Trade, Not Aid

If the new Administration means a change in the role of Government in the U.S. economy, it also means a change in the role of the U.S. economy in the world.

The time is ripe for a change. In seven years the U.S. has poured out $38 billion under the Marshall Plan, EGA and a hand ful of other plans, often badly and wastefully administered, which were designed to put the economies of Europe on their feet. As 1952 ended, they were on their feet, but the legs of some were shaky. The U.S. firmly believed that a free flow of profitable trade between the nations of the West was as great a bulwark to peace as arms. Somehow the unhealthy gap between U.S. exports and imports, that drained for eign nations of their gold and upset their currencies, had to be closed. But is con tinued U.S. aid the only way? In 1952 both the U.S. and Europe decided that a global WPA was no solution. Significantly, it is the Europeans themselves, chafing at the necessity for continued handouts and their dependency on every rise & fall of the American economy, who feel strong enough to raise the cry: "Trade, not aid!" In early winter, their cry was answered by a bold program advanced by many U.S. businessmen, notably the members of Detroit's Board of Commerce. The Detroit Board advocated the eventual re moval of all U.S. tariff barriers so that for eigners can compete on equal terms with U.S. manufacturers.

Actually, the U.S. has already done far more than the rest of the world realizes toward making it easier for foreign goods to enter. Since 1932, U.S. tariffs have been cut in half, and last year President Truman courageously blue-penciled some recommended boosts (e.g., Swiss watches, Italian garlic) pushed through the Tariff Commission by lobbies.

But even if the U.S. should throw off all tariffs, Europeans would have to sweat to close the trade gap with the U.S. Their production methods are still too costly, their plants too antiquated. Europe's form of capitalism, with its emphasis on low wages, is hobbled by production-control ling, price-fixing cartels. European management would have to learn that higher wages and better working conditions breed greater productivity; European labor would have to learn to work harder.

Furthermore, the world still has to learn, as Canada already knows, that the entry of private U.S. capital does not mean Yankee imperialism, though the groundless fear of such imperialism dies hard.

What private U.S. capital has helped to bring in Canada is a boom rivaling the U.S.'s own. The rest of the world also needs U.S. venture capital. But private U.S. investors cannot be expected to risk capital in foreign countries unless they have guarantees against expropriation of their investments. They have not been encouraged by such recent actions as the United Nations' sanction of Bolivia's seizure of foreign tin companies without compensation.

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