THE PRICE OF FAILURE
Roseman, Murray Richard
The Price of Failure By MURRAY RICHARD ROSEMAN SHORTLY before Christmas the U.S. delegation to the United Nations dispatched an urgent, bluntly-worded note to Secretary of State John Foster...
...Most countries would prefer to receive aid from the U.N...
...For the first three years it was supported mainly by the United States...
...rather than from either the Western ol Communist blocs...
...So in economic and psychological competition with communism our democracy is both our greatest asset and our greatest liability...
...The entire process goes on in plain sight of the entire world and contributes to the world's impression of us...
...Because of uncompromising regulation and revaluation (of a type possible only in a non-democratic, non-capitalistic system) the ruble has risen 50 per cent since 1947...
...The United States, with its vast industrial machine, is certainly economically capable of meeting the competition...
...He must be willing to foot the bill in a recession, with its public works spending and lower incomes, as well as in prosperous times...
...The Kremlin has still another monetary weapon...
...their wants by becoming and remaining part of the community of free nations...
...But are we politically ready...
...They will be permanent and visible reminders of Soviet friendship...
...Such a humanitarian program, reaching to every corner of India, could never be construed as imperialistic...
...To a growing number of Asians the pattern spells U.S...
...And the fact that our total aid during the same period, military as well as non-military, was nearly sixty times greater indicates we are willing to "tax and spend" for foreign powers...
...in economics at Harvard University...
...The Soviets offered $200 million at two per cent interest repayable in 30 years...
...At the same time American rice state Congressmen, as part of the farm alliance, made it impossible for us to accept the rice for either exchange or aid...
...The vast majority of Americans are sympathetic to the uncommitted people's desire for independence, self-sufficiency, and national dignity...
...But these successful examples are all too rare...
...One of the least appreciated implications of the Soviet Union's new economic strength is her capacity to affect the free world's money and commodity markets through her huge gold resources...
...renunciation of our traditional support for the colored, anti-colonial peoples...
...The virtue of our democracy is not speed or efficiency...
...Nor does Moscow have to wait for public opinion to initiate a new policy...
...The offer still stands and Egypt may yet accept it...
...help in meeting India's $840 million five year plan deficit drag on while politicians attack Nehru and demand military alliances as the price of economic aid...
...While we were cutting our $50 million yearly aid to India, Russia agreed to build her a $100 million steel mill (the 10 per cent cut was then restored...
...An effective mutual security program includes winning and keeping neutralist friends...
...Chile faces a dangerously mounting inflation...
...Soviet and U.S...
...It goes on behind closed doors...
...To get the voter's acceptance, matters of foreign policy must be discussed largely in terms of national self-interest...
...Now the Soviets are negotiating to build a second mill and an aluminum industry, and are already helping to construct a hydro-electric plant...
...We could lose this economic contest unless the country as a whole wakes up to its implications...
...They also had to be sure international complications wouldn't cause the dam to be shut down once it was built...
...With an economy concentrated on capital goods production and growing rapidly (the new Soviet Five Year Plan calls for a national output in 1960 equal to two-thirds of U.S...
...None of the same sort of talk is heard from Moscow...
...But, paradoxically, the same system also drags out into public view its dirty linen every time it wants to change, and the dirt is frequently offensive to its would-be friends...
...We also have been capable of giving the right kind of aid...
...Many Latin American countries have surpluses of coffee, bananas, or sugar, and the communist bloc is willing to take some of them off their hands...
...delegation's note stressed that we could succeed in economic competition "not by outbidding communism in sheer amounts of economic aid, but by making newly independent and newly articulate people feel that they can best satisfy MURRAY RICHARD ROSEMAN has had...
...Were there no communist bloc we would still be offering aid and assistance...
...It could be used to finance development or poured into the free markets, causing havoc...
...This method needed no scarce U.S...
...We have financed training of 3,025 Asians and sent 950 Americans to Asia as technical advisors...
...The voter must realize that these kinds of actions are constantly compared to Soviet behavior and see the pattern of the actions as they appear to Asians: our often inappropriate aid, the Goa blunder, close association with colonial Britain, our inde-cisiveness in France's struggles with her colonies, our racial problems at home...
...output in 1955), Russia is prepared for sustained economic and psychological competition...
...This warning has been previewed and echoed by members of both parties in and out of Congress, by the press, and even by Dulles himself...
...But the same proportion shows how little we are willing to spend for Indian aluminum factories as contrasted with French 'tanks...
...We] have observed the effectiveness of Soviet tactics . . . The United States must counter these Soviet offers . . . [Defeat] in a contest...
...We can seek to escape the consequences of the two American paradoxes by devices such as the trilateral aid and trade scheme used with Japan...
...The political paradox is created because we are a democracy while the Soviet Union is totalitarian...
...sources...
...Since 90 per cent of Burma's purchasing power abroad comes from rice sales we effectively cut her off from the foreign exchange needed for critical capital goods...
...The Administration has all but abandoned its quest for power to make long-term aid commitments...
...Brazil is plagued by industrial over-expansion, inflation, and unabsorbed immigrants...
...Argentina has its post-revolution disorganization and the problems of too rapid industrialization...
...Similarly successful was our aid to India's Community Development program...
...The entire Soviet economy stood behind its proposed loan and so could absorb the loss if Egypt defaulted...
...To make a major policy change, our Administration and Congress—lest they lose their political skins—must be convinced the voter will accept a change, change that usually comes after long, sometimes bitter, public debate...
...So when the Soviet bloc turned up willing to take rice, Burma naturally grabbed the offer...
...Pressed by a huge and growing communist aid program—Russia alone lent some $400 millions in 1955—we must meet two paradoxes of the American governmental system and economy if we are to wake, up in time...
...delegation to the United Nations dispatched an urgent, bluntly-worded note to Secretary of State John Foster Dulles...
...The Bank's directors were of necessity afflicted by the occupational disease of banking—Chronic Caution...
...The paradoxes lurk behind the situation that forced Burma into the Russian aid column...
...We claim no additional aid cart be absorbed in Latin America, but hard times have brought acceptance of Soviet trade and aid offers in our own back yard...
...Programs like these bring Asians and Americans into personal contact with one another, and that's the most powerful foreign policy weapon we possess...
...dollars, provided a way to distribute surplus American grain, gave Japan a badly needed market for her goods, and supplied capital to underdeveloped countries...
...Other programs have been proposed to help private enterprise meet communist trade bids...
...One of our most successful programs amounted to nothing more than the shipment of hybrid American corn and 130,000 American chicks to Egypt...
...In 1954 we decided to peddle surplus rice to Japan...
...And the people polled were overwhelmingly non-communist...
...Now Russia, communist China, Poland, Hungary, East Germany, Czechoslovakia, and Rumania are sending capital goods and technicians to Burma...
...It is possible, but it won't be easy, to bring about the basic changes in public opinion necessary to support this kind of creative program...
...We face an economic paradox because the same economic system which produced a standard of living that is the envy of every Asian development planner and makes possible economic competition with the communists also demands adequate return on private and government investment, insists on "sound" (i.e., business-like) spending of our money, and trains us to see red at the mention of government economic activity—either of ours or a nation we wish to help...
...The chicks, distributed among 7,000 villages, grew to twice the size of ordinary Egyptian chickens and laid twice as many eggs...
...By so doing we eliminated Burma from the Japanese market, where she had been selling most of her rice...
...Our failure to provide enough of the right kind of aid, our loud talk of walking to brinks, of military alliances and H-bomb tests are all products of these paradoxes and contribute to growing neutralist doubts that the uncommitted countries "can best satisfy their wants" as part of the non-communist world...
...But if Congress and the Administration offer any indication, the country as a whole has not awakened enough...
...This aspect of American democracy has great appeal to the hundreds of millions of newly independent peoples in the "uncommitted" nations...
...The yen were used to buy Japanese machinery which was sent to underdeveloped countries...
...Meanwhile, negotiations for U.S...
...Soviet aid and trade contracts are usually written in the now strong rubles, and rubles for repayment come only from the Russian Central Bank...
...Furthermore, it would go a long way toward removing from power politics the process of providing adequate living conditions for over a third of the world...
...Operation of the paradoxes threatened to send Egypt to Russia to get money for the Aswan Dam, though she preferred Western or U.N...
...The State Department has asked for only enough additional foreign aid funds to maintain spending near previous levels...
...This is pint-size alongside the $7 billion a year U.S.-Latin American trade bill but much of it is in critical capital goods...
...The slowness of democracy is a safeguard against oppression...
...of economic development . . . could be as disastrous as defeat in an armaments race...
...These doubts are reported in the Asian and Middle Eastern press...
...The U.N...
...Moscow was faced with none of the delays and investigations and verifications necessarily undertaken by the Bank...
...Our government's actions are limited by the attitudes of the voting public, the Soviet's by the power of the police state to keep citizens in line...
...He must learn to see through the false division Senator Knowland draws between collective security and neutralist aid...
...Haiti has too many people and nothing but sugar to export...
...Though both the corn and chickens are now bred in Egypt they are known as "American" corn and "American" chickens...
...There is little chance in Congress for the $100 million yearly aid most Americans in India say is a minimum necessity...
...It is rather its unique success in governing while safeguarding the rights and dignity of the individual...
...To meet the Soviet challenge the American voter must be willing to pay tax dollars for schools in India and Afghan highways as well as for domestic slum clearance, social security, armaments, and power projects...
...We did give India $71 million for finished steel—steel quickly absorbed and forgotten...
...The stronger the Soviet becomes, the less need to keep the gold as an economic hedge...
...Until recently, when the World Bank agreed to put up an equal amount at terms Egypt would accept, no Western offer matched the Soviet one...
...They needed assurance that Egypt could scrape together the rest of the cost of the dam and do it without going broke (the United States has now agreed to put in $55 million and Britain $15 million...
...Trade with the communist bloc rose from $200 million in 1954 to $500 million last year and is still going up...
...The Soviet switch to economic and psychological warfare, it said, "may one day be recognized as a major turning point in the struggle between communism and freedom...
...At the same time we can bring international pressure to have all aid channeled through the United Nations...
...But our fundamental humanism and generosity reach the outside world filtered and clouded by our traditional fear of being a sucker and our sometimes intolerant dedication to the economic principles we live by at home...
...But more aid alone will not be enough...
...But the price of failure may well be a predominantly hostile and suspicious world...
...And when those communist capital goods wear out or need parts, the replacements must come from behind the Iron Curtain, thereby continuing ties between Burma and the communist bloc...
...Only two per cent feared the Soviet Union...
...Soviet aid to this area is probably larger than our own (over $200 million of our aid goes to South Korea and a huge chunk to Formosa, neither of which is hardly neutral...
...We are not warmongers...
...The answer depends on the individual American, as a voter and as a member of pressure groups, and it depends on how effectively leaders of public opinion can create awareness of the new state of world affairs...
...The clucks of those American hens throughout Egypt does more to foster appreciation of America and Americans than a stack of defense alliances and a squadron of Sabre jets...
...If the growing decentralization and duplicity of our aid administration is halted and reversed, and if government work can be made respectable enough to attract competent people familiar with Asian affairs, we can launch an Asian Marshall Plan...
...She has stocks of nearly $8 billion and production of up to $500 million a year—both second only to the United States...
...aid to the neutral powers is extremely difficult to compare...
...During the same period the value of the pound and the dollar fell...
...They will be a symbol of Indian independence and sovereignty, and of her new position as a world power and Asian leader...
...The same thing is true of a Syrian oil refinery proposed by the Czechs, the $5 million cement factory, tanneries, glass factories, and oil storage tanks built by the Russians in Afghanistan (where the people of Kabul walk on streets paved by the Soviets), and the war damaged sugar mills Indonesia is rebuilding with Russian rubles...
...We have accomplished much with the $1.1 billion purely economic aid delivered to the uncommitted bloc since the end of World War II...
...A public opinion poll taken in West Bengal, India, reported over 31 per cent of its sample convinced that the United States was preparing for aggressive war...
...experience in newspaper work and currently is completing his Ph.D...
...We need only remember the current opposition to federal school and road building programs, and to slum clearance, or the opposition to government spending for our own citizens during the depression, to see the magnitude of the difficulty...
...They can become the rule if enough influential public figures, including Administration and party leaders, speak out frankly and strongly...
...The program seeks to develop the 85 per cent of India that is rural by providing better methods of farming, medical help, education, and social awareness to India's villages...
...It was vital aid, but to many Indians it looked like a capitalist-imperialist stunt to keep India economically dependent by giving her products instead of means of production...
...These industries will be more than a badly needed contribution to Indian development...
...Similar schemes have been used in Europe...
...grain was sent to Japan, payment being made in yen rather than dollars...
...Russia buys up to 200,000 tons of rice a year, though she probably doesn't need it...
...But it is a distinct liability in competition with totalitarianism...
Vol. 20 • June 1956 • No. 6
