The unraveling of South Vietnam : inflation, corruption, and the American military presence, 1965-1975

This dissertation argues that military and political decisions made by U.S. policymakers to wage war in Vietnam produced economic consequences that severely undermined the entire American objective of preserving an independent, anticommunist South Vietnam. The escalation of war in 1965 ultimately sent over two million Americans to serve in combat or support roles in South Vietnam. The overwhelming presence of Americans, which peaked at over half a million in January 1969, in turn created numerous problems for the urban South Vietnamese population. The extraordinary amount of wealth brought into South Vietnam, including in the form of commodities, foreign aid, and American soldiers’ purchasing power, disrupted South Vietnamese society and economy. Due to high levels of inflation, the sudden influx of American wealth into a small developing country created incentives for South Vietnamese to work for the Americans, who provided better compensation than South Vietnamese employers. Those who worked for the South Vietnamese state in the armed forces and the civil service received fixed incomes and could not keep pace with growing wartime inflation. The inundation of American soldiers and dollars into the country also led to widespread corruption both among Americans and South Vietnamese, which I argue was destructive to state legitimacy in South Vietnam. Oftentimes, South Vietnamese citizens had to make the morally difficult choice to engage in corrupt actions in order to support their families. The American presence thus exacerbated socioeconomic inequality in South Vietnam and contributed to eroding the national morale of those tasked with serving and fighting on behalf of their country.