Abolishing the Octopus

...U. S. investments in other Latin American countries amount to 8 billion dollars, half of which is in the mining and oil industries or in other vulnerable spots...

...They would like to create the image of a benevolent and helpful big brother who, almost unselfishly, or perhaps through enlightened self-interest, extends aid and defense contributions to his weaker neighbors...

...The U. S. government only needs to announce that it will not pro...

...But even if successful, this campaign will not sub stitute a "new" for an old image of the United States...

...The basic idea of the Alliance for Progress is to lead the Latin economies to the take-off point where the present monopolies will lose their importance...

...Today this political action is directed against the companies and clothes itself in an anti-American ideology...

...This is natural because the local oligarchy also finds it expedient to deflect the agitation against the Americans...

...It is better to be generous than to be forced to yield...

...Just as a good product will not reach the market unless the distributor's margin is sufficiently "incentive," so our foreign aid reaches its destination only after the Latin American ruling classes have taken their cut...

...So why not get out cheaply...

...Foreign aid not only is costly in terms of money...

...If, instead of spending this aid money over five years, we were to amortize the compensation for the owners over ten years, the taxpayer would be better off by half...

...As the economy of the West developed and reached its own "take-off" point, the monopolists were unable to maintain their power...

...The planners who thought up the Alianza Para Progreso forgot that in the American experience political action was the second necessary ingredient in liberating Western economy...

...Fortunately this was not the end of the story...

...In some countries their political influence is paramount...

...This certainly will happen unless the monopolists are challenged by political action...

...tect American corporations in litigation against foreign governments, and they may choose between various ways of protecting themselves—taking native partners into the business, selling to Latin governments, continuing to operate under management contracts with foreign governments, repatriating or reinvesting the money elsewhere...

...it also is arbitrary and involves a political price...

...The economy may develop not on lines of competition but within the framework of the present monopolistic structure: the ruling compound of a native and foreign oligarchy may continue and even strengthen its monopolistic power...

...We should like to make a proposal which might not solve the problems of Latin America but might remove an obstacle to good relations within the Western Hemisphere...

...Actually we are paying a sort of forfeit money on behalf of companies which underpay the producers and overcharge us, thereby confirming our complicity rather than denying or making up for it...

...These companies are too conspicuous...

...It is true that the Octopus will lose its grip if rapid economic development can confront it with competition...

...They may cost us politically and financially...

...Castro has expropriated a bit= lion dollars' worth of property...

...it merely will create a second image alongside the first one...

...They have become so big that a large part of the rest of the economy has become dependent upon their prosperity...

...It may be very costly to defend these interests...

...But the process is not automatic...

...The "image" which results is of a U. S. government enmeshed in an ugly intrigue of monopolists to despoil and deceive both our people and theirs...

...The proposal is fair to the public and to the government...

...We even might get credit for a nice gesture...

...Let's indemnify the owners now and get rid of properties which envious and proud nations will not leave in U. S. hands much longer anyway...

...The problem is that the image exists, and the question is how to cut through the vicious circle of aid which perpetuates those in power and gives them claim to more aid...

...Like naval bases, these companies no longer are assets but liabilities, things to worry about, traps...

...The U. S. government should declare that it no longer feels bound to defend every business interest of a U. S. citizen abroad, and that its prestige is not involved if such companies, be they interested in sugar, bananas, mines, transportation or electric power, are nationalized...

...It makes the U. S. responsible for conditions which the aid program means to overcome...

...How much is the operation likely to cost...

...The contradictions into which the Alianza Para Progreso is running shows how difficult it is to bribe a ruling class for its own good...

...The image of the U. S. in Latin eyes is firmly bound up with this condition, and instead of thinking up new "images" we should seriously analyze the origin and nature of the hateful image we wish to remove...

...The U. S. government is all right, people may be heard to say, but unfortunately it is helpless against the big American companies which are all too conspicuous in Latin America...

...The power of the Octopus was broken partly by political action and partly by competition...

...The one condition which is essential is a clear divorce between U. S. interests and company interests, and a clear return of economic sovereignty to the Latin countries...

...Wholly devoted to the Madison Avenue approach of "selling America," our policy makers think of a manufactured image which has no relation to the one actually existing in people's heads...

...They may become responsible for the loss of an ally or even for a war...

...The problem haunting U. S. policy makers is, to use professional language, "the image" this country casts on the minds of Latin Americans...

...Suppose about 4 billion dollars' worth of properties are in danger of being expropriated in the next ten years...

...This identification of certain economic interests with the American flag is highly embarrassing...

...If we search for a comparable experience of our own, we only have to look at the mining and railway empires in our own semi-colonial West— the companies were called "the Octopus" because they seemed to engulf the entire economy and to reduce independent producers to peonage...

...they operate in key industries, notably in mining and in the public utilities, services which in the public mind are connected with the notion of sovereignty...

...This is Latin America's share of our foreign aid over the next five years, judging by present appropriations and programs...

...Worse, we have maneuvered ourselves into a situation where they can extort more foreign aid for their own benefit without giving anything in return...

...It also is fair to the companies because it involves no expropriation...

...they certainly have been able to prosper by reinvesting their profits...

...They also are being accused of making too much profit...

...The question is not whether this image is true or incorrect or maybe partly correct...

...The image," of course, is a polite word for hate...

...An image which does not supersede but rather reinforces the original image of the U. S. as the seat of large corporations exploiting all nations of this Hemisphere...

...The military expenditure to support them may exceed the worth of the shares...