History of Globalization

Eisenhower's Historic Bargain

The history of nuclear regulation is the shortest, but among the most intriguing, in this book. This is a study of business regulation, so the regulation of the military uses of nuclear power by states is beyond its scope. Nevertheless, the history of the regulation of commercial nuclear applications cannot be understood in a way that is divorced from the geopolitics of nuclear weapons. The story begins with the Manhattan Project sponsored by the US to develop atom-splitting technology during the Second World War (Hawkins 1983). After the atom bomb descended on Japan in 1945, the US pursued a policy of unilateralist control of nuclear technology, a policy which had an eye to both military hegemony and commercial monopoly. After the Soviet nuclear program detonated an atom bomb in 1949, the US continued to struggle for a Western monopoly of the technology, just as the Soviets monopolized the technology within the Soviet bloc. But in 1952, the UK detonated its first bomb and the genie seemed out of the bottle (Simpson 1983). In December 1953, President Eisenhower abandoned the policy of sole US control of nuclear technology by announcing in a speech to the UN the ‘Atoms for Peace' program which laid the foundations for the establishment of the International Atomic Energy Agency (IAEA).

Atoms for Peace meant that the US would release a great amount of scientific and technical information on nuclear energy and supply enriched uranium, heavy water and other essential materials through the UN agency (IAEA) to nations who committed to controls to ensure the materials would be used for peaceful purposes (Scheinman 1987: 18). Following this announcement of intent, nuclear energy production was privatized in the US in 1954. After the Atomic Energy Act 1954, US companies in the electrical equipment engineering sector embarked on an era of world domination of nuclear power production. The Atomic Energy Commission (AEC) was transformed from a monopoly public producer of nuclear technology to a regulator of private production. The next step was for the US to enter bilateral agreements with cooperative countries for transfer of nuclear technology and materials in exchange for safeguards against diversion to non-peaceful use. These safeguards were guaranteed though inspections on foreign soil by US inspectors.