Fifty Billions for Tribute?

February 20, 1950

Sen. Brien McMahon’s proposal that our government contribute $50,000,000,000 over five years for a “global Marshall Plan” is the culmination, the reductio ad absurdum, of the befuddlement on foreign economic policy in which Washington has wandered for the last five years.

Senator McMahon’s proposal is, to put it baldly, a proposal to pay unparalleled tribute. No other word fits. “Tribute” is defined in the dictionary as “a stated sum . . . paid by one sovereign or state to another in acknowledgment of submission or as the price of peace, security, protection, or the like.”

When we were small and considered weak, our minister Charles Pinckney, on being told by Talleyrand that a gift to the Directory might avert war with France, made his famous reply: “Millions for defense, sir, but not one cent for tribute.” Yet today Senator McMahon, at a time when we are by far the strongest nation in the world, proposes that we pay up to $50,000,000,000 as the price of Stalin’s promise to stop threatening us with atomic or hydrogen bombs.

This mere proposal, by the chairman of the Joint Committee on Atomic Energy, is certain to be taken by the leaders behind the Iron Curtain as a sign of fear and weakness. The leaders of the Iron Curtain countries have already found that they can with impunity plant spies in our midst, blockade us at Berlin, beat or imprison our envoys, and insult and vilify us every day. What further move may they not be encouraged to take by this timorous offer of ransom? Even Secretary Acheson’s emphatic rejection cannot fully offset this blow to our prestige.

The McMahon proposal obviously lacks sense. Would we make ourselves safer by pouring billions of our dollars into Russia, by reducing our economic and military strength to increase hers, by intensifying the problems of our free-enterprise system to mitigate the problems of her Communist system? And if for four years Stalin has unswervingly refused to call off the atomic-bomb race, even when we were far ahead of him, and even at the risk of the annihilation of millions of Russians and of his own regime, does it make sense to suppose that he will reverse his stand now for a mere monetary bribe?

It is time we asked ourselves frankly, in fact, whether an atom-bomb “agreement” might not actually be more dangerous than the present known lack of agreement, by binding us and not the leaders of Russia. These are the same leaders who have broken promise after promise, who believe that the end justifies any means, who live by systematic perfidy. The proposals for international “inspection” of the vast depths of a totalitarian Russia are not realistic. Even if our inspectors finally did catch up with a plant in Russia that had been working on the bomb—after we had poured in our $50,000,000,000 to help finance it—what recourse then?

But the real point of this article is economic. Senator McMahon himself calls his proposal a “global Marshall plan” and casually drops Point Four inside it. It is a supergiveaway program. It is not only politically preposterous, but it rests on the same fundamentally false economic assumptions as the Marshall plan and Point Four. It wrongly assumes that the American capital thrown into such schemes is a net addition to the world’s capital. It is in fact a mere diversion of such capital. And it is a diversion, in the main, from productive private enterprises into far less productive collectivist projects.

Such schemes do not encourage private lending abroad; they discourage such lending. They do not speed up recovery and development of world resources; they retard that recovery and development. For as long as foreign countries can get easy money, seized from our taxpayers, out of the United States Government, they will neither give the assurances nor make the economic reforms that they would have to make to attract private investment.

It is time we called a halt to the giveaway mania.