Global Chain Reaction
( Originally Published 1952 )
America's Impact on the World
We today are bringing on the next war. We may not yet see clearly our own tendency to become provocative. But it is there—a bland refusal to inform ourselves on the real issues, a willingness to accept superficiality, prejudice, hysteria and mere arms as a complete substitute for any other approach.'
U.S. News & World Report
March 17, 1950.
'The world is different than we in America have thought. The plain fact is that the world is in a revoluti0n that cannot be bought off with dollars. If we c0ntinue our present foreign policy, especially in Asia, we are doomed to disaster.'
William 0. Douglas
U.S. Supreme Court Justice February 14, 1950.
ONCE THE SOVIET UNION WERE 'CONTAINED' OR DEFEATED, THE way would be open to worldwide peace, prosperity and progress: this was the premise on which America, during the five years before the Korean outbreak, spent $1000,000,000,000—some thirty-thousand million dollars to win friendS with gifts and credits, and nearly seventy-thousand million dollars to influence people with her military Strength.
One-hundred-thousand million dollars, that is one-third as much as it coSt the United States to fight the second world war; twice as much as all her Lend LeaSe supplies to the allies were throughout the war; two-fifths as much as America estimated the total national income, over that entire period, of the Soviet Union, whose power these expenses were to outbalance.
Their aid to friendly nations, Americans were promiSed, would give them strong fighting allies. But, 'Billions Buy Few Allies For U.S.--- Dollar-Fed Peoples Hope To Sit Out A War', U.S. News & World Report warned on March 1o, 1950. ' "Cold War", warming up, finds U.S. pretty much alone against Russia. . . . All talk neutrality. . . . In a showdown, nobody wants to fight.'
Their aid would make Western Europe Strong and self-reliant. But, `Western Europe today is like Humpty Dumpty', Business Week wrote on April 22, 1950. 'Not all the King's horses and all the King's men could put Humpty Dumpty together again. . . . Europe is in process of disappearing from the political map of the world . . . incapable of independent political or economic action, incapable of supporting itself or defending itself.'
Their aid would turn mankind away from the Soviet world and Communism. But, 'Which Way Will Broken Europe Turn?' remained the question the magazine asked after those five years and hundred thousand million dollars; for, it was feared, Western Europe might still 'cast its lot with Russia, where its natural economic ties are'. 'More of the world's people are pro-Communist than pro-American for the first time in history', U.S. News & World Report stated on February 24, 195o. 'Balance of power in the world is tilting more and more Russia's way.'
America's friends even blamed her for the fresh drift to war: `underneath the surface, tide of opinion is running against the United States in both Europe and Asia', the magazine reported on June 9, 1950. 'Resistance to U.S. ideas is growing. Irritation with U.S. power and behaviour is mounting. U.S. popularity overseas is fading. New U.S. idea, all-out "cold war", is unpopular even with people who have most to fear from Russia. . . . Average person on the Continent, or around the rim of Asia, is backing away from war. He wants no part of it. And he's beginning .to blame the U.S., rightly or wrongly, for 'pushing the world toward World War III.'
The basic reason for these disappointments has been recognized only by a few in the United States. It is this : as long as America fails to curb the power of Big Business over the nation's might and mind, as long as she fails to fight the danger of depression with reform of her economic order, America cannot help taking much more from her friends and allies, in terms of their economic progress and real security, than she gives them through grants and loans and military aid. So that, on balance, every nation in the world has been faring worse than it would have done with less American aid, if only the United States had put her 0wn house in order.
For, to protect her outdated economic system against the world tide of reform, America has been forced to hinder the march of change in other nations—instead of being free to encourage the progressive forces behind Labour Socialism, 'popular front' regimes and national independence movements, with which so many nations were trying to help themselves and to contribute to building a better, safer world.
To dispose of her surpluses of goods, America must try to outrival all commercial competitors with her superior economic might, to subordinate to her own interests those of the nations she has been aiding—instead of being free to let them develop their production and trade according to their needs, and to throw open her own enormous markets to their products, so that they may earn the dollars for the purchase of more American goods.
To stem the threat of depression, America has been forced to consider armaments as a 'pump-priming' device for her economy, to use the resulting growth of international tension as justification for still more armaments, and to drive herself, her friends and foes into an ever faster and more harmful arms race.
To protect herself against the Soviets' counter-moves, America has been forced to try converting the United Nations into a worldwide alliance against Communism—intensifying the dependence of the noncommunist world upon her aid and upon the drift of her domestic economy and her politics.
America's best friends have feared nothing more than this. `One of the European master-masons of the Marshall Plan' told the New York Times on December 12, 1949, 'that what he feared most was not that United States aid would end in 1952 but that it would continue. He was was not being paradoxical. Europeans do not want to go on being dependent. They fear that the United States, instead of making the necessary adjustments in its own economy—instead of making some of the sacrifices for the general good it is urging Europe to make—will go on trying to buy its way out of the mess into which two world wars plunged the Western world.'
America's impact on the world is compounded of the helpless drift of her economic order, the reactions it must provoke in the outside world, and the international policies which that drift and th0se reactions must, in turn, impose upon the United States.
Already during the decisive early post-war years it was not so much the threat of Communism as America's failure to reform her economy, which led to the need for the Marshall Plan and the circumstances that were bound to make a Cold War weapon out of the useful idea of an international assistance project.
The Cold War became inevitable immediately after VJ-Day, when Big Business in the United States enforced the premature abolition of rationing and price controls and sought its own safety from the danger of depression in curbing the nation's productive capacities.
Shortages thus became greater and more prolonged than necessary. The resulting rise in prices diminished by one-third the value of the world's large dollar reserves and of the allies' new American loans.
This loss cost the world about half as much as the Marshall Plan later gave to Western Europe. The American price rise spread inflation throughout the world. All countries had to reduce their purchases of dollar goods below their needs, greatly upsetting their recovery plans.
It required only the crippling accident of Britain's icy, snowy winter of 1947 to bring to a head the economic, social and political crisis of Western Europe, which might have been avoided had the United States promptly adapted her economy to her worldwide responsibilities as the 0nly economic victor of the war.
America's opposition to economic, social and political change in the 0utside world made matters worse.
Despite the mildness of the reform movements in Britain and many other European nations, American Big Business considered them as a major danger to itself. For there was no telling how far they might be driven by popular enthusiasm; how much further they might restrict the world scope of American 'free enterprise'; how greatly they might affect America's trade supremacy by enabling her allies and ex-enemies to develop close economic co-operation with the Soviet Union and the new 'People's Democracies'; how much they might influence the social and economic concepts of the new United Nations; and, particularly, how powerful a stimulus the success of reform in Britain and elsewhere might give to popular demands in America for a change of the economic order.
The initial dependence of much of the world upon American relief and reconstruction aid was used from the beginning to discourage economic unorthodoxy wherever possible and to weaken the forces that inspired the reform efforts abroad.
This was one of the reasons why Lend Lease assistance to all allies was abruptly ended the day after the war; and why, on September 18, 1945, ex-President Herbert Hoover, in the name of business, formulated before the Executives Club of Chicago 'certain policies, certain safeguards, certain limitations we should observe in making any further commitments'. America, he stated, could not afford to waste her resources `to subsidize social experiments'. On the contrary, she must make certain to derive 'some indirect benefits' from the post-war aid she was to give the world, and 'must have some protection from socialized foreign trade'.
Bernard M. Baruch, another influential 'elder statesman', insisted: `we must be careful when we give aid to other countries, that this aid is not used to nationalize their industries against us'. Even Walter Lippmann implicitly accepted the premise that America must aim at the defeat of economic change abroad when he argued that stalling on loans or refusing them would 'only provoke Europeans to go faster and farther toward planned self-sufficiency within a closed system which American businessmen and financiers cannot interfere with'. Henry Morgenthau, Jr., Roosevelt's former Secretary of the Treasury, took the same basic approach. The problem', he said, 'is not to browbeat or cajole the British into embracing the system we desire, but simply to make it feasible for them to participate in it.'
From the very end of the war, America used all these methods to have other nations embrace the system she desires: of stalling on loans when they resisted, granting the loans when the desired conditions were obtained; and of making it feasible, in the sense of making it inevitable, for Britain, France and others to participate in a world economy which American business was doing its best to reshape in its own image.
America soon halted, reverted, or involuntarily revolutionized the process of economic reform abroad, in alliance with the old vested interests everywhere that opposed their own nations' trends away from private enterprise. 'To be sure, as a general rule, the wealthy population of Europe looks to Washington for its salvation,' C. L. Sulzberger, the chief foreign correspondent of the New York Times, wrote on June 23, 1946; and the enemies of reform did not look in vain to America for the succour they needed.
Recovery all over Europe and elsewhere suffered from the vacillations of the American economy and the combined American and internal pressures that were brought to bear on unorthodox regimes.
Where they were heterogeneous and highly vulnerable, like the war-born 'popular front' alliances in France and Italy, the early damage was fatal and lasting, politically as well as economically. Dissension mounted with privation, relative unity yielded to open strife, and the ground was laid for the nations' political and economic helplessness that has continued throughout the Marshall Plan period and beyond.
Where the regimes were homogeneous and strong, like that of Labour in Britain, their inevitable post-war difficulties and frustrations were unnecessarily intensified. Their domestic policies were laid open to much undeserved criticism at home, which conveniently ignored the harmful American impact and tried to prove their incompetence. The people's enthusiasm for active participation in the reform work was dampened, together with their hope for success. Thus, the course was set for the gradual revival of conservatism, first within the Labour Party itself and then over the nation and the Commonwealth as a whole; so that Britain, New, Zealand and Australia were made to help rob the -world of its early- post-war hope of peace and progress through economic and social reform.
Finally, whe re the nev post-war regimes were 'People's Democracies', as in Eastern Europe and -what then was a mere half of China, the American impact -was hound to f0ster in them their revolutionary and counter-revolutionary, rather than their evolutionary and conciliatory potentialities; to intensify internal strife and make them into objects of international conflict, rather than to strengthen them as bridges between the capitalis tic and communistic systems.
This was the second lime of development, parallel to that of American inflation and depression dangers, which led to the need for the Marshall Plan. It was the second reason why the basically sound project of a European Recovery Pr ogram became so different in practice from what it should have been: an early, full and unconditional payment by America of the debts which, morally, she owed her wartime allies; a business-like clearing of the inter-allied accounts of gains and losses from their common enterprise of war—whose balance in favour of her allies is many times greater than the loans and gifts America eventually granted some of therm, with much delay and under onerous conditions.
When the European Recovery Program was launched, it had two major additional purposes: to protect America against depression dangers; and to fight the battle of Big Business for the prevention of reform at home and the gradual restoration of free enterprise abroad.
'Government pump priming is to be started on global scale', U.S. .News World Report wrote on February 27, 1948 when the Marshall Plan started, pointing out that this priming of the pumps of American business was almost twice as large as the domestic 'make-work' projects of the New Deal period had been in the thirties; and that it would put 'the U.S. in a position to direct production and business activity for much of the 'world'.
The E.C.A. (Economic Cooperation Administration) became the main instrument of America's endeavour to turn back as much of the world to as much private business control as possible. The influence of the American administrators of E.C.A. on the changing pattern of Europe is one aspect or the Marshall Plan that has not been sufficiently noted. . . Nothing quite like these economic missionaries has ever been let loose on the world. Certainly no group has ever had such power in the economic affairs of other countries', the New York Times wrote on May 2, 1949.
The chief of those 'missionaries', Paul G. Hoffman, qualified for his position of E.C.A. administrator by frequent professions of hostility toward any economic order other than that of 'free, private enterprise'. When he was still president of the Studebaker Corporation, he stated, according to the New York Times of May 14, 1947, that loss of personal liberty is not only 'an obvious feature of totalitarian states'; but, referring to Britain, that 'the danger of such a loss is ever present in all collectivist economies, including the Socialist'; and that 'the case against Socialism is not as obvious but it is just as strong'. 'As the final arbiter of the validity of European recovery projects', in the words of the same paper a year later, Mr Hoffman 'warned the British Labour Government there would be no loans for modernizing industries in process of nationalization in that country'.
Opposition to economic reform became the unwritten law of the Marshall Plan organization. 'The spread of Socialist autarchy to Europe, said one official, "is something we must be stubborn about"', Fortune magazine wrote in August 1949.
This American pressure was so strong and so successful that 'even United States officials long familiar with Europe' were reported by the New York Times on November 22, 1949 to be 'shocked at the extent to which private groups have stepped in to regiment European business during the past year as public controls have been lifted or have withered away'.
America's attitude toward economic reform in the 'backward' two-thirds of the world has been different only in one respect. Wherever an outdated, medieval status quo evidently needs change to increase business and investment opportunities, it is desired; but it should be toward more, rather than less, freedom for private enterprise. It should provide a 'favourable climate' for U.S. investments, free from clouds that threaten the nationalization of any industries or the submission of business to government planning.
Two old presidential doctrines have continued to determine American action in international affairs: President William H. Taft's doctrine that, 'while our foreign policy should not be turned a hair's breadth from the straight path of justice, it may well be made to include active intervention to secure for our merchandise and our capitalists opportunity for profitable investment'; and President Calvin Coolidge's doctrine that 'the person and property of a citizen of the United States are a part of the general domain of the nation, even when abroad'.
The Charter of the United Nations made such principles more obsolete than ever, but they were soon reaffirmed in new wording and in action. 'The time has come when the United States should give greater support to foreign investments of its nationals in strategic minerals that are in short supply', William L. Clayton, Under-Secretary of State, announced according to the New York Times of October 26, 1946. 'What happens to American investments in such sources has become a matter of national welfare. . . . No, this did not mean imperialism. . . "Dollar Diplomacy"? He -was amused at the term. "We never did have it".'
Sumner Welles, Roosevelt's Under-Secretary of State, reminded his successor on November 6, 1946: 'We have, of course, pursued an economic policy of "dollar diplomacy" under many administrations. . . Mr Clayton's statements can only be logically interpreted as meaning that this government is planning to return to the Coolidge doctrine . . . which threatens to infringe the sovereign rights of the peoples of other countries.' And this was what happened since the needs of American business required it.
`A new kind of dollar diplomacy', the New York Times reported on November 17, 1946, 'was clearly enunciated in a series of addresses delivered by distinguished leaders . . . at the Thirty-third National Foreign Trade Convention. . . . Acceptance of this new doctrine and willingness to incorporate it as a basic formula in our incipient foreign economic policy was implied in speeches by some of the Government officials who will largely be responsible for its implementation.' This new dollar diplomacy soon proved, as this report predicted, to be `based on exploitation of underdeveloped or industrially weak nations ... on the assumed responsibility by American businessmen and their Government to establish our free enterprise system in other nations of the world'.
In all these ways, the non-Communist world was more and more closely tied to the drift of America's unreformed economic order.
The solution of Western Europe's currency and trade problems was seen as depending more upon the United States' domestic economic policies than upon anything the Europeans could accomplish alone . . the New York Times of September 12, 1949 quoted the National Planning Association which appealed to Americans to stop the drift to fresh disaster with a comprehensive American reform plan 'to unleash the vast energies and the great productive facilities of this country in order to make it a better home for all our citizens, and thus to promote the well-being of the civilized world'. For, 'if a comprehensive plan for building a better America could be put into operation with full public support, unemployment would cease to be a problem, the fear of depression would vanish, and with a rising national income a greatly increased market would develop here, not only for the products of our own factories and fields but for countless articles of European manufacture and for the raw materials of the rest of the world.'
But since nothing of the kind was done, and since neither the Marshall Plan nor the large volume of pre-Korean armaments sufficed to keep up business, America drifted into the recession of 1949—which, in the nations dependent upon her, took on the proportions of a minor economic crisis. The American recession is disclosing how deep, how difficult, how insoluble by our present policies and devices, is the problem of European recovery', Walter Lippmann wrote in the New York Herald Tribune of June 17, 1949. In America's own economic activity the total decline in nine months of slump was 'less than five per cent', Charles Sawyer, U.S. Secretary of Commerce, stated on March 9, 1950; 'yet imports into the United States from Britain, Western Europe and their dependent territories fell by 10 per cent in the first quarter . . . by 32 per cent in the second, and by 38 per cent in the third'—sufficiently to provoke the 44 per cent currency devaluation in Britain and the Sterling area; an event which, in turn, was used for the propaganda purposes of American Big Business, as 'proof' of the incapacity of any economic order but that of 'free enterprise'.
America's trade policies bear an even greater share of responsibility in the world's ever-rising crisis than did the American recession. 'The United States must double the current volume of its imports from Western Europe by 1951 or concede failure of the Marshall Plan', Paul G. Hoffman stated before the Senate Appropriations Committee on June 24, 1949. And the Export Managers Club of New York was told by a prominent member that the nation 'must substantially increase imports from friendly countries . .' or it would soon 'be in the business of importing atomic bombs, shipping and duty prepaid'. This theme was frequently elaborated, but without effect. America continued resisting foreign imports and, all over the world, intensified her competitive struggle against the allies she wanted to help.
Moreover, the gradual revival of the old economic order in Europe was bearing fruit. There, too, the familiar phenomenon of glut in the midst of need began to reappear. 'Before any significant improvement in living standards could be achieved for the masses of Italy and France, "over-production" is being discussed in the steel industry, the New York Times reported on December 11, 1949. The problem of markets became so acute that 'almost without exception European and United States officials and statesmen close to the inside -workings of the Marshall Plan feel that it stands at a point of peril and is in imminent danger of failing'.
About six million tons of steel capacity -were idle in Western Europe before the Korean outbreak, and it -was freely predicted that the glut of steel would grow further, despite the crying need in every nation for more steel and all that is made of it. 'Europe's biggest glut in coal and coke since the depression of the early 1930's' was reported by the U.N. Economic Commission for Europe in March 195o. And similar dangers began to develop in other industries.
Unemployment, open and hidden, rose steadily almost every-where in Western Europe—a grim foretaste of worse to come. And the French Finance Minister spoke virtually for all of the old -world when he told the National Assembly on June 21, 195o that the economy of France had once more become 'stagnant'.
'It will take fifty years for Europe to come back to where she can buy and pay for what they need from us and service already existing loans', Paul G. Hoffman told the House Foreign Affairs Committee on February 24, 1950 'by 1953 those countries will barely have their noses above water and I don't see any substantial improvement in the picture for the next decade.'
The people of the 'backward' regions, the majority of mankind, fared even worse than Western Europe.
Two out of every three' of them still 'suffered premature death for lack of the primary necessaries of life', said Lord Boyd Orr, the former director general of the Food and Agriculture Organization in December 1949, reminding the 'advanced' nations that 'world peace must be based on world plenty'. The American Conference on Nutrition, at its meeting in Brazil in June 195o, stated that of the world's people `two-thirds are hungry—and the worst hit are in Asia and Latin America'. An official of the World Health Organization told the Conference that even in Latin America, the 'backyard' of the food–surplus-worried United States, 'chronic hunger affected about 70 per cent of the people'.
The world's income 'is now less evenly distributed than before the war', and 'the difference in standards of living is bound to grow larger rather than smaller', the U.N. World Economic .Report stated in February 1951.
This is why Asians, like people everywhere, asked America to talk less of war, more of peace, prove it by extending economic aid to Asia in a big way, fast', as U.S. Hews & World .Report wrote a few weeks before the Korean war, on June 9, 1950.
The nations of backward Asia received virtually none of America's bounty of government grants and credits, and relatively little technical assistance. The main exceptions were Japan, which was aided with over $2 billion, and Kuomintang China, whose civil war was financed with over $3 billion worth of American arms, supplies and funds.
Even of the $4 billion 'direct' foreign investments American business corporations made since the war—mostly in. their own enterprises abroad—Canada and the industrially advanced member nations of the North Atlantic Pact received the lion's share.
In many of the backward regions that received 'Point IV' technical assistance and private investment capital from America, the effect has been for these potential blessings to do much actual harm to the ordinary people—as such aid is bound to do where it is not preceded or accompanied by political and economic reform that uproots medieval privilege, proceeds with the fervour of a mass movement and seeks genuine progress in social planning in the interest of the majority.
`The gap between the wealth and power of sixty to one hundred families and the rest of the nation is increasing at an astounding rate as a result of the application of modern machinery and technical. assistance . . .', wrote the Damascus correspondent of the ,New York Times on August 13, 1951 about the typical impact of modern American methods of mechanized farming on Syria; for, without the necessary political change, these innovations were only `strengthening Syria's feudalism'.
Equally typical is the case of Venezuela, where American business invested heavily in large oil and iron ore deposits. Several thousand huge family fortunes' resulted, while 'almost none of this 'wealth is distributed among the population at large', the Atlantic Monthly reported in May 195o. On the contrary, 'the poor in both country and city are harassed by chronically inflationary prices caused by excess prosperity at the top'. The U.N. Survey of Econornic Conditions in Africa of February 1951 gave a warning that purely business-oriented investment in the production of raw materials for export 'may lead to one-sided development' in backward nations, unless here is at the same time 'fruitful exploitation of resources for internal needs'; in which, naturally, foreign capital does not engage.
The inherent inability of Big Business to foster social progress in backward regions, and the inevitable harmfulness of most technical assistance on socially unprepared ground, are not the only reasons why America has failed to benefit the backward nations. 'Millions of the peoples of the earth are trying to do today for themselves and their children what our forefathers did for us in 1776', U.S. Supreme Court Justice William 0. Douglas said in a speech on November 12, 195o; and 'it will be shameful if, when the history of the period is written, America is credited with suppressing these struggles, with aligning itself on the world scene with reaction, tyranny and oppression'.
Yet that is what has happened everywhere. A year later, on December 15, 1951, in a speech at Atlantic City, Justice Douglas criticized the Government for supporting with loans and grants 'corrupt and reactionary regimes' and giving 'feudal systems strength and vitality to perpetuate the causes that breed communism'.
It has happened where colonialism is concerned. 'America's wartime propaganda led Asia to believe that, with the coming of peace, the U.S. would champion colonial demands for independence', U.S. News & World Report stated on October I, x948. 'Instead, the U.S. adopted a course that is alienating millions and playing into the hands of the Communists'.
It has happened where nations gained their independence, where America had the choice of using her influence for or against the needed social and political reforms that alone would give substance to new-won national freedom.
Korea was the tragic test case.
`President Truman realized more than four years ago that Korea was "an ideological battleground upon which our entire success in Asia may depend",' his former adviser Edwin W. Pauley told the Senate Armed Services Committee on August 3, 195o. He quoted the President's judgment of 1946 which, had America been able to make it the basis of her policy, would certainly have prevented the Korean war and all it implied for the world. The furtherance of our policy of winning Korean support for our concept of democracy and for our programme of action within Korea can be effective in facilitating agreement with the Soviets', the President had said. 'By making possible the formulation and execution of liberal reforms such as the nationalization of certain industries and land redistribution, which are desired by a majority of Koreans, this policy should also help to broaden the basis for an understanding with the Russians.'
But America could not help acting in the opposite direction. These were some of the results, on the eve of the war between the Northern and Southern halves of Korea and the 'Eastern' and 'Western' worlds. 'Some observers here believe the police of South Korea are the chief obstacle to the success of the Government—that they are driving the common people into the arms of the Communists', the Seoul correspondent of the New York Times reported on February 1, 1950. 'Many Americans are horrified by the deaths by torture and wholesale executions of Communists. . . . The South Korean regime leans heavily on the leadership—even in the army and the police—of those who held positions of rank under the Japanese. . . . A few weeks earlier the National Assembly had raised a hue and cry over the number of prominent people who were dying under police and army torture.'
By contrast, Brigadier-General W. L. Roberts, U.S. Army, the commander of the Korean Military Advisory Group, told the New York Herald Tribune correspondent on June 5, 195o, two weeks before the explosion of an untenable internal situation into an international war which, by the summer of 1952, cost the United States alone 116,000 casualties: 'KMAG is a living demonstration of how an intelligent and intensive investment of 5oo combat-hardened American men and officers can train 100,000 guys who will do the shooting for you. . . . In Korea the American taxpayer has an army that is a fine watchdog over investments placed in this country and a force that represents the maximum results at the minimum cost.'
As the non-Communist world was made increasingly dependent upon America, the United Nations was bound to become more and more America's instrument.
'U.N. has done the U.S. proud', Business Week wrote on October 22, 1949. The U.S. has commanded bigger and bigger majorities in U.N. to justify its crusade against communism. . . Basically U.N. is a U.S. structure. The U.S. founded U.N. Behind its achievements stands the competency of U.S. technicians. . . . Perhaps most important of all, U.N.'s headquarters are on U.S. soil. . . . The U.S. gets what it pays for.'
At one end of the scale of dependence upon the United States among the members of the world organization are 'some small nations, hopelessly understaffed'—in the words of Business Week—for whom, 'time and again, the U.S. delegation has had to supply the staff work—even to the point of helping write policy speeches'. Nations like Bolivia, of which U.S. News & World Report said on May 25, 1951 in connection with an. uprising, that 'anti-U.S. politicians, though polling most votes in presidential election, aren't to get into power if Bolivia's Army can prevent it'; so that 'U.S. tin supply is relatively secure, at least as secure as Bolivian Army can make it'. Like Venezuela, whose government derives from contracts with American oil corporations 'half its revenue and 90 per cent of its f0reign exchange', as the New York Times rep0rted on May 26, 1950. Or, like Guatemala where, according to the Reader's Digest, the plantation activities of a single American corporation, the United Fruit Company, provide thirty per cent of the national budget, while United States purchases account for 91 per cent of the nation's exports.
At the other end of the scale are the great allies of the United States, wh0 keep on fighting a stiff uphill battle against their painful dependence upon her wealth and power. About the greatest of them, James Reston, the diplomatic correspondent of the New York Times, wrote from Washington on February 26, 195o: 'As one official here put it, the British for months now have been very much like the clown in the circus whose full-dress suit looked fairly reliable but could be zipped right off his body by stepping on a hidden string. "We have to be careful in demanding that the British do this or do that", he said, [lest] "we might just pull the string that would leave them naked before the world".
The United Nations and its specialized agencies are deeply committed by their Charters t0 economic and social reform all over the world. Yet all their mild reform suggestions that go against the American business concept of 'free enterprise' are being sidestepped and hindered, and whenever necessary opposed and defeated, by Washington.
A typical example is the fate of the United Nati0ns' basic obligation to foster full employment. Washington signed and ratified the 1944 Philadelphia Declaration of the International Labour Organization, reaffirming that 'the war against want requires to be carried on with unrelenting vigour within each nation', and explicitly approving the main aim of that battle, the promotion by every member nation 0f `full employment'. Washington signed and ratified the United Nations Charter, which also obliges member nati0ns to aim at 'full employment'. Yet, instead of leading the way to international fulfilment of these pledges, America became an example to those who tried to bury them.
The United States actually went on record before the assembled representatives of the world as having changed her mind about the primary importance of jobs for all. 'Surrounded by delegates from countries with Socialist or Communist planned economies', the New York Times reported on May 21, 1949 from the Economic and Employment Commission in Geneva, 'Mr Lubin sounded a warning that the United States was not prepared to sacrifice its free economic institutions in the interest of an illusory security based on economic regimentation . . . adding that this country did not consider full employment the "only end" of social policy. .
As joblessness continued to rise in America and Western European countries whose economic systems had gradually been made safer for 'free enterprise', a group of American, British, French and Australian experts were asked by the United Nations to work out a plan for combating unemployment. It called for far from radical policies more or less along Rooseveltian lines. But even before the various governments had an opportunity to discuss it, the powerful National Association of Manufacturers demanded to be heard before a U.N. subcommittee and, in the words of the New York Times of February 16, 1950, 'derided a pr0posed plan of automatic counter-checks to fight world unemployment through the United Nations as over-ambitious, unrealistic, fantastic and a sure road to ruin for the individual competitive system . . . criticizing the experts' basic assumption that full employment is a policy to which governments should relate their activities'. This ended what hope there might have been for the plan.
Another constructive report of U.N. experts calculated that the backward regions of the world, for reasonable development work, needed outside financial help to the minimum extent of about $14 billion a year (then the equivalent of one-quarter of America's annual Cold War expenses). Immediately, the United States 'issued a warning against falsely raising the hopes of economically backward countries for abundant foreign help', as the New York Times reported on May 18, 1951; and 'objected also that the report placed too much emphasis on government control in planning the economic development of these countries'.
But in most U.N. reports the viewpoint of the American government, and therefore of American Big Business, has come to prevail, as in the typical case of a study of the Economic Commission for Asia and the Far East on the possibility of foreign investments in the countries of South East Asia. 'There appears to be greater anxiety to meet the susceptibilities of foreign investors', an editorial in the Hindustan Times, New Delhi, of May 20, 1950, commented on the study, 'than to discover the needs of these regions and find out how best they could be met under existing conditions of the investment market throughout the world'.
One of the outstanding examples of the defeat by American 'free enterprise' of important U.N. initiatives concerns a measure that was to provide urgently needed help for the two-thirds of mankind who are chronically hungry or undernourished. The United States will oppose, and in effect defeat, the proposal by the Food and Agricultural Organization for an "international commodity clearing house" designed to transfer surpluses to shortage areas . . . by negotiating sales of food surpluses in "inconvertible" or "soft" currencieS that could not otherwise be made', the New York Times reported on November 3, 1949. For such a solution of one of the world's main problems might run counter to Cold War requirements : 'the United States, it is argued, might make surplus wheat available to Poland, for example, without knowing whether it would be traded for a currency usable for buying arms'. It would run counter to America's policy of promoting 'free enterprise' throughout the world: such a 'world agency would be a step toward state trading and away from the "normal" or private trade relations encouraged by this Government'. It would run counter to the principle that American surplus food should not only yield its price and fill hungry stomachs but also help America in her armaments and to increase her influence: 'this country will support bilateral commodity agreements rather than the collective agreements planned by the F.A.O.', i.e., agreements like that under negotiation at the time with India, 'in which American wheat would be traded by a form of barter for Indian mica and other critical materials required for this country's (military) stockpile'.
`If U.S. crops are going to help feed the world', Business Week added, 'officials prefer to use them to promote U.S. foreign policy—in India, for instance.'
The Korean war, and the armament boom that followed, at first seemed to solve many of the problems not only of America but also of the rest of the non-Communist world.
The threat of depression receded, unemployment fell, production rose, surpluses turned into shortages, international competition for markets diminished, and the 'backward' nations reaped higher profits from steeply rising prices of their primary products. To Japan, in Premier Yoshida's words, the Korean war was 'an act of providence'; and the same was true of Germany, for it promised both nations plentiful business and very favourable peace terms, new military and political power and alliances with their conquerors of yesterday.
But the relief was short-lived. Fresh problems have arisen and are mounting, old ones have reappeared or are casting their shadows ahead.
One of them is the dangerous effect on the economic and social life of the Western world of rising armaments. Since the end of the second world war, Western Europe has been carrying much greater burdens of military expenditures than ever before in peacetime. In 1949-5o they were over $5,100,000,000 or two-fifths as much as the military outlay of the infinitely richer American economy. By 1950-I American pressure further increased this already menacing load to $7,900,000,000, nearly to the breaking point. Yet the pressure has continued, and William C. Foster, the new Marshall Plan administrator, stated on April 4, 1951 that Western Europe 'could carry a defence programme of 4o to 5o billion dollars annually, if necessary.
Following the principle expressed by Senator Robert A. Taft, that `it is cheaper to fight a war with soldiers of foreign nations, even if we have to equip them, than with American boys' (The Observer, May 20, 1951)„ America increased her military supplies and continued some of her economic aid to Western European nations beyond the lapse of the Marshall Plan; but not sufficiently to keep their problems from mounting all the time. On the contrary, this aid has become the instrument of enforcing on them an ever greater armament effort. The U.S. Ambassador to Belgium, Robert Murphy, according to United Press of April 16, 195r, gave one of the first typical warnings of `possible cuts in United States aid to nations that were not doing their part in European defence efforts', which later became more and more frequent.
It is often overlooked that Britain, per head of her population, has recently been spending thirty-eight per cent more on armaments than the United States. A calculation of the U.N. Economic Commission for Europe in the summer of 1951 showed that 'defence expenditure in man-years per thousand inhabitants' in Britain amounted to 46 man-years in 1949, 47 in 1950 and 82 in 1951; against 31, 30, and 74 man-years, respectively, in the United States; and against 42, 43, and 49 man-years in the Soviet Union.
It is also often overlooked how much the economic role of armaments in the United States differs from the role they play elsewhere. To America armaments have become a more and more vital 'pump-primer', an indispensable aid to the maintenance of her uneasy prosperity and her unreformed economic order. To Britain and other nations armaments are a terrible burden without economic compensation, an ever growing danger to their precariously balanced economies and welfare institutions—a burden that has largely been imposed upon them as the result of world reactions to the course of America's domestic and foreign policies.*
But it is not only the armament burden in itself that soon caused the initial economic relief of the Korean war to give place to fresh difficulties. The tremendous rise of food and raw material prices due to the armament boom, unbalanced the Western European economies even more. To France, for example, which actually depends less on imports than Britain and some other nations, 'ten months of the raw material boom . . . cost the same amount as all the aid she received under the Marshall Plan', wrote Le Monde on May 26, 1951. Everywhere, the 'dollar gap' problem has again grown critically acute, and the stern deflationary measures that had to be taken in attempts to close it have accelerated the fall of domestic demand for the products of consumer industries, intensified international rivalry on the world's markets and given rise to growing unemployment in the midst of the armament boom--foreshadowing the grim possibilities of the 'post-rearmament' deflation that may threaten the world some day unless the arms race continues to grow.
In the economically backward regions, where revolution brews and help from the 'advanced' nations is more than ever needed, the net effect of the armament boom has been further deterioration. The rise of food and raw material prices meant higher profits for business, but still higher living costs and greater shortages for the people. 'The race for defence and rearmament may tighten the world's hunger belt to the danger notch', the Food and Agricultural Organization of the United Nations stated on October 28, 1951. The U.N. Economic Commission for Asia and the Far East, on March 3, 1951, expressed the fear that the rearmament programmes in the West would so diminish the flow of capital goods that all development programmes in backward countries would come to a stop for lack of physical equipment. And the U.N. Economic Commission for Europe warned in January 195 2 that the armament race intensified the already enormous discrepancy between the industrial capacities of the 'advanced' and 'backward' nations. 'Defence expenditures in the leading industrial countries of Eastern and Western Europe, the Soviet Union and the U.S.A.', the report estimated, 'are likely soon to reach levels where they will together equal, or even exceed, the aggregate national incomes of all the under-developed countries', i.e., of two-thirds of mankind.
That social and political reform in these great vacuum areas of actual and potential conflict is making no progress goes without saying. Even in Southern Korea, the small but crucial test area of the ideological struggle, America and the United Nations have made no headway in bringing the promised democracy or even sufficient economic relief to the war-decimated civilian population. 'If free elections were held after the armistice, how would South Korea vote?' the Manchester Guardian correspondent, according to his report of September 25, 1951, asked experts in Tokyo. 'Many think that the results would indirectly favour the Communists', he wrote. 'Some even believe that the elections would give a Communist majority.'
Never have so many nations, and among them so many playing such vital roles in the world's civilization, been so dependent upon another power. As The Times wrote on August 29, 1951, 'over two-thirds of the globe, along the great arc stretching from Europe to Japan, no treaty can be signed . . . no decision can be made without the approval and support of the United States Government.'
Never have so many nations followed a leader so helplessly, made so little effort to influence the basic policies of their alliance, even though those policies intensified the problems they were supposed to solve.
`We are not getting from Britain and from France their own true judgment of the great issues', Walter Lippmann wrote on January 3, 195o. 'They have had to think about the appropriations committees of Congress when what we needed desperately is their independent, unfrightened, uninfluenced contribution to the problems which we cannot possibly know enough to solve all by ourselves.' And again on February 9, 195o: The big votes [in the United Nations], unanimous except for the Soviet bloc, have never had so much significance as it has been fashionable and official to say they had. Our strongest allies and partners have never been so happily confident and convinced of the soundness of our proposals and the wisdom of our tactics as their recorded votes have appeared to indicate. [But] they assented to our leadership, and they suppressed their doubts and misgivings . . . they thought it expedient to present a solid front to the Russians, and also to CongresS. . . . '
So it has remained in crisis after crisis. There have been innumerable demands on America by her friends and allies on secondary matters, innumerable criticisms of American policies, mainly on minor issues. But the great majority of the United Nations have never really taken stock of the post-war world leaderShip of the United States, never united to challenge its fatal course, of which Walter Lippmann already said on February 1 o, 1948: 'The worst of the Truman foreign policy is that in order to juStify the enormous and mounting costs, it has been necessary to argue ourselves into the assumption that nothing can be settled.'
`From that', he continued, 'it is a small Step to the view that nothing ought to be settled since any settlement requires concessions and compromises, and thus to acquire the habit of not looking for, of not trying to think out, ways and means of breaking the stalemate.'
Like the leaders of America, the leaders of most allied nations have been completely absorbed by the problems of living in the same world with Communism, with Communist states and Communist revolutionary movements; so much so that they have not dared to face the problems of living in the same community with the all-powerful, unbridled economy of the United States.
The question seems never to have occurred to them how Europe and Asia and all the rest of the world would fare if somehow Communist power were wiped out, in ultimate fulfilment of the policies of the American alliance; if they found themselves alone on earth with the American giant whom no Soviet counterweight would any longer induce to give at least some consideration to other countries; but whom an economic order always endangered by the threats of glut, unemployment and depression would force to subject the world to the imperative needs of American 'free enterprise', as interpreted by the giant business corporations.
Acting as though the Communist problem were the only one in the present world, as though strife and war were phenomena that did not exist before the Soviet Union was founded, as though salvation would naturally follow the destruction of Communist power, they have never given proper recognition to the role America's economic and political forces have been playing in making the Soviet problem grow to such dimensions in the post-war world.
The World The Dollar Built:
Death And The Dollar
The Other America
Oh, To Be Secure
Big Labor And Big Business
Global Chain Reaction
A Floor Under The Risks Of Peace
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