Some Fallacies of Foreign Aid
JULY 01, 1959 by WILLIAM HENRY CHAMBERLAIN
Mr. Chamberlin is the well-known author, lecturer, and contributor to the Wall Street Journal and many nationally known magazines. His most recent book, The Evolution of a Conservative, (Chicago: Henry Regnery Co.) was reviewed in THE FREEMAN, June 1959.
Spring is open season on the hard-pressed American taxpayer for that annual raid that goes by the name of foreign aid. (The preferred official characterization is "mutual security.") The pattern of this raid is familiar. The Administration sets a figure (in this year a little short of $4 billion) and protests that the most disastrous consequences will follow if a penny less is appropriated.
On behalf of its program, it mobilizes the big guns of the State Department, the Pentagon, and other government departments and agencies. Congress—well aware of the widespread unpopularity of this program among constituents—listens a little skeptically, prunes a little here, clips this or that item, but ends by voting most of what has been requested. What has not been challenged as vigorously and effectively as it should be (although the Citizens Foreign Aid Committee has made a promising beginning in this direction) is a set of dogmatic assumptions which are supposed to justify lavish hand-outs to foreign governments. Among these assumptions are:
· That foreign aid saves foreign nations from "going communist."
· That it increases American security, prestige, and popularity.
· That it promotes international trade and prosperity and world peace.
These assumptions overlook certain grave disadvantages, both to givers and recipients, which seriously undermine the effectiveness of government-to-government subsidies. They also do not stand up to the test of practical experience.
The dispensing of foreign aid in the shape of money and materials given freely to foreign governments has become a major bureaucratic enterprise. It employed 450 people in 1948. Ten years and $41 billion later this staff had grown to 12,000 directing 2,000 projects. In addition, some 9,000 persons are engaged in supervising the military assistance program, which has amounted to $23 billion.
Poor Plans Poorly Executed
There is an obvious yawning gap between the qualities necessary for successful administration of aid projects—often in countries which, in history, language, and customs, are extremely unfamiliar to most Americans—and the available personnel. An advisory group, headed by William H. Draper, Jr., former Undersecretary of the Army, which came out with a strong endorsement of foreign aid, and which was probably selected because most of its members are known to favor the idea, made this significant admission:
"We have not developed the well-trained corps of personnel required to carry out such a far-flung program with absolute efficiency. Some projects have been imperfectly conceived, inadequately planned, and poorly executed."
This seems to err considerably on the side of understatement. The defects pilloried in the novel, The Ugly American, were drawn from the life of American foreign missions, not made up in the authors’ imagination. Among these defects are insensitiveness and ignorance in regard to local manners and customs, aloofness from the life of the people among whom the work is being carried out, and a tendency to live in self-created American ghettos as closely modeled on Peoria, Dubuque, and other American towns as possible. There are just not enough qualified people to go around for the efficient operation of a giveaway program in the neighborhood of $4 billion a year.
What can happen to your tax money and mine when administration is loose and slipshod is evident from this excerpt from the report of the House Committee on Government Operations about aid to
Another example of "down the drain with the taxpayers’ money" was the financing of an ultimately unsuccessful French colonial war in Indo-China to the tune of $745 million. After the military disaster at Dien Bien Phu, the French threw up the sponge and Indo-China was partitioned between a communist-ruled North and an anticommunist South. Only some $95 million of the $745 million was ever recovered.
The scandal about corrupt misuse of overlavish aid to the primitive state of Laos, adjoining Indo-China, is notorious, although the International Cooperation Administration was not very cooperative in furnishing congressional investigators with detailed information on the subject.
Even when no direct wrongdoing or culpable negligence is involved, there are serious psychological roadblocks in the way of effective American remolding of the economies, social customs, and daily lives of Oriental peoples. The missionary spirit, when it is a matter of unselfish individual dedication to a religious, educational, or philanthropic cause, is a fine element in the American heritage. But the missionary spirit, bureaucratized and supported by large appropriations of public funds, is something else again. Here is an excerpt from a recent report of Vermont C. Royster, editor of the Wall Street Journal, on a recent visit to Thailand, perhaps still better known as Siam:
"Consider that here is a country which, for all that it may be backward by American standards, has managed to get along for a thousand years without
"Yet here come the Americans with a program which, when you look at it, would remake the country from one end to the other, from top to bottom. There is no area of Siamese life—schools, farms, business, language, homes, government, customs—left untouched in some fashion by the United States aid program.
"No one, be he a visitor here among the ancient temples and palaces or a stay-at-home reading about it, need be surprised that a program so conceived rubs many Siamese the wrong way. Certainly, the evidence of it is not hard to find.. . .
"One friendly Siamese, with a twinkle in his eye, put it to his American visitor this way: ‘I suppose we ought to be glad that you are helping us, but we do wish you wouldn’t help us so hard.’ "
The reaction to American largess is sometimes much more negative than this tepid, good-natured criticism. Consider the case of
Two measures of the revolutionary government were nationalization of the tin mines, principal source of
The climax was reached in
This is not the first case when violent anti-American demonstrations have followed large American subsidies. Part of the fault, one suspects, may rest with the new-fangled timid pussyfooting reaction to such outrages. There was a time when stiff diplomatic action would have followed the desecration of the American flag, attacks by lawless mobs on American official representatives and American official buildings. Now, all too often, the reaction is a nervous self-questioning as to whether our foreign aid program to the offending country was big enough, whether we should not think out some new handouts. That is not the road to friendship and respect.
A pointed comment on the dismal failure of our Bolivian policy is to be found in a letter published in Time by Roger A. Freeman, who was fiscal adviser to the Bolivian government on a special
"I returned with the conviction that a continuation of
Bribing the Beggar
Whatever may be the answer to
A distinctly negative by-product of the too easy assumption that a plentiful transfusion of dollars is an easy way to check the spread of communism is the temptation to try to exert blackmail. This occurs when the representative of Backward area lets it be known—with more or less subtlety—that, unless his government receives a generous handout from the United States Treasury, said government will turn to
Gives a Wrong Impression
An incident that occurred in the spring of 1958 shows the dangers and pitfalls of undiscriminating handouts. A representative of the small country of
Something must have gone astray with our diplomacy when a foreign government can get the idea that it is conferring a favor by accepting the largess of the American taxpayer. One wishes we had more diplomats like the representative of a private business firm who, when questioned by reporters in a Near Eastern country as to why the United States was not giving some additional requested aid, gave in substance the following friendly but frank reply:
"Do you really understand who is paying for this foreign aid? It isn’t the American government, which you think of as being so incredibly rich that a few hundred million dollars makes no difference. It is average American citizens like my son and my son-in-law, whose families can’t have meat every day, who must scrimp and save in many ways in order to meet the taxes which are the source of the aid."
The businessman reports that his remarks produced a sobering impression. And the Austrian government, which, like other European countries, has long been in a position to stand on its own feet, acknowledged in the dedication of a report on the Marshall Plan aid its indebtedness to the American taxpayer. Too often, however, it is assumed that money grows on trees in the
It is a good thing that the advocates of foreign aid no longer have the field to themselves, that organizations like the Citizens Foreign Aid Committee are bringing to attention the argument against this substantial item in the national budget. The principal concrete suggestions of this organization are as follows:
· That our traditional generous private charity and governmental grants to relieve disaster be continued.
· That in countries which we are morally obligated to defend and which are directly threatened by Red aggression military assistance—for the time being—should be continued, but on a realistic basis.
· That until foreign aid is terminated, the Congress take steps properly to exercise close supervision and control over the manner in which all foreign aid funds are being spent.
· That the $3.9 billion requested by the President for the fiscal year 1960 be reduced $2 billion, and that each year thereafter foreign aid be substantially reduced until terminated within three years. Foreign aid is no adequate substitute for self-help. A nation, like an individual, stands straightest when it stands on its own feet.