Neither Adam Smith nor Karl Marx

...It dominated the scene briefly under the Weimar Republic (and was, incidentally, not sufficiently Marxist to grasp the power realities of the German state...

...But the Vice President laid special stress on private investment abroad, which, he said, was less likely than Government loans to arouse suspicions of ulterior motives...

...Vice President Nixon, who was among the speakers, emphasized the need for a foreign-aid program to counter the Russian policy of aid to underdeveloped nations...

...Moreover, the latter must demand profits and guarantees which are often incompatible with the strategic and political aims of a governmental foreign-aid program...

...Russia would not give Egypt the money for the Aswan Dam only because it was more strategic to give Nasser arms with which to defy the West and upset the Middle Eastern balance...

...But experience in both West and East has refuted classical economics beyond recall...

...European society owes much to the impulse of its Marxist parties...

...indeed, he regards governments as the puppets of these private investors...

...It has proved its devotion to liberty and its abhorrence of tyranny...

...No Marxist would admit that private investors are more disinterested than governments...

...The struggle between the free world and Communism in the uncommitted countries follows the precepts of neither Adam Smith nor Karl Marx...

...Democratic socialism is, after all, the child of both Marx and the democratic tradition...

...The San Francisco conference did not commit itself to former foreign-aid chief John B. Hollister's absurd contention (later repudiated by the State Department) that aid should not be extended to nations with mixed or socialistic economies...

...Adam Smith's idea of economic freedom involved the freedom to trade and invest in any nation...

...Karl Marx contributed mightily to a just society by his partial understanding of the realities of power in an industrial age, but he laid the foundations for a new despotism by not understanding those realities well enough...

...But Marxism has become relevant in Asia in ways that would have surprised its founder...

...Nevertheless, since giving up the Marxist idea of revolution in order to engage in the give-and-take of democratic politics, it has lost much of its dynamic appeal...

...Asian economic development needs undogmatic approach Neither Adam Smith Nor Karl Marx By Reinhold Niebuhr A group of big American financiers and industrialists gathered in San Francisco some weeks ago to plot the course of "free enterprise" doctrine and practice in our struggle with Communism...

...Now that Stalin had shattered the Marxist dream, the gentlemen in San Francisco evidently felt that Smith had achieved a new relevance...

...Adam Smith made Marxism relevant in the West, and the subsequent modification of orthodox free-enterprise doctrine has made it—at least in undiluted form—irrelevant...

...Yet, the economy of all Asian and African nations is mixed at best, and there is no chance that the mixture of economic freedom and political control will follow the Western pattern...

...But it is no secret that one reason we canceled our loan to Egypt was that the South strongly opposed helping a cotton-producing nation...

...In Communist countries, the middle class, traditional bearer of the idea of freedom...

...The Conservatives are not too strong after the Suez fiasco, and Labor may well win the next election with a watered-down nationalization program...

...After World War II, this Marxist party turned nationalist under Kurt Schumacher at the very moment that the conservative opposition espoused the limited internationalism of the NATO community...

...However, a world in which capital flowed with complete freedom across national boundaries has never really existed...

...There remained only the idea of nationalization of property...

...The conference, consisting generally of enlightened businessmen, was all for this...

...Obviously, private investment could not meet this kind of competition...

...German Social Democracy has, by comparison, not done nearly as well...

...The question is whether this offers a chance for a diluted Marxism in the form of democratic socialism...

...It is now out of power, in part because the workers' enthusiasm for nationalization waned when they discovered that the authority of the "coal board" and the "steel authority" was not too different from that of other bosses...

...In that race, Russia has the advantage of being much freer to make loans for political reasons even though they may conflict with her economic interests...

...It would be ironic if we refused to help India because her economy was too collectivistic (or because we did not like that fool, Krishna Menon), when, in fact, India's very freedom and her effort to satisfy the consumer needs of her population make it difficult for her to compete with Red China, which is taking the capital needs of its new industrialism out of the backs of its peasants...

...Nevertheless, they make an effective appeal to the people of moribund agrarian or pastoral cultures who are anxious to enter the 20th century...

...Prime Minister Nu of Burma speaks for the Asian nations when he declares, "We are committed to democracy, but there is no opportunity of combining democracy with free enterprise as you [in the West] have done...

...It has become a race to provide the wherewithal for technological progress...

...is merely the bureaucracy of the political oligarchs...

...The main issue in the contest between India and China for hegemony in Asia is whether a democratic government, which cannot be as ruthless as a despotic one, can get enough aid from the free world to finance its technological equipment...

...The British Labor party triumphed after the war with its slogan of "Fair Shares for All...

...Adam Smith contributed mightily to a free society, but he almost wrecked that society with the unfulfilled promise that justice would flow inevitably from freedom...

...What is more important, it liquidated or transmuted an empire—an achievement which was beyond the competence of the greatest statesman of our age, Winston Churchill...

...And that idea, when applied, gave too much power to a political oligarchy, however democratically controlled, and did not provide sufficient private incentive...

...The Kremlin oligarchs are interested in the policies of the rulers rather than the welfare of the people...

...It had illusory foreign-policy notions about neutralizing Germany, and in domestic policy it was checked by the Christian Democratic party's welfare-state policies and successful appeals to initiative in the economic life of resurgent Germany...

...He might have added that the theories of Adam Smith, applied in undiluted form, created such monstrous injustices as to pave the way for the Marxist rebellion of the industrial workers of the West...

...It has furnished some of the best fighters against both Nazism and Communism...

...However, the conference did strongly suggest that our policy should be to support private enterprise throughout the world...

...Fortunately, we are living in a dav in which healthy nations do not concern themselves too much with the dogmas of either Smith or Marx but profit by the truths they have winnowed from the errors of both...

...And it was made even more unrealizable by the nationalistic autocracies of the Nazi period and, today, by the heirs of Marx who are busy buying up governments in the underdeveloped world, whether they be outright dictatorships or quasi-democracies...

...It will be some time before the Marxist party comes to power in the birthplace of Marxism...

...Meanwhile, the Conservative party has taken over the policies of the welfare state as our Republicans took over the social achievements of the New Deal...

...For in Asia a Marxist-inspired despotism has become the means of wringing capital from desperately poor people and thus making the transition from agrarianism to industrialism without any of the freedom which the West won through the conflict between economic and political oligarchies...

...Not long after the San Francisco meeting, the Russians signed a loan agreement with Syria carrying 2% per cent interest...

...In making this assertion, Nixon showed little understanding of the potency of Marxist propaganda in the uncommitted world...