The Futility of Foreign Aid

August 31, 1953

Nothing has more conclusively demonstrated the complete futility of our foreign-aid program than what has been happening in France. One of the chief purposes of the foreign-aid program was to try to put France politically and economically on its feet, to remove or reduce the influence of the Communists, and to help make France into a strong and dependable ally. Not one of these objectives has been achieved.

Certainly we did not spare expense. A recent report by a Senate staff committee headed by Alex L. Hillman estimated that from April 3, 1948, to Jan. 31, 1953, United States assistance to France and Indo-China alone totaled some $10,900,000,000. This is more aid than went to any other country in that period. What have we got in return?

Certainly not monetary or economic stability. The franc now stands at less than 4 percent of its prewar value. Nor is the situation such as to give anyone confidence that it will be stabilized even where it is. The budget has been chronically unbalanced. The government has been reduced to short-term borrowing at the Bank of France—i.e., to printing more paper money. As A.E. Jeffcoat pointed out in a recent article in The Wall Street Journal, French public spending, which swelled from 1949 to 1953 by 40 percent (while national income rose only 9 percent) presently chews up nearly half of France’s national income. Government “investments” in both nationalized and private industry take up about 26 percent of state spending. Subsidies to groups like exporters and alcohol distillers use up 9 percent of the nation’s budget. The state social-welfare program consumes about 12 percent.

Our aid has not brought political stability to France. A French government now stays in power, at best, for a few months. Weeks may pass with no government at all. About as many voters still vote Communist as before Marshall aid began. The Communists can still impose paralyzing strikes. In fact, the Communists are hardly needed for this purpose. It has now been demonstrated that if any Premier even attempts to take the measures that are absolutely essential to halt inflation and restore solvency, unions of every political color will go on strike.

Has our military aid made France a strong and dependable ally? There is little evidence of it. As I have pointed out here in previous columns, to the extent that we pay for France’s defense, France does not have to use its own money for defense. In the fiscal year 1952, 62 cents out of every dollar the government spent actually went for nondefense items—largely of the welfare-state type specified above.

Has our aid to France and other countries brought us their gratitude, friendship, and good will? Has it made them into stauncher allies? Almost every dispatch from Europe today reports the opposite. On Aug. 10, William Philip Simms wrote to the Scripps-Howard newspapers: “The biggest peril to American people today is not Soviet Russia, but the growing anti-Americanism here in Western Europe. And it is rankest among those for whom we have done the most.” Warren H. Phillips made a similar report to The Wall Street Journal a few weeks before, explaining how anti-Americanism has been caused by our help: “Taking charity by itself is pride-destroying. But it is doubly so when the recipients come to believe that their governments have bartered their foreign policy and domestic political independence, too, in return for U.S. aid.”

The money we are now pouring into foreign aid is worse than thrown away. It subsidizes and prolongs extravagance and socialistic policies that Europe would otherwise have been forced to abandon long ago. It produces anti-Americanism in European foreign policy as a proof of “independence.” Yet we are scheduled to spend the tremendous sum of $6,652,000,000 for foreign aid in the present fiscal year, and the President has implied to Congress that foreign aid must continue indefinitely.