Dear Editor

...By trying to extract nuggets of wisdom from the Clay Report, he has done it great violence...

...It would have this country concentrate on Latin America because we have important "interests" there...

...Only creative progressive modification of traditional techniques will raise productivity in many industries in the early stages of development...

...CORRECTION One word accidentally fell out of my article on William Appleman Williams' book (NL...

...His one admirable statement, that foreign aid should be for humanitarian ends, seems to be disregarded in the rest of the article...

...the countries of Asia, Africa and Latin America must transform old societies...

...To attempt to impose American economic culture on all countries would engrave more deeply the image of our policies as being aimed at maximizing profits of American business...

...In other words, cannot Americans fight this totalitarianization of the underdeveloped world for a while longer, in the reasonable hope that we may prevail...

...Even here Ritner combines the terms "humanity" and "United States policy...

...I don't believe in calling a man a dog until he wags his tail...

...But...

...They should be eliminated in all cases where such aid is going to self-sufficient countries, such as Japan and those in Western Europe...

...The copy of the underground Revoluciôn, mentioned on page 13, was dated the first half of February 1957...

...Let me suggest a few basic disagreements with Ritner and with Clay...

...We had to create a society out of a wilderness...

...foreign interests, economic or political...

...Shortwindedness, an imperative with a magazine article, is usually a boon to everyone concerned, but it has its occasional disadvantages...

...When these activities are undertaken by government, they should not be "sold" to the American people as cold war weapons, or on the basis of any rationale except the real one, which is compassion...

...To buy the loyalty of a government with arms assistance is either unnecessary or futile if that government rests on popular support...

...New York City Donald R. Shanor...

...If we had time enough to repeat the history of Western Europe, if we had no quicksand of population growth, if we had no tug-of-war between opposing economic systems, it might be right...

...Is Nkrumah...

...He describes the chaff as trite and fuzzy, and parades the salvage as a worthy challenge to our present foreign aid program...

...And our own financial policies were hardly as prudent as those the Clay Report espouses...

...Beyond that, let us put this particular fantasy at rest, and turn to practical long-run aid techniques...

...His vision of a "middle-class entrepreneurial society, with its characteristic hum of muted conflicts-of-interest" is an appealing one...

...others do economic development for its own sake...

...5. Bruce E. Wright has taken one of my slams at the Clay Committee and turned it around as if / had said what I criticized them for saying...

...Thus, the prospect as I see it is not nearly so agreeable as that which Ritner holds out...

...Some were ill-conceived initially...

...But not spending money in Jordan might send Jordan down the drain, and that is a very different matter indeed...

...It sounds to me more like a rumble...

...I know this may happen, but I am not so sure that it must...

...As it is, I do not believe that capitalism, as it exists in the backward lands, will adduce the will, the discipline, the tremendous energies needed to mount the lifelong offense that development requires...

...I am addressing myself here to only two of them: the emphasis upon private enterprise and the lack of political framework, which alone can justify foreign aid intellectually and can provide viable standards for its performance...

...But reform would not be difficult if entrenched private interests did not oppose it, and strong central governments may be the only counterweights to these defenders of the status quo...

...Money spent in Jordan may go "down the drain...

...But he is wrong in thinking I said Stalin used the National Committee "Free Germany" for his East German occupation government...

...the era of wildcat banking makes Latin American deficit financing look almost orthodox...

...He and the Clay Report are only half right...

...But what is the alternative...

...as if the latter should take the highest consideration, or perhaps he feels that humanity should get in line with U.S...

...But they risk confusing hardheadedness with plain old ossification...

...To assume that development of underdeveloped nations can or will take place in the same manner that it did in the United States and Western Europe is quite far from the "realism" which Ritner professes...

...The Clay Report would divide the underdeveloped periphery into zones of influence...

...I do not think anyone can prove that totalitarianism is the most efficient system for promoting economic development—even in economic terms, even brushing aside the social costs...

...and that's about it...

...However, the military assistance programs are already earmarked to a separate budget, and it is not enough to urge that they be called by a different name...

...if it does not, the attempted purchase is both illusory and dangerous...

...I believe the idea is a myth of pedants...

...His pious references to private enterprise and democratic capitalism would seem more appropriate in Time than in The New Leader...

...Cambridge E. E. Hagen Professor of Economics, Massachusetts Institute of Technology Peter Rimer's article is itself only a group of cliches...

...I have never seen such a society...

...Washington, D. C. Frank Church U.S...

...I might also add that, for reasons of format, an editorial judgement was made to omit the numbers which I had put before each point...

...While the Clay Report contains some aphorisms which are sound, its general philosophy and concrete recommendations are open to serious doubt...

...Maybe so, but Kenen can't prove it by the Report...

...foreign aid policy...

...The suggestion that aid to such projects is visionary grand planning must arise from a misunderstanding of the process of growth...

...All should be judged by the degree to which they further a defined objective on which the American people have reached a consensus...

...New York City Robert L. Heilbroner The annual foreign aid debate is this year somewhat more sophisticated than usual, but not by much...

...Ritner also praises the Clay Report's emphasis on local initiative and local enterprise...

...In consequence of its lack of a philosophy of foreign aid and its concern with Congressional approval, the Clay Report ends, like all its predecessors, with the suggestion for drastic cuts in foreign aid...

...some are right, but have been wrongly justified...

...Ritner's publishing firm (Macmillan) is about to publish a book which documents in agonizing detail the political obstacles to development in Latin America...

...He sees this as the next inevitable chapter in their history...

...For understandable historical reasons, in some countries which are efficiently managing economic development, attitudes toward private enterprises in such industries differ from our attitudes...

...He is right...

...They advocate an increase in multilateral assistance, which would surely dilute the connection between U.S...

...It is for lack of a political system which is capable of developing what resources there are, of inspiring and mobilizing labor, of marshalling and fruitfully employing savings, of putting to good use the capital that exists...

...In other words, many underdeveloped nations are underdeveloped exactly because they are lacking in those economic and non-economic prerequisites which go into the making of free enterprise...

...The road to development will be, I fear, The New Leader welcomes comment and criticism on any of its features, but letters should not exceed 300 words...

...It is not for a lack of resources, labor, savings, even capital, that most of the world stagnates today...

...The analogy between American experience in the 19th century and that of today's developing countries is quite misleading...

...It is fundamental that aid programs which look essentially to economic development should be concentrated in a few key countries where this is a feasible objective...

...One criticism is justified, the other is not...

...Finally, the Clay Report belabors the obvious—that money spent in some of the less developed countries cannot in fact transform them...

...In all other cases they should be evaluated solely on the basis of military, not political, necessity...

...It is the depth of irony to follow this article with the excellent analysis by Reinhold Niebuhr of the role of capitalism and socialism in underdeveloped countries...

...It is utterly inconceivable that most of the underdeveloped nations can be brought on the road to economic development without the state having first created the social and economic infrastructure indispensible for such development...

...He seems to have extracted some good sense from the Report and he has fully discarded the remainder...

...Foreign business ventures into traditional societies have rarely entered into production for the domestic market until the process of economic development, fostered largely by indigenous enterprisers, was well under way...

...The hope of the Clay Committee is that by cultivating the "middle class" (actually the upper class) of entrepreneurs, a market system will develop and burst through the old society...

...The transcontinental railroad is the leading case in point, but one could cite several others...

...In his own view, foreign economic aid should be concentrated on a handful of important and promising recipients...

...The basic weakness of the Clay Report, however, is its lack of a coherent philosophy concerning the purposes of foreign aid...

...The point is that even humanitarianism, if it is to be worth anything to anybody, requires at least as much thought—as much strategy, if you will—as war-planning...

...Duhnke is right in pointing out that I should have referred to Communist leaders instead of plain Communists when comparing the victims of Hitler and Stalin's terror...

...New York City Peter B. Kenen Associate Professor of Economics Columbia University The margin of my copy of Peter Ritner's article is too filled with Is and Xs to permit a point-by-point reply...

...He has, in fact, missed the whole point of that elaborate exercise...

...Scanning the whole Clay Report, one cannot escape an uneasy feeling: The General and his colleagues may well have in mind our own foreign business interests...

...Our money, it concludes, is wasted on these countries...

...When governmental aid finances such "economic overhead facilities," it is merely replacing a function which the breakdown of the 19th century international financial order prevents private capital from performing today...

...The success of our own private enterprise, moreover, owed much to public subsidies and gigantic investments in "infrastructure...

...Was Stalin...

...We should give it when or as a technically sound project is evolved...

...You cannot have reform without reformers...

...For punishment, he ought to read both Ritner and Niebuhr all over again...

...Such cuts may or may not be justified...

...In countries where enough indigenous David Hamms seem to exist, let us finance an indigenous development corporation...

...It will not be private enterprise, but nationalist enterprise, not capitalism but socialism which eventually brings the immense enterprise about...

...But these are not the only countries which favor government enterprise in "basic industries...

...Ritner approves the Clay Report's complaint that our foreign aid is too widely dispersed...

...The trouble is, when I put my ear to the ground, I do not hear a hum coming up from the southern continents...

...This is also my comment on Professor Hagen's letter...

...Economic growth rests upon two pillars: creative advance in technology, in the small as well as in the large, by many individual entrepreneurs, and provision of adequate facilities for transport, communication, power, urban services and general administrative services by government...

...I fear another such book could be written for most of Asia and Africa...

...I said it was not a "bad" paper...

...I shall not raise here the domestic issue of free enterprise beyond saying that the development of free enterprise in the Western world was predicated upon massive state intervention in the form of mercantilism, which preceded it...

...accordingly he has resigned himself to it...

...Is it standing on the Empire State Building dropping $10 bills to the people below...

...We ought to recognize that relieving famine with gifts of food, or succoring the victims of earthquake and volcanic eruptions, or providing inexpensive modern drugs to cure or mitigate certain diseases are essentially humanitarian activities...

...Yet it is a political prerequisite of that foreign aid that it not appear as a mere continuation of the aid which was extended to Africa by the colonial powers...

...There is such a thing as charity among peoples and nations, and it is its own reward...

...It waits upon political action...

...refreshing though Peter Ritner's rhetoric is, his conceptions of how economic growth proceeds and how economic aid planning is done are, in my view, more delightful than illuminating...

...Heilbroner believes that the pauper states must out of desperation sooner or later turn to totalitarianisms which sacrifice everything to the cause of economic development...

...It is well to examine and re-examine our aid programs...

...they are already densely populated...

...foreign aid and U.S...

...My article made clear, within its space limitations, that the Committee was used only as a model or prototype for the Communistdominated coalition...

...It is, therefore, essential for the success of foreign aid in Africa that nations other than the former colonial masters join prominently in the foreign aid effort...

...His inference that we should treat "bad" governments in the same manner in which we treat recalcitrant pressure groups within the United States demonstrates the common chauvinistic American conception that the politics of the world are really only domestic affairs and should be run solely for the benefit of the United States...

...1. I don't like finding myself at odds with Robert Heilbroner, but I am over one central point...

...for it still is concentrated primarily not upon the kind of policy to be pursued, but upon the amount of money to be spent...

...Though I respect this judgment, I think my method would have made it clearer that I was presenting 13 points as a fair sampling of Professor Williams' strange polemical methods...

...I believe instead that it will only give us more of what we already have—a spectacle of energies dissipated, misapplied, untapped, while a great despair mounts and mounts...

...The basic reason is that except in a few industries Western producers cannot produce as cheaply for the traditional mass market by modern methods as can indigenous producers by traditional methods, because in underdeveloped economies capital maintenance is too expensive and labor too cheap...

...they are not really underdeveloped, but just plain poor...

...His view may be tenable, but it is not quite the same as Clay's...

...I might have satisfied a few of them had I been able to write the original piece at greater length...

...He argues that our own economic development was the result of private effort, not "Brobdingnagian" public investment...

...Let me instead try to indicate my disagreement in the broadest possible terms...

...Some of its arguments emphasize the security of the United States...

...That government enterprises will necessarily be run inefficiently in such countries is nonsense...

...However, that question can be convincingly answered only through a consideration of the basic political purposes of foreign aid, related to the concrete situations in the nations concerned...

...rougher and harder than that promised by the Clay Committee or by Peter Ritner...

...refer to that aid which is simply palliative...

...It even has its parochial, "ethnocentric" side...

...it stubbornly, blunderingly hews to certain principles which 1 believe are the basis of a sound position...

...It is their context, cliches and all, that gives them a very dangerous meaning...

...he suspects the members of the committee of being unduly influenced by "our own foreign business interests...

...But consistency is not the chief virtue of this particular state document...

...Tt would disentangle the United States from Africa because we have few "interests" there, while Britain, France and Belgium have many...

...2. It's good to hear Senator Church saying that American policy should largely be motivated by "compassion...

...4. Professor Kenen questions the objectivity of the Clay Report...

...To take one more glaring instance, the Clay Report inveighs against excessive political centralization, bureaucracy, and all the rest...

...I wish to emphasize that I think the Clay Report is just as far from providing "a persuasive rationale for the foreign aid policy of the United States" as Professor Morgenthau does...

...It forces the foreign-aid dialogue out of certain ruts...

...The Clay Report has not considered this issue and, hence, falls far short of providing a persuasive rationale for U.S...

...At the same time, it contends that this country must insist upon reform in the less developed countries...

...Over the long haul was Hitler a superior economic manager...

...We are now considering aid to a government steel mill in India...

...We have aided government enterprises of other types...

...The authors of the Clay Report are not wholly consistent in this regard...

...What kinds of "interests" are at issue here...

...some made sense at one time but have outlived the first necessities and continue only because bureaucratic inertia is incapable of arresting their momentum...

...Both can be faulted, it seems to me, more for omissions than for error...

...It is also true, I think, that this kind of aid should be directed primarily to the entrepreneurial level, with less emphasis on infrastructure than has sometimes been our practice...

...Theodore Draper GERMAN COMMUNISTS In his letter to the editor in the April 29 issue of The New Leader, Horst Duhnke made two criticisms of my article, "Ulbricht: Ten Years After Stalin" (NL, March 18...

...The hard questions posed by General Clay and his colleagues cannot be separated from their context...

...Beyond this...

...It is an ethnocentric absurdity to assume that free enterprise can be "stimulated" from outside, where none of the factors which have gone into the making of free enterprise in the Western world exist...

...Economic development in most of the world does not now wait upon economic activity...

...3. I do not agree with Professors Morgenthau and Kenen's assumption that civilized or even partially civilized societies exist which do not possess many individuals of "free enterprise" entrepreneurial talents in our economic sense...

...Laurence, Kansas Bruce E. Wright Peter Ritner replies: I must answer my critics one by one...

...Finally, a word about Ritner's proposal for a network of aid to small-scale enterprises...

...policy...

...When Congress decides to end the existence of the Tennessee Valley Authority, let it terminate aid to all government enterprises that compete with private ones...

...Of course government industrial projects in some countries are mere ornaments, the quality of their administration of no concern to the officials involved...

...Geneva Hans J. Morgenthau Graduale Institute of International Studies One must agree with most of the specific recommendations of the Clay Report even though the rhetoric leads down blind alleys...

...But it is not that easy to define what genuine compassion consists of...

...But I cannot accept his offering, no matter how carefully refined...

...There is no reason for us to be ashamed of our impulse to prevent needless suffering, or to expose it to confusion and attack as an attempt to buy friends or to beat the Communists...

...This is what Peter Ritner has done in his distillation of the Clay Report...

...Political considerations play only a marginal role, In consequence, the report can recommend, for instance, that the European nations should pay a major share of foreign aid for Africa...

...DEAR EDITOR THE CLAY REPORT Both the Clay Report and Peter Ritner's article about it ("The Battle of Clay's Cliches," NL, April 15) make a number of points with which I am in general agreement...

...I think there is a place in our planning for a third kind of aid, neither required by immediate military considerations nor realistically geared to economic development...

...We were opening new lands...

...April 29...

...Davis, Calif...

...How can politically timid and corrupt, economically inert regimes be galvanized into action...

...Most individuals coming from an American background are singularly incapable of evaluating what changes would be efficient...

...Senator from Idaho These days liberals are compelled to be realistic, and they take great joy in finding ways to agree with the hardheaded people of this world...

...I cannot think of any aid policy that would result in a more disastrous boondoggle than to move Americans in large numbers into the business of providing aid at retail to smallscale indigenous business...

...Their stress on safeguards against expropriation, approval of the Hickenlooper Amendment, and strictures on public investment in industrial facilities all lend credence to this interpretation...