Truman's inaugural address, 1949.
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Widening Boundaries of National Interest [Excerpt]

IN A few paragraphs, the fourth point of President Truman's inaugural address in January 1949 phrased a concept that sparked an electric response along the great circuit that links the minds and imaginations of human beings throughout the world. The concept was basically simple. It declared that:

1. Mankind for the first time in history possesses the knowledge and skills to make his environment yield an adequate and progressively improving return to all peoples.

2. Despite this knowledge, more than half of the world's people still live under economic systems which provide less than minimum needs of food, clothing and shelter, and lack the promise of betterment.

3. Since the security and continued prosperity of the United States and other relatively industrialized nations can be maintained only if there is complementary progress in the economically backward areas, we should assume the leadership in a concerted productive effort which will promote both their interests and ours.

4. Basic to the accomplishment of this purpose is a flow of investment capital, carrying with it technical and managerial skills, to create and harness mechanical power and production tools and equipment so that they supplement the work of human muscles. Our policy should focus on creating conditions that permit and encourage such transfers, under procedures that avoid imperialism or any form of exploitation on either side, and are founded upon mutual respect and recognition of a mutual interest.

5. "Democracy alone can supply the vitalizing force to stir the peoples of the world into triumphant action, not only against their human oppressors, but also against their ancient enemies--hunger, misery and despair."

The wide and extraordinarily warm response invoked everywhere outside of the Communist world by this formulation of a new phase of American foreign policy merits examination. Seemingly, it stemmed in part from a recognition that we were thereby taking a further step away from our traditional isolationism. Our acceptance of a common interest between United States and Western Europe had been attested by our participation in two world wars and by direct military and economic aid, amounting to some 55 billion dollars, given to Europe during and after the second of these struggles. Point Four was a declaration that our interest included a concern for the well-being and progress of the entire world.

Furthermore, this interest was defined not in military or even in political terms. The pronouncement placed it squarely upon economic considerations that linked the continuing progress of our system to a correlative development in the economies of all democratic peoples. As a nation, we have 6 percent of the world's peoples and 7 percent of the world's land area, but more than half of the world's industrial output. Yet we possess only one-third of the raw materials, so that we depend upon others for a large part of our strength. These economic ties have a way of persisting through periods of peace, war or the uneasy half-war, half-peace, in which the world now lives.

Thus, the principles stated in Point Four were accepted as an assurance that we have moved from self-contained sufficiency to a recognition of our responsible partnership in a free-world effort. This emphasis has tremendous import. Its implications should be thoroughly understood here as well as abroad.

There already was no lack of evidence that the United States stood ready to coöperate with other nations in time of need. Over the past ten years the total of its military and economic assistance to other nations has amounted to the staggering sum of approximately 80 billion dollars. But the money was spent for emergency measures to meet successive crises. One after another, lend-lease, UNRRA, the United Kingdom loan, Philippine rehabilitation, Greek and Turkish, Japanese and Korean aid, the Economic Recovery Program, and even to a major degree our subscriptions to the International Bank and Monetary Fund arrangements agreed upon at Bretton Woods--each was submitted to and accepted by the people of the United States as something that must be done to avoid catastrophe, with a strong implication that once it was done the situation would be well in hand and our responsibilities discharged.

It is unfortunate that the presentation of the Point Four concept to the American public and the specific steps implementing it have taken a form that carries the dual connotation of a "give-away program" and one that is principally concerned with sending technicians abroad to offer advice. Humanitarian motives are deeply ingrained in the United States tradition and have been nourished by the religious and democratic heritage of its people. But the tendency to accept the giving of grants and advice as an all-embracing definition of what is implied in the Point Four program does a major disservice to its basic principles.

Such an interpretation narrows the broad pronouncement of community of interests put forth in the President's original statement, and it even now clearly whittles down the statement of purpose given to the program by Congress in Title IV of its Act for International Development (Public Law 535). In Section 403(a) of this law, Congress states: "It is declared to be the policy of the United States to aid the efforts of the peoples of economically underdeveloped areas to develop their resources and improve their working and living conditions by encouraging the exchange of technical knowledge and skills and the flow of investment capital to countries which provide conditions under which such technical assistance and capital can effectively and constructively contribute to raising standards of living, creating new sources of wealth, increasing productivity and expanding purchasing power." In a preceding paragraph [Section 402 (a)] it is stated: "The peoples of the United States and other nations have a common interest in freedom and in the economic progress of all peoples. Such progress can further the secure growth of democratic ways of life, the expansion of mutually beneficial commerce, the development of international understanding and good will, and the maintenance of world peace."

It is this emphasis upon community of interests that gives significance to Point Four as an important forward step in the evolution of our foreign policy. Once accepted, it is clear that any program for carrying out our intent must be broad enough to embrace all of the aspects in which our economy exerts important impacts upon the economies of others in the free world, not merely the giving of gifts and technical advice. It is equally clear that the program must be a continuing one--geared to the deliberate pace of economic development rather than to the bell-clanging rush of apparatus designed to put out fires.

The pressure of compelling political or security considerations will necessarily change the focus and the emphasis of our economic policies at home and abroad. The policy of Soviet Russia and her dominated satellites is to organize a tightly-contained economic area having the least possible trade with free-world areas. This necessarily restricts our community of economic interest to those countries outside the Soviet orbit. The militarily aggressive Soviet policy forces us at the present time to give precedence at home and abroad to those aspects of economic activity which will assure successful resistance to that aggression either through direct production of armaments or through correcting deficiencies that make certain areas peculiarly vulnerable to pressure from without or subversion from within.

But the aim of our foreign economic policy should remain constant--in peace, in emergency, or in war, if war cannot be avoided. If we live up to our pronouncements, we shall conduct our economic affairs as a whole in a way to further the healthy, balanced development and the progressively larger yield of the economies of all peoples who elect to belong to the free-world trading system.



If we look beyond the present emergency to our long-term economic prospects we see that the stake of the United States and Western Europe in an expanding economy throughout the free world is even more impressive. The United States accounts for more than one-half of the heavy industry production of the world, but it mines only about a third of the 15 basic minerals upon which such production depends. Even so, it is depleting its mineral reserves at an exorbitant rate. On balance, the mineral reserves now within Soviet Russia's effective control are larger than those available to the United States within her own borders and from other parts of the Western Hemisphere. Our industry will become increasingly dependent upon imports. If access to the raw materials of the underdeveloped areas were to be denied to us and to Western Europe, our current industrial outputs would be devastatingly affected. Unless development in those areas keeps pace, it simply will not be possible for the United States and Western Europe to continue to expand their economies in the future in the manner which has given them their strength in the past.

Thus both the security of our free world and our own continuing economic growth are dependent upon the development of the underdeveloped countries. But we should be under no illusions that we could, even if we wanted, expand them as raw material suppliers exclusively, retaining ourselves the more lucrative operations of transferring such materials into manufactures. The history of the United States shows conclusively how stubbornly the people of a nation and of its several segments insist upon the prerogative of diversification, and how wise they are to do so.

Thus while we must seek to expand the free world's raw material production, our policy must be sufficiently broad and sufficiently wise to encourage an industrial expansion as well. The chief incentive of the underdeveloped areas to produce additional raw materials for export will be the desire to acquire the exchange to purchase the equipment for building healthily-balanced economies. Initially they must purchase such heavy equipment from industrialized areas, since machine tools and machinery generally are the product of relatively mature economies. Eventually, they will produce such machines themselves. Those who fear the impact of such competition would do well to consider the volume of market demand if the billion people of the underdeveloped free-world areas could raise their per capita incomes from the present average of $80 per year to the $473 level of Western Europe or to the $1,453 level of the United States.



...If 3 billion dollars annually were directed wisely into crucially productive channels, if it were supplemented by additional grants or investments from other relatively advanced economies, if our procurement and export policies are handled with due regard to the interests of the whole free world--the tempo of economic advance in the areas in question would be, in truth, revolutionized. The hope of discernible progress would replace the despair of stagnation. And we should have gone far toward giving meaning to the institutions of democracy, and a sense of a living and deepening community of interest to free nations. [Full Article]

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