Some Fallacies of Foreign Aid; W. H. Chamberlin

SOME FALLACIES OF FOREIGN AID tll WilliamJJen'1l Chamterlin SPRING is open season on the hardpressed American tax payer for that annual raid that goes by the name of for eign aid. (The preferred official characterization is "mu tual security.") The pattern of this raid is familiar. The Administration sets a figure (in this year a little short of $4 billion) and protests that the most disastrous con sequences will follow if a penny less is appropriated. On behalf of its program, it mobilizes the big guns of the State Department, the Pentagon, and. other gov ernment departments and agencies. Congress-well aware of the widespread unpopularity of this program among constituents-listens a little skeptically, prunes a little here, clips this or that item, but ends by voting most of what has been requested. What has not been chal lenged as vigorously and effectively as it should be (al though the Citizens Foreign Aid Committee has made a promising begin'ning in this direction) is a set of dog matic assumptions which are supposed to justify lavish Mr. Chamberlin is the well-known author, lecturer, and con tributor to the Wall Street Journal and many nationally known magazines. His most recent book: The Evolution of a Conservative (Chicago: Henry Regnery Co.).

233 234 WILLIAM HENRY CHAMBERLIN handouts to foreign governments. Among these assump tions are: • That foreign aid saves foreign nations from "going communist." • That it increases American security, prestige, and popularity. • That it promotes international trade and prosperity and world peace. These assumptions overlook certain grave disadvan tages, both to givers and recipients, which seriously un dermine the effectiveness of government-to-government subsidies. They also do not stand up to the-test of prac tical experience. The dispensing of foreign aid in the shape of money and materials given freely to foreign governments has become a major bureaucratic enterprise. It employed 450 people in 1948. Ten years and $41 billion later this staff had grown to 12,000 directing 2,000 projects. In addition, some 9,000 persons are engaged in supervis ing the military assistance program, which has amounted to .$23 billion.

Poor Plans Poorly Executed_ There is an obvious yawning gap between the quali ties necessary for successful administration of aid proj ects-often in countries which, in history, language, and customs, are extremely un£amiliar to most Americans and the available personn.el. An advisory group, headed by William H. Draper, Jr., former Undersecretary of the SOME FALLACIES OF FOREIGN AID 235 Army, which came out with a strong endorsement of foreign aid, and which was probably selected because most of its members are known to favor the idea, made this significant admission: "We have not developed the well-trained corps of per sonnel required to carry out such a far-flung program with absolute efficiency. Some projects have been im perfectly conceived, inadequately planned, and poorly executed." This seems to err considerably on the side of under statement. The defects pilloried in the novel, The Ugly American" were drawn from the life of American for eign missions, not made up in the authors' imagination.

Among these defects are insensitiveness and ignorance in regard to local manners and customs, aloofness. from the life of the people among whom the work is being carried out, and a tendency to live in self-created American ghettos as closely modeled on Peoria, Du buque, and other American towns as possible. There are just not enough qualified people to go around for the ef ficient operation of a giveaway program in the neigh borhood of $4 billion a year. What can happen to your tax money and mine when administration is loose and slipshod is evident from this excerpt from the report of the House Committee on Government Operations about aid to Iran: "Dnited States aid and technical assistance programs in Iran which, between 1951 and 1956, totaled a quar ter billion dollars, were administered in a loose, slip shod, and unbusinesslike manner ... It is now impossi236 WILLIAM HENRY CHAMBERLIN ble-with any accuracy-to tell what became of these funds."

Another example of "down the drain with the tax payers' money" was the financing of an ultimately un successful French colonial war in Indo-China to the tune of $745 million. After the military disaster at Dien Bien Phu, the French threw up the sponge and Indo China was partitioned between a communist-ruled North and an anticommunist South. Only some $95 million of the $745 million was ever recovered. The scandal about corrupt misuse of overlavish aid to the primitive state of Laos, adjoining Indo-China, is notorious, although the International. Cooperation Ad ministration was not very cooperative in furnishing con gressional investigators with detailed information on the subject. Even when no direct wrongdoing or culpable negli gence is involved, there are serious psychological road blocks in the way of effective American remolding of the economies, social customs, and daily lives of Oriental peoples. rThe missionary spirit, when it is a matter of unselfish individual dedication to a religious, educa tional, or philanthropic cause, is a fine element in the American heritage. But the missionary spirit, bureauc ratized and supported by large appropriations of pub lic funds, is something else again. Here is an excerpt from a recent report of Vermont C. Royster, editor of the Wall Street Journal, on a recent visit to Thailand, perhaps still better known as Siam: "Consider that here is a country which, for all that SOME FALLACIES OF FOREIGN AID 237 it may be backward by American standards, has man aged to get along for a thousand years without United States dollar aid or United States aid. advisers. Its peo ple are proud of their independence, their tradition, their own way of life, and are probably as successful in the pursuit of happiness as any people can be.

"Yet here come the Americans with a program which, when you look at it, would remake the country from one end to the other, from top to bottom. There is no area of Siamese life-schools, farms, business, language, homes, government, customs-left untouched in some fashion by the United States aid program. uN0 one, be he a visitor here among the ancient tem ples and palaces or a stay-at-home reading about it, need be surprised that a program so conceived rubs many Siamese the wrong way. Certainly, the evidence of it is not hard to find. . . . "One friendly Siamese, with a twinkle in his eye, put it to his American visitor this way: 'I suppose we ought to be glad that you are helping us, but we do wish you wouldn't help us so hard.' " Backfire in Bolivia The reaction to American largess is sometimes much more negative than this tepid, good-natured criticism. Consider the case of Bolivia. This land-locked South American country, located on the high Andean plateau, has a long history of economic poverty (much of the population is composed of primitive Indians) and politi238 WILLIAM HENRY CHAMBERLIN cal disturbance. In 1952, Bolivia experienced a left-wing revolution and has been in economic hot water ever since, despite United States handouts to the radical re gime in power to the amount of $129 million- $43 to every Bolivian.

Two measures of the revolutionary government were nationalization of the tin mines, principal source of Bo livia's wealth, and splitting up the large estates to pro vide small holdings for the Indians. Neither has worked well in terms of productivity. There have been con tinual, sometimes violent, strikes in the tin mines. And the Indian small proprietors, whose wants are few and simple, show a tendency to knock off work as soon as these are satisfied. The climax was reached in Bolivia when-because an American weekly magazine published an unfavorable picture of the economic situation and quoted an un identified American diplomat as jokingly suggesting that Bolivia and its problems should be divided among its neighbors-mobs went on the warpath in La Paz, the capital, and other Bolivian towns. The United States Embassy was stoned. Diplomatic cars were burned. American citizens were evacuated to the suburbs for bet ter protection. And the Bolivian government, whose members should have known that the United States gov ernment is not responsible for comment in American publications, filed formal protests with the State De partment.

This is not the first case when violent anti-American demonstrations have followed large American subsidies.

SOME .FALLACIES· OF FOREIGN AID 239 Part of the fault, one suspects, may rest with the new fangled timid pussyfooting reaction to such outrages. There was a time when stiff diplomatic action would have followed the desecration of the American flag, at tacks by lawless mobs on American official representa tives and American official buildings. Now, all too often, the reaction is a nervous self-questioning as to whether our foreign aid program to the offending country was big enough, whether we should not think out some new handouts. That is not the road to friendship and respect. A pointed comment on the dismal failure of our Bo livian policy is to be found in a letter published in Time by Roger A. Freeman, who was fiscal adviser to the Bo livian government on a special United States mission in 1956-57: "I returned with the conviction that a continuation of United States aid policies would lead to further eco nomic and social deterioration and disaster .... The real power is in the hands of the armed and communist ..

led mine workers unions who will not permit the steps necessary to economic recovery. United States aid policy has, for the past six years, been strengthening their hand." Whatever may be the answer to Bolivia's economic and social problems, lavish American aid has accom plished rather less than nothing. It has not improved American prestige or popularity, rather the reverse. And it has not brought political or economic stabilization to Bolivia. If the United States did not exist or was not com240 WILLIAM HENRY CHAMBERLIN mitted by its government to expensive, far-reaching, and indefinite programs of subsidizing the economies of for eign lands, there is no reason to assume that under developed countries would vanish from the map, cease to exist, or "go communist." They might very well be in a stronger and healthier position if they were obliged to face their problems realistically, without the constant hope that America would bail them out of all their difficulties.

International Blackmail A distinctly negative by-product of the too easy as sumption that a plentiful transfusion of dollars is an easy way to check the spread of communism is the temp tation to try to exert blackmail. This occurs when· the representative of Backwardarea lets it be known-with more or less subtlety..,...that, unless his government re ceives a generous handout from the United States Treasury, said government will turn to Moscow. A na tion whose rulers are cynically prepared to sell out to the highest bidder is not worth buying, if only because there can be no assurance that it will stay bought. An incident that occurred in the spring of 1958 shows the dangers and pitfalls of undiscriminating handouts. A representative of the small country of Lebanon, which had already received $38 million in economic help, along with some military aid, announced that this was not good enough. The United States must provide $170 million in the next six years-or else. In the event that SOME FALLACIES OF FOREIGN AID 241 Uncle Sam did not sign on the dotted line, Lebanon would deliver a truly crushing blow. It would refuse American aid altogether!

Some Explaining Is N ceded Something must have gone astray with our diplomacy when a foreign government can get the idea that it is conferring a favor by accepting the largess of the Ameri can taxpayer. One wishes we had more diplomats like the representative of a private business firm who, when questioned by reporters in a Near Eastern country as to why the United States was not giving some additional requested aid, gave in substance the following friendly but frank reply: "Do you really understand who is paying for this foreign aid? It isn't the American government, which you think of as being so incredibly rich that a few hun dred million dollars makes no difference. It is average American citizens like my son and my son-in-law, whose families can't have meat every day, who must scrimp and save in many ways in order to meet the taxes which are the source of the aid." The businessman reports that his remarks produced a sobering impression. And the Austrian government, which, like other European countries, has long been in a position to stand on its own feet, acknowledged in the dedication of a report on the Marshall Plan aid its in debtedness to the American taxpayer. Too often, how ever, it is assumed that money grows on trees in the 242 WILLIAM HENRY CHAMBERLIN United States; and this attitude in foreign countries is encouraged by the more reckless advocates of unlim ited foreign aid among our politicians and publicists.

It is a good thing that the advocates of foreign aid no longer have the field to themselves, that organizations like the Citizens Foreign Aid Committee are bringing to attention the argument against this substantial item in the national budget. The principal concrete sugges tions of this organization are as follows: • That our traditional generous private charity and governmental grants to relieve disaster be continued. • That in countries which we are morally obligated to defend and which are directly threatened by Red ag gression military assistance-for the time being-should be continued, but on a realistic basis. • That until foreign aid is terminated, the Congress take steps properly to exercise close supervision and control over the manner in which all foreign aid funds are being spent. • That the $3.9 billion requested by the President for the fiscal year 1960 be reduced $2 billion, and that each year thereafter foreign aid be substantially re duced until terminated within three years.

Foreign aid is no adequate substitute for self-help. A nation, like an individual, stands straightest when it stands on its own feet.