Why The U.S. Ruined Guatemala: Merging The Cold War Ethos and Economic Determinism as an Explanation

Diego Rivera's famous mural: "Gloriosa Victoria", depicting the Dulles brothers, the American ambassador Peurifoy, and Eisenhower's face on a bomb greeting Castillo Armas. The archbishop of Guatemala blesses their unholy coup while the men stand over the corpses of Guatemalans.
Diego Rivera’s famous mural: “Gloriosa Victoria”, depicting the Dulles brothers, the American ambassador Peurifoy, and Eisenhower’s face on a bomb greeting Castillo Armas. The archbishop of Guatemala blesses their unholy coup while the men stand over the corpses of Guatemalan victims.

The historical significance of the Guatemalan coup in 1954 within the context of the cold war is unquestionable because it set a precedent for the American government’s use of covert regime change when dealing with communist containment. However, historians have disagreed in their analyses of the event, with their responses either focusing on economic determinist outlooks or the cold war ethos as the main factor contributing to the coup’s origin. The two opposing authoritative texts correlating with these theories regarding this watershed event in the early stages of the cold war are Schlesinger and Kinzer’s Bitter Fruit: The Story of the American Coup in Guatemala and Richard Immerman’s The CIA in Guatemala: The Foreign Policy of Intervention. The subtitles of the books carry subtexts that expose the stark contrast in the authors views on why the coup happened, as Immerman specifically focused on the CIA’s involvement, while Schlesinger and Kinzer’s title was meant to reference the United Fruit Company and their subtitle more broadly described it as the American coup, instead of just the CIA coup.

The reason for the discrepancy in Schlesinger and Kinzer’s analysis was in inferring the reasoning for the coup as anti-communistic in an economic sense, because it revealed the U.S. government’s role in supporting the interests of the United Fruit Company, which dominated the Guatemalan economy and relied heavily on the poor country’s cheap labor in order to reap huge profits, “United Fruit had for years been the largest employer in Guatemala as well as the largest landowner and exporter”(Bitter Fruit, 70). This analysis was more in line with classical historian thinking, while Immerman’s revisionist cold war ethos focused on the prevailing American culture of fear in relation to the rise of communism in the western hemisphere. Immerman focused on the CIA’s involvement in Guatemala and posited that the agency’s mindset was a dire one, in that even if Guatemalan communist influence was minimal, America had to make a stand against any perceived presence of the Soviets in the U.S. sphere of influence “…the cold war was under way, and sides had to be taken”(The CIA in Guatemala, 4).

Both Bitter Fruit and The CIA in Guatemala were released in 1982, which was important for increased attention because the releases inadvertently coincided with the Iran-Contra affair. But more importantly, the newly expanded Freedom of Information Act allowed greater access to government documents, especially for Schlesinger and Kinzer, as they had more connections in the American government than the unknown Immerman had. A decade later, Nick Cullather’s Secret History reflected Immerman’s lean toward the cold war ethos. Nick Cullather worked as a historian for the CIA in the early 90‘s and was able to solidify Immerman’s analysis in Secret History by being able to view the CIA’s way of thinking during the 50’s from inside the agency. Even though much of the book was censored, the author was able to use such a seemingly detrimental blockage to his advantage by allowing the reader to infer what the CIA thought was significant enough to block out in the covert operation they had confidently named PBSUCCESS. Cullather explicitly, but tactfully argued that American business interests in Central America were only a smaller equation in the larger problem that was the ideological battle for political influence between two superpowers on an international scale. Although Cullather and Immerman incorporated nuanced arguments in their works, the authors largely focused on the development of PBSUCCESS and its relation to the cold war ethos, and implicitly refused to take a multi-faceted, pragmatic approach to analyzing the cause of the coup. However, Piero Gleijeses in Shattered Hope: The Guatemalan Revolution and the United States, 1944-1954 was open to considering a variety of causes for U.S. involvement in the coup, by concluding that there were multiple reasons, such as “the search for economic gain, the search for security, and imperial hubris”(Shattered Hope, 361).

Immerman and Cullather largely overlooked the fact that operation PBSUCCESS grew out of a failed uprising funded by UFCO only two years prior during the Truman administration, that was possible with approval and a minimal planning role for the CIA, “the Truman administration had considered intervening in Guatemala… Recently declassified CIA records show that this planning was extensive”(Karabell, Architects of Intervention,12). Schlesinger and Kinzer emphasized the economic reasoning for the coup by recognizing the fruit company’s major role in massively funded public relations attempts at delegitimizing the democratically elected Guatemalan regime, both in the eyes of the American government, and in the opinions of American people. Schlesinger and Kinzer mentioned another coup attempt in 1953, an aborted coup which was orchestrated by the CIA with UFCO funds on a fruit company ship. Perhaps even more interesting, was the cold war ethos adherents overlooking what Gleijeses found necessary to quote from Schlesinger and Kinzer’s book, that “Without United Fruit’s troubles, it seems probable that the Dulles brothers might not have paid such intense attention to the few Communists in Guatemala, since larger numbers had taken part in political activity on a greater scale… in Brazil, Chile, and Costa Rica without causing excessive concern in the U.S. government.”(Bitter Fruit, 106).

Immerman and Cullather rather preferred to focus on the psychological mood of the State Department under John Foster Dulles, one that was inscribed with fear after McCarthy irrationally accused even conservative American officials of being communists. The cold war ethos adherents argued that the emotionally charged atmosphered was the cattle prod for the Eisenhower administration to live up to its campaign promises of being tougher on Communists than the preceding Truman administration that had “lost China” and created a stalemate in Korea. Immerman and Cullather (although Cullather to a lesser degree) described the Guatemalan coup in 1954 within a larger context of the cold war that was morally complicated and extremely politicized. Again and again, Immerman brought up the need to contextualize the CIA’s decisions and “that the programs of the Truman and Eisenhower administrations cannot be understood outside of the context of the period’s cold war ethos…”(The CIA in Guatemala, 20). Very little did Immerman and Cullather mention the influence of United Fruit, and when they did it was only in order to mitigate the effects that the company’s lobbying in America and economical dominance in Guatemala had leading up to the coup. Unlike Gleijeses, Immerman and Cullather thought that the cold war ethos and economic determinism were mutually exclusive and were adamant in proving that United Fruit was an unimportant factor in the CIA considering PBSUCCESS compared to the domestic and international political tensions which were high in the mid 1950’s.

Unlike the conspiracy of a corporation-controlled American government that Immerman derisively mentioned on occasion, in Bitter Fruit Schlesinger and Kinzer did not attempt to portray the Eisenhower administration as being under the control of United Fruit. The authors instead argued that since some of the people in the U.S. government were also at one time or another officially employed or receiving an income from UFCO, that there were subsequent mutual benefits for directing policy that was pro-business in Central America. Immerman was ambivalent when it came to correlating United Fruit and the Eisenhower administration’s interests. The CIA in Guatemala repeated that economics was not the most important factor when compared to the McCarthy-inspired-atmosphere of fear in America, and the author even argued that it was misleading to describe Eisenhower as a defender of corporations. Immerman went on to say that such an assertion (the kind that Schlesinger and Kinzer argue) “is an oversimplification, for it has already been shown that, within the context of the cold war ethos, to defend UFCO in Guatemala was tantamount to defending the hemisphere against the Communists”(The CIA in Guatemala, 123). Immerman went on to make a valid argument in denying the correlation as a conspiracy theory, “United Fruit’s connections within the Eisenhower White House cannot be ignored” yet then convoluted his argument by stating “These people [the Eisenhower administration] thought like representatives of United Fruit because they had the same backgrounds. They did not have to be persuaded by company lobbyists”(The CIA in Guatemala, 124).

No, the Eisenhower administration did not have to be persuaded by lobbyists, because as Schlesinger and Kinzer proved, some of them were themselves company lobbyists, or at least, in the case of Eisenhower’s secretary, married to the head UFCO lobbyist. Although this did not necessarily mean that economic determinism was the sole factor in the U.S. ultimately following through with supporting the uprising of Castillo Armas. Gleijeses explained that UFCO’s war mongering was relevant only up until the end of Arbenz’s term, as the company’s exaggerations of communist influence began to actually take shape in reality because the Guatemalan communists, or PGT “gained influence in the early 1950’s, when in the United States, McCarthyism was at a peak and… no president had ever been as close to the communists as was Arbenz. It required no manipulations by UFCO minions [for the Eisenhower administration] to appreciate these truths”(Shattered Hope, 362).  Gleijeses, Immerman, Cullather, and even Schlesinger and Kinzer all agreed that by 1954, the Eisenhower administration, especially the Dulles brothers, figured that enough was enough: it was time to act in America’s backyard before the Soviets gained an irrevocable foothold. The failed attempts at overthrowing the Guatemalan government that was now intent on enacting land reform were clear precedents for a better coordinated operation, which Schlesinger and Kinzer attributed to the heavy amount of CIA resources involved in operation PBSUCCESS

Schlesinger and Kinzer were able to cite several people who held conflict of interests by either working in the State Department or CIA while investing in or formerly working for the United Fruit Company: Senator Henry Cabot Lodge, his brother the ambassador the United Nations, and Eisenhower’s personal secretary, Ann Whitman, was the wife of the UFCO head of public relations, to name a few (Bitter Fruit, 88). To the authors of Bitter Fruit, it was plain enough that this conflict of interests really was a significant portrayal of U.S. government shared interests when it came to business relations in America’s so-called backyard. However, even though the journalists were able to unveil U.S. corporate and government collaboration through freedom of information requests, they did not attempt to garner the Guatemalan participation that was necessary in order to reveal the full story behind the coup. Cullather had some anonymous Guatemalan sources available to him (not personally but through secret CIA documents), and even though much was censored by the American intelligence agency, through his access he was able to paint a more personal picture about CIA operatives and their opinions on the situation in Guatemala during the coup. One such insight Cullather revealed was the presence of a double agent named Jorge Isaac Delgado, a man who revealed the plans for PBSUCCESS to Arbenz and then told the CIA of a “secret mission to buy Czech arms”(Secret History, 54).

It was difficult for the authors to extract much of what happened in Guatemala in 1954 from Guatemalans themselves because at the time they were writing the country was still engulfed in civil war as a direct consequence of the U.S. sponsored Castillo Armas led-coup against the Arbenz regime. As Gleijeses remarked, “It is difficult to reconstruct the details of the events at Zacapa…” referring to the moment that the army betrayed Arbenz, even though Castillo Armas was only in control of a weak and disorganized force of a few hundred mercenaries. There were no large battles, the Guatemalan army did not put up the kind of resistance that Arbenz expected. Thus, Immerman and Cullather argued that the propaganda that the CIA employed through clandestine radio broadcasts as well as the few American flown vintage bombers that terrorized the capital had instilled fear into Arbenz’s government and the military. However, Gleijeses believed that it was not Arbenz who was necessarily scared of Castillo Armas, but that the Guatemalan military were only afraid of an American intervention occurring after Armas was defeated “Had they felt free to choose, most Guatemalan officers would have rallied to Arbenz in June 1954 and crushed the rebels. But fear gnawed them- fear of the United States”(Shattered Hope, 335).

A deeper look at primary documents written in Guatemala at the time would be necessary in order to shed more truth on how and why the coup took shape. In recent years the CIA had declassified even more documents, and the work of other authors has shown that more voices could be made available that reveal what went on in the country outside of the what Cullather’s Secret History and the book’s focus on operation PBSUCCESS. Indeed, a CIA Freedom of Information Act document called SHERWOOD 501 reported on the situation in Zacapa, where the turning point in the Guatemalan coup had occurred. Up until then, Castillo Armas stayed a few miles from the border of Honduras, and the two expeditions he did send out were defeated handily by local garrisons and police. Arbenz expected his generals to make a move against Armas, but they remained cautious out of fear of U.S. retaliation, and when Armas moved into Zacapa, a CIA plane reported- “NO FIRING OR ACTION SEEN”(foia.cia.gov, Sherwood cable). At that point, only a week into the coup, it was certain that Guatemalan generals were complicit in the coup, even though they were hostile to Armas as a traitor to the country.

Arbenz did not foresee his military betraying him, but it was not out of naiveté, according to another CIA information report, “Arbenz has no fear of a conservative coup and has taken no active steps to guard against one”(Information Report NO. 00-B–57327, 1). The CIA was led to believe that Arbenz had a strong hold on his country’s military, but it also knew that, with enough pressure, the minority within the Guatemalan officer corp that resented Arbenz would take action. The American government hoped for a larger part of the Guatemalan society to support the coup but operatives within the CIA knew that “the ‘opposition’ of business groups and conservatives (with the exception of a few landowners) has been greatly exaggerated. This is evidenced by the ‘surprising’ lack of serious concern in most business circles about the effects of the new land reform bill”(Information Report NO. 00-B–57327, 1).

Declassified CIA documents reveal that the cold war ethos was a factor in implementing operation PBSUCCESS, but that it was not the sole factor. An analysis of these documents would acknowledge economic aspects realized by both the U.S. government and the Arbenz administration, “Arbenz realizes that Guatemala is economically dependent on the US but intends to bluff through his defiance of US corporations to any length short of national suicide” (Information Report NO. 00-B–57327, 3). Most of the time the CIA utilized euphemisms to refer to United Fruit, but this document was peculiar in particular because it referred to the company explicitly in a sentence shortly after, “An integral part of his program is the removal of Guatemala from the category of a ‘subsidiary of United Fruit’”(Information Report NO. 00-B–57327, 3). When it was apparent that UFCO would no longer invest in the Guatemalan economy, the CIA recognized that the only thing supporting the country’s economy was the high price of coffee. The agency considered economic warfare, i.e. deliberate U.S. changes to the price, as a possibility given this situation: “These tactics would centralize the wealth and starve the workers”(Information Report NO. 00-B–57327, 3). However, the CIA found it was best to stay the course with operation PBSUCCESS even though there were contingencies that made the coup seem precarious in the eyes of the Eisenhower administration and the CIA.

United Fruit no longer played a crucial role in the overthrow of Arbenz, which could be seen by the lack of correspondence in conspiring against the Guatemalan government through official company letters. Steve Striffler and Mark Moberg in Banana Wars made it clear that UFCO was primarily worried about keeping labor unions weak. YetUnited Fruit was also adamant on the U.S. implementing regime change in Guatemala, which caused the company to influence the American government up to a certain point. Letters between United Fruit company officials proved that they indeed believed that economics was the essential factor in the United States fighting against communism abroad. When company lobbyists petitioned a labor dispute with the State Department, the government “…representatives were obviously disturbed by the bad relations…” and “stated that they considered the free labor movement, as well as American business itself, to be essential arms in the fight against communism”(Banana Wars, 142). Philip Bourgois made it clear when he released a selection of previously secret company letters that “labor peace” was the main concern for company officials so that profits could be maintained. This was the point that UFCO lobbyists maintained repeatedly when meeting with the State Department, in that their capitalist venture was an essential part of the battle against communism in the U.S. sphere of influence, and that communist containment was necessary both politically and economically.

The CIA reported that Guatemala landowners and United Fruit were desperate to exaggerate claims of communist infiltration, “The reactionaries immediately turned the Communist spotlight on all reform measures regardless of merit”(Information Report NO. 00-B–57327, 2). In another CIA information report from 1952, operatives discussed how the agrarian reform would not be deemed threatening if implemented in another country. Guatemala was so backwards, and UFCO domination of exports so complete- that the economic situation in the country was deemed to be akin to feudalism. Thus the agrarian reform the Arbenz regime sought would be considered nowhere near communistic if taken place elsewhere, even in Latin America. Arbenz was a huge admirer of the New Deal, the report said, and “the Guatemalan agrarian reform program is fashioned after the “American” system,” because it was “characterized by the sale of unused land to homesteaders, and other features”(Information Report NO. SO 96102, 1). Although the CIA did not take this admiration for the American system seriously into consideration. The agency’s analysis concluded that this attempt at imitating FDR’s New Deal was flawed, and that the agrarian reform law allowed the prospect that “…landowners who have been enemies of the government can bribe the administrators or sell their land to persons friendly to the government who will then be in a position to protect it from division and distribution to the farm workers.” the CIA then concluded that “The law appears to open the way for extensive graft”(Information Report NO. SO 96102, 3).

In 1950 and earlier, there were tensions between the Truman administration and the Arevalo and Arbenz administrations, even though the Guatemalan communists, the PGT, did not have significant influence at the time. The New York Times reported in “Guatemala Seeks U.S. Envoy’s Recall” (by an anonymous contributor) on the requested recall by Guatemalan officials of the U.S. ambassador, Richard Patterson. Even the liberal New York Times assumed that the Guatemalan request was suspicious, “the particulars of this charge were apparently not included in the official note received by Washington”(New York Times, April 6, 1950, 1). The author sub-textually belittled the Guatemalan government’s concerns, even though the writer reported on the recalled ambassador doing such petty things as how he protested “against the failure of the official band to play the national anthem of the United States at an international sports event”  and indicated economic factors by stating “He also felt obliged to protest in behalf of American businesses interests in that country”(New York Times, April 6, 1950, 1). Ambassador Patterson was so presumptuous and jingoistic that he demanded that the sovereign country he was supposed to be only an envoy to play the American national anthem, and the Truman administration officially defended such actions. This seemed to give credit to the argument that the U.S. not only thought of the Central American country as within the American sphere of influence but as an extension of American hegemony as well.

The desires of the U.S. government to keep its “backyard” tidy and clean of any kind of communist influence did not however, include an overtly imperialistic aspect in the sense of territorial acquisition. The Eisenhower administration was interested in keeping a clean international image, especially when it came to creating a sense of integrity in the newly established United Nations. Which was why John Foster Dulles was furious when he heard that the French called for “the stopping of all bloodshed” during the escalation of the Castillo Armas coup. The United States wanted to keep up appearances of being an altruistic democracy, when the reality of the CIA’s actions pointed the U.S. attitude to be more like that of an international capitalist superpower that acted under the pretenses of neocolonialism. This meant that U.S. mindset at the time of cold war tensions was indeed market driven, and so the Eisenhower administration wanted to keep Guatemala in its sphere of influence at all costs in a conscious bid for a political win against the Soviets and McCarthy at home, but ultimately and subconsciously the reasoning was also financial in nature.

The U.S. Republican broad definition of a communist essentially meant anyone that did not adhere to the beliefs of an American style of capitalism, which was almost laissez-faire in reaction to the traitorous and socialistic FDR (New Deal) and Truman (GI Bill) administrations. Both economic determinism and the cold war ethos had parts to play in considering why the State Department and the CIA were so adamantly in favor of overthrowing the democratically elected, American inspired, Arbenz regime. The two causal factors were indeed, almost inseparable when closely analyzing the origins of PBSUCCESS and the outcomes of the operation, because those in the American government that were afraid of communist influence were also intent on defending capitalist “free trade” policies, and in the case of Guatemala, that meant defending UFCO. However, as Karabell explicated, “UFCO was a convenient ally for the Eisenhower administration, as it was for the many elites who depended on its business in Guatemala. It was a factor in the overthrow of Arbenz, but it was one among many and less important than the local groups that plotted against Arbenz”(Architects of Intervention, 16).

The CIA used these local groups to its own ends, and UFCO could be considered a puppet of the U.S. government considering that the U.S. threw the company under the bus with a justified anti-trust lawsuit immediately after Arbenz was deposed. This was even in spite of those in the Eisenhower administration that were directly connected to UFCO, as even the Dulles brothers had United Fruit as one of their clients for their private law firm several years before (Architects of Intervention, 16). To ignore these facts and apply the reasoning for PBSUCCESS strictly to the story of the cold war ethos would distort the larger picture of what actually happened. Using the cold war ethos as an explanation would make more sense in the later context of Vietnam because it was political and not on the American economic periphery, but in 1954 the U.S. needed Guatemala as a foreign market and an obedient ally in foreign policy as well. The most truthful way to explain the course of events when considering the origin of the PBSUCCESS coup would be to merge Schlesinger and Kinzer, Immerman, Cullather, Karabell, and Gleijeses. The aforementioned authors combined with an analysis of primary documents reveals that the cold war ethos and economic determinism were not mutually exclusive, and that the preservation of capitalism politically and economically was a facet in considering the cold war ethos as a significant determining mindset.

The Overlord: Bitter Fruit and the Corporate Oligarchy

The Cold War was well under way in the 1950’s and the two belligerents: the United States and the Soviet Union, longed to expand their respective spheres of influences- with the U.S. focusing on Latin America, while the U.S.S.R. aimed to solidify its “iron curtain” in order to retain influence over Eastern Europe.  For the American government, this meant supporting domestic companies that held monopolies in smaller Latin American countries, and especially undergirding a corporation that represented “a fable of American capitalism”.  United Fruit Company was the standard bearer for how a small capitalist venture in 1870, started by Captain Lorenzo Dow Baker,  could be transformed from a simple fruit trade into a huge trans-national corporate entity which held almost absolute political and economic power first and foremost in Guatemala (and still substantial, but less so in other Central American countries) through backdoor deals with complacent, inept and thoroughly corrupt dictators. General Jorge Ubico was the last of the old dictators before the democratic revolution that went under the name of “The Guatemalan Spring” in 1944, however, before he fell, Ubico was able to deal a fatal blow to Guatemala’s economic sovereignty by signing a ninety-nine-year agreement for an UFCO Pacific coast plantation and granting “the company the kind of concessions to which it had been accustomed: total exemption from internal taxation, duty-free importation of all necessary goods… Ubico, in fact, insisted that laborers be paid a daily wage of no more than fifty cents in order to keep other Guatemalan workers from demanding better pay”(pg. 70).

In Bitter Fruit, Schlesinger and Kinzer thoroughly hammer the point that United Fruit Company held high stakes in Guatemala. UFCO invested immense amounts of money and manpower in public relations stunts so that the American people and government would be concerned with the corporation’s Latin American interests as a nationwide issue that needed the public’s attention and the Truman (then Eisenhower) administration’s protection.  Once democratically elected Guatemalan president Arevalo announced future land reforms in order to benefit impoverished peasants, UFCO hired Edward Bernays as a spokesperson for the company.  The “PR” expert subsequently led mostly liberal American journalists on a carefully orchestrated trip to Guatemala so he could show off the company’s paternalistic, supposed benefits to locals and make a point that increasing communist subversive activity in the country was responsible for labor antagonisms, not legitimate union concerns. Schlesinger and Kinzer focused on the fact that some officials both in the U.S. State Department and the CIA had owned stock in UFCO holdings and how some even moved on to work for the company after they had left government positions. Senator Henry Cabot Lodge from Massachusetts (UFCO’s home state) instigated congressional concern for the company when the congressman “whose family owned stock in United Fruit, strode onto the Senate Floor in 1949 and denounced the [Guatemalan legislated] Labor Code for discriminating against United Fruit and forcing the corporation into a ‘serious economic breakdown’ through labor unrest”(pg. 83).  Bitter Fruit’s focus on the correlation between United Fruit’s lobbying to hold onto economic power in Guatemala and U.S. government interest in preventing the spread of Communism in its “backyard” is thematic in that by 1954 the two interests became one and the same.

Schlesinger and Kinzer were able to uncover corporate and government collaboration through mostly domestic sources with only some Guatemalan participation that was necessarily anonymous due to continuing internal strife throughout the war stricken country; even while they were writing Bitter Fruit in the late 1970’s. Howard Hunt was the CIA director of misinformation during the U.S. backed “Liberation” coup against Arbenz in 1954, and he was an important source for the authors: since propaganda played a major role in Castillo Armas successfully carrying out the coup.  In particular, Hunt was insistent on UFCO’s involvement as the catalyst for the CIA funded and organized endeavor, and Schlesinger and Kinzer’s thesis was that if UFCO had not existed, then the American government would have had less interest in toppling the democratically elected revolutionary government in Guatemala. However, the situation was aggravated by Arbenz’s tolerance of, and minimal influence from Communist party members, and Bitter Fruit implicated that the Truman administration had no interest in directly intervening in Guatemalan affairs for United Fruit. But the authors explicitly stated that once the Eisenhower administration took power (along with the advent of McCarthyism) the death knell for democracy in the Central American country grew significantly louder until “the North’s” intervention was imminent.  Overall, Bitter Fruit focused on the American perceived communistic outlook in Guatemala as the justification for the eventual coup, yet argued that this perception was started by United Fruit’s propaganda and Schlesinger and Kinzer verified their point by unveiling the American government’s involvement with UFCO representatives through sources revealed by the Freedom of Information Act.

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President Eisenhower and Secretary of State John Foster Dulles. Dulles was adamant about “containing the spread of communism”.