Best Foot Forward?

The U.S. is spending about $35 billion a year--$750 per American family--on defense. Since the war, it has passed out some $60 billion--$1,300 per family--in various forms of foreign aid. Both kinds of effort are necessary, but both have merely negative effects; they restrict Communist aggression without advancing U.S. interests or ideals. There are no serious proposals on the docket for using U.S. military might or foreign aid in an effort to shift the balance of world power heavily in favor of the U.S. and its allies. In fact, foreign aid has been drastically cut and the prospect is that it will be cut further. Use of the enormous military plant now seems to depend on the Communists. If they make a rash move, possibly the U.S. will be able to punish them; if they do not, the U.S. will go on paying blackmail to the threat of aggression at the rate of $750 per family per year.

The U.S. system of political alliances is being strengthened--but there is no possibility that it will be improved to the point where the Communists can be made to back down. U.S. military muscle has been toughened, but not in any way that possesses decisive results. Secretary of Defense Wilson says in this month's FORTUNE: "I got to thinking here three or four months ago about Korea, Indo-China and EDC, and I came to the conclusion that nothing different from what happened would have happened if we had been twice as strong in a military sense--if we had had 250 wings and twice as many ships."

The Clearest Sketch. This sobering reflection on the limits of military power--even $70 billion worth of military power a year--calls attention to the great defect in the present U.S. world position. There is no forward motion toward a goal--no end in view. Since the political and military paths seem to offer no hope of decisive progress, the U.S. has begun--belatedly--to explore the possibilities of a broad economic advance on the part of the non-Communist world.

In recent days there have been many signs that Washington is seriously considering a major campaign on the front of world economic policy. This week Secretary of State Dulles gave the clearest sketch of Washington's embryonic plans. Said he:

"There is need for economic policies which will help to develop all underdeveloped countries. In the Communist countries developments are achieved through a system of forced labor akin to slavery. Living standards are kept very low and the people are forced to work very hard. In this way, railroads, power projects, industrial plants and other capital developments are created. It is a cruel system. But it has substantially raised material production in the Soviet Union. And even though this is particularly for war purposes, the result does have a certain fascination for the peoples of underdeveloped countries who feel that their own econo mies are standing still.

"In a free society it is normal that the developed countries lend money to the underdeveloped countries. Our United States, in its early days, was partially developed by European capital. Today, it is the United States which has the most capital available to help to develop other countries. We must find a way to put it to work."

The Only Step. Dulles was not talking about mere government-to-government aid. His remarks called up a vision of U.S. capital, accompanied by its know-how and its contagious vitality, flowing out to other lands, serving as a concrete example of what can be done materially with an economic system built on freedom and justice.

Before the flow of U.S. capital can be greatly increased, U.S. foreign policy has to wage a successful campaign to loosen the present fetters on international trade. This will meet resistance--abroad and at home. And the resistance will prevail unless the fight for a U.S. world economic policy is seen as an essential step in the desperate general struggle against Communist world domination--as, indeed, the only really important step short of war that can be taken.

Recent signs that Washington begins to view world economic policy in that light include:

P:The recall to Washington of former Budget Director Joseph Dodge, whom the President has asked to develop organizational plans for foreign economic activities, especially in Asia. t| Secretary of the Treasury George Humphrey's promise at the Brazil conference of greatly expanded Export-Import Bank loans to Latin America.

P:The criticism of Humphrey's speech by Pennsylvania Republican Representative James G. Fulton, who told the Brazil conference that Humphrey had not gone nearly far enough (see HEMISPHERE).

P:Last week's White House news that the President would seek a three-year extension and a liberalization of the reciprocal trade treaty setup.

So far, these attitudes and actions do not add up to a program. But read in the light of Dulles' remarks, they do mean that the U.S. is thinking about putting its best--or economic--foot forward.

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