Time for Reappraisal

February 21, 1955

If developments in Russia, France, or Formosa force an “agonizing reappraisal” of our foreign policy, they call no less for reappraisal of our foreign economic policy. Yet this reappraisal need be agonizing only in the sense that it may force some of us to abandon a few of our pet ideas.

The necessity for diverting more of our military resources to the protection of Formosa must increase our expenditure in that direction. But this need not mean that our total budget expenditures must be increased by the same amount or even that this total must necessarily be increased at all. The need for more expenditures in one direction underlines, rather, the need for more economy in other directions.

Yet this need is getting almost no attention. Army partisans are using the Formosa crisis for a dubious insistence on more foot soldiers. And our armchair strategists are somehow certain that even a defense expenditure of $40.5 billion a year is not enough. One of their most persistent fallacies is the assumption that the amount of defense we get is directly measured by the amount of money we spend. This assumption has survived repeated exposures of shocking misdirection and waste in military spending before Congressional committees.

Foreign economic policy cannot be treated in a separate compartment from foreign political, diplomatic, and military policy. What is needed especially at this time is a clarification of our whole relationship to our so-called “allies.” Since the end of the second world war this relationship has been strangely one-sided. We have showered other countries with money, goods, armament, and agreements to defend them. We have asked and got in return only the vaguest assurances regarding what they will do in a crisis to help defend us. One of the chief purposes of having military allies has always been to economize the use of one’s own resources—to have others share the burden of defense or war. But our own so-called alliances have been one-way contributions and assurances that have increased, not reduced, our defense expenditures.

This applies to the nearly $50 billion that we have thrown into foreign aid since the end of the second world war. It applies to the $4.7 billion that we are planning to spend in the same way in the next fiscal year. Almost the whole of this new sum, at least, could be saved. We must of course continue to give aid in certain special situations, as in Korea and Formosa. But there is no earthly reason why we should continue to bribe a now-prosperous Europe to defend itself, or continue the Truman giveaway program known as Point Four. We need not go again into all the fallacies and follies that lie behind our foreign-aid program. I have already done this in scores of Newsweek articles over the last eight years, as well as in a book, Will Dollars Save the World? (1947), and in a pamphlet, The Illusions of Point Four (1950). (Both published by the Foundation for Economic Education,Irvington, N.Y.) Fortunately there is now a growing recognition of the futility of our foreign-aid program. One evidence is the appearance of such new books as The Dollar Dilemma: Perpetual Aid to Europe? by Melchior Palyi (Regnery; $2.75) and Billions, Blunders, and Baloney, by Eugene W. Castle (Devin-Adair, $3.50).

The fantastically one-sided nature of the “alliances” we have made was glaringly exposed in the Korean war. It was a “United Nations” war. But the United States supplied not only more than 90 percent of the money, but (apart from South Korea itself) 90 percent of the men and casualties. Yet when it came to deciding how we were to conduct this war, and what the truce terms were to be, our token allies had apparently as much to say as if they had shared equally in the blood, sweat, and tears. We suffered, in brief, all the disadvantages of an alliance with none of its advantages. Such a situation should never be allowed to occur again. If we are now forced to carry alone the burden of defending Formosa, we can at least stop wasting subsidies on European countries that seem apathetic even about defending themselves.