Magnificent Vision

...He must approach them not as a conqueror or exploiter but as a friend bearing the Promethean gift of the welfare state to enrich their lives...

...Reviewed by Horace M. Gray T>eyond the already achieved welfare state of the West looms the vision of a welfare world yet to be created...

...Between the two, however, lies a vast uncharted sea where the wild storms of nationalism, revolution, and contending ideologies rage, and upon which Western man embarks only at deadly peril...

...The general pattern of economic organization in the West, and especially in the United States, is state-protected, monopoly capitalism, supplemented by varying amounts of state enterprise, cooperative enterprise, free competition, and welfare provisions...

...Myrdal thinks a "created harmony" can be achieved in the world economy by application of the same rational coordination of public policies which has proven so successful at the na-' tional level...

...Even confirmed doubters can scarcely escape the contagion of his courage and optimism...

...Myrdal rejects both the polarized extremes of a free market economy and of Marxian total planning...

...A mixed economy of this character, as Western experience demonstrates, can be productive, powerful, and rich, and it may yield adventitiously substantial increments of welfare, but the latter is no part of its basic purpose...

...He calls for unilateral removal of trade barriers by the West, elimination of unfair trading practices by private business, commodity stabilization agreements, international control of industrial and shipping cartels, restoration of the international capital market, and special inducements to stimulate the flow of capital into the underdeveloped countries...

...By so doing the West could universalize the welfare state and create a welfare world...

...To assume, as Myrdal does, that a system so organized and motivated can, if transplanted, meet the urgent humanitarian needs of underdeveloped countries defies credulity...

...Does the West, as he assumes, really possess a true welfare state—i.e., one directed to welfare ends...

...He shows how by piecemeal, pragmatic state intervention to solve particular problems, and subsequently by coordination of such interventions to achieve balance, the nations of the West have gradually transformed capitalism into a system which functions in accordance with the majority interests of all the citizens...

...If the West would universalize the welfare state it must first create one, not attempt to palm off its present system onto others...

...The functions of the central government are to maintain balance and harmony within the system, to restrain excesses, and to direct the economy toward welfare ends...

...Structurally, Myrdal's welfare state comprises a variety of operating entities—public, corporate, individual, and cooperative...

...In Myrdal's view, this is the modern democratic form of economic organization in the West, already attained by some, partially attained by others, and the ultimate goal of all...

...If the underdeveloped nations cannot satisfy the demands and expectations of their people through advantageous economic relations with the West they will in desperation resort to totalitarian methods...

...In short, it must help them create welfare states appropriate to their needs and circumstances...

...Myrdal's universalism, though noble in conception, has a quality of unreality about it, largely because of his admitted penchant for "huge generalizations...

...As a consequence, the world economy has disintegrated steadily since World War I; the rich nations of the West have become richer while the poor nations, in the non-Soviet sector, have become poorer...

...partial, not complete...

...The bitter proof of Myrdal's confusion on this score is that his policy prescriptions are all approv-able on welfare grounds but not a single one of them is acceptable to the monopoly capitalism of the West...

...He attributes the tragic indifference and failures of the West to the introverted, nationalistic character of the welfare state...

...The West, he thinks, must become reconciled to large measures of nationalization, protectionism, and state control by these countries during the early stages of development...

...Clearly, it is a "planned society," but only in a special sense...

...Capital grants and technical assistance, while important, can never be more than palliatives unless the basic trade policies of the West are changed...

...rather, it is a "created harmony" achieved by rational state intervention and planned coordination...

...When he comes to consider policy prescriptions, Myrdal's "huge generalization" respecting the nature of the welfare state rises to plague him and sow confusion...

...Yet the spirit calls him and he must go...

...It calls for coordination of all public policies toward welfare ends...

...Driven by the inner compulsion of his idealism, and clad in the armor of rationality, he must venture to those lands where men dwell in darkness and poverty...

...Governments, under public pressure to maximize welfare, may assume greater responsibility for the planning and direction of the economy toward welfare ends...

...Except perhaps for the Scandinavian countries, it does not...

...He recognizes this possibility and concedes the formidable difficulties but, sustained by an unfaltering trust in democracy and human rationality, he boldly launches his ship on this fateful quest and bids his followers to be of good cheer...

...Welfare, as such, is a mere appendage of monopoly capitalism, not an end in itself or a determinant of either private or public policy...

...Monopoly capitalism is the Achilles heel of the West in all its relations with the underdeveloped countries...

...it is the mercantilistic, protectionistic, monopolistic elements in his amorphous welfare state which are responsible for these failures, not the welfare or humanitarian elements...

...The main problem is to stimulate the flow of capital and technology from the West into the underdeveloped countries to modernize their agriculture, build up their public capital and social services, and get local industries started...

...It is the pernicious spirit of monopoly which has disintegrated the world economy and frustrated all constructive efforts toward reintegration...

...it reflects mercantilistic and monopolistic rather than welfare and humanitarian motivations...

...If the West would save itself, and serve both its self-interest and its democratic ideals, it must cast aside its nationalism and assist the poorer nations toward economic development...

...Power is widely decentralized among subordinate organizations such as federal, provincial, and municipal authorities, private business corporations and associations, cooperatives, labor unions, and consumer groups...

...What is this welfare state which he would universalize, which, like, Prometheus, he would bestow upon all mankind as a gift from the West...

...This conflict between monopoly and welfare may eventually be resolved if Myrdal's theory of social evolution operates as he predicts...

...The welfare state, despite its success at internal integration, has one serious defect—it is nationalistic, protectionist^ and introverted...

...flexible, not rigid...

...This is quite misleading...

...Thus, neither in respect to structure, motivation, or policy can such a system properly be described as a welfare state...

...Myrdal's magnificent vision can become a reality only if the West can solve its monopoly problem...

...Such planning is rationalistic and pragmatic, not deterministic...

...Emphasis on short-run welfare goods and on the protection of national interest groups renders it indifferent or even hostile to the world economy...

...Only then will the West be free to fulfill its mission of promoting universal welfare...

...These organizations have gradually assumed more and more power until today they are responsible for much of the economic decision making...

...They may eliminate monopoly and thus facilitate the emergence of a true welfare state, which will replace the mongrel form now extant...

...The economic disparity between the two has become so pronounced as to generate a revolutionary crisis...

...The harmony thus realized is not the old "liberal" or "natural" harmony of a free market economy...

...No one understands this more clearly or exploits it with more devastating effect than the Communists...

...Skeptics and realists may regard Gunnar Myrdal's universal welfare as a Utopian dream, an earthly City of God which never was nor can be...