Money and Security: Troops, Monetary Policy and West Germany's Relations With the United States and Britain, 1950-1971

Military Review,  Sept-Oct, 2003  by John C. Binkley

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Hubert Zimmerman, Cambridge University Press, New York, 2002, 275 pages, $45.00.

Normally, monetary policy is not discussed in the same breath as military force structuring, but as Hubert Zimmerman, an Assistant Professor of International Relations at Ruhr-University argues in Money and Security: Troops, Monetary Policy and West Germany's Relations with the United States and Britain, 19501971, they not only can be discussed together, but they might be at times inextricably intertwined.

Zimmerman's thesis is quite simple. During the period from 1950 to 1971, the United States and Great Britain faced competing pressures as they determined what troop levels Germany should maintain. It was to be expected that the two Western powers had to address traditional military and foreign policy questions arising out of the creation of the NATO, as well as the expected budget concerns related to the direct out-of-pocket cost of maintaining a presence in Europe.

What was novel for both the United States and Great Britain was how such an extended foreign military presence during peacetime affected the two countries' balance of payments during this period and what alternatives both would use to address the imbalances. To put it succinctly, they were "confronted with the dilemma of having to assign more relative value either to their central economic goal of strengthening the balance of payments or to vital security considerations." Because they could not ignore security considerations, the question was who would pay for their continued presence in Germany and how would it be paid.

Many of the military and political decisions the United States, Britain, and West Germany made during the 1950s and 1960s had a large "balance of payment and monetary policy" component. For example, Britain's reevaluation of the size of the British Army of the Rhine (BAOR) in 1957 has traditionally been attributed to geopolitical factors related to the Suez Crisis. Zimmerman argues that the failure of British arms exports to West Germany exacerbated the balance of payments problem caused by maintaining the BAOR, which became a crucial factor in the reevaluation. Similarly, Zimmerman shows how the U.S. Department of Defense used arms sales to West Germany to offset the effect the Vietnam war had on the balance of payment, thereby postponing the necessity to decide between the Great Society and the war. Moreover, the constant pressure on West Germany to increase its contribution to NATO was directly related to payment issues.

This book presents an entirely different perspective on familiar events and is well worth reading. The subject matter is not necessarily easy to understand, as one would expect when dealing with monetary policy, but Zimmerman makes the subject far more readable than might be expected. I highly recommend the book.

John C. Binkley, Ph.D., University of Maryland, College Park

COPYRIGHT 2003 U.S. Army CGSC
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