Notes on a New Approach to U.S. Economic Foreign Policy

Extract

The purpose of this article is to outline a fresh approach to America's economic relations with the non-Communist world. These proposals envisage a direct attack by the United States and its allies on the structural distortions which have persisted since 1945 in the non-Communist world economy. The chronic dollar shortage of our major allies is taken to be, essentially, a symptom of these more basic structural distortions. The proposals would end, after a transition period, the system of annual Congressional grants to our allies and would substitute for it the combined operation of investment and financial pools. These pools might be built up from the present International Bank and the International Monetary Fund, although they would require operations different in scale and purpose from those now conducted by these institutions. The proposals would apply a common approach to the problems of both the industrialized portions of the non-Communist world and the underdeveloped regions, and would thus combine or coordinate U.S. economic efforts in Europe, Japan, and in underdeveloped areas. It is believed, also, that they would mitigate some of the more serious political friction between the United States and other non-Communist countries and strengthen the non-Communist world as against the Soviet bloc.