THE Western world is now confronted with two kinds of major economic problems. The first is comparable with what was presented after the First World War; it is that of diagnosing and curing defects in our economic system and customary principles of policy. The second is a novel one; it arises from the competition between the Western world and the Communist world in armaments and in economic influence on other countries.

To equip themselves for this competition, as well as for other reasons, the countries of the West will need to consider, with the aid of recent experience, both what reforms in their own system will strengthen their resources and what is the best economic strategy to adopt in their external relations.

If actual war is averted, the issue will depend upon the demonstrated success of the two rival economic systems, both in their impact on other countries and in what is seen to be their ability to provide their own peoples with what they want.

The leaders of the Communist world, whatever else in Marxian doctrine they may have forgotten or abandoned, still apparently believe that the Western or "capitalist" system is destined ultimately to perish of its own intrinsic conflicts, and that therefore all they need to do is, by skillful policy and use of opportunities as they arise, to accelerate the process. Doubtless they are now watching, with special and eager interest, the visible strains within the Western system and its attempt, under American leadership, to arrest the development of the present recession into a serious depression and to remove the causes which will otherwise lead to a recurrence of it. It is with this in mind as well as more immediate anxieties that current issues of policy must be faced.

Rather more than 12 years have passed since the end of the second great war. It is now becoming more possible to distinguish between the merely transitional problems of a return to peace conditions and those which reflect deep-rooted defects in the economic system of the free world.

It was about 12 years after the first war that, in spite of a remarkable recovery, the world fell into the great depression. Happily the present situation is in very important respects more favorable than that of 1930. The main causes of the disaster of that time, as we shall see, do not now exist. Nevertheless this year's recession, after the long and almost continuous expansion which preceded it, appears to reflect both weaknesses in our economic structure and errors in the principles which determine our policy. Some of these recall past experience while others are novel, at least in their relative importance.

Successive crises during the last year have confronted the statesmen and financial authorities of the principal Western countries with difficult issues of policy. There was the devaluation of the franc, reflecting a serious deficit in France's balance of payments; there was the struggle in Britain against inflation and the threat to sterling; there was the puzzling conjunction in America of inflationary and deflationary tendencies, of rising prices and falling employment. Then came the recession, marked by rapidly mounting unemployment figures and (ominously recalling the earlier depression) a sharp fall everywhere in commodity prices, with great loss to the primary producing countries on whose custom the exports of the industrial world so largely depend.

While this recession lasts--and it is still uncertain how long, how deep, how wide it will prove to be--the effort of all concerned will doubtless be concentrated on dealing, by improvised measures, with the immediate difficulties it presents. But when this exceptional period of emergency is past, the time will be opportune for fuller inquiry, in a longer-term perspective, of the more enduring problems which are likely to confront us for many years.

The purpose of this article is to discuss these two major problems, the internal and the external, and to suggest, very tentatively, the direction in which answers to some of the more important questions they raise should be sought.


It will be a convenient preface to what follows about possible changes in our present system and doctrine to recall the issues of policy which faced statesmen and financial authorities in the years following the first war, the decisions then taken and their consequences. I was at that time engaged in work at Geneva which brought me into intimate association with the influential members of the League of Nation's Financial Committee and also with the central bankers and treasury officials on both sides of the Atlantic; and I remember the objectives of the relatively small number of men who then shaped the course of events.

The war had been such a shattering and unprecedented experience that it seemed a sufficient explanation of the troubles from which the world was suffering when it ended. The material destruction, the dislocation of world trade, the burden of war debts, both internal and external, the depreciation of currencies by war finance, were in themselves so great that they obscured any more profound and lasting damage to the old economic system which had originated before the war itself. It was therefore natural that reconstruction was thought of in terms of restoring the old foundations and rebuilding on them to the old design. By comparison with 1919, the world of 1913 seemed to most of us a paradise from which we had been banished for a time by a flaming sword and to which we could hope to return now that the sword was sheathed.

Our effort therefore was to win our way back to what had been lost, and this was attempted by seven separate but converging paths.

Capital equipment had been destroyed and its normal renewal had been interrupted; the arrears must therefore be made up. The old automatic adjustment of supply to changing demand by competitive prices had been impaired, and largely replaced, by state controls; the conditions under which the old system could function again must therefore be reëstablished. Currencies, under the stress of war finance, had broken away from their metallic anchor and had ceased to have any stable relation to each other; the gold standard must therefore be reëstablished and national budgets be so reformed that it would not again be destroyed by the printing press and "borrowing from the bank." Normal trade channels had been blocked by that most extreme form of "protection," the blockade and the submarine, and their resumption impeded by new and high tariffs; so tariffs must be reduced and then made more stable. The world's financial structure had been overburdened by the two great international obligations of reparations and inter-allied debts; a great effort must be made to limit these debts and make them compatible with adequate new foreign investment. Some countries, such as Austria, Hungary, Greece and Bulgaria, had been so weakened and exhausted that they could not unaided keep in step with the general recovery of Europe; the stronger Powers must therefore combine to help them. Only in one respect was it seen from the first that a radical change must be made in the prewar system, and that was primarily political, not economic: the League of Nations was created.

Here along seven lines was a consistent and comprehensive policy which apparently promised success.

And in a decade success seemed to have been achieved. The prewar system had been reëstablished; prewar standards of prosperity had been surpassed; currencies were again linked to gold; there was once more a stable medium of exchange for both internal and external transactions, and world trade had recovered. Reparations for some years poisoned international relations and impeded recovery, but with the Dawes Plan of 1924 a final settlement seemed to have been reached; and capital was flowing freely (alas! as it proved, too freely) from capital-forming countries to those needing development. The weaker countries had been reconstructed, largely through the dramatically successful efforts of the League. And behind economic reform was equally notable political progress. Hitler had made a momentary appearance soon after the war, but in the period of prosperity which followed the Dawes Plan he, and the forces which he represented, had disappeared from sight. Europe's central problem of relations with Germany seemed near solution with the rapprochement that found expression in the Locarno Treaties and Germany's welcome into membership of the League. Free political institutions had been established in Germany, Poland, Austria, Czechoslovakia and elsewhere; and except in Italy there was no notable instance of a previously free constitution being replaced by dictatorship. The League of Nations was fulfilling its task and seemed likely to continue to do so. 1929 seemed the threshold of the land of promise--not the edge of the abyss.

What followed afterwards was thus not a simple tragedy of failure. It was the deeper tragedy of illusory success, collapsing into disaster through hidden weaknesses, but so dazzling while it lasted as to persuade all but a few critical minds of its permanence. Not to recognize this--and it is too rarely recognized--is both to do injustice to those who shaped policy some 40 years ago and to neglect a warning which may now be salutary.

There was the devastating collapse, in rapid succession, of the normal economic structure of trade, of the world's financial system, of parliamentary government, of the new international institution, of peace itself. A decade of recovery was followed by a decade of collapse--into a second war.

The weaknesses which account for the collapse quickly became visible. The gold standard to which the world had returned proved at once too rigid and too weak. There was no institution like the present International Monetary Fund, with its real, if inadequate, power to give emergency help to a currency in distress. As a country's balance of payments deteriorated it could only restrict its imports, and thus spread the trouble to other countries, or adopt deflationary policies which caused unemployment and evoked strong public resistance--or allow its currency's link with gold to snap.

The inflation in so many countries during that period was somewhat different from recent inflation in that it was usually due to the use of the printing press (or "borrowing from the bank") by governments to eke out deficiences in their revenue. It could be, and for a time often was, checked by the government, but at the cost of great strain and hardship; and at last the strain became in some cases intolerable. Germany, for example, which had a vivid memory of the misery caused by the fall of the old mark, was determined to preserve its new currency at any cost; and the cost was heavy indeed, for it was Brüning's extreme deflationary policy that gave Hitler his chance to return. In all cases the responsibility for supporting a currency rested solely on the particular country. Countries which had such a positive balance of payments as to impair dangerously the currencies of other countries did not recognize even in theory, still less in practice, any obligation to take complementary action to reduce the strain.

Even more serious was the burden of international debt. After some years during which the governmental debts, reparations and the allied loans had disastrously impeded recovery, this burden had been at last relieved in 1924. The consequence, however, was an orgy of irresponsible and reckless lending through private channels. In the general optimism following the Dawes scheme and the subsequent burst of prosperity it was easy to float loans which were eagerly bought by a credulous public. In a vast number of cases the issuing houses were content to sell to the public and get out, without recognizing any responsibility for ensuring that the loan was used by the borrowers for productive purposes or that they were likely to meet its service. There was neither governmental control nor generally accepted doctrine to distinguish between good and bad loans. The consequent mountain of international indebtedness in 1929 and the following years broke the general financial structure of the world, submerged good loans with bad, stopped normal and necessary investment, and forced many banks, especially in America, to suspend payments. And it was this collapse of the financial structure which converted the economic depression, which would otherwise have been serious but not fatal, into a world catastrophe.

Lastly, governments and financial authorities had not then accepted as orthodox the methods, already being advocated by many economists, by which depressions could be foreseen, partly prevented by timely strictness during boom and mitigated by laxer policy when they came.

It was a combination of these defects in institutions, in doctrine and in policy which explains the ultimate failure of the temporarily successful efforts made after the first war; the frustration of all the hopes of the five years' period of boom, from 1924-1929; the catastrophe of the following years.


To recall this earlier experience is to remind ourselves how different is the situation of 1958 from that of 1930. No mountain of international debt now weighs on the financial system. Allied indebtedness during the second war was averted by lend-lease; what was borrowed outside the scope of that great act was offset by Marshall aid and other forms of help; what remains is of a less dangerous character. While some reparation in kind was exacted from Germany, no attempt was made by the victorious allies to saddle her again with a large cash debt. Indeed, the amount poured into Germany from 1945 onwards for reconstruction immensely exceeded any reparation in kind exacted from her. Moreover, the world's financial structure, thus relieved of the burden of governmental indebtedness, was not, as it had been before, burdened by reckless private loans. The public and the financial institutions concerned had learned their lesson. After the collapse of 1931 the banking system of America had been placed on a sound foundation. The disastrous speculation on the Stock Exchange in the 1920s, on margins and borrowed money, was prevented from reappearing on any similarly dangerous scale by new safeguards and acts of policy. There is now, too, a much greater mass of built-in support for continued expenditure in time of recession in the form of pension schemes, investments by insurance companies and defense expenditure.

In all these respects the present situation is much more favorable. It must be borne in mind, moreover, that the defects in the prewar system discussed above were not only among the causes of the great depression; they were the main causes. Nevertheless there remain serious weaknesses and dangers in our system, as we have been sharply reminded by this year's recession.

Attention is at this time naturally concentrated on immediate anxieties. The tonics and tranquillizers now available for use in depression and boom are more numerous and less distrusted than a generation ago, and some have been tested in practical application (though their possible after-effects may still be open to some doubt). The tonics include a resort to deficit budgets, with both additions to government spending and reductions of taxation, and the supply of easier money in various ways to encourage both consumer expenditure and business enterprise. They doubtless will be used, as each changing phase of the recession seems to require, until they become unnecessary through the resilience of natural recuperative forces.

When the immediate emergency is past, however, the deeper causes of the recession will doubtless be the subject of full inquiry and study, both official and academic, in the light of recent as well as earlier experience. Both inflation, in the somewhat different form in which it has appeared in recent years, and the technique of averting and arresting depressions will occupy the center of the stage. They need not be further stressed now. It is more useful to emphasize a third problem which has hitherto received less attention than its importance merits.

In the environment of economic organization and policies within which it works, the present currency system on which world trade depends is dangerously unstable. The great difference in the size and strength of the present economic units makes some currencies which are of great importance to the economy of the West very vulnerable and subjects them, recurrently, to excessive strain. This is an international problem because of the far-reaching effects of sudden devaluations or of desperate measures to avoid them and because only concerted policy, novel at least in the scale of its application, can give a solution.

The main root of most of the impediments to external trade since the last war, such as quota restrictions or inconvertibility of currencies or forced devaluations, has been the disequilibrium between the dollar and the non-dollar world. This is both serious and likely to be long-lasting, as the cumulative result of several factors. The American economy is not only the strongest in the Western world but also the most dynamic and most rapidly advancing. If it were simply the strongest, a stable basis of trading would be established through a compensating difference in living standards, wages and therefore wage costs. But as it is also the most dynamic, a new equilibrium thus attained is constantly liable to be again upset. In the second place, what the non-dollar countries buy is (with some exceptions) more essential to their economy than imports are to the United States. Moreover, the external trade of the United States, though important in relation to that of the rest of the world, is only a small part of its own economy, and government action affecting it is likely therefore to be determined to a greater extent than elsewhere by the condition of the internal market, especially in time of depression.

For the same reason the impact of an American tariff is likely to be disproportionately greater on smaller industrial nations. Nor is any surplus in America's balance of payments likely to be corrected, as it has been in the case of other surplus countries in the past, by a large outflow of private investment. There has indeed been very little of such investment (with the investors bearing the risk) except for oil and mineral development or for the establishment of subsidiaries of American companies or in special areas, Latin America and Canada. It was indeed natural that an American investor who could get 6 percent in good equities at home should not take the additional risks of political disturbance and currency trouble involved in investment abroad. The massive aid of the United States Government through the Marshall Plan and in other forms has, in addition to its direct purpose, made such a precarious equilibrium possible as to preserve reasonable stability in most other currencies. It cannot, however, be expected that such philanthropic aid will continue and increase sufficiently to prevent dangerous disequilibria from developing again.

The logic of the balance of payments is, however, inexorable. Nothing can prevent such adjustments in the credit and debit items, capital and current, as will make them, at all times, and for every country, cancel out to zero. Thus so far as there is a gap in any country's balance of trade it can be bridged only by credits of one kind or another, or by gifts, or by increases of exports, or by a depletion of reserves, or, so far as these do not suffice, by a reduction of imports. A continuance of this process will inevitably not only upset the stability of the weaker currencies, and prevent their convertibility, but will destroy such measure of regional convertibility (through the E.P.U. and in the sterling area) as has hitherto been maintained and on which a very large proportion of world trade has depended. It follows that, after a short and disastrous period of depletion of reserves, the position will be reached in which any remaining gap in the current balance will inexorably compel an equivalent reduction of the American exports which would otherwise be sold. In other words--once this point is passed--if an American tariff or a subsidy to a particular class of exports, e.g. shipping, reduces foreigners' dollar earnings by x dollars, other American exports of what would otherwise be sold abroad competitively under free conditions (e.g. such manufactured goods as automobiles) will then be reduced by exactly x dollars. Thus the aid given to particular industries, by tariff or subsidy, will then be exactly matched by equal loss to other industries--apart from the loss to the American consumer through higher prices. Other factors are involved, of course, but at least it is well to bear in mind, as part of the background to every problem, this inexorable logic of the balance of payments.

Along what lines, then, should a solution be sought for the long-term problem of the dollar disequilibrium which will otherwise make the basis of all currencies and of world trade permanently unstable?

A primary responsibility, of course, rests upon the countries with the weaker balances and more vulnerable currencies. In the long run, the attempt to create a larger economic unit in Western Europe, through the Common Market of the six countries and the "free trade area" including the further eleven, might give an ultimate solution. But at best the first will become fully effective only over many years; and the second, without which the smaller union will be insufficient, is the subject of difficult negotiations with the issue still uncertain.

In the meantime it must be expected that the pressure of the stronger dollar on the weaker currencies of smaller economic units will continue. If each country must shoulder by itself the task of defending its own currency the strain evidently will prove too great.

The way in which the strain will reach the breaking point may be illustrated by the case of the sterling area. The benefits which this system brings to the members of the area as a whole, and the strength which it adds to the economy of the West, are immense. If the system collapsed it would be difficult to replace it--perhaps impossible without great loss to the whole free world. But there is now serious question whether it can be maintained under present conditions. The positive margin in Britain's balance of payments and her exiguous and precarious reserves are insufficient to meet her other commitments and at the same time to serve as the central reserve of the sterling area. Various proposals have been made to cope with the situation which is developing, among them extra support in varying forms for the sterling area system, with perhaps some wider sharing of the responsibility for its management; and an enlargement of the resources and functions of the International Monetary Fund. These are items which would need to be carefully considered in the wider inquiry proposed above.

I suggest that more important than any such specific reforms is the need (now gradually coming to be recognized, but very inadequately applied in practice) of a basic change in the accepted doctrine governing international economic relations. The world has departed from the nineteenth century form of gold standard and consists of tariff-protected economic units of widely different size and strength. In this world the old principles of policy--"most-favored nation," "no discrimination"--are either obsolete or inadequate. The present precarious equilibrium and currency system cannot be maintained unless countries with excessively positive balances of payments take as definite steps to redress the inequality as do the countries which have an adverse or inadequate balance and are struggling to maintain their currencies. Disequilibria can be redressed only by complementary and differential action on both sides, not on one side alone. This change of doctrine has already received some recognition. In the European Payments Union, for example, countries with an embarrassingly strong balance have recognized the obligation to proceed further with liberalizing their external trade policy than their fellow members; and in the sterling crisis of 1957 it was noticeable that simultaneously with the increase in the United Kingdom bankrate there were reductions of the rate in Germany and the United States, the strength of whose currencies was imperiling the pound. These are limited and slight examples of the growth of a new doctrine which may prove of vital importance. It would perhaps be the principal item on the agenda of a general survey.

For the moment this question is partly obscured by the urgent problem of arresting a depression and by the fact that some of the measures which would be required by the application of the above doctrine are identical with those likely now to be taken by the United States as anti-depression measures. This does not apply, however, to such measures as the lowering of tariffs. And in any case the problem just discussed will remain long after this year's menace of a depression has been dealt with or has passed away.

Here, then, are some of the reforms needed to strengthen the economic system of the West. The repair of its present weaknesses is not only required in the interests of those who live within it; it is now also the prior condition of meeting successfully the challenge of the rival system.


To meet this challenge it will not be enough for the West to strengthen its own system. A well conceived strategy and a skillful technique in the provision of aid are also necessary.

The West must of course present its own system in such a way as to make it more attractive than the alternative offered by the Communists. This is much more than a matter of propaganda and salesmanship. The West must really develop what is best in itself in addition to presenting its best aspect.

The Communist world starts with some advantages. The personal freedom and rights which rank so high among the benefits given by the Western system to its own citizens are much less highly valued by most of the uncommitted peoples, who have never known them, than the material increase in living standards which the Communists can plausibly promise that their system will give more quickly. Secondly, the demand for "independence" is politically more powerful than either a desire for personal freedom or even for material gain. This is proved by the extent of the reaction against "colonialism." As practised by the Western empires at least, colonialism brought immense material benefits, which with independence are likely to be lost or reduced. Further, it is of course a disadvantage to the West that the uncommitted countries of Asia think of colonialism in connection with the Western empires, which they have seen, and not with the much harsher Communist imperialism of which they have had no similarly direct experience.

These initial handicaps increase both the need and the difficulty of devising and applying an appropriate strategy. It must be flexible and capable of adjustment to the varying psychologies of the different uncommitted and hesitating peoples and to changing circumstances. For this reason it is impossible now to suggest anything like a detailed "plan of campaign." All that can be done is to suggest the requirements which different and successive plans must satisfy and the methods of forming and adapting them.

Financial help, however generous, rarely wins gratitude and friendship--and this is at least as true in the relations of nations as of individuals--unless the benefit is real and obvious and unless, in addition, the manner of giving is such as to spare the recipient's sensitive pride and minimize any feeling of inferiority or dependence. In most underdeveloped countries the value of aid is limited by the inadequacy of the local administration. Large sums merely handed over to the government, even if not corruptly diverted to improper purposes, may be largely wasted through inefficiency. In some cases, too, there is an obvious danger that a country will play off West against East and ultimately use the aid given by the West in such a way as to make it, from the Western point of view, worse than useless. Thus technical assistance, and proper conditions and supervision, may often be essential if financial help is to yield its fruit in either material benefits or improved political relations. Sometimes a foreign expert (like the present American member of the Iraq Development Board) may be accepted in the direct service of the national administration and accorded the same executive power as the national members. Where this is possible he is likely to be much more useful and effective than if his relationship were only that of an external adviser. No form of technical assistance is likely to be so well worth while as a financial supplement to enable really first-rate men to accept such positions.

But more often technical assistance will be in the form of expert advisers. The advisory relationship is a delicate one which requires personal qualities not possessed by many who would be highly competent at home in their own national service. Much depends, however, on the character of the task. Expert advisers for a temporary and technical job such as building a bridge or a road or helping to establish a policy for dealing with specific agricultural problems are likely, if well chosen, to be of great value. On the other hand, a foreign official with many years experience in the civil service of his own country is much less likely to be able to adapt his experience to a country in which officials have to work within a completely different social, economic and political environment. There is also some danger that a large number of foreign officials, who with their wives and families form a distinct and comparatively large community in a small capital, may be a perpetual reminder of dependence.

To take advantage of opportunities to supply experts either for executive or advisory posts, administrative arrangements need to be made beforehand. Lists of suitable and available experts of many kinds must be kept constantly up to date and there must be machinery for selection and for the provision of such supplementary financial inducements as may be appropriate. The World Bank has much relevant experience to offer in this connection.

Governmental action should not be such as to discourage private investment in the sphere where the latter is more appropriate. After the first war private lending was excessive and reckless; now the opposite weakness is conspicuous. This is in part due to the fact that the policy of such official institutions as the Export-Import Bank is apparently not based on any clear distinction between what is appropriate for public and private investment respectively, and often undercuts the latter by offering lower and essentially uneconomic rates. There is a wide sphere, of course, in which public lending is essential and private investment impracticable. But there are also many cases where a particular enterprise, with both substantial prospects of profit and some inevitable risks, could well afford to pay a rate sufficient to attract private lending or investment. In such cases there is a double advantage in the private system being given its opportunity. In the first place, there must obviously be limits to the total amount of taxpayers' money and commitments; secondly, private lending and investment escape some of the political and other dangers involved in official action and the use of public money. Official policy should be reviewed and directed towards encouraging and not handicapping private investment in suitable cases. At the same time, it is desirable that there should be arrangements to secure at least informal consultation between private investment institutions and the administration, so that the former may benefit from the advice and information which are available from official sources.

A reform of policy of the kind suggested must of course be based on the best available expert advice, both diplomatic and economic. In the first place, there are ambassadors and their staffs in each local capital. The selection of persons of the requisite experience for diplomatic service in underdeveloped countries may be of even greater intrinsic importance than for the more-sought-after capitals of great countries where policy is more likely to be influenced by direct contact between the ministers of the respective governments than by ambassadors. There is also now a wealth of expert advice available from those who have had direct experience of assisting in development work in different parts of the world.[i] Especially valuable are the advice and guidance that can be obtained by private consultation with officials carefully selected from the large numbers who have been engaged in distributing aid from the United States or other Western countries or in providing technical assistance through the United Nations, through national organizations, or the World Bank. The experience thus available urgently needs to be crystallized into doctrine, subject to constant review and modification, and then widely applied.

It is difficult to overestimate the extent to which the practical and political value of the financial aid and resources provided by the Congress could be increased by such study and review and consequent improvements in technique and method.


The assumption that the competition between West and East will be on the economic and not the military plane is of course predicated on the hope that the annihilating power of the ultimate weapon will continue to deter both from its use. If we survive the perils of this first and most dangerous period, when each side is feverishly competing to improve its nuclear weapons and the equipment to launch them, a better prospect may begin to open before us. What can we foresee as the possible, if precarious, stages of advance toward a less insecure world? Long-term objectives of policy may help us in the choice of our first steps.

When it becomes evident to both sides, beyond hope or illusion, that each can destroy the other, both may realize that "enough is enough" and that it is useless to go on with the present increasingly expensive experiments and to add to the then sufficient stocks of atomic bombs and equipment. This would at once relieve the burden on both economies, and perhaps work a change in the psychology of the Communist as well as the free world which would help to transform the conflict into a less dangerous form. Conditions might then become more favorable for achieving a phased and controlled reduction of armaments, with each phase preserving the balance of power, but at a lower level. The next stage--if we reach it--would be one in which, as the available economic resources on both sides increase, the cold war would more and more concentrate on economic competition. This economic rivalry would doubtless still be hostile and perilous. Both sides would bid for the uncommitted areas, and some methods adopted by the one would be bitterly resented by the other. But these very methods might well become increasingly unattractive to the countries whose favors are sought, sensitively jealous as they are of any impairment of their national independence.

At this stage the West could perhaps take much of the venom out of the economic conflict by publicly proposing to channel economic aid to underdeveloped countries through a strengthened organ of the United Nations, to which both the Western nations and Russia might make equal contributions. If the offer were accepted, the economic competition would take a less dangerous form; if it were rejected, the West would gain in the eyes of the uncommitted world. The rivalry of the two systems might even begin to provide an incentive to each to develop what was best in it, and most attractive to others; and incidentally to reduce the difference between them. In the end the issue would turn upon the demonstrated success of each system in giving what its own citizens most want and other peoples most envy. In such a competition it rests with those who live within the system of freedom and free enterprise to ensure its success.

Every stage of such an advance must of course be precarious and subject to reversal. But assuming we survive the first one, each successive stage will be less dangerous and will generate forces which will help progress to the next. Such a prospect, even if it seems now both doubtful and distant, may perhaps give us who live within the free world an incentive to develop the best that is in it, and to show this best to others.

[i] Much of it has been published, e.g. Maurice Zinkin's "Development for Free Asia" (Fairlawn, N.J.: Essential Books, 1956) and a recent pamphlet by David Blelloch ("Aid for Development," London: Fabian Society, 1958) who has worked with technical assistance missions in South America and the Middle and Far East.

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  • LORD SALTER, P.C., Secretary of the Allied Maritime Transport Council during the First World War; Director of the Economic and Financial Section of the League of Nations, 1922-31; Parliamentary Secretary to the Ministry of Shipping, 1939-41, and afterward Head of the British Shipping Mission in Washington; Member of Parliament for Oxford University, 1937-1950; Minister of State for Economic Affairs, 1951-52
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