To the Editor:

. . . Peter L. Berger [“Speaking to the Third World,” October 1981] explains that the United Nations’ plea for a gratuitous transfer of wealth from the rich to the poor countries is based on fallacious neo-Marxist reasoning about past colonial “exploitation” and the debtor-creditor relationship it is supposed to impose on the present generation, an international version of hyperactive affirmative action. More important, Mr. Berger recognizes that foreign financial assistance is like giving a starving man a fish instead of inducing him to use a fishing rod. But his article does not go beyond this. The stubborn question remains: how can we get the starving to use fishing rods, or to participate effectively in the striving economic world of the democratic capitalism Mr. Berger so warmly recommends?

A fact that is so well known as to find a place in elementary textbooks is that poor countries are caught in a variety of “vicious circles of poverty.” For example, poverty leads to low saving which leads to low investment which leads to low productivity which leads back to poverty. Specifically, poor countries stay poor when they continue to lack capital, the enterprise with which to apply it, the technology and managerial skills with which to use it, the trained workers with which to man it, and the industrial discipline to keep it going. At best, foreign aid can give them only a meager portion of the first and almost none of the rest—and much of what they get in practice is dissipated in waste and corruption. But all of the building blocks of economic growth, recited above, are readily available from another source.

My own studies have shown (for example, in Journal of Economic Issues, June 1980) a very close relationship among Third World countries between success in economic growth and the volume of foreign investment welcomed from multinational corporations, especially those of United States origin which still overshadow all the rest. The multinationals offer profit-seeking capital that dwarfs the volume available from gifts or giveaway “loans.” Because they are profit-seeking, investments gravitate to their most productive uses, avoiding grandiose public buildings, showy airports, and impressive steel mills planted in deserts or jungles. The multinationals train workers because they need to, stimulate productive enterprise among local suppliers, processors, and traders, and generate higher incomes for consumers. They compete effectively against exploiting local monopolies despite the fact that they pay wages commonly two or three times as high.

The spectacular economic growth over the last quarter-century in Singapore, Taiwan, South Korea, Brazil, Greece, Hong Kong, Portugal, and Thailand was no accident. On a per-capita basis these countries received more foreign investment than any of the others. Nor is it a mere accident of fate, including available natural resources, that accounts for the still grinding poverty in countries like Angola, Bangladesh, Indonesia, India, Ethiopia, Sri Lanka, Sudan, Tanzania, Uganda, Chile, Nigeria, Peru, Zambia, Madagascar, Burma, Congo, and Morocco. All of the above, for most or all of the past twenty-five years, have not only received pitifully little foreign investment, if any, but have aggressively rejected more liberal offerings. They have erected barriers—at the worst, punitive programs of nationalization; at the least, restrictions on the repatriation or even retention of profits, on modes and places of investment, on personnel practices and imports, on disposition of ownership, and so on. Why the self-defeating barriers?

The answer lies in the mythical ogre of “dependence,” an element of the New International Economic Order to which Mr. Berger gives only casual reference. In the doctrine of the NIEO, dependence is a curse word. That reaction may be understandable in countries with a colonial background and with a regrettable tendency to contrast the essential dependencies of free international interchange with the political independence they so recently achieved. But understanding the confusion does not excuse it, for its residues are a spirit of narrow nationalism, idle dreams of socialist “planning,” and a futile pursuit of autarky that can lead only to economic disaster. Dependency, in short, is resisted in much of the Third World, vigorously and in effect masochistically. The most accessible target for that resistance is the multinational corporations. . . .

For the American economy, direct investment in the Third World extends our markets and insures supplies of raw materials. It provides substantial returns, otherwise lost, for our capital, technology, and managerial skills. On balance, it reduces the deficit in the flow of funds between the United States and our trading partners. Probably, though this is controversial, its net effect on our domestic employment is to increase it. But in the broader framework of international affairs, the potential contribution of the multinationals is immeasurably more critical. Where permitted to do so, they generate not only economic progress in the less developed countries but also the will and the strength to withstand Communist aggression and subversion. In an era in which the Soviet Union has made spectacular imperialist gains through force, this is far from a negligible consideration. If we allow the preservation and extension of individual freedom to enter our calculations, it is crucial.

Melville J. Ulmer
University of Maryland
College Park, Maryland

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To the Editor:

. . . Having spent most of my government career in the U.S. aid program at home and abroad, I write in criticism of Peter L. Berger’s position. . . .

Mr. Berger states accurately that those who are temporarily in control of the governments of less developed countries (LDC’s)—frequently after a seizure of power by force—are not true spokesmen for their countrymen. Thus, the billions of souls of the underdeveloped world have no spokesman other than those of us who accept moral responsibility for mankind, and because of our positions of leadership in our own society can discharge this responsibility, if only in a small way.

To be strictly factual, Mr. Berger is wrong when he asserts that the Western world bears no responsibility, or only mitigated responsibility, for the plight of the Third World. . . . In my work I was often saddened by the rapaciousness of foreign businessmen in underdeveloped countries and critical of the actions of foreign governments—our own as well as those of other seemingly enlightened countries.

It is not, however, because of our past sins of omission and commission that we ought individually to accept moral responsibility for the plight of the Third World, but because we bear a moral responsibility to create a better world. . . .

It fits our public style to advise friendly dictators and oligarchs now in control of LDC’s to create the social, political, and economic conditions which would make democratic capitalism eventually possible in their countries. Our private style requires us to improve their police and military power and to use their territory to improve our strategic or political position. There may be an isolated country or two, with which I am not familiar, in which we genuinely attempt to conduct a development program, but in my own experience, the constraints imposed on U.S. aid programs by our national and private-sector interests make such genuine development programs rare. Still, we occasionally accomplish some good. . . .

Our present international position is dominated by our relations vis-à-vis the Soviet Union, and our relations with the Third World are largely constrained by that relationship. If it were possible to resolve our relations with the Soviet Union so that stability reigned, we could undertake genuine development programs in LDC countries. . . . Professional sociologists, as well as political scientists, economists, educators, and other professionals could then make genuine contributions. . . .

Monroe Burk
Columbia, Maryland

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To the Editor:

Peter L. Berger’s attempt to ridicule those of us who have spent the better part of their adult lives working in Third World nations smacks of an infantilism I have not come to expect from COMMENTARY. Many of us have commuted to these distant places but not so “haplessly” as Mr. Berger implies. Is he saying that all workers in remote nations who originate in the major nations are simplistic nomads in search of the intangible? As a biologist, I have commuted to the South Pacific nation of Fiji for thirteen years in search of plants that heal. Many of the species have shown remarkable activity against tumors in trials at the U.S. National Cancer Institute. . . . Would Mr. Berger have us believe that these “peasants” have nothing to teach us? Looking at the field of medicine, I will remind him that even in an age of synthetic drugs, over 27 percent of all prescriptions written in the United States are derived, in part, from plants, many of which were first introduced to world medicine from “peasant” medicine in the Third World. . . .

I know of many other people who have lived and worked in these “peasant” nations, who are anti-nuclear advocates, “advocates of solar energy and holistic healing,” and believe strongly in “alternate energy.”. . . All of these workers are dedicated to their task, have made major contributions to our understanding of social and environmental realities, and have shown themselves to be more sensitive to the offerings of “peasants” than Mr. Berger.

The inane generalizations about people Mr. Berger has never met (“Needless to say, these people have contributed little if anything to the countries to which they have come . . . while at home their main contribution has been to legitimate various tyrannies”) strike me as the impotent gestures of an academic whose view of the Third World comes from textbooks and the interior lounge of too many foreign Hilton hotels.

Michael Weiner
University of California
Santa Cruz, California