The outbreak of war in Korea, and the general heightening of tension and conflict in the Far East and other socially backward areas, have given even greater importance to the Point Four program, which hopes to raise submerged populations through technological aid. J. K. Galbraith, an enthusiastic advocate of the Point Four approach, here offers some specific recommendations aimed at making a good idea better.
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Few actions by an American Chief Executive ever produced a more whole-souled response than President Truman’s call in January 1949 for a “Bold New Program” to help the undeveloped areas of the world. Even the professional opponents of idealism were silenced by the warmth with which the proposal was greeted. To be sure, there were warnings against playing Santa Claus to the world—it is quite wonderful how this amiable saint has become in recent times the symbol of all that is foolish—but almost no one came forward to argue that we should tend to our own affairs and leave the Hottentots in peace and poverty.
One can only speculate on the reasons for this widespread approval. I have no doubt that in the main it can be attributed to good nature and generosity. However, it is also probable that some Americans saw a better justification for their own comparative wellbeing when it was accompanied by efforts to help those who are less fortunate. There were also a good many sententious pronouncements, which some people no doubt took seriously, that if we did not raise the world to our own level of living we would be dragged down to the level of the world. It can be assumed that fear of Communism, that great buttress to the golden rule in our time, had something to do with the endorsement.
Regretfully, it is also my conclusion that the popularity of the Point Four idea was associated with a sad misunderstanding of the problem of rendering assistance to less favored peoples. During the war a new and damaging phrase, “American know-how,” entered our vocabulary. A rough synonym for organizing, engineering, and mechanical experience, it has gradually assumed the concreteness of a sack of wheat. It is something that can be picked up, exported, planted in far lands where, with proper care, it will flourish to the untold benefit of the inhabitants. Best of all it is almost free. For many the charm of Point Four was in the notion that we could deliver this know-how by the planeload to every corner of the world and at little cost to ourselves.
In the twenty-odd months that the Point Four Program has been under discussion, and while the less than bold appropriation for initial execution has been mousing its way through the Congress, the more roseate visions of easy wealth for the world have been somewhat dispelled. That is just as well. It would be a grave misfortune if faith in the idea itself had weakened, but it is no misfortune to see more clearly than before the problems of extending help—effective help—to undeveloped or backward countries. For, in truth, these problems are exceedingly difficult and pervasive. They cannot be evaded; they must be faced.
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First in what will be a kind of catalogue of these problems is the extraordinarily awkward fact that in most of the world, progress—technical progress as we understand it—is abnormal and in some sense unwanted. Speculating on this subject in the last century, Walter Bagehot reached the conclusion that stagnation is normal for most communities. Only an exceptional combination of cultural attitudes and social organization nurtures change. Translated into terms of the Indian farmer or the Guatemalan Indian, this means a basic preference for things as they are. These people are not avid for change; the burden of vigorous demonstration of the benefits is on those who advocate it. This fact can all too easily be turned into a reactionary plea for leaving men alone—for leaving them to the dull, painful, hungry, and brief lives they now live. But the fact that such an argument rises so readily to the surface, once inertia is conceded, is no excuse for ignoring that inertia.
One of the great consequences of this inertia is that there is almost no market anywhere in the world for technical advice as an isolated quantity. It must be provided in a mixture either with capital equipment, or with patient, skilful education or persuasion, or with both. The nature of the mixture varies with the type improvement to be undertaken but in nearly all cases the component of technical advice is the secondary one.
In the case of large engineering projects—electric power and irrigation development, construction of transportation facilities, and the development of mineral and other resources—capital is the critical element in the mix. If that is available, the technical assistance comes more or less automatically. Given the ability to finance the job, Paraguay or Bolivia will not have the slightest trouble getting a firm of construction engineers to supervise the building of a hydroelectric dam. The General Electric technicians are bought in a package with the turbines. Technical advice on such construction, if there is no capital effectively available for the job, does not even have much academic interest.
When one turns to improvements in agriculture or in public health, the capital component becomes less important although it is still required. There are few parts of the world—the countries of Western Europe apart—where American agricultural technology or an appropriate adaptation of it would not greatly increase the productivity of the land and labor devoted to crop and livestock production. This will require some import of, and hence raise some problem in paying for, improved seeds and breeding stock, serums and medicines, spray materials and rigs, fertilizers or the plants for producing them.
However, none of these things will come into use in any agricultural community except after a long process of demonstration and education which, in practice, must also be combined with a good deal of adaptation to the climate, soil, and existing modes of crop or livestock culture of the country. In the United States we have, in the Agricultural Extension Service, an extraordinarily comprehensive and quite costly system for bringing the results of technical advance to the farmer. The Extension Service has always spent a good deal of its time trying to persuade the farmer—to sell him—on innovations that are to his advantage. If technical advance requires such extensive educational machinery in the case of American agriculture, where farmers are well educated, alert, and, on the whole, predisposed toward change, it is evident that there won’t be much progress elsewhere without an equal or greater emphasis on education.
All this contrasts with the vision of an American expert, loaded with “know-how” and USDA bulletins, disembarking on some distant airport to put his cargo at the service of an eager peasantry. If this traveler is to be useful he must have a corps of helpers for the huge task of training yet another corps of native extension workers. He must be willing to stay a long while, and persuade his local recruits to forego the fascinations of the capital (this is an especially serious problem in South America) for the dull rigors of the agricultural hinterland. It will be evident that even in agriculture, where the needed component of capital is relatively small, the operation here pictured is a costly one both for the aiding country and the aided one.
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Because a wholehearted commitment, both moral and fiscal, is required of the country being aided, the attitude and competence of the government of the country is clearly a matter of first importance. It has been pretty well recognized that unstable governments and inefficient and incompetent administration is one of the problems of the Point Four program. Like illiteracy, it has been accepted as one of the given hazards. It may be doubted, however, if all aspects of government inadequacy and its hazards have yet been fully appreciated.
In most of the countries that are candidates for aid, government is a possession, not of the people at large, but of a minority ruling class. There is no government in the world today, that of Tibet possibly excepted, that can disavow an interest in progress and development. But there is a vast difference between an avowed and an actual interest—between the interest of Chiang Kai-shek and his erstwhile intimates in the welfare of China, and that of Nehru in India. Where the ruling class is corrupt or preoccupied with protection of vested wealth and prerogatives, the Point Four program faces an especially acute problem. Aid will be asked for but not really wanted. Actual misappropriation of assistance funds, as so obviously happened to relief and military aid to China, can undoubtedly be controlled. A far more serious problem is resistance to help at the points where it can be most useful or a simple disinterest which means there will be little or no local participation in the program.
The possibility of actual resistance must not be discounted. In the Caribbean republics and dependencies and to a considerable extent in South America, no aspect of technical backwardness bears more heavily on the masses of the people than the incredible costs and inefficiencies in the distribution of food and other staples. In all of these economies, and especially in the island communities, the strategic economic and (very often) political power is held by a small group of importers together with those who hold agencies and concessions from foreign firms. These traders exact a heavy toll on imported goods before passing them along to a myriad of petty wholesalers and retailers each of whom handles his small volume on a high margin. Those who man the toll gates in the ports and commercial centers have a strong interest in keeping the distributors small and inefficient. An effective chain store would soon by-pass the importers and buy direct from foreign sources. As the initial experiences of Sears, Roebuck in South America seem to have indicated, there is nothing that would be more welcomed than a modern system of distribution. Especially in the case of food, where it is most needed, nothing would be more disagreeable to those in positions of power.
As our sad experiences in Asia have indicated in recent years, there is special reason to expect that countries in the initial stages of independence will throw up a corrupt or corruptible ruling class. It is likely to be composed of men who too often have sought independence in order to have the power and the privileges of spoliation previously reserved to foreigners. There is no evidence from China, South Korea, or Indo-China that this group is likely to be much more popular than the foreigners with their own masses.
Under such circumstances, the spigot gains from technical aid will go unnoticed by peasants and laborers when set against the draughts at the bunghole by tax-gatherers, landlords, and usurers. The answer, if we are to aid such countries at all, is that we must aid them where the aid counts. Above and far beyond Point Four, we must put ourselves on the side of truly popular government with whatever pressure we can properly employ. This, in light of traditional attitudes toward intervention (carefully nurtured by ruling classes, to be sure), is a sobering commitment. As the counterpart of a promise to help people, rather than privileged minorities, the logic of it seems to be inescapable.
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The problems of Point Four are not all to be found overseas. Enough has already been said to make it clear that this is not a formula for buying improved welfare at a bargain. There is much to be said for a modest start; to load the airlines with eager specialists uncertain of their mission (except as it involved the filling of a notebook with an exciting combination of fact and fiction for a subsequent report to the Kiwanis Club) was certainly something to avoid. Yet it must be doubted whether the $34,500,000 now fixed by the Senate committee as the appropriation for the program is an earnest of serious intention. At best it can only be considered sufficient to cover the first experimental steps on the basis of which larger sums will be spent in the future.
Also, we have yet to face the question of how the component of capital, so indispensably associated with technical progress, is to be supplied. In these years of the dollar shortage, funds for the purchase of capital equipment, like much of the equipment itself, must come from the United States. Except as a long, slow growth in what would have to be a stable and peaceful world, there is very little hope that American private investment will play much of a role. There is nothing more inspiring after a businessmen’s luncheon than to hear an account of the opportunities and responsibilities of American business in far lands and of the way in which business will surely rise to this challenge. The principal consequence of these speeches in the past, so far as can be determined, has been to develop in the average member of the audience a renewed interest in a branch plant in Texas.
The difficulty is that the United States has almost no tradition of private investment abroad of the sort required by the Point Four program. Foreign investments have been made where, as in the case of oil, copper, iron ore, rubber, and other raw materials, there was need to develop sources of supply for American industries. In 1948 about two-thirds of American foreign investment was for oil development alone; as this declined with the completion of Middle Eastern projects, including some overdevelopment, the total volume of overseas investment has declined. There has also been a smaller though substantial investment in branch plants and sales facilities as supplements to the main stem of the American market. All of this activity has, in effect, been subordinate to American operations. Except in Canada, Americans have done comparatively little investing in enterprises that were of, and for, the economy of a foreign country. This was the type of investment (especially in railroads) which dominated England’s operations as a capital exporter in the last century. It is the type of investment which the Point Four program requires.
Whatever the factors setting the American investment horizon, they are not likely to change very soon. It seems likely that the comparatively favorable rate of return that investment has generally commanded in the United States has been important—there is little doubt that British capital went abroad under the incentive of a high return in the New World and under the compulsion of a low return at home. In recent years in the United States return on domestic investment has been singularly favorable. It also seems likely that American businessmen are less inclined than their British precursors to contend with the bizarre habits and customs of foreigners or to attempt to predict the unpredictable behavior of any government except that in Washington. This has not prevented influential groups of businessmen, in one of those Micawber-like manifestations which make American business attitudes such a fascinating study, from opposing a government guarantee of convertibility of earnings which would somewhat lessen these risks.
In default of private lending, there remains only, and as usual, the government. If Point Four is to pass beyond the stage of dispatching missions to recommend dams that will never be built, roads that will never be constructed, or ports that will never be improved, then US government loans will have to be available. Fortunately there is nothing terribly new about such lending although the need for it will have to be more explicitly recognized than now if Point Four is to succeed.
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There are two other problems which must have a place in this catalogue. One of them is the intransigent circularity that characterizes the causes of poverty. Low productivity—meager output per worker—is one side of a coin of which a low standard of living is the other. What a man does not produce he cannot consume. But from low living standards and bad diets come the bad health, physical weakness, and mental lethargy which, in their turn, are the cause of low productivity. The same low productivity leaves no surplus for health and medical care which might strengthen the bodies of this or the next generation; it means there is little surplus for schools which, by raising the levels of literacy, would provide access to the minds of the people. The circle is not only closed at any given time but there are forces that insure that it will remain closed.
The problem of Point Four is to determine at what point or points this circle can be broken. I confess that I have no very firm view. There is a wealth of evidence—the heroic example of modern Mexico comes to mind—that schools, paid for with resources from outside the local community, are the most forthright and durable approach. But one cannot but be impressed by the dramatic experiments of the World Health Organization in Haiti, where disease has been selected as the vulnerable link in the chain. With the aid of penicillin, a mass attack is being made on the twin scourges of yaws and syphilis. This, like similar efforts in the past to clean up malaria, is relatively inexpensive. Perhaps such efforts should have precedence even over the attack on illiteracy. But I am by no means certain that there aren’t communities where the first step shouldn’t be the more dramatic types of heavy construction leading to better supplies of irrigation water, cheap power, and access to natural resources. In our own day we have seen the catalyzing effects of such construction in the Tennessee Valley which, prior to 1938, was one of the nation’s, if not the world’s, backward areas. Perhaps the most one can say is that there must be a strategy for breaking the circle that is adapted to the needs and potentialities of the particular area and that there is no formula which provides a secure basis for generalization. One can say, with some certainty, that the strategy should not be decided by collective bargaining between interested government agencies in Washington and within the UN. That is dangerous.
The other problem, which has been much discussed in connection with Point Four, concerns population and the danger that population increases will quickly blot up the increases in productivity associated with technical advance. It has been pointed out, and I believe quite accurately, that most of the countries to be aided are in the first of the Malthusian stages. Birth rates and death rates are both high. An improvement in health and welfare will reduce the death rate before it affects the birth rate. The result will be a sharp bulge in total population.
This is a formidable prospect, but my own disposition is to urge that no one be too much alarmed. Were such a population increase to be the consequence of Point Four, it would mean that the program was being defeated by its own brilliant success. It is permissible to argue that we should first go ahead and have the success. Moreover, such massive consequences are hardly to be squared with the present modest proportions of the program. In any case it would be a cruel man who would consign great areas of the world to poverty and disease because there were new dangers in the attempted escape.
Political discussion in the United States commonly leaves to the enemies of an idea the task of discovering its difficulties. The friends of the idea confine themselves to stating its virtues. It should be evident that this article violates that convention. In my view, the problems that will be encountered in making a Point Four program effective, not merely as a salve to our consciences, but for the people it was designed to help, do not subtract anything from the substance of the idea itself. There can be nothing but good in an effort by one community to help another and less fortunate one. If, from now on, we are aware of the difficulties which the Point Four program presents, we shall be better prepared to resist the discouragement and disinterest and the tendency to be content with a far too modest accomplishment which will be its greatest hazards.
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