False Internationalism

October 3, 1960

The irresolution of our own spokesmen and officials, in the face of increasingly brazen Communist aggression and insults, has caused a deep uneasiness in the American people. This uneasiness is now reflected even in the trend of business and the security markets. Neither Presidential candidate has come to grips with the issue. Nixon seems to be the prisoner of his position, bound to defend the Eisenhower Administration’s every act or failure to act. Kennedy seems to suffer even more than the Administration from an appeasement ideology, typified by his remark that the President should have “expressed regrets” to Khrushchev for the U-2 flight, and promised not to do it again.

The truth is that the so-called internationalism that not only we but politicians of the whole West have been preaching and practicing for the last fifteen years is a false internationalism. It has put mere organization above principle. It should have been obvious from the beginning that no organization of which the Communist states were members would be allowed on net balance to promote world peace and justice.

TIME TO REEXAMINE

Whether our proper course now with respect to the United Nations is to try to expel the Communist countries from it, or to withdraw ourselves and form a union of non-Communist democracies, or merely to cease to be the U.N. host country, does not come within the purview of this column. But our attitude to the world economic bureaucratic machinery we helped to set up is directly relevant to our economic future. It is time to reexamine our premises.

It is time to ask whether we should continue to pour out billions of aid to subsidize foreign governments and their socialist planning. It is time to ask whether this aid in fact accelerates world economic growth or retards it. It is time to ask whether there is any real need for the International Monetary Fund, or whether this institution has not merely prolonged worldwide inflation and fiscal irresponsibility. By sanctioning arbitrary official valuations of irredeemable paper currency and automatic borrowing rights, and conniving at devaluations of scores of currencies, it has reduced the pressure within each country for monetary discipline, for free and full convertibility, and for making that country credit worthy.

The World Bank is the best of all these postwar official international institutions, but because it is an intergovernmental institution it inevitably subordinates economic to political considerations in its decisions concerning which countries and which projects shall have credit.

FREEDOM ABRIDGED

It is no accident that all the international commodity agreements, whether in wheat or metals or sugar, resort to a complicated set of rigid import or export or production quotas that try to freeze the situation and prevent the natural competitive forces from operating. These agreements clearly cause more economic disruption than they cure.

Finally, such regional institutions as the European Common Market, though they reduce tariff barriers and increase trade among their own members, tend to increase tariff barriers and to disrupt trade with nonmembers. Everything valid that the Common Market or the Free Trade Area seeks to accomplish could be accomplished better if each nation simply reduced its own tariff and restored the most-favored-nation principle.

What the world today calls “internationalism” is really interstatism, intergovernmentalism. It is a set of barriers, compulsions, prohibitions, and controls administered by an international bureaucracy. True economic internationalism is the internationalism that came close to realization before World War I. It is the freedom of individuals in all lands to deal freely with each other, to buy from and sell to each other, to lend to and borrow from each other, to exchange each other’s currencies at whatever rates they can mutually agree upon, and to do all this without having to run to some nationalistic-minded government bureaucrat for a special license for every transaction.

Is it utopian to think that we can begin once more to move toward this international freedom.