In addition to his desire to halt the advance of “creeping socialism” in U.S. domestic policy, Eisenhower also wanted to “roll back” the advances of Communism abroad. After taking office in 1953, he devised a new foreign policy tactic to contain the Soviet Union and even win back territory that had already been lost. Devised primarily by Secretary of State John Foster Dulles, this so-called New Look at foreign policy proposed the use of nuclear weapons and new technology rather than ground troops and conventional bombs, all in an effort to threaten “massive retaliation” against the USSR for Communist advances abroad.
In addition to intimidating the Soviet Union, this emphasis on new and cheaper weapons would also drastically reduce military spending, which had escalated rapidly during the Truman years. As a result, Eisenhower managed to stabilize defense spending, keeping it at roughly half the congressional budget during most of his eight years in office.
The doctrine of massive retaliation proved to be dangerously flawed, however, because it effectively left Eisenhower without any options other than nuclear war to combat Soviet aggression. This dilemma surfaced in 1956, for instance, when the Soviet Union brutally crushed a popular democratic uprising in Hungary. Despite Hungary’s request for American recognition and military assistance, Eisenhower’s hands were tied because he knew that the USSR would stop at nothing to maintain control of Eastern Europe. He could not risk turning the Cold War into a nuclear war over the interests of a small nation such as Hungary.
As an alternative, Eisenhower employed the CIA to tackle the specter of Communism in developing countries outside the Soviet Union’s immediate sphere of influence. Newly appointed CIA director Allen Dulles (the secretary of state’s brother) took enormous liberties in conducting a variety of covert operations. Thousands of CIA operatives were assigned to Africa, Asia, Latin America, and the Middle East and attempted to launch coups, assassinate heads of state, arm anti-Communist revolutionaries, spread propaganda, and support despotic pro-American regimes. Eisenhower began to favor using the CIA instead of the military because covert operations didn’t attract as much attention and cost much less money.
A CIA-sponsored coup in Iran in 1953, however, did attract attention and heavy criticism from liberals both at home and in the international community. Eisenhower and the Dulles brothers authorized the coup in Iran when the Iranian government seized control of the British-owned Anglo-Iranian Oil Company. Afraid that the popular, nationalist, Soviet-friendly prime minister of Iran, Mohammed Mossadegh, would then cut off oil exports to the United States, CIA operatives convinced military leaders to overthrow Mossadegh and restore Mohammed Reza Shah Pahlavi as head of state in 1953. Pahlavi returned control of Anglo-Iranian Oil to the British and then signed agreements to supply the United States with almost half of all the oil drilled in Iran.
The following year, a similar coup in Guatemala over agricultural land rights also drew international criticism and severely damaged U.S.–Latin American relations.