Reflections on Foreign Aid:

...2. Mutations in political and military friendships and alliances are as apt to occur in the future as they have in the past...

...Four books have been published: The China Tangle, The Road to Pearl Harbor, Churchill-Roosevelt-Stalin, and Between War and Peace: The Potsdam Conference...

...Others are arranged and financed by the Government out of the public treasury: loans, grants for which recipient governments set aside equivalent amounts of their currency (counterpart funds), military assistance and support, gifts of food and other relief contributions and technical aid and advice in many realms...

...But Liska's appraisal of the ruling characteristics of the behavior and conduct of national states seems to me to lean too far toward the Machiavellian...

...The American people are also recognizing a genuine obligation to assist poorer peoples to improve their conditions of life and labor...

...The British Government strove to assure this by informal conversations within the small group who ruled British official and banking life, and by trusting the financial instinct of experienced lending houses...

...For a few brief years it seemed as though these might be inaugurating a new basis for the conduct of foreign aid, whereby it would be detached from the control of individual national states and serve their common rather than their conflicting aims...

...Considering the nature of the task, his effort is a very creditable one...

...It encouraged loans for various favored purposes such as the readjustment of the reparations plan imposed upon Germany and the revival of German industry...

...Liska's observations upon the behavior of both donor and recipient countries are acute and stimulating even when they are disputable...

...The first great era of this activity was between 1870 and 1914...

...There is a real chance they may fall under the control of elements hostile to us...

...He has made a genuine attempt to deal with all of the main realities which present themselves to a country extending foreign aid and which determine its results...

...But indifferent nations (those that avoid associating with either side) will feel themselves justified in seeking or even in claiming aid as a premium for not being actively unfriendly...

...5. Certain countries, whose territories were determined by historic accident, have not the basic means for a viable existence...

...We must nevertheless go on with it...

...Ironically, at the same time, the American Government was compelled to provide large sums for the relief not only of some of its smaller allies such as the Philippines, but of its former enemies, Germany, Japan and Italy, in order to prevent disease, disorder, unrest and possible Communist triumphs...

...In 1914 this whole financial activity was engulfed in the failure of diplomacy that brought about World War I. After the end of that tragic contest among the Western nations, international loans conceived and arranged under the auspices of the League of Nations contributed to the convalescence of Europe—notably the reconstruction loans for Austria, Hungary and Greece...

...We must persevere in our willingness to help them, but it is not being made easy or pleasant for us to do so...

...The French government maintained official control over access to the French loan market, and used it to debar potential enemies such as Austria-Hungary and to sluice supporting resources to valued but deficient allies such as Tsarist Russia...

...The productive plant and professional training with which we endowed Cuba is now helping the Castro regime to retain power...

...One of them is the habit of comparison: Each country is apt to appraise the aid obtained not only by the benefits it gets but in comparison with those enjoyed by other countries...

...The U.S...

...4. There is the question, incisively phrased by Morgenthau in his introduction to Liska's book: "Does successful foreign aid require a particular intellectual, political and moral climate, or will the injection of economic productivity and technological capability from the outside create this climate...

...A sensational example of this political seesaw was the Soviet intervention in the discussions about the financing of the Aswan High Dam in Egypt...

...The "states" in his "statecraft" are purposeful, selfish, ungrateful, suspicious and cynical...

...Who knows whether Yugoslavia and Poland, to whom we are making loans with the thought of enabling them to retain or display some national independence, will not line up against us at some critical time...

...The German Government tried to make the best political use of the lesser amounts of German lendable funds by close association between official agencies and the few large German banks which were called upon to collect or supply the capital for foreign investment...

...Some extensions of "foreign economic aid" are financed and conducted by private American interests: loans to foreign governments, purchases of foreign securities, the establishment of plants and factories in foreign lands...

...The consequences of this failure were grave...

...American capitalists flinched at the idea of again taking the risks of foreign investment...

...It was taken for granted during that time of tussle over the balance of power in Europe that the flow of foreign investment should be in accord with, or even subservient to, national foreign policy...

...The American Government tried to assure that the loans and investments which its citizens were making would conform to certain features of its contemporary foreign policy...

...He has managed to conceive an instructive order for the guidance of our thought about this intricate subject...

...These will not achieve economic progress until or unless they are absorbed in larger political units...

...So many and diverse are these ventures in kind, in purpose, in circumstance and in consequence, that any reflections on the way in which they should be regulated to serve our foreign policy must be either crude or tedious: crude if they are brief and general, tedious if they enter into the complexities of the subject...

...Countries showing the will and capacity to make economic progress are apt to believe they should be rewarded for their efforts...

...But other expositions recognize that in order to benefit progressively the recipient peoples must manifest essential qualities and submit to essential self-disciplines...

...But our foreign policies were soon reversed...

...Some of our official statements of intention have been so phrased as to appear to be expressions of an ardent belief that merely by providing material and physical aid we can assure an improvement in human conditions and political tranquility everywhere...

...became the chief supporter of the United Nations and the organizer of alliances against the extension of international Communism...

...It is to be anticipated that despite our admonitions and instructions some countries that we are aiding will squander our aid...

...The reaction to these distressing developments dominated the American attitude toward foreign economic aid during the decade of the '30s, the years before World War II...

...Those who are lagging are apt to believe that their unrelieved need is the stronger reason for receiving more help...

...In these causes our economic resources are indispensable and expandable...

...For example, we have aided Western Germany to attain its present thriving condition, and recently we promised economic support for Poland...

...On the other hand, we may benefit by the acquisition of friends and allies to whom others have given support...

...The "craft" in his "statecraft" is one compelled or well-advised to rely on suspicion rather than trust...

...Moreover, in his effort to be thorough and profound, his exposition is sometimes turgid...

...Thus, administrators of our program of foreign aid must reckon with all the fickle possibilities...

...Who can predict with certainty what may happen in Taiwan and South Korea over the next 20 years, or what ultimate ends may be served by our many economic undertakings...

...Obviously this competitive encounter between the U.S...

...We have learned how hard it is to know whether our aid, in particular situations, will result rewardingly or in rueful regret, as it did in the two earlier eras...

...There are several reasons why...

...Finally, even if the whole program is generous and wisely directed it cannot satisfy all recipients, and cause all to be grateful...

...Herbert Feis, formerly of the State Department, is the author of a series of books on U.S...

...George Liska, in his book The New Statecraft: Foreign Aid in American Foreign Policy, (University of Chicago, $5.00), has elected to do the latter...

...and the USSR is a temptation to poor states to take aid from both sides while leaving themselves free to take whatever course in any ultimate crisis is thought best...

...The acceptance of such recognized risks is a justified gamble on our ability to avert or prevent adverse developments in these countries...

...The fifth in the series, now being written, will deal with the advent of the atom bomb and the end of hostilities with Japan...

...It lacks appreciation of the force of longing for peace and compromise which figures in the policies of all but the few most wanton despotisms, such as Communist China...

...Soviet offers encouraged Egypt to seize the Suez Canal, but subsequently Egypt has resisted Communist influence and has welcomed Western aid...

...This distinguishes his presentation from such other forays in the area as Professor W. W. Rostow's The Stages of Economic Growth, which masks the difficulties by technique of definition, by subordination of various actualities and by allowing the reader to construe selected historical instances as governing indicators of future expectations...

...During the great though deceptive prosperity of that period, only this country had the means to spare and the willingness to take the risks...

...This may be due to any one or several causes or conditions: Climate, corrupt or confused government, a lack of education, sloth, civil war, social conflict, or excessive growth of population...

...In the final outcome the investment operations turned out to have been reckless, and the governmental guidance wrong...

...The administrators of our foreign program must continuously consider how much political flirtation to countenance, and whether to continue or suspend our benevolent aid...

...Such are the perplexities, uncertainties, and tangled equities with which our program of foreign aid is beset...

...But who knows whether these two countries will not come to conflict over their frontiers...

...Rather than attempt what would have to be an inadequate review of the many ideas and views in the book, I will note a few of the reflections which a reading of it has brought to mind...

...ACCUMULATED experience has revealed the various reasons why the ultimate outcome of well-intentioned effort is often obscure...

...There was a short period after the end of the War when earlier attitudes about foreign aid lingered on, and caused us to be slow in assisting our allies in the West— Great Britain and France in particular—and to be rather severe in the financial terms on which we insisted...

...These purposes are so commanding and so commendable that we ought to be willing to devote an adequate and enlarging fraction of our national income to them, in good times and in bad, despite the difficulties, discouragements, risks, wastes and mistakes...

...By banning loans to the governments of former allies such as France, Belgium and Italy it tried to compel them to pay back governmental advances made during the War...

...The American Government, pursuing policies of isolation, neutrality and non-intervention did not grasp the need or responsibility to help other countries in distress...

...Countries aided in the belief that they will be allies or friends may leave us, and our contributions to their strength may be turned against us...

...They are too small, or have too few natural resources, or are condemned to constant friction with their neighbors...

...A startling example is Cuba: In that country, American private enterprise invested more than a billion dollars and the American Government rendered many economic services...

...Achievement is conditional...

...By Herbert Feis Reflections on Foreign Aid Even if our whole program is generous and wisely directed it cannot satisfy all recipients and cause all to be grateful IN A settled and sensible world the provision of foreign economic aid would be a simple exercise of generous tuition...

...7. Our program must reckon with the rival activities of the Soviet Union and its companion Communist states...

...During recent decades, opinions on the ways in which foreign economic aid should be connected with foreign policy have tumbled about like so many pieces of clothing in a washing machine...

...But the main source of foreign capital during the decade of the '20s was the United States...

...It is an indispensable part of our combined exertions to fend off the threatening assault of international Communism and to succor the United Nations as a system which may bring peace with justice...

...Then private capitalists of Great Britain, France and Germany invested abroad on a scale—in relation to national income—greater than that contemplated by the United States...

...It is possible that if during this period we had provided substantial aid to the lagging economies of Britain, France, Belgium, Holland and China these countries might have confronted the Axis in such strength that World War II might have been averted...

...In other words, some of our economic wards may not develop the necessary conditions for economic progress and will be as poor or poorer than before...

...Unless we manage to keep such animosities between recipient countries under control, our aid will turn out to have been only a contribution to conflict...

...Professor Hans J. Morgenthau is justified in writing in his introduction that the book is "a pioneering effort" to develop a coherent theory of foreign aid as an instrument of foreign policy...

...Even as we strive by the extension of our aid to influence either the political structure, or loyalties, or type of social and economic organization of various countries, the Soviet Union tries to influence these affairs in the opposite direction...

...We have become cognizant of the need for skillful and sinuous diplomacy, bold advocacy of social reform and perception in the selection and acceptance of risks...

...foreign policy and diplomacy through the years of World War II...

...1. We are confronted with the unpleasant fact that antagonistic feelings toward white peoples of the West have been aroused, especially in the countries peopled by Negroes, Arab Moslems and Asiatics...

...When should neutrality or dual relationship be tolerated, when reprimanded at the risk of making an enemy...

...and from the Soviet Union, which hopes to encourage elements resistant to American friendship and active in the effort to detach Algeria from France...

...The Marshall Plan ushered in the present era of extensive and varied aid, and ever since we have been required—day by day, and step by step—to consider how to use our ability to provide capital for the advantage of our foreign policy...

...3. Some of the regimes which are being upheld by us are politically vulnerable...

...A contemporary instance is the dual flow of aid for the Government of Morocco: from the United States, as a reward for cooperation in the maintenance of our air bases there and for its temperateness in regard to the France-Algeria trouble...

...We are contributing to the development of both Israel and Egypt, and yet no one can be sure that the quarrel between them may not again turn into an armed one...

...6. The American Government finds itself induced or compelled to assist countries who are at odds with one another, and who may go to war against one another...

...Disillusionment and failure followed the advent of the great depression of 1929-1933, the almost universal default on our foreign loans, the survival of the Communist regime in the Soviet Union and the emergence of Adolf Hitler...

...We cannot escape from this rivalry but we must not become a victim of it...

...It frowned on financing which would support military establishments...

...But in today's world it calls for diplomatic calculation, and puts patience and optimism to trying tests...

...Friends and allies are apt to think themselves justified in asking and getting more than nations that are indifferent...