New Economic Policies for the West

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THE fact that foreign policy was a dominant issue in the 1960 Presidential election is probably evidence enough that our foreign economic policies should be critically reëxamined, particularly as they apply to the developing countries. The gap between the economic philosophies of the developed and underdeveloped countries seems to be widening and in most of Asia, Africa and Latin America the expectation of rapid economic development has not been fulfilled. The fact that some of the most dedicated and optimistic practitioners of development call for a large increase in economic aid to achieve an average increase in income of only $2 to $6 per head per year in the developing countries is evidence not only of the intractability of the problem but also of a desperate need for drastic changes in our thinking.

A French economist who had been through the best graduate schools both in his own country and in the United States, and who has had several years' experience with the economic development problems of Middle Africa, recently offered a disturbing appraisal. "Nothing that I have learned," he said, "is of the slightest use to meet the problems of economic development of these countries. And most of the present priorities that everybody gives to their problems are wrong." There is indeed considerable evidence to support the view that the critical breakthroughs in this field of knowledge and policy have yet to be made. The following personal observations, some of which will be anathema to my professional colleagues, represent an attempt to point out some new paths of policy.

The goal of foreign economic policy is to contribute to our foreign policy objectives. From this point of view, the most important goals of foreign economic policy are these:

(a) to promote maximum unity, strength and sustained growth in the free world and especially among our strongest allies. These are mainly the Atlantic countries and Japan, which are the great reservoir of capital, technology and skills in the free world;

(b) to influence developing countries in so far as possible toward the kind of liberal economic system of which we are now part, and away from that of the Soviet bloc, by realizing the rapid development which can be derived from coöperation with the liberal system of the West;