fabulists told the FBI, and later the general public, that White was a spy for the Soviets. One, Elizabeth Bentley, had been a member of the Silvermaster group. She turned informant for the FBI and eventually linked White to Silvermaster through the people who had conveyed Treasury documents. She never met White and had no direct knowledge of whether he was involved in the Silvermaster ring other than by having such people working in his office. Even the FBI had serious doubts about her credibility.
The other informant, a Time magazine journalist named Whittaker Chambers, may have met White in the late 1930s; Chambers was in the Communist Party and at the time associated with many people on the left. When suspicions arose a decade later, White denied having ever met him, but Chambers habitually used a variety of aliases, so the truth is obscure. Chambers dramatically produced a microfilm for the FBI, dubbed the “Pumpkin Papers,” literally pulling it out of a pumpkin on his farm in 1948. The film contained, among other items unrelated to White, images of four pages of lined paper on which White had scribbled notes on various topics. Anyone who has worked in a bureaucracy like the Treasury Department would recognize these pages as the kind of notes taken during the meetings that consume so much of an official’s day. Chambers claimed, to the FBI and later in his autobiography, that White had given him the notes to convey to Soviet intelligence. But when called to testify before a grand jury, Chambers admitted that White had never personally given him any documents. As with almost every aspect of Chambers’s stories, the truth is elusive: how he obtained the notes and why he never gave them to his friends in the party are unanswerable questions.
Third, in the 1990s, the US government declassified several thousand Soviet cables from the ’40s that it had intercepted, partially decrypted and translated in a project known as VENONA. Some fifteen or so of those cables include references to White. Taken out of context and accepted as literal truth, these reports from Soviet intelligence agents appear to confirm White’s complicity in espionage. In context, however, the story is more benign. Although the VENONA interceptions lasted throughout the war and into the early postwar years, all of the cables mentioning White date from April 1944 through June 1945. Several refer or relate to two meetings in April and August 1944 between White and a Soviet agent code-named Kol’tsov, or to Soviet efforts during that period to gain better access to White and even to recruit him as an agent. At that time, White was meeting regularly and with full public disclosure—the Treasury even issued a press release—with a delegation of Soviet officials in preparation for the Bretton Woods conference. At least one of those delegates was periodically reporting back to Moscow, suggesting that he was succeeding brilliantly at gaining access to White. (Kol’tsov was most likely N.F. Chechulin, the deputy head of the state bank.) Those cables look incriminating until you realize that they are a one-sided and self-serving depiction of conversations with a US official who was simply doing his assigned job. Moreover, the seemingly nefarious implications of the cables have never been corroborated.
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In May 1945, during the conference in San Francisco to establish the United Nations, White granted an interview to a Russian named Vladimir Pravdin, who was accredited to the conference as a journalist for Tass, the Soviet news agency. Pravdin cabled his gleanings to Moscow in terms similar to Kol’tsov’s. In each of these cases, it looks suspicious that White was freely discussing US policy issues, including matters such as how strongly the United States might object to a proposed veto for the Soviet Union over Security Council discussions. (If the transcription is correct, White was wrong in implying that the United States might yield on that issue.) But even if one accepts Pravdin’s report as gospel, the revelations were, at worst, indiscreet gossip and far from espionage.
To understand Steil’s aim in this book, consider again the “eureka” document that is supposed to reveal White’s secret longing for a Soviet-style economy. White noted there, with some satisfaction, that every modern economy—Soviet, American or what have you—relies on a mix of government and private sector activities. The differences in economic systems are important and large, but not so fundamental as to deter the United States and the Soviet Union from continuing to cooperate in an alliance with other major powers. To Steil, White’s position is heresy because it elevates government alongside the private sector as an important actor in the economy. White’s “private views on the inevitable global spread of Soviet-style planning,” Steil writes, “suggest he was far more interested in locking the United States and Russia into political alliance than in the creation of a system to revive trade among private enterprises.” Not only does this passage distort White’s views, it also reveals Steil’s politics. Get government out of the way, eliminate bureaucracies like the IMF, bring back the gold standard, and the world will be a better place. White had a different view, and that was all it took to set the hatchets in motion.
How did the conservative ideas of Friedrich Hayek and the Austrian school become our economic reality? By turning the market into the realm of great politics and morals, wrote Corey Robins, in “Nietzsche’s Marginal Children” (May 27).