That Egyptian Dam

April 2, 1956

The proposal that the U.S. Government and its agencies pour hundreds of millions of our taxpayers’ dollars into a grandiose dam in Egypt has at least one merit. It illustrates almost every bad principle involved in our foreign-aid program.

1—The High Dam at Aswan is to be more than 3 miles long, to cost $1.3 billion (at least half of Egypt’s estimated national income), and to take some fifteen years to build. Our proposed aid is called “economic”; but indirectly it is military aid. The less the Egyptian Government needs to lay out for its own dam, the more funds it will have left over for buying armaments. When the dam is completed it will no doubt supply power to create still more armaments.

2—This is one more plan for our government to subsidize foreign state socialism. The Aswan High Dam is doubtless inspired by the Dneprostroi dam and hydroelectric plant, the prewar pride of Soviet Russia, which also inspired our own TVA. The Dneprostroi dam was not justified by economic results. (See Boris Brutskus, Economic Planning in Soviet Russia, 1935.) State-directed “industrialization” programs are usually disguised militarization programs.

3—One of the originally declared objectives of the Marshall and other foreign-aid programs was to “combat Communism.” Yet this money and aid are to be given to a country that is buying arms from Communist countries and pursuing foreign policies that coincide with the purposes of those countries. One of the favorite arguments for our foreign aid is that it tends to halt Communism by providing foreign countries with higher living standards. This is a naïve belief. In the decade since the second world war there is no evidence that higher living standards, when achieved, have been accompanied by marked decline in Communist sentiment.

4—Our foreign-aid program, both directly and indirectly, tends to discourage and delay a return to the principles of free enterprise in foreign countries. We do not encourage free enterprise by subsidizing socialistic ventures. Moreover, when we so freely offer government-to-government loans or gifts we make it unnecessary for “underdeveloped” countries to undertake the reforms or give the assurances calculated to attract private capital, either native or foreign.

5—Another favorite argument for our foreign-aid program has been that it is needed to win “allies” Experience daily shows however, that our foreign aid often has precisely the opposite effect. The countries that are gracious enough to accept our handouts insist that there must be “no strings attached.” In plainer words, our money must be given to then unconditionally. In consequence, we have abandoned even the most essential conditions. Only a few days ago Secretary Dulles announced that “there is no connection what so ever” between giving U.S. economic aid and securing U.S. allies. He went on to point out that Pakistan had security arrangements with the U.S. but not India or Ceylon; yet all three are receiving U.S. aid. Our foreign aid advocates begin to remind us of Santayana’s definition of a fanatic—one who redoubles his efforts when he has forgotten his aim.

6—The Administration cites the Aswan-dam project as an illustration of why Congress must give at least moral if not legal assurances that our aid will be continued over a period up to ten years. But that project seems to illustrate precisely the opposite. If we commit ourselves to continued aid regardless of what policy the Egyptian Government follows, we lose whatever chance we might otherwise have of exercising any control for peace. Our one hope of retaining control would be to leave the Egyptian Government in constant doubt regarding the next year’s handout.

Not that even this policy is here recommended. We have already thrown away the tremendous sum of $50 billion in foreign aid since the end of the second world war. Judged by its originally declared objects, never has so much accomplished so little. It is sad to speculate on how much more we could have got for that $50 billion if we had been permitted to spend most of it at home!