Table of contents

Kalos: What is to be done with our World.
By Alfred de Grazia


PART THREE: The Dystrocrats


To the misfortune of the world order, which has not been ready or able to fulfill a new universal level of high expectations, the elites of the dystrocracies have set impossible standards. Partly as compensation for their unfulfilled expectation, they have pursued foreign policies that are typically dystrocratic. Although these are, on the whole, detrimental to world order, they are nevertheless psychologically necessary and instrumentally rational to the dystrocracies. These foreign policies are often substituted for domestic policies and have resulted in the stultification of internally induced reforms. The types of policies need to be understood.1

Playing the Game of the Rich

Foreign relations that stress friendship and private help are weak medicine for the dystrocracies. Still, they go on, and often to good effect. Sometimes the poor countries will go so far as to invite universal church and philanthropic activity within their jurisdictions. Since these groups were for a century the bete noire of the dystrocratic intelligentsia, they can only be reintroduced with caution. The Indian, Filipino, and central African governments, for example, get modest services performed by virtue of tolerating and encouraging Christian charitable and educational groups. Many south American countries by being hospitable to Jews can get a channel to the outside world and to an international world that they could not otherwise have through their own rather small international elite.

These outlets into the world are usually stopped up abruptly and cruelly by nationalistic, dictatorial ideological regimes. Sometimes countries that tend to behave in fairly normal ways will suddenly get rid of a minority that has been doing nothing, or little but good, so far as the economy of the country and its connections with the outer world are concerned. I am thinking not only of the many cases involving Jews but, for example, of the case of the Greeks in Turkey. Turkey has also paid several times over for its mistreatment of the Armenian minority over half a century ago. The Indonesians have destroyed a great part of their commerce and industry first by the expulsion of the Dutch and then by the expulsion of the Chinese, which is presently continuing. The Burmese expelled the American foundations, including a rather busy Ford Foundation enterprise.

They may also agitate about their problems through public relations in the plutocracies. By publications, traveling, and sending students, they can improve a little their relations with them. A remarkable amount of this kind of competitiveness for the American ear occurs within the United States. Literature of different national groups abounds, with the aim of convincing American decision-makers and opinion-leaders of the necessity to assist by arms, by material goods, by loans, or gifts the countries concerned. The U.S.A. also is host to more foreign students than any other country in the world. Scarcely a week goes by without some of them appearing before one or another of the numerous Rotary clubs, Lions clubs, women's clubs, student forums, and television programs.

Of course, no one gets the full ear of America, not even powerful Americans. Travelers, agitators, propagandists, authors, students and the like from dystrocracies may feel that they are not getting as much attention as they deserve, but a moment's reflection upon the thousands of components that bombard the American mind will provide the reason.

Dystrocracies, and other nations as well, can work with expatriates who are immigrants or descendents of immigrants in plutocracies or taxocracies. Every country in Europe and some others, such as Lebanon and Israel, have their claques in the United States. Red China and the soviet Union have had less success with their "built-in" publics abroad-as, for example, the Russian Jews in America or the overseas Chinese in Asia-because of their domestic policies and the extreme demands that these regimes make upon their cultural relatives.

Dystrocracies, and their businessmen and farmers, have long been the inferior partner of economic relations with foreigners. They are normally anxious, once possessed of native independent governments, to reverse their former role. They seek to call the tune. Regardless of the advantages brought by the older arrangements, they are psychologically fixed as "exploited" peoples who must now exploit the exploiters. It is hard for them to think of a new tune.

The techniques of reverse exploitation are numerous, but reduce to two general methods: to charge more, and to expropriate. Licenses are made more costly, native share are enlarged, boycotts are imposed, native wages and participation are increase, capital exports are blocked, and direct rules and orders become more frequent. Land, plants, and rights may be also taken over, with or without compensation.

These actions have numbered in the thousands over the past generation. The classical cases-Japan's closed doors, Venezuela's refusal of English debts, Mexico's expropriation of Americans in the 1920's, etc.-are now swamped by recent instances. "The right of peoples and nations to permanent sovereignty over their natural wealth and resources," proclaimed by a United Nations General Assembly Resolution of December 14, 1962, vaguely outlines a rapid world-wide dystrocratic movement to subject foreign parties to unquestionable domination. Syria, Iraq, Iran, Egypt, Venezuela, Indonesia, Malaysia, Algeria, Ghana, Guatemala, Cuba, Peru, chile, Libya, and other nations have feasted upon the foreign riches within their grasp.

They have often found the foreign goods inedible. The foreign enterprises may promptly vanish in one gulp-a store and its inventories, some houses, a trading office- and trade declines. Or the oil wells, plantations, and factories require technical supervision and continuous inputs of machinery, which the dystrocracy is unable to provide. Production usually declines.

International law is scarcely considered today as an obstacle to any or all tactics; pacta sunt servanda has meaning only in particular cases and in the higgling and haggling after the fait accompli.

Still, retaliation is suffered. The retaliation nowadays is in some ways more oppressive than before: an outright armed conflict carries some possibility of enthusing the local population; withdrawal of loans, advances, and purchases hurts a poor country without stirring up patriotic fervor in the masses.

On the other hand, the dystrocracies incur advantages that often seem to outweigh the losses. Some of these are unforeseen; some are logical. In an expropriation of land (foreign and native), new capital may be obtained for the state; foreign power is evicted; the threat of a return to power by the previous ruling class is reduced; offices, favors and compensation for the new elite are provided; some small farmers obtain subsistence plots, a desirable money economy is fostered by the flow of funds from any compensation into the industrial capital market (if inflation is not running high); and, perhaps most satisfying of all, the fresh sweet air of freedom fills the atmosphere.2

When the military regime of General Juan Velasco seized the reins of government in Peru in 1968, a burst of popular enthusiasm greeted his anti-American actions. The Peruvians seized U.S. fishing vessels and then the holdings of the International Petroleum Company, a subsidiary of Standard Oil of New Jersey, claiming a fantastic debt of $690.5 billions to the people of Peru accumulated since 1924. In retaliation, the United States cuts its guarantees of Peruvian sugar purchases. But amidst frantic applause, General Velasco said, " This date marks the beginning of a struggle for economic independence, which will allow Peru, as well as other Latin American states, to shake off its choking and infamous slavery" to the U.S.A.3

It must be admitted : the variety of severe charges and expropriations brings on the whole more injustice a than justice to the foreigners. The target is "company" but most of the original members have died or changed companies and the stock has changed hands; so who is being punished? One crime can explain, but does not justify, anther crime; further, the emotic effects on dystrocracies are in the balance bad. But the general pneumic and dikaic effect is good, for opportunities under the law (meaning native law) and in the socio-economic structure are enhanced for a large group in the population.

The unfortunate part of the dystrocratic attempt to reverse its historical exploitation is that it is ineffective. Most countries that lose their colonies become more prosperous. Italy and Germany are better off without colonies; so is France. The total U.S. investment in Latin America is $15 billions, Suppose in some unlikely set of circumstances the total sum is expropriated without compensation, Assume, that the U.S.A. does not retaliate financially, and does not save an estimated two billion dollars of military and other grants and of retrieved Latin-American assets in the U.S.A. Total U.S. assets will drop by half of one per cent; if the whole expropriation occurred over a period of two years, the national income of the U.S.A. would diminish by one per cent for two years.

On the side of Central and South America, a major dislocation of markets would occur. Exports would have to be increased rapidly in order to import necessary tools and skills. Essentially, the Cuban experience would be repeated. Large losses of skilled and education citizens would occur. Economic conditions would deteriorate. Taxocratic (socialist or peoples') governments would be proclaimed and constitutionalized, but de facto, dystrocracy would prevail. The nations would then arrive at the next logical step, to play off the Soviet Union, or another country, against the U.S.A.

The moves in this game are so conventional, that one might have predicted that the Peruvians would seek promptly to engage the help of the U.S.S.R. SO they did, walking in the footsteps of Egypt, Syria, Cuba North Vietnam, Congo, Nigeria. Tanzania Indonesia and others, The reverse also occurs; countries evading the clutches of the U.S.S.R. seeks American help, as with Yugoslavia and most of Western Europe after World War II.

Attempting to play off one powerful; country, whether a plutocracy or a taxocracy against another is an uneconomic, exhausting and dangerous business for the dystrocratic elites. The plutocracies and taxocracies can afford it better.4 To arrange a new program of aid is time-consuming and complicated; to extricate a country from prior arrangements may incur severely damaging reprisals; to execute a volte face in foreign affairs may bring about domestic revolt.

The general ineffectiveness of aid-diplomacy under conditions of national sovereignty is by now clear. It is admissible that no dystrocratic country has the temperament to suffer rich foreigners for long. It is agreed that even outright unconditional grants from one government to another are unreliable : they are demanding to both parties; they are wasteful and erosive of the morale to sacrifice and initiative in the recipient country, It must be conclude that only an international government, a megalocracy of some intensive kind, can organize and redistribute resources amid general psychological equanimity.

At the same time, self-help is necessary. To a degree, freedom from foreign influences of any kind holds an advantage. Even well-meaning foreigners, armed with tools. designs, and cash will usually hinder general progress in self-help. Ultimately ninety percent of kalos must come from the rockbottom human foundation of every country.

Dystrocracies therefore must create their own Kalotic Revolutions even while striving for a Kalotic Cosmarchy. Meanwhile their posture towards their unilateral supporters, whether plutocratic or taxocratic, should be radical, but logical. It is self defeating to deny compensation in expropriation and nationalization. The full psychological euphoria can be obtained without the destruction of the positive conditions of foreign participation in the eudemic policies of the country.

Any foreign company can be compelled to transfer is assets from the nationalized property to new local enterprises, using bonds acquired in the compensation for the property. That is, do not expel the foreigners, but compel their transfer of assets and skills to new areas of commerce and industries within the country. Let the newly nationalized property be distributed among a large number of the population, so as to restrict the native regime from dangerous political aggrandizement and to limit the inefficiency of the seized enterprises.

For example, in the Peruvian case,the assets of the expropriated oil company could nave been transformed into voting shares of stock and these shares distributed among the Peruvians who wished them in return for cash or promissory notes equal in total to the value of the company. The foreign company in turn could have been given a credit to the total amount for employment solely on economic enterprises within the country. The export of net profits only only would be permitted, and these must be profits from the new enterprises, if, as, and when they occur. In other words, "Do not kill the goose that lays the golden egg; just move her nest".

The conclusive fact is that both domestically and internationally the elites of dystrocracies cannot now function in harmony with world consensus, Kalos can emerge only through world organization. Only a world order can offer to the dystrocratic elites the possibilities of enhancing their position without selling out to another nation. Only through world organization can sovereignty be exchanged for a more flexible autonomy of the groups within the toparchy. Only through cosmarchy can world psychological signals penetrate the whole population of dystrocracies, gripping them and preventing the same signals from being mediated by a special sector of the population or an elite, thereupon to be misused, misinterpreted, and unbelieved.

Nothing to sell

If any given dystrocracy were completely; shut off from the world economically, the world economy would not be perceptibly changed. For most things that dystrocracies grow or manufacture, there exists an exportable equivalent from the plutocracies. If they grew and made nothing, a modest conversion and step-up of plutocratic output would supply them with all that they had before. The United States actually did this for some allied and occupied countries during and just after World War II.

The productive countries appear to need little from the un-productive countries. That is, cosmopolitan economies no longer need to obtain much from the parochial types. What can China provide for the international markets? Manpower? But manpower is not needed except for certain skills which the Chinese have too little of themselves.5 Rice? Even presuming that they could provide for themselves and export it, there is already a fairly good balance of rice in the world among all those who want to eat rice and those that grow it. Handicrafts? Possibly, but there is only a small market fir handicrafts. And could we say the same thing fir India? One can go into India and move around from one town to another, but yet find few things that could be exported. Turkey? The same situation prevails.

The politists if dystrocracies are constantly saying: "We need you help so that we may manufacture things for export." But there is little to suggest. Lucky the country that has oil, at least for the time being, because there is always some market for oil. Whatever price is paid for oil is nothing the country itself can take credit for, because oil is discovered usually by foreigners and gushes out of the ground. Nor are there enough oil "crops." What can the Turks, Indians and Chinese produce? Soft goods? There is already a surplus. For a pittance one can buy a complete textile factory in New England: the major cost is for transporting it somewhere else and setting it up. But only the newest machinery is valuable for export competition: the oldest machinery is capable of large-scale production only in the protected domestic markets.

The fact that the already productive countries can still produce much more, but that the unproductive countries do not have much to offer, except to themselves, means that the United States and Western Europe cannot contribute much to the development of other countries through the process of trade. It is also true that American industry when left to its own devices tends to invest in other busy countries that are producing things that are wanted here. So American investment goes first to the countries of Western Europe that least need it and then lastly to the countries that would seem to need it most.6 It follows thus pattern not alone because of political uncertainty nor because of low returns on investments, but rather because of the un-certainty of getting one's money back because the other country cannot export enough to let one take his profits out or sell his business and get, his capital out.

One form of trade has occurred frequently in the past. The richer countries can find a market in the poorer countries among the richer classes, and the richer classes in these countries will always find something that they can sell to the richer countries elsewhere. So the leaders can garner the best fruits of modern technology, while the poor remain in the same conditions of life. This kind of disjointed international trade can proceed until such time (admittedly remote) as the necessities of life might trickle down to all the poor people of the dystrocracies. This tended to be the system of international trade operating beneath the imperial system before the age of socialism.

Today, socialism is no longer credited with the answer either, because of its inflexibility and highly politicized programming of trade. Self-generating, self-sufficing, and self-perpetuating international trade has to produce something resembling a balance by giving everybody something to sell and everyone some power to buy. Would that Indian hair might be an absolute necessity, so that every American must own at least one Indian wig. Then essentially the basic problem if trade between the two countries would be solved. Wit that easily and cheaply produced item as their stock in trade, Indian merchants could buy enormous quantities of goods from America. Under the great equalizing factor of hair, which all women have alike regardless of social class and caste, the whole face of India might be changed. The country would tend to become middle class; many new varieties of industry could be capitalized domestically. The example is fantastic in its premises, but expresses validly the overwhelming need of people to have something to sell if they wish to obtain somthing that they cannot themselves make.

Production capital, and skills are all very highly concentrated in the world. Even the production of commercial crops in the United States and elsewhere is concentrated in a small proportion of commercial farmers who supply food to the markets of the world. By contrast, the subsistent-production of corps and the production of processed or manufactured goods is dispersed.

Another way to rescue the drifting economic structure of the world is to increase the manufacturing capacity of countries everywhere on the basis of what they are capable of producing internally without resource to the world market. That is, think of India or Brazil as not only supplying themselves with food-stuffs by improved subsistence agriculture but also as acquiring an improved manufacturing capacity, subsistence manufacturing, by which they can make a vehicle more efficient than the ox-cart, a one-cylinder motor-bike, and other gadgets, tools, and things that can substitute for the more expensive tools of the wealthier countries, and yet can be produced entirely from local ingredients. There is much to be said for invention in this area.

However, since invention in this area does not necessarily inspire adoption, the process of change may be slow. Frequently subsistence-type manufacturing inventions that are perfectly workable are opposed or made impossible by local circumstances, politics, or customs. The lure of expensive foreign articles is great too.

The problem of the world economic structure is aggravated by the existence of many countries that offer principally one crop to the world. That is, besides those many countries which have nothing to offer the outer world, there are countries which have a rich and abundant crop, metal or mineral to offer, but nothing more. They are subject therefore to all the misfortunes that can befall world trade in that commodity.

A number of countries are cursed by the complications of a one-crop system. In 1953 these countries owed more than 50% of their export receipts to the production of a single beverage: Brazil, Colombia, San Salvador, Guatemala, Haiti, Angola,Ghana, French, Camerons, Ethiopia,,Sudan, Pakistan, Uruguay, Liberia, Egypt, other unique foods are the basis for the export economies of panama, Cuba, Mauritius, Nigeria, Siam, Honduras, Formosa, and Equador. And then in minerals there are these single commodity nations: Iraq, Saudi Arabia, Bahrain, Kuwait, Quatar, Belgian Congo, and Northern Rhodesia.

All of these countries lead a precarious existence. They cannot hope to have a balanced market every year for the one crop on which most of their export receipts depend. They find that the market is erratic, the demand is inelastic; often the more they produce,the less their total gain; they have years of towering prosperity and impoverished years. When the flush years come, they earn a lot of money; many millionaires are made; and the regimes are content. But typically they have the gambler's psychology; when the good year comes, with its heavy winnings from abroad, they do not handle their receipts with the same regularity and prudence that are to be found among people who get each year the same modest profit. They do not become conservative, regular, disciplined producers and savers. They tend to squander the resources that flow in.

Some of the same countries are in poor economic condition today because substitutes for their crops have become available in the world markets. Cotton would play a much greater role in world trade if it were not for the discovery of synthetic fibers that are exceedingly cheap to produce. Rubber has been replaced by synthetic rubber in the auto industry. Iron is not so important now that aluminium, glass, and plastics have come to maturity; a country such as Venezuela has won a fair assurance of a fair income in the world market fro its iron ore deposits, but a generation ago could have counted upon a greater return. Perhaps one day petroleum will enter this category and then disaster will strike some of the one-mineral countries. The Arab, world which does poorly even enough when its magnificent wealth of petroleum earns foreign exchange for it, must watch anxiously the growth of nuclear power and the development of electric automobiles.

Where the raw materials are processed, where production is centered and owned, where the surpluses of manufactured goods are created, there are the capital centers of the world. There the loans are made if they are to be made at all. Finance is perhaps even more heavily concentrated than manufacturing. Moreover, not only are the deposits of people from the rich countries used to feed these concentrations of loan potential in the capital markets of the world, but the savings and deposits of the rich of the dystrocracies go there as well. The sheikhs of Arabia place their money in Bereut, but also in Switzerland, France, London, and New York; South Americans have notoriously banked their liquid funds in Paris, Madrid, Rome, and New York. They contribute to the vicious circle of concentration of wealth and proverty of enhancing the power of the capital centers of the world over their countrymen and themselves. They increase the difficulties of manufacturers, rationalized farmers, and food processers in their own countries.

It would be wise for dystrocracies to creep up the scale of their foreign partners, trading first with those that are reciprocal by function, then farther along, and finally with the plutocracies. Foreign affairs balk this. The U.S.A. and U.S.S.R. usually blacklist a number of countries from, the trade, aid, and investments of their allies.8

Conflicts between elites that have traditional of religious differences also block rational trade. Neighbors who are hostile, such as Greece and Turkey, will make bad bargains with remote nations rather than good bargains between themselves.

Plutocratic Manipulations

The troubles within plutocracies reflect themselves in problems of international affairs. Even while they are irresistibly drawn into imitating taxocratic practices in their own lands, the plutocratic elites and masses in large part turn against the taxocracies abroad as their worst enemy. The reasons are fairly evident, They have different structures, different dominant attitudes, exchange little in the way of goods and information, and each fears in the other what it fears may happen to itself taxocracy fearing choice, freedom, and personal wealth, plutocracy fearing personal suppression and poverty.

On the other hand, plutocracies find alignments with stratocracies to be convenient and often congenial. Though strange from the standpoint of logic, the relation is historically understandable. The class origins of most stratocracies are plutocratic and traditional, hence even though contradictory, anti-taxocratic, especially where the taxocrats are of different social origins. The democratization of stratocratic elements around the world, performed partly by revolutionaries and partly by American military in search of military efficiency and command by merit, is beginning to break down the heavy plutocratic prejudices of the military, and for the first time nations run by the military are looking with interest into the possibilities of alliance and mutual aid with their cousins, Under such circumstances, the plutocracies are becoming hard pressed to retain the fealty of the world's stratocrats. Examples of the trend exists in Peru, Egypt Pakistan, Cuba, and South Vietnam.

The greatest defect of the foreign relations of plutocracies is their inability to focus upon external goals for an extended period if time without becoming taxocracies internally and aggressive externally. The U.S.A., Britain, and France, to take the three most prominent examples, have spent considerable sums overseas in economic and political development. Their investments overseas and their commercial activity have also contributed to the level of economic activity in dystrocracies. They have furthermore given funds in small amounts to the United Nations and to regional alliances.

However, these sums have been largely wasted or non-creative because they have lacked philosophical focus. Much has gone simply to support and elaborate regimes that promised nothing to toparchy or cosmarchy, to illegitimate or quite incompetent traditional regimes, and to stratocracies with a genius for hammering plowshares into swords,9 and to projects furnishing some detail to an utterly mismanaged situation that is glorified as a long-range plan. There seems but little question, as the 25th year of the United Nations order passes, that all of the projects of foreign aid born of government-to-government plans and spending have benefited the dystrocracies less that the old fashioned voluntary efforts, both altruistic and profit-motivated, of missionaries, businessmen, and voluntary associations. Still, the plutocracies and dystrocracies are, if anything, more insistent than ever upon the imposition of taxocratic and non -philosophical solutions. The major problem lies in the constitution of the plutocracies themselves, in the unclarity of purpose, the non-persistence of intent, and the indefiniteness of organization that they offer to the outer needy world. Once more, they must adopt Kalotic policies.

The domestic policies of the richest countries of the world call for full production, without differentiation of product by Kalotic rank order, for low interest rates, and for fulfilling the desires if their domestic consumers. The governments believe in spending money to promote business and to keep out of trouble with their poor at home, while maintaining a free hand abroad. They have no population policy even when they have fairly rapidly increasing population as in the United States. They accept the idea of active government and are gradually socializing.

Out of these domestic policies come certain types of international policies. The plutocracies believe that their balance of payments should be almost always favorable.10 Hence they will dump foreign responsibilities that impair this balance in preference to assuming domestic responsibilities that would produce the same effect. They do not extend foreign aid beyond what they can readily supply without being accused of hurting domestic interests. They generally insist that foreign aid should be unilateral because it can be better controlled in the national interest, which means control to turn on or turn off the aid in accordance with domestic policies. They believe in international economic policies that strengthen the power position of the country. Their intent internationally is to expand their markets, to obtain access to raw materials, to strengthen their defenses, and to invest money where it will bring in the largest return. From time to time they will give a bonus to a poor friendly country, or a country they hope will be friendly; aid is used, said Senator George Aiken, as "a diplomatic pork barrel."11

We should not exaggerate, of course, the extent to which international trade policies are based upon the profit motive. It is easy to discourage a business enterprise from going abroad, and it is difficult to get it to go abroad. This is truer of Americans than of some other countries, but it is yet generally true. The business man knows his local markets. He does not know what he is going to get into when he goes abroad.

The conditions of going abroad are in fact so risky, particularly in the poorer countries, that high returns on foreign investments might be expected, but the average return on foreign investments is not high, nor has it been for a long time. Even in colonial period return on investment was moderate. The facts belie the myth of high imperialist profits, which is widely propagated not only in the dystrocracies but also in the plutocracies. Studies of the rate of return of investment of the British in India and of Holland in the Netherlands East Indies, over a period of many years, showed that the difference between the return on domestic investment and the return on colonial investment averaged perhaps one percent annually more from the colonies. This meant a difference between five percent and six or six-and-a-half percent return on the gross investment in a typical case.

Stratocracies generally follow the foreign economic policies of the plutocracies, except that they tend to suppress trade because of their suspicion of commerce. Taxocracies, from whom more daring international policies mighty be expected because of their relative freedom from labor and consumer pressures, are nevertheless taken up with the notion of a favorable balance of trade. They try to isolate their domestic policy from their foreign policy. Yet their foreign trade is heavily regulated and suffers therefore from a lack of initiative and imagination, key factors in competitive foreign markets.

In sum the international policies of plutocracies, apart from occasional forays into technical assistance, do little to build a world order. A unilateral contract, and therefore no true bargain, is made between the rich and poor lands. Domestic policies determine the foreign international policies of plutocracies as well as dystrocracies. There remains often a charity of the worst type, where only a twinge of conscience or a flush of prosperity prompts a small gift to the foreign poor. The one sided "bargaining" can set up no barriers to discriminatory tariffs, and it implies that plutocracies can export to the poor countries more than they import from them, as Tinbergen has pointed out.

It is easy to see how serious this can be. Between 1957 and 1965, for example, a $7 billion decline in the value of exports of all the poor countries plus increased prices on imported manufacturers overall offset all foreign aid.12 In a country whose economy is heavily involved with a single commodity, a slight decline in price-of coffee, or rubber, or oil for example- will far more than overbalance the foreign aid that may be coming into the country from abroad.

Thus, the regulation of commodity prices constitutes one of the most important problems of cosmarchy. That the policies of the plutocracies are inadequate is to be expected from the lack of consistent attention given to international problems generally. There is little comprehension and perception of the problems of the dystrocracies in the policies of the wealthier countries. The politicians who set domestic policies and therefore foreign policies directly and indirectly are men whose political fortunes have depended upon the economic attitudes and situation of constituents who have no interest in foreign policy. Foreign ministries are usually filled with persons of small competence in economics. Businessmen are chasing their individual customers, not setting policy.

And there is, of course, misorganization of the world with respect to international economy. The world order is economically a dystrocracy. The United Nations could be an important factor in creating a world economy. Its attention is focussed on world order, and the small sums that it can spend might be spent more rationally than the sums available to any other organization of the world, not excepting the World Bank. So believe for example, Tinbergen and his associates,13 who urge the United Nations to formulate the aims of an economic world order. We cannot organize without goals, he says, and the United Nations is not defining what a truly world economy would be like. The United Nations could go farther to correct undesirable features of the distribution of aid and private investment. The United Nations could establish, through its regional commissions, ways of planning and assisting regional cooperatives around the world. The United Nations can represent the uncommitted groups of the world, countries which lack a sharp foreign policy because they are somewhat free from American or Soviet influence and who can therefore be persuaded to adopt more consistent international policies. The United Nations could set up some type of international commodities exchange. It could even speculate in the commodity markets, and thus stabilize prices. If it in fact made any profits from the speculation, the profit could go into the general United Nations fund and be used for the purpose of international assistance. Thus concludes the Tinbergen group.

However, we must always warn with respect to the UN that, to the extent that it is effective, it would have to be reorganized politically and militarily, which would get us back to the basic controversy concerning the UN, namely, who is represented there, what weight is given in the voting, how can antagonistic independent regimes put aside their conflicts within the UN? Basic political and military considerations, in brief, prevent the United Nations from doing what seems to evolve naturally in the economic sphere. Kalos is a 360 whole; its elements have to be sought and achieved together.

1. Gustavo Lagos has written from this unusual point of view of the world politics of poor countries in International Stratification and Underdeveloped Countries ( Chapel Hill, N. C. : University of North Carolina Press, 1963). See also H. G. Johnson, ed., Economic Nationalism in Old and New States ( Chicago : University of Chicago Press, 1967).
2. See Kenneth L. Karst, "Land Reform in International Law", pp.41-82, in Richard S. Miller and R. J. Stanger,eds., Essays on Expropriations .
3. Washington Daily News, February 5,1969.
4. For all concerned, it is costly. On the entanglement of the U. S. A. with dystrocracies in revolt, see Richard J.Barnet's Intervention And Revolution ( New York : New American Library,1968). Pages 260-2 contain a fine summary of "the American presence" in Poor countries.
5. But note that,under anti-Kalotic and free-market world conditions, a " brain-drain" occurs and the dystrocratic countries lose even their precious few skilled doctors, teachers, and businessmen.
6. In 1950,non-governmental U. S. A. investment in West Europe was $1.7billions,in 1965 $13.9 billions; in Latin America, $ 4.4 billions in 1965 $9.3 billions; in the rest of the world expect Canada, the rose from $ 2.1 to $ 10.8 billions.
7. Zimmerman,ox., p. 159.
8. Gunner alder-Karlsson, Western Economic Warfare 1947-1967 (New York : Humanities, 1968).
9. See Richard J. Barnet, op. cit.
10. A recent study has shown that Historically American production grew faster during periods of price inflation and favorable balance of payments. to manipulate in reverse the economy is like trying t stuff the squeal back down the pig's throat. Jeffrey G. Williamson, American Growth and the Balance of Payments,1820-1913 (Chapel Hill, N. C. : University of North Carolina Press,1968).
11. Time, March 23, 19799,p.16.
12. Financial Times, London, July 19, 1965 Cited in N. W. Pirie, " Orthodox and Unorthodox Methods of Meeting World Food Needs," Scientific American, 216 ( February, 1967). pp. 3-11,5.
13. Op. cit., pp. 186 6.


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