Trade and Politics
Gambs, John S.
Trade and Politics America in the Market Place, by Senator Paul Douglas. Holt, Rinehart and Winston. 381 pp. $7.95. Reviewed by John S. Gambs For all who want to know more about foreign trade...
...Senator Paul Douglas is uniquely equipped to do the job he has done so well...
...like him, he is a major economist...
...Douglas is a liberal in both the American and the English senses of the word...
...In common with most progressive economists, Douglas has few kind words to say about the old gold standard, which often achieved equilibrium in international trade at the expense of full employment...
...and he makes the speculating "gnomes of Zurich" seem pretty sinister...
...Myr-dal, like Douglas, has held high public office in his country...
...We should not now trade freely with the Communist nations...
...To help remedy the unsatisfactory balances of payments, such as now trouble the United States and the United Kingdom, Douglas would urge supplementary international money to be managed by an international agency...
...We should retaliate promptly by erecting trade barriers against nations that place obstacles in the way of our exports...
...No reader can leave the book unimpressed by the erudition and wisdom of its author...
...But the reader of this review must not let these two criticisms prejudice him against the book...
...But de Gaulle feels that he has real grievances, and these the Senator does not seem to see...
...But he is by no means a simon-pure free trader...
...His many years in the Senate and his service on several committees related to problems of foreign trade have shown him economic and political realities that cannot be seen from the towers of Academe...
...He dislikes trusts, cartels, and the multiform consortiums of international business, and feels that expansion of the area of free trade will lessen their power...
...Douglas's volume has vast merit...
...Douglas, to take an example, has a special pique against France, partly because de Gaulle does not see that draining gold away from us may hurt his nation as much as ours...
...Unlike him, however, Myrdal is disillusioned about the Nineteenth Century doctrines of international trade and some current ideas about growth...
...Do not high coffee prices here merely subsidize the already rich planters at the expense of those millions of American coffee drinkers whose incomes are low to modest...
...Trade is one thing, of course, and growth is another, but at many points they come together, as they do in one of his chapters and as they do in a book that covers the same area, Gunnar Myrdal's Economic Theory and Underdeveloped Regions...
...He wonders, for example, whether the maintenance of artificially high prices for coffee through commodity agreements does much good to the underlying populations of either Brazil or the United States...
...There are many derogations from the basic principle...
...He expresses the same distaste that most American liberals express for speculators—in this book, speculators in foreign exchange, of course...
...One almost detects in him the bafflement of the generous and paternalistic employer who does not quite understand why his employes cannot see that what is good for the boss is good for them...
...Though he does concede a few American mistakes, his broad thesis appears to be that if only the free world would have sense enough to accept American foreign policy, economic and political, the nations would move towards greater prosperity and international peace...
...The first is that Douglas seems to see the world's welfare in terms of the welfare of the United States...
...In this book, Paul Douglas has skillfully mixed theory and fact to make an admirable volume—though a few doubts will have to be registered presently...
...But two things bother this reviewer...
...Reviewed by John S. Gambs For all who want to know more about foreign trade and especially for those who seek to understand the foreign economic policy of the United States, America in the Market Place is an indispensable book...
...As an American liberal writing on foreign trade he advocates policies which would tend towards full employment and low prices for mass-consumed goods...
...This would reduce the world's dependency on gold as an international currency and dissolve the fears of devaluation by the great nations...
...Though his language is relatively simple, Douglas reveals enough knowledge of trade theory to be able to give the pure theoreticians themselves a handicap...
...A liberal in the English sense, Douglas believes that free international trade is the goal to strive for...
...He was a major American economist before he entered politics...
...One could wish that Douglas had taken account of some of Myrdal's dissenting ideas...
...The second objection arises out of Senator Douglas's over-conventional treatment of economic growth in the hot countries...
Vol. 30 • November 1966 • No. 11
